The oversubsidized french press

Is the French press oversubsidized? No if you listen to the various press organizations who insist on the sorry state of most newspapers and magazines who suffer from both a loss of sales and of advertising and face a very difficult year 2013. Yes if you listen to the annual report of Cour des Comptes or if you read the parliamentary report of Mr Françaix, MP.

The real problem lies with the French budget which is harder than ever to balance. It seems obvious that the government cannot afford anymore to spend 1,2 billions euros for helping a fledging industry which is not so well treated in other European countries.

What Cour des Comptes and Françaix suggest is that it is not logical to subsidize at the same time the Post Office and the home delivery system. If newspapers and weeklies transfer the delivery from a costly and less efficient postal service to their own home services, there is no reason to keep a 300 million euros help to the Post.

Another matter is the fact that many magazines devoted to TV programs or people news profit from a benevolent and generous  French system. Françaix considers that only publications dealing with news i e dailies and newsmagazines contribute to a democratic debate and should deserve a public support.

The government has set up a commission to work on the reform of public aid. By the end of April, it will have to state a position on postal service and magazines, two very tricky topics. The various lobbies are very active and president Hollande will have to face very unpleasant choices.

The Google deal

So Google managed to extricate itself from an akward situation in France by signing a protocol with the French government and the newspaper industry. It will cost 60 millions euros to the giant of MountainVview plus an exchange of Internet technology with the print media.

Is it a good agreement? Probably yes. Will it solve the basic problems that the print industry faces as the digital news get more and more intrusive? Probably no;

The press managed for once to speak with one voice and benefited from the support of the Hollande administration. The fund will help to finance some improvements in the digital offer and the use of the Google platforms can be useful. However, Google partnership will not be enough to make for the lack of strategic vision of the dailies and weeklies which were involved in the deal.

The newspapers don't need the advice of Google to improve their offer on both the print and the Web. And yet, this improvement is the only way to keep the favour of a public which is slowly pulling out. Another big challenge is the growing use of mobile supports, smartphones and tablets. What kind of news, what ads can be provided through these very popular systems?  There again Google doesn't provide the answer.

And last but not least, the new protocol does not include the leisure and people magazines. In France they command a powerful lobby led by Lagardere. They will most likely push their case and embarass the government.

Lest wait for the next step.