The Washington Post A success story

On October and for the first time, the digital audience of the Washington Post was larger than the NY Times. It is an impressive success for the gray lady is a toughcompetitor and has been active and dynamic for many years in the digital field. However, its results are mixed. The third quarter figures for 2015 showed that the NYT could not stop the fall of ads in its print edition and in spite of an audience of 1 million subscribers, its digital site cannot make for the losses in print advertising. Also, the Facebook offer of advanced articles that was supposed to provide new ad incomes for the newspapers does not work as well as it was supposed to do. It seems to cannibalize the audience of the legacy media websites without carrying much new profit.

As far as the Washpost is concerned, it appears that the sale to Jeff Bezos was a smart move from the Graham family. Contrary to what many people, including myself feared, the Amazon owner has played his part very successfully. He has stopped the flow of departures from the newsroom and hired a huge team of technicians to improve the web operations. He has also approved a very aggressive marketing policy, offering very chap subscription rates to the digital users in order to attract a large new population.

Still, these two major newspapers face now another challenge which has been met already by several pure players like the Huffington Post, Politico or Buzzfeed: how to keep growing. The only way is to look to Europe and Asia wher there is a large English speaking population. One can bet that Bezos will work at it thanks to his world Amazon network.

A last question. What is doing France's Bezos, i.e. Niel coowner of le Monde? it's time he works on the newspaper's digital strategy.

Regional newspapers the fall season

Last week, minority shareholders of the  regional daily NRCO based in the center of France announced they were willing to sell 25% of the daily's capital. Press observers wondered aloud who would be foolish enough to buy.
Many newspapers are or could be on sale. It is the case of Sud Ouest, number 2 of the regional press whose owners are trying to find a way out without losing too much. Sud Ouest group was valued 300 millions euros, 10 years ago. Now it would be around 60 millions.

Nice Matin, the once prosperous Riviera daily is deep into financial trouble. It is owned presently by its employees but it is obvious they will have to rely very soon on a local investor.

On the eastern part of France the many dailies belong to a bank, Crédit Mutuel. Their circulation is droping fast and they move deep in the red. The aging chairman of the bank, Michel Lucas or his successor will have to sell soon but, once again, who could buy?

One group seems to be willing to reorganize this devastated field, it is the Belgian Rossel which owns already Voix du Nord and several publications in the East of France. It has however to find a proper financing not only to buy in but also to buy out the redundant employees, mostly printers who are less and less necessary in the digital age.

As I have explained many times in this blog, US local press does not offer a remedy to the decline of the regional dailies. On the other side of the Atlantic, things don't go well. One has to think very thoroughly about what users consider is valuable in local news.

The fragile model of the New York Times

Ken Doctor is one of the best American experts on newspapers. In his last blog, he comments the figures of the New York Times  for the first half of 2015. They are both a source of comfort and worry. True, the Gray Lady has reached the impressive figure of 1 million digital subscribers, including 1000000 from non US countries. True also, these subscriptions bring 185 millions dollars a year, a figure close to the cost of the newsroom which amounts to 200 millions.

However, it could be too late, too little. Print advertising keeps going down at a frightening speed: minus 12.8% for the second quarter. The digital ads went up by 14.2 but the global figure is still -5.5.
The print circulation keeps going down too. 10 years ago, the print sales were 1.5 million. Today, they are 650000. Admitedly, if you add up the million digital subscribers, you get the same global number as 10 years ago but the daily is far less profitable.

One of the main reasons for this fall of net income is that digital publication has a heavy cost. The NYT must hire a growing population of computer and Internet experts and lauch new experiments that are expensive and not always successful like NYT Now. Moreover, the potential for new subscribers is limited, unless the Gray Lady chases more foreign customers, a process which is not cheap either.

The lesson one can draw is that quality and good journalism have a cost but it pays with always reluctant subscribers  and also, one must rely more and more on digital tools which are hard to find and very, very expensive. Still for the main Western newspapers, there is no choice. They must move on or be irrelevant and disappear.

Newspapers a tycoon's weapon

Are print media and specially newspapers a matter of fun and influence for ambitious tycoons?
After so many sales of dailies in Europe and the US, it is worth thinking a bit about the outcome of old fashioned legacy media.

In France, the last transaction, the buying for about 80 millions euros of le Parisien by Bernard Arnaud, the very wealthy owner of Loreal needs some explanations.

It is obvious that Arnaud is not looking for a profitable business. le Parisien has lost money for 4 years and its circulation is dropping by 7% a year. Moreover, threre are very few synergies with Les Echos, the French equivalent of the FT which belongs already to the tycoon.

However le Parisien is a fairly popular daily based in Paris region where it still sells about 250000 copies. No politician from this part of France can afford to forget its role and influence. It is easy to think that Nicolas Bazire, the very politically minded deputy of Arnaud could wish to add this political tool to his master's empire.

So this operation is better understood if you consider the background of two very important votes which aregetting close: regional elections in December 2015 and presidential elections in 2017.
Still, nobody can assess the part played by socil networks to shape public opinions. It is still flattering to own some big dailies but is it useful in this digital century?

The crisis of regional newspapers

The Marseille daily La Provence is about to let go 60 employees and raise by 10cents its price to prevent new losses. With a circulation of 110000 copies the newspaper is threatened to become irrelevant in Marseille conurbation whose population is up to 1 million people.

Its neighbour Nice Matin is not in a better shape. Its advertising and circulation are in free fall and it can ill afford to pay its furnishers and its social security fees. Its new owner, the employees association has no income and is desperately looking for investors.

Further North, the Bordeaux daily Sud Ouest has reached a precarious balance for 2014 but can hardly expect to pay back its heavy banking loans and advertising and circulation keep going down.

The other regional press groups have to face the same challenge of advertising and classified ads going down by 7% per year. They all raise their price which has a negative influence on sales. Why would people pay more and more for publications that provide less and less fresh news?

An expert on French press told me recently that within 10 years, only two press groups would survive, one of them beeing probably the Belgian Rossel who is interested in La Provence, Nice Matin and Sud Ouest.

And yet, people are always intrested by local news and services but there are many providers moving to fill the gap. The most notorious is Google which strikes deals with local business in many big cities, including Marseille to help them to promote themselves. Solocal, ex Pages Jaunes is following the same pattern and Facebook which is more and more interested in news will go the same way. Local pure players will have no choice but to deal with these powerful and wealthy giants.

Its obvious the regional landscape is going to change dramatically before 2025.

newspapers on sale

Newspapers are on sale everywhere and so are many magazines, all of them at bargain prices. Yesterday, Group Sud Ouest finalized the sale of Midi Libre to La Depeche for a sum which should not exceed 20 millions euros, a far cry from its buying price ten years ago. The same with Express sold by Roularta to Drahi the new telecm owner for about 10 millions euros.

And now, there is the rumour that the New York Times, the most prestigious American daily could be bought by Bloomberg. The price would certainly be much higher than the 250 millions dollars fixed for the sale of the Washington Post and could amount to more than 1 billion dollars. Still, it would be a revolution in the American media world as the grey lady is the last major newspaper to belong to a family.

What does it mean? First that there are still people who are interested in legacy media and willing to put money to gain what they consider is prestige and influence. Then there is the fact that prices have gone down dramatically as the examples of the Post, l'Obs, sold for 5 millions euros or Express show. So why not try a new adventure and merge digital and print media as Bloomberg would obviously like to do with the Times.

As usual, the battle for the media is a battle of moguls. But now they are using the money they acquired in digital affairs. Blommberg will face Bezos, Drahi will attack Niel.

And yet, I wonder. Are the future news giants to come from the former legacy media, boosted by digital money? It is not sure. Audacious pure players are all over the place and growing very very quickly.

The future of legacy media

It appears that year 2014 is a year of new assessments, a cross road where the legacy and new media followed new paths that will remain the same for years to come.

Two major processes became obvious these last few months.
First, the triumph of news websites which after many unsuccessful attempts seem to find the proper recipes to drag audiences et finance their efforts, as long as they deal with national and international pieces of information. However, their shape is very different from the usual print press. They collect data spread all other the place, they rely heavily, too heavily maybe, on Google and social networks such as Facebook which is slowly turning into a new and very powerful media. they mix up more and more text and video, blurring the lines between traditional media, press, radio and TV.

Then, the legacy media keep drowning, losing for ever advertising income and their readership. The success of their Web services is uneven. Some seem to make it like the NY Times, le Monde or le Figaro. Others, dailies or magazines are trailing behind and, anyway, none of them is able to finance properly a strong investigation team. If and when they vanish, what will replace them?

The big question, I will treat next time in this blog is the future of information. What do people want? What are they willing to pay? What level of information is necessary in a democratic society? Keep tuned. 

The digital challenge of the regional newspapers

French regional newspapers are in bad shape. The figures are well known: a regular fall of circulation, at about 2% per year. A faster decrease of classified and advertising at a rate of 8% per year. The result is the obligation to raise the price of the newspapers which is punishing for the subscribers that make a huge majority of the readership.

It is hard to see the future of Nice Matin. The once prosperous daily of the French Riviera loses 12 millions euros a year and its circulation is in free fall. It is obvious that the proposal of the employees who wish to buy their newspaper is not realistic. Their financing is not properly fixed and they intend to keep working the printing unit which is losing a lot of money. Rossel proposal is more to the point but it is painful: It intends to reduce drastically the staff and close the printing unit. However, even if Rossel prevails it remains to be seen whether Nice Matin can survive more than a few years.

The digital challenge is not easy to face either. Regional dailies are desperately looking for devices with a very limited success. Ouest France and Sud Ouest are trying an evening edition, mostly devoted to national and world news. For the moment, it doesn't work. Subscribers are scarce as they can get for free the news offered by these dailies. There are so many websites in French or in English that provide that kind of information. Look at Huffington Post, Slate and the websites of the free sheets.

However, the big question is the financing of the very costly collection of local news. In the US, the local newspapers have been trying for years to build up paywalls and attract local advertisers. By now the figures are very disappointing. Local pure players are not successful either. For the moment, at least, the public is not willing to pay.

And yet, people want to know what's happening in their city, the place where they live. There is a solution but it has not been found yet.

Bezos man takes over at the Washington Post

When Jeff Bezos bought the Washington Post on August 2013, I told some of my friends that when he would get fed up with the ailing newspaper, he would sell it to Politico.

It was not just a joke. I think that the choice of Frederick J. Ryan to replace Katharine Weymouth as the new publisher of the Post goes a long way in this direction.

Lets see the facts. Politico was created 8 years ago by a group of talented journalists coming mostly from the Times and the Post to cover on the web the political life of Washington. The Post and the Graham family refused to get involved in this adventure. Politico was launched instead by Allbritton, the only media group based in Washington.

Since then, both Politico and Allbritton have thrived. Politico has broken even and developed new activities in New York, international affairs and intends to set a new branch in Brussels. Its mother company has made headlines last year by selling its huge television properties in order to finance new developments on Web services. F. Ryan has been one of the founders of Politico and he was in charge of the television branch. After its sale he has been recuperated by Bezos to go where? At the Washington Post.

I would not be surprised if Bezos was in touch with Allbritton for a global deal, a merger of the Washington Post and Politico. it would be a smart move as the future of the print seems very dark and Politico looks more and more like an Internet Post. And Ryan is the right man to organize this merger.

Is it far fetched? Maybe but it would be a good gamble for the owner of Amazon.

The Guardian helps local news

I was interviewed yesterday by the French media publication INAGlobal about the future of regional newspapers. It is a well known fact that they are in deep trouble. Their very successful formula that offered to a large readership a bundle of national news, extensive local news, info service, classified ads and commercial advertising doesn't function anymore. It appears that people want just to satisfy very personal needs. They get what they want through Google, the social networks and various applications easy to consult on their smartphones.

And yet, local life is a breeding ground for a lot of very interesting information. When a big event happens in Ferguson, Missouri, the national medias are at pains to collect the proper pieces of news that will help their audience to understand what is happening. So, in the US, the Guardian has decided to build up  a working relationship with several local dailies to improve this understanding.

It seems however that this sharing of information is more profitable to a popular national website such as Guardian USA than to more modest local publications. And there is no money exchange while the financing of local news collection gets more and more uneasy with the collapse of classified and the limited success of paywalls.

As I said to my friend of INAGlobal, solutions are hard to find. Maybe the national media will have to contribute much more to the working of local networks.

le Monde is facing too many challenges

It is not an easy job to be at the helm of le Monde. The  national newspaper which is probably the most prestigious French daily is bleeding and looking for new recipes for growth.

Its circulation has been steadily going down for the last ten years and is now at 275000 copies, a far cry from the distant times when it reached four hundred thousands. However, its colleagues, including le Figaro, do not fare  much better.

Its digital audience is not bad, with 2 millions readers a day, according to Audipresse One and has a fairly large foreign readership.

It is not a surprise if the newspaper was in the red in 2013 by 6 millions euros in spite of a profitable digital branch, le Monde Interactif and 2014 doesn't look any better with declining print circulation and lower advertising income.

And yet, le Monde has strong assets.  Its image is good not only in France but also abroad and its potential for digital development is strong but it needs a strategy. Two big challenges face its owners and its management. One is a decision to move to morning publishing instead of an afternoon distribution which is inefficient and costly. In that case, le Monde should close its printing unit in Ivry and get printed either at le Figaro or by some other Paris unit and get partially printed with regional newspapers out of Paris. This solution would allow the daily to extend a home delivery service through the regional press. The other challenge is the digital policy. It seems obvious that the Monde should adopt the paywall and follow the example of the New York Times even at the risk of losing some advertising income. The future financing of the newspaper is at stake as digital income must increase steadily to make for the vanishing ads.

These decisions are urgent but it is hard to tell what the owners of le Monde who have just bought the newsmagazine Nouvel Observateur intend to do. Are they willing to devote enough time and money to the daily or do they push for building a huge press group including Libération which another risky challenge? An open question and no answer yet.

Newspapers sell their digital sites

Last January, the Guardian sold for 985 millions dollars its very profitable website of cars digital sales. This month, the various American press groups that own Cars.com are putting it on sale for 3 billions dollars. It means, for instance, that Gannett, the largest American newspapers group will reap 810 millions and Mc Clatchy, 750 millions.

Any expert of the news industry will wonder why ailing newspapers facing a permanent reduction of sales and advertising and bound to move, as quickly as possible into the digital age, are selling their more profitable assets, losing copious dividends and ad market advantages.

To this obvious question, the Guardian states that it intends to invest on a grand scale into the digital services of the daily, hoping in a few years to turn its digital branch into a profitable venture.

It seems that the American groups expect to ease their pulling out of the print industry by using this huge amount of cash to buy into television networks. This way, Gannett and Tribune could drop their dailies and become prosperous TV and Internet  businesses. The case of Mc Clatchy is a bit different as they seek to get rid of their debts, maybe to sell later on their print activities.

What does it mean? The most likely answer is that the owners of the press industry, following the example of the Graham family, are giving up on their print business and moving to more promising fields, Internet but also television which is still highly profitable if well managed.

At the same time, many young people, helped by wealthy sponsors try to figure out the future of the news industry. They are the Gannett and Tribune of to morrow.

Liberation's emergency

Time is running short for Libération. There is no proper shareholder, a growing lack of cash and bankruptcy probably on March. It is a pity for there is certainly a solution for an ailing newspaper. However, the solution implies a total revolution in the working of the newsroom, something which is not easy to realize.

In my opinion, an editorial staff of 60 could provide a good news service centred on the urban population of France. The news delivery system would be a combination of a paid website and a print biweekly financed partially by advertising.The total sales would be much lower than presently but the expenses would also be sharply reduced with a limited printing budget and a drastic reduction of the cost of Presstalis. If the new Liberation provides high quality service it will meet its constituency after 2 or 3 years.

This will probably not happen and it is a shame. I strongly believe that the French public is ready to accept and pay for new digital offers that answer a growing demand. It happens already in the US where booming digital media attract a growing number of talented journalists. The Atlantic is easy to cross.

Liberation Is there a solution?

The newspaper Liberation is deadly sick. Journalists, friends and outside observers are desperately looking for a solution. Is it possible to save the sinking ship?

Let me first compare the daily to two other news providers, La Croix and Mediapart.

3 years ago, the circulation of Liberation was, at 130000 copies and la Croix's sales hardly over 90000. In 2014, the two dailies are at about the same level, 95000. The circulation of la Croix is growing slowly but steadily by 1% a year. For Liberation, the fall has been close to 30%. The two dailies are heavily subsidized by the taxpayer, about 6 millions euros a year each. However, la Croix, with a small staff and a loyal public of subscribers breaks even, Liberation with few subscribers and an errand readership has been in the red for several years.

Take Mediapart. The pure player has 80000 subscribers, not so far from the two dailies. It has a small but dedicated newsroom, a very attractive content. Its audience is growing and it is profitable.

What could be then a recipe for survival for Liberation? Lets be honest, there is no silver bullet but maybe something to try.

I think that the daily should stop being  a daily. It could combine two weekly print publications on Friday and Monday combined with a website. Access to both could be done through a subscription. There would be no free offer and sales of the print in a limited number of newsstands.

The main thing would be the content. Liberation should chose a field which is not well covered by the other national news providers and which is the urban life. Its staff should work on Paris conurbation and 7 or 8 French big cities. A smart combination of scoops and in depth reporting would satisfy a public which is not very well informed about what is really happening in his city.

The publisher should aim at a population of 50000 subscribers to break even. If you consider that the population concerned would be over 15 millions people, it seems attainable.

However, the objective is to catch a loyal readership through a reliable and comprehensive information. There are many young journalists who are eager to comply.

The New York Times in 2013

Year 2013 was not bad for the NY Times whose long term strategy of moving from print to digital proves profitable.

Last year digital revenue of 149 millions euros grew by 36%. The newspaper has now 760000 subscribers to the digital service.

Still, advertising is lagging behind. During the last quarter, print advertising went down by 1.6%, digital advertising was even by minus 0.2%. The print circulation kept decreasing.

What does it mean? First, advertising is less and less the solution for the newspaper industry. During the last quarter, the powerful Gannett group registered a decline of 5.6% of its print advertising. And digital ads don't make it as there are more and more competitors, news and not news, on the market. Look at the figures of Google or Facebook and their fight to conquer the mobile market.

There is only one solution, paid subscriptions. The NYT has been a pioneer in that field and it pays handsomely. However, be careful, the product must be of top quality, the subscription rates must be attractive, the marketing must be efficient.

the challenges of le Monde

For the prestigious French daily le Monde, 2013 is not a good year. Its circulation is down by 5% at 275000 copies. Its advertising income is just even thanks to the success of its Friday magazine. It is likely that the profits of the Website will just compensate the losses of the print version.

Still, there are some reasons to hope for the best. The Website attracts a powerful audience with nearly 9 millions unique visitors and 32000 digital copies are sold everyday, much much more than other national dailies such as le Figaro or les Echos. In fact, le Monde is probably the only French newspaper which is known worldwide and can attract French speaking internauts in Africa and America.

What le Monde needs is a global strategy to stop the fall of the print circulation which still contributes to 90% of its income and improve its paying services on Internet which should make for a lagging advertising revenue.

It means that the daily should move from an afternoon to a morning newspaper. It would allow it to be better delivered out of Paris and use the printing facilities of the regional press. No doubt such a move would turn an important profit that could be used to find new subscribers. Up to now, the subscription service has been fairly inefficient and needs to be boosted.

Moreover, the merger in process of the digital and the print newsrooms will definitely improve the offer of the Web service.

So the future doesn't look too bad but time is running short. 2014 will be a decisive year.

The future of regional newspapers

The French regional newspapers have lost 1000 jobs in one year. Their circulation keeps going down by an average of 2% a Year and advertising keeps sliding down at about 7 or 8% these last two years.

The shrinking of the French press is not unique in the world. In the US, American regional dailies suffer badly and there is no end to it.

What are the reasons? Are there any remedies?
The main cause for this downfall is the fact that people under 40 don't buy papers anymore. Their parents made a great use of the local press because of all kinds of information they provided on their day to day life. Now, you can get these tips on many free websites that inform you on movies schedules, restaurants, sporting events, public transports and just everything.

30 years ago, the strike of the local daily could paralyze the life of a big city. To day, it is hardly noticed.

What are the solutions? There are two ways to make for this crisis that seems to last for ever.

First, the regional press must increase and improve its digital offer. They must set up a paying wall with very low rates as a start and a generous offer of news and videos. Never forget that the competition is tough and you have to outsmart the people that crowd the Internet field.

Then, newspapers have to think hard about their periodicity. Is it really necessary to publish every day? The print industry can survive for a long time but 7 newspapers a week is no more an obligation.

It means that the staff will have to be drastically reduced and reorganized. Less printers, more technicians experts in the mechanism of Internet and still many journalists with a different working schedule.

A hard challenge for the press establishment.

The New York Times keeps moving

If one compares the Washington Post and the New York Times, one can see the staggering difference between a daily which is successfully moving from print to web, the Times and another one which has let Politico pick up its best journalists and its top customers, the Post. It is hard to figure what Jeff Bezos is going to do to repair a fairly hopeless situation.

In the Guardian of Monday 14, Jill Abramson, the executive editor of the Times, explains what her vibrant newsroom is doing. It is playing the best card to boost the digital audience and attract advertising: the development of video, motion graphics and animation. Still the 1000 journalists newsroom keeps investigating on China, Apple or Bengladesh.

With 700000 thousands paying subscribers (one third out of the US) and 59 millions unique visitors, the Times is becoming a world global news provider. Competition will be tough for the other English speaking websites.

However, the interview hinted at a management problem which most newspapers will have to face: with the increasing importance of marketing and ambitious market research, the part played by the CEO is getting more important and perhaps, more intrusive. It is a touchy topic for Jill Abramson who has to live and work with Mark Thomson, the ex director general of the BBC.

newspapers on sale

The buying of the Washington Post by Jeff Bezos is just one stage of the lenghty process of property transfers of newspapers and magazines in most Western countries.

In the US, the Tribune company is trying to get rid at a bargain price of its former flagship newspapers such as the Los Angeles Times and the Chicago Tribune and the New York Times has just sold the Boston Globe with a heavy loss. The Gray Lady itself could one day be on the market in spite of the denials of the Schultzberger family. Remember what the Graham said two years ago?

In the UK there is no guarantee that the Murdoch family will keep for ever the Times and the Sun. Their ambitions are obviously turned towards movies and television, so much more profitable.

In France it is the same pattern. Neither Hersant, nor Tapie are to keep for ever their ailing dialies, Nice Matin and la Provence. Sud Ouest will sooner or later be transfered to some regional investor willing to trade losse for image. It seems obvious too that the Flemish group Roularta is losing patience with its French investments, Express, Etudiant, Point de Vue. After tough social plans, they could be put on the market. Same story with Amaury familyIt is of two minds about a partial or a total sale of a fairly prosperous group that suffers from its press branch, Equipe and Parisien.

What seems to happen is that a great part of the press goes to businessmen, tycoons looking for a good image but not relly interested by the job. The tragedy of the press is that it does not produce adventurers any more. They are all trying their luck in the digital world.

Bezos speaks on the Washington Post

In the september 3 issue of the Washington Post, Jeff Bezos speaks for the first time about his vision of the Washington Post he is going to visit to morrow. Needless to say, the man is cautious. He admits he is not an expert of the press and has no magic bullet to cure instantly the ailing newspaper.

Still, some of his comments exhibit a lot of common sense. He stresses that the Post cannot go down the drain indefinitely. A business must, at some point thrive and grow unless it becomes irrelevant. However the digital competition for print newspapers is punishing and the paywall is fragile. As he says, when the Post publishes in print version the result of a lengthy and costly investigation, it is immediately summed up and dispatched on many free websites. For the internaut, there is no reason to buy the daily if he gets for free the main elements of the topic. And yet, one has to find funds to finance the work of the journalists. In other words, digital subscription is not the global remedy, it is part of an elusive solution.

Bezos does not explain how this dilemma can be solved and I am not sure there is an obvious solution. It is likely he is going to try and the man is patient but what will happen in five years?