The regional newspapers crisis

French regional newspapers face their worst crisis in 50 years. Nobody knows in what shape they will finish a long year 2013.

It is a matter of both money and ownership. As far as money is concerned, the advertsing income is down by 10% from a 2012 year which was rather bad. Classified ads are vanishing, moving to Le Bon Coin or other dynamic pure players. The circulation is down by 2 or 3% but 2012 was not so bad thanks to the presidential and parliament elections.

The ownership problem is even more serious. Most of the owners are broke or not willing to invest. In the South, the divorce between Tapie and Hersant won't carry any proper solution. Tapie will not be able to invest in la Provence which badly needs a fresh amount of cash. He will probably be forced to sell. Same thing with Nice Matin and Hersant. The sale of the Riviera newspaper is bound to happen very soon. Some Monaco investors are interested.

Group Sud Ouest is also in trouble. The family owners cannot afford to pay back 70 millions of loans and finance a 150 employees buying out. They are starved of cash and looking for a benevolent investor. This fall, tough decisions will be taken.

Even Michel Lucas, the banker and owner of the eastern newspapers seems reluctant to invest more. His huge press group hardly breaks even.

Most dailies keep investing in a digital offer but the profits are scarce and don't make for, by far, the loss in advertising and circulation.

A paywall for the Guardian

Is the Guardian a success or a failure?  In the Washington Post of July 2, the question is asked. This independant British newspaper has managed to collect recently the most spectacular scoops. The lates is the publication of first hand informations on Prism, the secret system engineered by the Americans to collect e-mails and telephone calls from all over the world.

If the circulation of the paper version of the Guardian is lagging at 150000 copies, the website is a tremendous success. It raises to 41 millions unique visitors per month, the largest information site in English.

And yet, the finance of the newspaper goes deep in the red. In fact it loses about 1 million pounds a week. The future of the Guardian which belongs to a private foundation is threatened by what is turning into a permanent deficit.

The solution seems obvious to many observers: Why is the group so reluctant to accept a paywall and follow the exemple of its main competitor, the New York Times? Of course, its audience would go down but if you consider the scope and the quality of the information it provides, many people, all over the world, would be willing to pay. With 1 million subscribers paying 150 euros a year, the Guardian would be eminently profitable and could finance an enlarged staff.

As we look at the evolution of the media on the web, it appears that gratuity is a thing of the past.Lets hope that the Guardian will follow the major newspapers of the world.

Bernard Tapie and the future of newspapers

When Bernard Tapie bought into La Provence and Nice Matin he delivered ambitious statements about his media policy. According to him the newspapers of the South could recover from their past losses and diminishing sales. He asked Patrick Lelay, ex chairman of TF1 and an old mate to audit the fledging dailies and  suggest a full reorganization of their staffs.

It was a long time ago, six months. Since then, the famous businessman has been silent as well as his unhappy partner, Philippe Hersant. However, Tapie has not left the world of newspapers, not as a press mogul but as an object of investigations by judges and reporters. Now that the judicial process is aiming at the past deeds of Tapie with the possible cancellation of his 400 millions deal with the government, the press business seems very remote indeed;

The big question, now is what is going to happen with the Southern dailies. Will Tapie be obliged to sell his 50% share? Who would be ready to buy? Is it possible to find in 2013, new investors for both Sud Ouest and the Southern dailies, the sick members of the regional newspapers community. We wait for the answers.

TV Are the networks breaking down?

Internet and the digital technologies have already deeply disrupted the musical world, the press and the publishing industry. The next step, in the US and very soon in Europe is the breaking down of broadcast television. Until recently the networks had to face the challenge of theVOD and the fact that tens of millions of viewers want to watch their favorite programs any time, when they like. The boradcasters have complied and provide services free for a short time and then paying where you can get all the programs already shown in the air.

Now things look a bit different. The digital geants such as Google, Apple, Amazon or Netflix want to be producers and programmers. They are starting to invest in programs of entertainment or fiction, like "The house of cards" from Netflix. They also buy the rights of series and films to the Hoollywood giants, only too willing to get more cash. Youtube, the video branch of Google is building up full channels which you can get on the Web at a bargain price.

The competition can be deadly for the networks in the States or in Europe, now that a majority of the population is starting to use tablets which are cheaper and more user friendly. France which owns the most successful European support of video, Dailymotion should have a second thought before selling it to just anybody. What if Dailymotion is the successor of TF1?

Politico drops local television

 Politico, drops local television. In a nutshell, it is the message sent last week by Mr Allbritton the 44 years old head of the Allbritton group. This powerfull media enterprise based in Washington DC has made a significant move towards the digital age. It is about to sell its 7 local TV's including a very prosperous station in DC for about 300 millions dollars to invest in digital news. And it keeps and intends to develop its flagship activity in Internet, Politico, the very successful web and print publication on the US political life.

Allbriton stated that Politico that started 4 years ago with 2 top journalists from the Washington Post employs now 200 people and is profitable. It is fairly obvious that new websites will be lauched thanks to the big money collected through the sale of the local TV's. Two years ago, at a conference in Paris a Politico executive hinted that a public could be interested by an international affairs site. It would be a costly investment but the financing is there.

At the same time, the Washingon Post is steadily declining. for the first term of 2013, its sales and its advertising income are down and the future looks very dark indeed. In DC it is a tale of two medias.

Aids to the press

The report on the reform of aids to the press was published last week on the website of the ministry of Culture. Its content confirmed what I wrote in my blog of April 17. The government is willing to keep a low VAT on all kinds of publications including electronic news services. Moreover the looming crisis of Presstalis influences strongly the debate and the report. It is obvious that the generous subsidies to the postal service will be drastically reduced in order to finance the huge bill of a large buying out of Presstalis employees. A conservative evaluation puts it at 100 millions euros and nobody is willing to foot the expenses.

Still, there is no long term design for a new organization of the ailing French press.  

french press less subsidies

The ailing French press will get less and less public subsidies. Up to now, government aids amounted to 10% of the budget of newspapers and magazines. However, the French administration is broke and a major upheaval of the cosy system enjoyed by the press since 1945 is about to happen.

It is likely that newspapers and newsmagazines will keep a lower VAT and some help to home delivery but the other publications will have to face a sharp rise in postal rates due to the massive reduction of Post office subsidies. Groups like Mondadori, Prisma or Bayard will suffer more than le Monde or le Figaro.

Still, the government faces drastic choices for the future. The French delivery system is in shambles. According to some experts its reorganization could cost up to 250 millions euros while nobody, neither the publishers or the state is willing or able to pay. A massive transfer from postal service and Presstalis to home delivery managed by the regional newspapers networks implies a costly reorganization. And internet services are thriving on fixed and mobile supports.

A big question looms above everything else: is the media industry too complicated to be managed by the not very competent government?Most European countries say yes.