Group Rossel last stand

The Belgian group Rossel delivered yesterday a press release stating that it pulled out of an endless negociation for buying Group Hersant Media, GHM.It is the result of the negative votes of CGT Union people who refused the reorganization and loss of 220 jobs in the Eastern newspapers of GHM.

Is it the end of the story? Not at all. The union thought wrongly that the socialist government would pour tens of millions of euros to save their jobs. They had a nasty surprise when they realized that the staff of the Industry minister was made of the same civil servants they had met at CIRI, the Finance ministry department in charge of failing corporations. They understood too late that the socialists are not more wealthy and generous than Sarkozy people;

And yet, Hersant has to find a solution to pay back to its 17 bankers its 215 millions of debt. No hope that anybody will pay for him. Rossel is waiting very quietly for the unions to face the tough reality and the banks to agree for a partial loss in hope of saving the remaining part of the huge Hersant debt.

What happens to the media

The turmoil in the media world raises many questions and few answers. Yes Internet is delivering a massive offer of news but opinion polls during the last French elections showed that the public trusted mostly television to be informed. In fact in Europe and in the US people are spending more and more time watching TV, 3hrs30 mn for the French viewers and thetelevision websites are very successful.

Yes the daily press is in bad shape everywhere. In Australia, both Fairfax and News Corp groups are firing hundreds of employees and journalists and starting paying walls. However, the public keeps a strong interest in daily news, whatever their origin, all news television, websites, applications on smartphones and tablets.

The main question remains how to satisfy this apetite for informations which increases every year for every genberation. The answer is money. Quality news are costly. This is why the experience of paying walls needs to be watched very carefully as it is more and more obvious that advertising is lagging behind because of fractured audiences.

A time of crisis

Yesterday, the unions of groupe Hersant Media staged a demonstration in front of the ministry of Labour and of the Regional Newspapers organization. As I have mentionned in previous blogs, the ailing group should cut 600 jobs in the eastern and southern dailies before a sale to the Belgian group Rossel. At the same moment, Elysee and Matignon are working on a solution for Presstalis that could cost about the same number of jobs. It appears then that the crisis of the press industry will be as lethal as any other social dossier facing Jean Marc Ayrault government.

What are the solutions? First, the government should put in charge a social mediator who would try to help the press organizations to reach a settlement with the unions.

Then , the French press owners, dailies and magazines, should build up a more agressive digital strategy. They just need to look across the borders and watch what Springer or Schibsted are doing. These powerful media groups draw a growing profit from their Internet investments, some of them in France. We certainly could do the same and start right now.

The story of the Times Picayune

The Times Picayune, the prestigious daily of New Orleans has existed for 130 years and is a must reading, every morning for the people of the big city. And yet, its management has announced that it was giving up its daily print edition. It will be published only three times a week and rely upon its Website for daily news.

This decision has provoked an uproar among the political and cultural establishment of the Southern city but it won't be revoked. The newspaper is losing money and it is very likely that its exemple will be followed by many others in the US and in Europe.

It is more and more obvious that the newspapers will have to figure out new formulas to survive. The best solution,for the moment, is to combine a bi or threeweekly publication with a paying wall providing instant news. This is bad news for Presstalis,the French delivery organization which is losing the sales of dailies and magazines.

Do you know the Atavist?

The New York Times devotes a long survey to a very interesting start up called the Atavist. The 3 young men who started it and got the support of luminaries such as Eric Scmidt from Google intend to promote a special brand of journalism. They work on long pieces of reporting shorter than books but much longer that the average found in newspapers or magazines. These papers are sold on their site and include multimedia elements, sound and video. They also offer support for people who intend to publish on the Web. As the NYT suggests, it is a comforting experience to see young people still interested by journalism and willing to use the Web potential to promote a sophisticated form of news reporting. So have a look at www.the atavist.com

The first challenge of president Hollande

As I have been warning long in advance the staff of François Hollande, the crisis of Presstalis is blowing up with a financial investment to save the company that grows every month. On January  150 millions euros were needed. I discovered last week it had jumped to 200 millions. Read a good story on Presstalis on the website of Electronlibre.

I remember very well that we had heated debates on this matter at the strategic committee of Etats Généraux de la Presse, 4 years ago. Several of us, including myself were in favour of a drastic solution : the merger of Presstalis with a huge logistics company that could cope with the declining figures of press activities. Otherwise, how could you make profitable a company that sees its sales declining by 10% a year.

Sarkozy refused to move in that direction so the Etats Généraux were cosmetic about the looming disaster of press delivery. Now it is late and maybe too late to reach a consensus. The new government will face a tough negociation with the CGT. Good luck Mr Ayrault.

The model of the New York Times

The New York Times seems to win the challenge of developing its paywall. It has 450000 paying subscribers that add up to the print subscribers who have opted for the digital service. The global figure is 800000  digital subscribers. If you consider that the average subscription fee is 120 dollars a year, it means that the paywall amounts to about 60 million dollars a year, a fairly significant figure.

Still other newspapers executives should not jump too quickly to an early conclusion. The NYT is a very special daily doted with a strong label, an exceptionnal team of 1000 journalists. Its digital policy has been pursued for 15 years with many significant failures. Also, the print edition that carries 90% of the income is in trouble. Since the beginning of 2012, the sales have gone down by 4.5%.

The lesson for French newspapers is that a proper digital policy is a long term effort that will pay off in 5 or maybe 10 years, when the print will be close to collapse. It means too that the quality of information must be coupled with a very cautious subscription policy People are definitely more ready to pay now than 5 years ago but they will only agree with very moderate rates. It is obvious, for instance,that the subscription rate of le Monde is much too high which is a pity if you consider the huge potential of this prestigious daily. What national and regional dailies must do is build up a long term strategy to improve the content of the website and get people used to pay for what they need. The rendez vous is 2022.