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Redefining journalism

With the violently agitated context of so many platforms and of a potentially unlimited supply of agents, how do we update the definition of journalism? Where do craft or trade begin, where do they end? Inevitably, the profession reacts by circling the wagons, hoping to hold its own against hordes of writers now fragmenting what used to be cozily monolithic, easily understood audiences.  This is the time, more than ever, to revisit notions such as news reporting and news treatment.  This rethinking can’t be centered around yesterday’s corporatism, or legal definitions.  Instead, we must look at the following three concepts:
-    ethics
-    practices
-    training
We could also mention types of journalism, nature of the players, media… But, for today’s discussion, these are just sub-chapters.
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The end of Motorola?

Once upon a time, Motorola was the king of cell phones. AT&T invented the cellular network, Motorola, already a leader in radio technology, designed the mobile devices and, in 1983, introduces the Dyna-Tac, the first of a long line of clearly superior products, all ending in Tac.  In the late eighties and nineties, MicroTacs and StarTacs were musts for Silicon Valley geeks and MBAs alike.  Motorola’s prowess was, in fact, much wider, ranging from NASA communication equipment to microprocessors (6800, 68000 and PowerPC families) and networking equipment.  The company even made yet another name for itself by inventing the Six Sigma quality improvement processes.  Motorola was a widely admired electronics giant.  Was. More

News websites: More bucks for the click

Here’s the tragedy of our business model: Swelling demand, shrinking revenue. News is much in demand in these turbulent days.  The number of viewers is on the rise.  And, at the same time, the money we manage to extract from these swelling audiences is shrinking inexorably. We are about to pay the price — so to speak — of our dependency on the advertising market, one that is highly sensitive to deteriorating economic conditions.   If, during 1929’s Great Depression, the cost structure of media had been what it is today, how many news organizations would have survived to report it? More

Android: First Impressions

Let’s forget, for a moment, the sublime irony at the end of the W years, the right-wing neocons’ parting gift: a socialistic, state-owned financial system. Too depressing.
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Instead, let’s take a first look at Android, the latest entry in the most dynamic segment of the high-tech industry, smartphones.  (The nice folks at T-Mobile will immediately object, it’s their phone not Google’s, but tell that to users, it’s Android, it’s the Google phone.) More

Paid-for-free papers: the mirage of the hybrid models

In less than five years, major newspapers will be giving away more than 50% of their copies. We call this the hybrid model. It works like this: a paid-for newspaper (one posting a price on its first page) with a vast portion it circulation distributed in selected – that’s the key point — areas for free.
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I started writing this column last Monday in the Copenhagen airport while waiting for my connecting flight to Oslo. I was able to grab a copy of the International Herald Tribune for free in an airline courtesy rack.   All the while, fifty meters away, a newsstand sold the very same paper for 20 Danish Kroner, approximately €2.68 Euros or $3.60 dollars. (Just for context: the New York Times charges $2.80 a week  for weekdays home delivery in Manhattan).
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Where is the catch? Actually, the IHT does just what many other papers already do: selling papers to airlines to reach business travelers. And the higher you go in the air travel social ladder, the more free papers and magazines you get. Business hotels do the same.  But for airlines, the deals are well structured, mostly for logistics reasons: putting the right number of copies in airport gates and on-board is way more complicated than dumping stacks in a Hilton. Numbers are closely held but, usually, airlines buy newspapers for a fraction of the face prices. For the International Herald Tribune, it must be around 10% of the official price while others get around 20% of the same. But, in many cases, cross advertising deals and logistics billing end up offsetting the entire price of the paper. Then, we can safely say that any paper you find while boarding your plane is 100% free from the publisher’s perspective.
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Why are publishers paying such a high price to have paper delivered on airlines? Two reasons: reader attention and demographics. In this context, there are no official studies for daily newspapers or news magazine.  But we can derive a few trends from the in-flight magazines industry. According to a survey made in 2006 by Arbitron (PDF here), 80% of travelers have read an in-flight magazine in the past month. During each flight, the time spent reading is 31 minutes — that’s about the time spent daily by a reader of a national newspaper in Europe. Again, this is for a magazine, nice and glossy, that just happened to be “in the seat pocket in front of you”, but with a rather shallow content. For a newspaper you actually choose to pick-up at the gate, the reading time and emotional engagement is likely to be higher, especially on long-haul flights.  Now the demographics: 72% of such readers have an annual household income higher than $100,000 and 27% higher than $200,000. An attractive target indeed.
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How big is the airline free distribution? That’s a good question. Free or almost free distribution is buried deep into audit circulation data. Let’s have a look at the International Herald Tribune figures. As a Paris-based newspaper, the IHT files its circulation data to the French audit bureau of circulation (OJD) even for its global sales.

Here are the key figures (rounded) for the full year 2007:
-    Total circulation: 242,000 copies
Breakup per zone:
-    Europe: 57%
-    Asia: 38%
-    Middle east:  2.5%
-    Americas: <2%
Breakup by type of circulation
-    Individual sales: 44%
-    Third party paid circulation: 38%
-    Non paid circulation: 18%
Now, the OJD report shows that in the “Third party circulation”, airlines account for 60% and various “hosting” (than includes hotels and corporate sites) for 36%.
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Well, you get it: more than 56% of the circulation of The Herald Tribune is actually free. (That is all third party, 38% + the 18% admittedly non-paid). And if we apply the same calculation to the French press, we get, as a real free circulation:
-    17 % for Le Monde
-    27 % for Le Figaro
-    37 % for Les Échos (France’s main business daily)
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Hence the question, how to implement the idea on a much larger scale? How to reach a bigger chunk of high value audiences using the same technique?  “Than can be summed up in one idea”, says Bruno Patino, former CEO of Le Monde Interactive, who likes to pitch the concept of paid-for-free newspapers: “The audience I do want, as a publisher, gets the paper for free; the rest have to pay for it”. This principle is applied by an increasing number of newspapers such as La Repubblica in Italy, El Pais in Spain, Le Figaro in France and, of course, the Herald Tribune (eventually to be merged with the New York Times as their websites will soon be). These papers currently give away about a third of their circulation.  My prediction is this proportion will reach the 50% mark in three to five years.
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The hybrid model bumps against two limits, though. The first one is the fit of the product to the target audience(s). OK, giving away a business newspaper to a business reader on a flight between London and New York or in Sheratons makes sense.  But for most general news publications, the goal is to cultivate three types of demographics: young, women, and “urbanites” (those who live in big cities and spend well). Problem is: reaching them with mainstream newspapers doesn’t work, even (or especially) free ones.  In France or in Spain, in places such as universities where several newspapers stand side-by-side, the ones who go first are the quality free papers such as 20 minutes, Metro, or Qué, which are designed precisely for young urban people of both genders. (Having said that, it is probably somewhat worrisome that student don’t pick-up newspapers with heavy world affairs or economics coverage, but that discussion is for another day). Fact is: we know that the “one-size-fits-all” doesn’t work in the media sector — especially as audiences become increasingly segmented). At least it won’t fly without a major product adaptation and segmentation.
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The second limit is the social approach of the news business. Giving away a quality paper in affluent universities, trendy places, while, at the same time, asking a young person leaving in a below-average neighborhood to go to the newsstand and pay for the paper, is to say the least, disturbing.  Of course, there is the option of “you do it, but don’t say you do it”. This is even more cynical. Some will retort that free newspapers have been doing audience selection by optimizing their distribution maps for a long time. Right, but it was done for a much wider audience: in the greater Paris area for instance, the free quality daily 20 Minutes reaches 1.57m people, the second free Metro 1.37m,  compared to 0.8m for Le Monde, 0.5m for Le Figaro and 0.3m for the business daily Les Echos). Plus, free papers are mostly read by commuters, so their social penetration is unparalleled.
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There is no argument: newsmedia are not philanthropic institutions. But it is also undisputable they carry out a social function in their community. This function remains more important than ever as media become more interactive, more conversational. And it is part of the monetization process. By making a caricature of the audience selection process, this social function will wither away. –FF
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Software: how do you compete with free?

That’s the question Steve Ballmer, Microsoft’s CEO, is trying to answer every morning when he goes to work. On the server software side, Windows Server is doing well, especially with the Exchange e-mail server and the unheralded but very good collaboration server, SharePoint.  These products have matured, they’re relatively easy to set up and manage by IT organizations.  The Exchange component  is a spectacular success: it manages e-mail, contacts, calendars for hundreds of thousands of organizations all over the world.  Even Apple finally embraced Exchange: the iPhone now syncs well with Microsoft’s server and the next version of OS X promises “native” Exchange support.  In plainer English: Apple’s Mail, Address Book and iCal programs, for example, will sync with Exchange “out-of-the-box” just like the iPhone does.  (This will be a relief to suffering Entourage users.  Entourage is Microsoft’s own Outlook sibling on the Mac, but it is a poor relative and lacks Windows’ Outlook depth and polish.)  Seeing that Windows Server generated more than $20 billion last year, one is tempted to think everything is going swimmingly. More

IMPORTANT NOTICE TO SUBSCRIBERS

A significant number of issues of the Monday Note are caught by anti-spam filters, especially in corporations. We are investigating the problem.

In the meantime, you can “white list” — i.e. authorize as an acceptable sender — the following address:  frederic.filloux@mondaynote.com by adding it in your address book

Thank you  –FF

Media: the big squeeze

Last week, the most quoted terms in conversations with media people were: “budget revision”, “looming cost cutting program” (in France, many newspapers just underwent serious ones), “plunge in advertising revenues by year end”, and so on. Of course, not all media outlets will have a bad year; some have done well in the first semester — at least in Europe. But everyone is bracing for a tough 2009. Many media execs, though, think the last thing to do is act like a deer caught in the headlight; they claim to be — still — moving forward with developments. Indeed, this is the time for more carefully managing our businesses — not for panic or paralysis.
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Looking at a broader picture, newspapers and online medias are likely to be squeezed in two ways. First: the advertising exodus. Short terms ad contracts are the easiest ones to cancel; in some markets, buying habits further exaggerate this predisposition. There, media buyers rely very little on analysis, mostly on the flavor of the day; they tend to follow the crowd. I’m still perplexed by the abysmal gap between the deep research media invest in and the superficial ad buying process — I’m told Latin countries are more affected by such behavior. Anyway, the ad depletion won’t necessarily be in line with the demand for news, substantially higher in these troubled times.
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Second: the impact of the credit crunch on an industry already in a painful transition. Going from traditional to new media requires large amounts of capital. At this time, fresh capital and credit are scarce and expensive (1 month LIBOR is now at 4.14% compared to 2.49% a month ago). This is a big problem for a media group such as Tribune Inc.; it is likely to default on some of its huge $13bn debt, a result of Sam Zell’s ill-timed LBO.  As for Gannet, it had to borrow €1.2bn from a $3.9bn unsecured revolving credit line in order to repay $2bn of commercial paper reaching maturity (and issuing fresh commercial paper is highly uncertain now).
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European media will feel that same pinch. In Spain, Prisa group (publisher of El Pais), wants to recapitalize itself for  €2bn ($2.7bn) via subordinated debt or warrants. The Polanco family, owning 70% of the group, will have to give up its current control — assuming the recapitalization goes through, which is less certain than ever. In fact, Prisa was in the process of selling its Digital+ unit for an expected €3.5bn. That, too, is now up in the air. In any event, Prisa won’t be in the best of moods to help rescue the French Groupe Le Monde facing a similar predicament. Le Monde expected to unload its biggest magazine, the cultural weekly Telerama, but potential bidders have evaporated since the cost of capital is now certain to exceed cash flow from the asset. (But Le Monde is almost sure to find some capital by selling junk securities to friendly banks or state-backed thrift institutions. So, why worry?).
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One thing is sure: American medias will emerge faster than European ones from the two crises, lower demand for advertising and higher cost of capital. For the structural challenge, see a previous Monday Note: The J-Curve of Global Print Press. More than ever, I believe the swiftness of the turnaround (which, unfortunately, goes along with corporate brutality) will prove to be decisive. One anecdotal illustration is a conversation recounted on Alan Mutter’s blog, in which an acquaintance calls him to float the idea of scrapping a daily’s worst day of the week. A weird concept to which Mutter responded: “How about trying something less drastic, more creative and potentially far more profitable?
— Like what?
— Like turning the paper into a themed edition aimed at a carefully targeted audience of untapped readers and advertisers… ”
And it goes with his ideas about modernizing newspapers. Definitely worth reading. (We are all working around the same ideas: slicing up an audience — that is structurally and increasingly erratic –  to get smaller but more valuable target groups).  No doubt: from a pure product adjustment perspective, the English speaking press is moving fast to reinvent itself. No doubt, again: casualties will be much higher than expected — especially after last week’s tailspin.
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The coverage dilemma
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The current crisis is not an easy one to cover. It is complicated, full of credit mechanisms technicalities, and macro economic considerations. On top of this, providing an overly pessimistic analysis could amplify the panic. For questions of cultural approaches to the market economy as well as editorial resources, coverage is much more thorough in the Anglo press than in the French one. In France, coverage is mildly adequate but stays too close to the surface: indexes (stock crash: good fodder), and the ritual “Are our deposits safe?” (Yes, absolutely).
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But, curiously, important questions get low coverage. For instance: European banks are no less vulnerable than American ones. Get this: in the US, outside Wall Street institutions, banks have lent 96 cents for each dollar of deposit, in continental Europe the level is €1.40 for each euro of deposit. The same goes for debt to equity ratio: European institutions are in worse shape than the biggests US bank. An eerily unpleasant similarity: the French minister of Finances, Mme Christine Lagarde, has the same depth of knowledge regarding the true exposure of their respective banking system as Hank Paulson does. None. As a matter of fact, BNP Paribas doesn’t have a clue on the real balance sheet of the Belgian bank Fortis it hastily acquired for a respectable €14.5bn ($20bn). When I asked a banking/insurance expert why BNP Paribas took such risk, he retorted: “They apply the following rationale: if they don’t go for it, one of their competitor will, and the market will penalize BNP Paribas for being too cautious. If it turns sour, BNP Paribas will go under as everybody else.  In the ensuing blame game, they won’t be singled out “.  Ah, the shared warmth of manure…
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Another subject receives almost no coverage in France: the upcoming collapse of the pension system. Slowly, painfully, over the last few years, the debate over shifting from an exhausted distribution-based pension system (today’s salaried workers pay for the retired ones) to a capitalized one (retirees get their pensions from their savings) had begun to gain traction. Even Left thinkers were about to convert and accept the notion the old system was no longer be viable. After last week’s world markets’ crash, this heated debate is gone for good: no one will defend a pension system tied to the financial markets.  Right or wrong, it’s a fact. For the public debt, consequences will be catastrophic. Which leads to another question: as Mexico experienced 20 years ago with the dollar, French public debt is now denominated in a global currency (the Euro). This makes a big difference: France (like any other Euro zone member) is no longer the issuer of its “own” currency.  In other words, it can no longer use the old trick of printing more money.  This will lead to cries of Lost Sovereignty.  But, consider this: California, an economy approximately as large as France, can’t print currency either.
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On the positive side, though, the crisis is doing an otherwise impossible job of educating the public on financial as well as macro-economic issues. Audiences of business papers and websites are skyrocketing. The spread of this knowledge will be invaluable to policymakers when the time comes to face an angry electorate and to defend the unpleasant choices we will all be facing.  The old demagoguery was: Less taxes, more programs.  This is now out of fashion.  At least for a while…  –FF
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“Cloud Computing is bad for you”…

So says Richard Stallman the father of the Free Software Foundation. He makes a simple argument: By using Cloud Computing applications you surrender your life (data) to some big company you can’t trust.  You’re no longer in control.  Conversely, if you keep everything on your (Linux) desktop, you’re the master of your own destiny.
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This is, to say the least, countercultural. The new and improved wisdom is “everything”, every application, every service will be delivered from the Cloud, a “server farm” somewhere in the world.  To be a little more precise, yesterday’s difference between the e-mail client application and the e-mail service is going away.  The browser becomes your OS (Operating System) through which the e-mail service (Gmail or Outlook Web Access) is delivered.  Even Photoshop will go this way: you store the original image in the Cloud and, through your browser, you navigate the universe of editing features.  You give an order, say crop a part of the picture, Gaussian blur, twist a color.  Then, the order is executed on the server, in the Cloud.  This uses much faster computers than your laptop and your browser gets the rendered result.
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This is exactly what Photoshop Express does. The old way local processed the image locally because you couldn’t count on the network bandwidth (speed) to ship back an updated image from the server each time you made a modification.  The local processor had fast access to local memory, performed the image rotation and the screen had similar fast access to the modified image residing in memory.  The ‘everything local’ (storage, processor, display) advantage hasn’t disappeared, but networks are faster, servers have more muscle (in most cases) than my laptop and we use smarter ways to pick which part of the image we want to send from the server to the browser.  Put another way, Photoshop in the Cloud isn’t a universal solution: graphics professionals will want a 30”screen, eight processors and 16 gigabytes of local storage.  But ‘the rest of us’ will find the Cloud solution satisfactory, especially if we can walk to any computer in the world, upload, edit and e-mail polished pictures without a local application, using Photoshop (or its competitors) as a service, not a desktop application.
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This is both an actual example and a valid metaphor for the new genre of application software delivered as a service (SaaS) from enterprise servers or from a Cloud Computing provider such as Google or Microsoft Live. Stallman will have none of this.  Interviewed by The Guardian, he counters: “It’s just as bad as using a proprietary program. Do your own computing on your own computer with your copy of a freedom-respecting program. If you use a proprietary program or somebody else’s web server, you’re defenseless. You’re putty in the hands of whoever developed that software.”
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The gentleman is opinionated, to say the least. A Google search on his name will produce a rich trove of strongly worded rants revolving around one idea: software ought to be free.  This hasn’t made him friends in companies such as Microsoft but Linux and its cousin FreeBSD, all related to AT&T’s Unix, have become indispensable components of modern computing.  Richard Stallman knows very well that, without the free software movement, there would be no Cloud Computing.  Amazon, Yahoo!, Google and most others run on free Unix relatives.
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Going back to the argument Stallman just made against Cloud Computing, it’s hard not to find parts of his statement either naïve or disingenuous. If you use proprietary software, he says, “You’re putty in the hands of whoever developed that software.”  The idea is that free, Open Source software, protects people against dirty deeds, manipulations from the authors of proprietary software.  Sounds ominous but, regrettably, Stallman forgets to offer examples of such bad actions.  Higher price, perhaps?  But the cost of ownership, that is training, maintenance and the like, dwarfs the initial price tag of software, be it on the desktop or on servers. Unlike an extraordinarily gifted programmer such as Stallman, most users cannot inspect the source code of their word processor or e-mail program.  As a result, the ‘protection’ afforded by ‘freedom-respecting’ programs isn’t as good for me as it is for him.
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There is more.  We no longer live in a disconnected computing world: we get e-mail, we look up Richard Stallman on Wikipedia. So, even if we sagely run spreadsheets or photo-editing programs on our desktops (the Cloud Computing giant Google offers a neat desktop Picasa 3 on Linux…), we have to communicate and we have no way to inspect the software that runs on the network.  Like it or not, we have no choice, we trust others with our data.  Bad things happen from time to time, but not to the point of killing the system.  Cloud Computing may or may not be The Future but doing everything on the desktop is definitely passé.
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Richard Stallman forgets a statistical truth: Trusting people get screwed sometimes.  Paranoid people get screwed all the time. –JLG
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Making €100 per inhabitant per year

Against all odds: In theory, there was no way for Frettabladid (the free Icelandic newspaper) to make its business model work. When its publisher (a local media group) launched the paper in 2001 it settled for two things that are the opposite of the conventional wisdom of the free press business: home delivery and copies shipped by plane to their destination. These choices where dictated by peculiar local conditions. The 300,000 Icelanders are mostly concentrated around the capital Reykjavik and a couple of significant cities are several hundreds kilometers away, with unpredictable road conditions. On the top of this, almost everyone is commuting by car. Early on, the managers decided their product has to be as good as the paid one — and better than pre-existing free dailies. “We stuck to the basics, said its editor in chief Jon Kaldal at last week Free Press Congress in Madrid. It’s about journalism, and scooping the competition.” Which the paper did.
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Now, the key figures:
-    103,000 copies of Frettabladid are distributed every day (weekend included), which is more than one third of Iceland’s population
-    the bulk of it is delivered in 82,000 homes, i.e. 87% of the 94,000 homes in Iceland
-    10,000 copies are distributed in what is called “neighborhood boxes”
-    11,000 copies in shops and gas station
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Advertisers understood quickly the potential of such penetration rate. From 24 pages in 2001,  Frettabadid has now 64 pages (half of it is editorial). Most of the ads (65%) are general brand type, 20% are classifieds and 15% are real estate and jobs.  “Our classifieds pages are more read than our sport pages”, jokes Jon Kaldal. With a 60% market share for print advertising, Frettabladid’s position seems robust.
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Or is it, really?
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In 2007, Frettabladid pulled-out a revenue of €30m — that is a hefty €100 for every man, women and babies leaving in Iceland — the country enjoys the sixth GDP per capita among the OECD members. (As a comparison — for what it worth — a dominant free newspaper such as 20 Minutos in Spain gets about one euro per citizen). In terms of profit, even though the owner of Frettabladid doesn’t breakup financial results, the 2007 margin was about 11%.  Was. Enter the financial crisis. Iceland, with a highly leveraged financial system, is hard hit.  Just to get an idea: the total assets of the banking sector have grown from 96% of the gross domestic product in 2000 to eight times Iceland’s GDP at the end of 2006. And the largest local bank is seven times more likely to default than the typical European bank. Predictably, the impact has been dramatic for Frettabladid: 50% of its ad revenue has evaporated since the beginning of the year. This year, the paper’s P&L will bleed red ink.
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The looming recession is likely to jolt all kinds of medias, whether they are free or paid for. In the United States, predictions for the fourth quarter are gloomy. TNS is forecasting the weakest holiday season in 17 years as all sectors cut ad spending According to Ad Week, money spent by Procter & Gamble, the nation’s top buyer, was down 8% to $1.6 billion; AT&T is down 16%; Time Warner, down 9%; Johnson & Johnson, down 12%; Walt Disney, down 9%  and Kraft Foods down 7%. And remember, contrary to the Euro zone, the US is not (yet) in recession.
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Media resilience will vary. The global downturn is likely supplemented by a flight to the performance-based advertising model. More than ever, brands will seek to maximize the bang for their rarefied buck. Media that will be good at measuring yields will do better than “shot in the dark” kind of. In that context, Google will suffer less thanks to its affordable text-based, traceable ad system. At the other end of the spectrum, TV is more likely to plunge. As for the print, paid-for newspapers are not good at measuring ad performances. In surveys, they tend to inflate their audience by multiplying the number of readers per copy. (In France for instance, there had been so much tweaking and twisting of audience measurement that absolutely no one gives any credit to the most recent official figures.  This, according to ad execs, will push down the prices even further).  Overall, a decline of 15% to 20% in ad revenue is not unlikely for 2008.
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The free press is in a peculiar situation. As Pr. Piett Bakker (by far the best specialist of the trade, see his blog here)  recalled at the Madrid conference, several markets (Italy, Spain, France) are already saturated with sometimes four or more titles in a single city. “A recipe for disaster” he said.  (He mentioned that, for the first time, the circulation of free papers is actually declining in Europe).
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Undoubtedly, the upcoming recession will accelerate the necessary consolidation of the sector (in other words, the weakest both economically and editorially will fold, some will merge, etc). Having said this, I tend to believe the free press has two assets that could attenuate the effect of a recession — only for the best of them. One is (again) the ad performance: much better that in the paid press (each time I’ve seen an advertiser doing a test based of performance, it scored high). The second asset being the distribution/logistic system. It not always known, but in many instances, free newspapers are much better at targeting and tracking audiences that the paid ones (which have a sick 30% rate of unsold papers every day). This has a tremendous value in itself and advertisers will certainly bet on it.  Having said this, I won’t follow the PressGazette website when it states that “Free papers defy downturn”.  OK, some British free papers such as City AM (in my view one of the best of its league) or TheLondonPaper are still in expansion mode (the former is launching new cities, and the latter enjoys record ad revenue), but 70% of the free titles are still not making profits, and will face hard times, as everyone else will.

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The Inimitable Gallic Way

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In France, press barons and the government are loading the guns for an upcoming offensive against the free press. On October 2nd, president Nicolas Sarkozy launched a national conference on print press. This event is called “Les Etats généraux de la presse écrite” (an historical reference to the times when French kings held public debates to address a national crisis).  The overall purpose is to rework a set of laws and directives issued in the aftermath of WWII. At the time, industrial resources (printing presses, newsprint) were scarce and the government had to step in order to guarantee an equal access to all publishers. What should have been a temporary stimulus plan became a sixty plus year-old de facto system.  Distribution was guaranteed for any publication (French kiosks are swarmed by mediocre unprofitable, short-lived publications) and above all, a closed-shop system has been granted to the main union, the Syndicat du Livre. Indisputably a generous social grant for its membership: in a French printing plant, the median salary for an unionized worker is  €46,000 € a year against €33,600 for a journalist (who is going to work twice as much). To make things worse, staffs are about twice what’s needed to operate a printing press. Altogether, French newspapers suffer from the most expensive production system in the world. The last decade of decline in the French newspaper sector has not seen any major evolution.  In return for the status quo, the main union has become quite cozy with the heads of media groups. Instead being agents of change, media moguls have secured long tenure in exchange for slow motion reforms. Now that the crisis has unfolded, everybody is turning to a government, which spend roughly one billion euro a year (10% of the industry’s revenue) in various aids.  And in the starring role, president Nicolas Sarkozy himself, with his usual demagogue posture.
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In his introductory speech, Sarkozy a set the stage against the free press (which, in passing, is also “free” of any subsidy): “It’s insane to believe that advertising revenue will one day pay for all information: free, is an abstraction, a figment of the imagination. It is the death of the paid press”. As a matter of fact, what is not an abstract view is Sarkozy’s carelessness with the topic. Had his staff done a fraction of the homework required for the subject, this is what they would have found:

-    Many of the best and most respected newspapers in the world such as the New York Times or the Times of India get most of their money  from advertising (respectively 80%and 90%).

-    The reunion of whiners invited last week at the Elysée Palace is giving away an increasing number of free copies. A rate of 30% of free distribution is not uncommon even for the national press.

-    The very same people are conspicuously sneaking a peek at a “hybrid model”, mixing the paid and the free, as do La Republicca in Italy or El Pais in Spain. (In Paris, if you happen to have lunch in the business district, chances are great you’ll have your free copy of Le Figaro).

-    A market without free papers doesn’t necessarily mean a healthy paid press sector. Take Germany for instance who forcefully rejected free newspapers: the average circulation of dailies and weeklies newspapers decreased from 31.4 million in 1997 to 26 million in 2007, a 17% decline. Furthermore, unlike countries that have significant readers (i.e. young) of free papers, young German readership is simply non existent.

-    Again, according to Piet Bakker, publishers of paid papers in fact control 55% of the worldwide circulation of the free press.
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And if any doubt remains about the anti-free press bias of this consultation, the chairman of this workshop is no one else than the fiercest opponent of the free newspapers concept. Bruno Frappat is the chairman of Bayard Presse group and the former publisher of La Croix, an excellent general news daily that enjoys both the highest level of public subsidies of any French paper (quite a competitive field in itself) and the oldest readership (above 65). Welcome to the new world.  –FF

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