Media 2016, new trends, new organizations

One can be sure of one thing: in 2016, there will be new upheavals in the media. In France, several groups are bound to move. Regional newspapers are in trouble and sales and mergers are likely. The departure of Michel Lucas, the aging chairman of Credit Mutuel means that Ebra, the chain of eastern regional dailies that belongs to the bank, could be put on sale, as it is obvious that the bankers from Strasbourg have not been able to make it a profitable business and a dynamic digital operator.

The same for group Sud Ouest. Its family owners are willing to let it go but the price offers are deceptively low.
Another process for Nice Matin. For the moment the daily belongs to its employees but it is running short on cash. Mr Estrosi the president of the Southern region is trying to find a new investor who could also be a political ally.

Another challenge for the 3 national newspapers, le Monde, le Figaro and les Echos. They must keep moving towards a global digital project. For the moment, the most successful is les Echos. Le Monde and le Figaro must be more assertive on a rigorous paywall and an attractive digital subscription offer. Still, it is obvious that France is lacking a major opearator in digital news and the Americans such as Vox, Buzzfeed, Politico Europe, keep coming. The only French success story is Mediapart but it must grow over its 110000 subscribers to survive in a very competitive world where Facebook and Google are more and more powerful.

Good luck for 2016.

New journalism, new practice

A recent seminar organized by the Sciences Po school of journalism with contributions from top Anglo-saxon actors showed how quickly the news scene is changing.

A master word is engagement. What worries major operators like the FT or the NY Times is the time spent reading the messages or watching a website. If a user retweets a piece of news without reading it, it is a total waste for the news provider. With the growth of mobiles that make now 50% of the audience, the risk is even greater. It is why the Instant Articles proposal from Facebook can be attractive. Facebook customers get the best articles from their favorite newspaper in a few seconds. If you don't wait for the loading, you have a better chance to read the text. However, some French operators like Le Parisien are reluctant. They criticize Facebook for providing very few data on the readership and data are more and more the future of digital media.

Google, Facebook main competitor has fully grasped the challenge. According to the head of their German research center, they start delivering for free very interesting data on most consulted keywords. British newssites received such a collection of data during the last British elections, a good way to assess the topics that interest the voters. Everybody knows that the social networks are fully informed about the behaviour of their hundreds of millions of customers, a precious  piece of information for news operators who lack the means to collect these data. It is getting more and more obvious that the delivery and the engagement for the news will have to rely on the all powerful social networks but as we know too, there are no free lunches. A big question: how the media will keep their freedom if they depend more and more on world giants.

Robot journalism is also on the list of priorities. In France, le Monde and le Parisien relied on the algorithms provided by the start up Syllabs to cover the last regional elections. Some editore are thinking of using them also for sports coverage. It will be another revolution in the newsroom even if it should allow more time for journalists to do indepth reasearch.

Canal Plus What can be done?

In my previous blog, I showed how precarious was the situation of the pay channel Canal Plus, facing a tough competition on its main programs, sports and fiction.

In this post, I shall attempt to provide an unsollicited advice to Vincent Bolloré, the powerful chairman of Vivendi and its subsidiary, Canal Plus.

It appears that Canal has already lost the battle in the field of sports rights. Bein TV, the sports broadcaster financed by Qatar with its illimited funds, is buying the main competitions in soccer, basket and others and Altice and Next TV have just bought into the British first league. Apart from buying Bein TV, an idea suggested by the daily Figaro that doesn't seem very likely, Canal risks to be marginalized.

However, there is still hope in the field of fiction. Contrary to  sports, Canal has more leeway to produce the best series and invest in top movies. Its teams have a lot of experience and have been very successful in the past. Of course, picking up the best directors and screen play authors is expensive but there Canal is in full command which is not the case with sports rights.

So, I think that Canal should change drastically a model which has been very profitable for 30 years but is not working anymore. The broadcaster should drop sports altogether and offer a full program of high quality fiction series, movies and documentaries. It would also sharply reduce its subscription rates from 40 to 20€ per month.

To put it in a nutshell, Canal Plus should follow the pattern of HBO in the US and, hopefully, win the competition with Netflix which is cheaper but has not an outstanding program.

Such a revolution would mean that Canal would lose millions of subscribers looking for sports only but it could reach a new public with a cheaper and more entertaining offer of fiction.

What is sure is that Canal cannot stay the way it is.

Has Vivendi a strategy?

Vincent Bollore, the powerful chairman of the Vivendi media group is facing a strategic quandary. He must answer rapidly to the challenge of Vivendi's subsidiary Canal Plus, the prestigious pay TV channel that enjoys 7 million subscribers spread in France but also in Poland and in Africa.

Since its creation in 1984, Canal as users call it has been a very successful French HBO, building its offer on highly rated movies and series and first league soccer matches. To have access to its premium menu, customers were willing to pay 40€ a month. Until recently the company was very profitable and brought a lot of prestige to Vivendi whose other branches are working in less glamorous fields such as music and telecom.

However its managers did not grasp in time major upheavals in the media field. These last 5 years, incentives to subscribe have greatly diminished. The offer of free channels has gone up to 23. Moreover, two new competitors have attacked the French market, investing in what used to be Canal's main assets. Bein TV financed by illimited Quatar funds offers for 11 € a month a large choice of sports competitions. Netflix started last year with American and French series for 10€ monthly. Its not a big surprise if the number of subscribers is going down at a fairly fast pace.

A few weeks ago, Vincent Bollore who took over Vivendi last year stated that he was willing to invest as much as 2 billion € to develop and improve Canal's offer. Yet, to everybody's surprise he let Canal lose the British soccer first league bought for 300 millions by Altice, the ambitious media group owned by Patrick Drahi.

It appears that by now Canal subscription rate is much too expansive. Bollore finds himself in the uncomfortable position of Air France chairman facing the low cost companies such as Easyjet. In television, as in Air transport lowcost is now the rule.

What can be done to save  French television major player? We shall discuss solutions in this blog's second part.

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.

Digital news service needs subscribers

A hard lesson learnt these last few years by the digital news operatives is that advertising is not the solution to finance an ambitious news service. This is why, Facebook offer of advanced articles from legacy media is well received by powerful newspapers such as the NYT or the Guardian who prefer to share advertising with the huge social network rather than trying a hopeless competition with it.

Still, there is nothing better than a loyal population of subscribers. To attract them, many media have tried a counter rule. Once you have read 10 articles during the month, you must subscribe if you want to read more. The NYT, the New Yorker or, in France, le Monde or le Figaro have used this system with some success.

However, the Finacial Times is working on a new kind of offer: if you want to try the FT, you can subscribe for one month, for 1 euro and then, if you re convinced with the quality, you will subscribe for the year, at a normal rate. The Washnington Post is going the same way with an offer of 19.99 dollars for the first year.

The FT considers that it is important to keep a readership  for the full publication and not for scattered articles you can also get on Twitter or Facebook. It is an intersting effort to justify the existence of a proper media, with its various chronicles while the users tend to pick up pieces of news all over the Web. The last figures show that the FT strategy works but one must never forget that people are willing to pay only for top quality. The news digital services are under tough darwinian laws.