The J-curve is an economics metaphor, a way of saying things will get worse before getting better. That’s the prospect for the global print media sector.

For the American press, advertising revenue keeps dropping at a steady yearly rate of 12% to 15%. No industry can withstand a sustained double-digit decrease of its core business. It is not erosion, it is a collapse. And since advertising represents 70% to 90% of the cash-flow for US dailies, the sense of urgency is morphing into panic. Of course, some components of this decline, such as the credit crisis shock wave, are specific to the American market. But we can consider the American market as an advanced indicator for the industry. With this in mind, watching the reactions of two opposite cultures, US and France, could be enlightening.

The US industry was slow to react at first. But, now, the pace is accelerating. For the first six months of 2008, 4494 journalist positions have been lost in the United States. The latest busload was announced last week at the Los Angeles Times where 250 staff members, including 150 journalists will be soon gone (and the number of published pages will drop by 15%). No doubt the shrinkage at the LA Times will spread elsewhere.

The press is now in “survival mode” as an analysis puts it. Big newsrooms like the New York Times (staff of 1400) will soon be history. The market simply can no longer sustain such media battleships. That’s sad for the great trade mystique, but there no time for hand-wringing. We must instead tame and ride the shift, and save what can be saved. The US will be much faster at the restructuring game than Europe. Downsizing will be more decisive and quicker. In less than a year, we already went from a hiring freeze, to buyouts of contracts, to mass layoffs. That’s sad, brutal, unpleasant, but it will clear the way for the major shift ahead. And most American companies — as long as the financial market do not breath too much down their necks — will be left with sufficient cash to invest in new, diversified, more agile kind of media (and yes, for bulk of it, much shallower…).

In a country such as France the course of events might be different. Let’s turn, for an example, to a recent report on the evolution of the French print press. Jean-Marie Charon, a well-respected French media scholar, who also happened to be fiercely independent from the ever-present lobbies of the trade, led the working group. (Disclosure: I was a member of the group, it gathered here and there for nine months or so ; I kept quiet until we found out the report was widely circulated).

To make it short, the report’s conclusions rely on two scenarios: one soft, saying the press will somehow mutate, co-habit with on-line developments, but the basic structure will remain with some refocusing. The other scenario describes a major shift toward the digital media, with some casualites. New breeds of journalists with digital skills should emerge; they will contribute to the reinvention of journalistic “genres” suited to the Internet era. By force, today’s players will adapt or face extinction, as agile pure players will wait in ambush, ready to take over the slots left undefended. Drafted months ago, the reports conclusions appear to be strengthened by ongoing industry events.

Now, guess what is happening to this report? All the lobbies you can think of have obstructed its release. For a start, publishers were outraged. Some old trade fogies contended it was out of question to publish a scenario featuring such an industry upheaval. Bad timing, they said, as the press gathered its rags and prepared to beg the French government for another shot of taxpayer money (in France subsidies already account for 10% of the revenue for daily newspapers). Next September, President Sarkozy will hold a national conference on print-press. The shindig is loftily dubbed “Etats Généraux de la presse”, this is a shameless historical reference to the times when French kings held big public debates to address a national crisis. You see, we are right into the twenty-first century. Every old (and no so old, unfortunately) press baron is getting ready for the event, rehearsing sob stories, thinking of ways to shame a complacent government into “one last dose” of life-support funding.

That kind of French “corporate welfare” is not a stimulus for change. Neither are the unions. Technical workers and journalists are on the same page — no release of the report — but for others reasons. They refuse to even look at recommendations for drastic change of their status. Fact is, with a few exceptions, French newspapers executives and newsrooms managers are still “digital-adverse”. This is is great news for the media pure-players to emerge in the coming months, but no so great for the future of the French print media.

Not every European country suffers of such bad alignment of planets. Nordic countries have been able to reinvent themselves quite quickly thanks to four factors: the big players enjoy a controlling in their market, resulting in solid financial health, in having the means to make changes; a cultural long-term approach, also allowed by the capital structure of their media groups; an obsession with the training and the intellectual openness of their managerial elite; and strong and disciplined leadership.

Countries that yield to corporatist lobbies and rely on government charity will take much longer to adapt. For them, the bottom of the J-curve is still far, far away. –FF