With Severe Hemorrhaging Worsening, Cardiac Arrest Nears for Some French National Dailies

By Philip M. Stone

GENEVA, Switzerland, September 30 -- If anyone was ever in doubt that newspapers that fail to satisfy their readers will lose them, then look no further than France.

The most recent year-on-year circulation numbers for the French national newspapers are dismal with France-Soir leading the decline with a 13.7% drop. At Le Monde, one of the world’s most prestigious titles and considered France’s newspaper of record, circulation dropped 10.5% and management announced plans for a 12% reduction in staff (90 to be fired). At Le Figaro, the voice of the French upper middle class, circulation dropped a comparatively modest 3.9%, but the financials were so bleak that Robert Hersant, who had bought the paper only in 1975, sold it to Serge Dassault, head of the Dassault aviation empire. Dassault has his own ideas on what should and should not be reported about French business interests causing even more public uproar at the newspaper. This week he appointed a new editor-in-chief.

It is not that the French don’t like to read; it’s that newspapers are not their favorite traditional read – magazines are. France has the world’s highest magazine readership per 1,000 inhabitants with eight times more magazine readers than newspaper readers. And while the country suffers one of Europe’s lowest newspaper readership, the provincial newspapers are holding their own – it is the national newspapers that are in the most trouble.

But if the product is right the French will buy. L’Equipe, one of the world’s most outstanding daily sports newspapers, had European football tournaments and the Olympic Games to concentrate on and saw its circulation grow by 11.8%. Les Echos, a financial newspaper, saw a slight circulation increase. So what they do that the other national dailies don’t? The common sense answer is they concentrate on what they do best and give their readers what they want.

LOSING TOUCH WITH PROVINCIAL READERS

There is a suspicion that the nationals have lost touch with their readership. For Parisians the nationals are an interesting read, but if you live outside of Paris you could seriously question whether the paper was for you. That could be one reason why provincial newspapers are doing rather well.

Also the nationals must exist with the least efficient distribution system in Europe. Most nationals have a deadline for their first editions destined for the provinces of around 4 p.m. with possible exceptions for late-breaking bulletins. So the football game that night may not be in the provincial edition of the national while it will be in the local provincial newspaper. Which would you buy?

The French advertising market is still very sluggish so if it were not for substantial French government subsidies the very existence of many national publications would be in doubt. Subsidies take various forms from 50% reductions in communication charges, to cut-price mail delivery, cut-price travel, providing partial building funds, keeping newsprint costs low, 0 corporation tax if the money is reinvested within five years and 0 VAT. It even keeps the news agency AFP in business via very substantial government contracts, thus providing for a low cost national news agency.

One can argue on economic terms, and EU policies, whether such subsidies should continue, but there can be no doubt that without them the national newspapers, already dripping in red ink, would go into cardiac arrest.

The economists might say “No bad thing”, but it was Napoleon who opined, “Four hostile newspapers are more to be feared than a thousand bayonets!” Another problem with the nationals today is that if Napoleon was in power he would not fear them.

LITTLE GOVERNMENT CRITICISM

With such subsidies in their hands, the national newspapers are loathe to criticize the government. Last year the daily La Croix fired a reporter who wrote a book severely criticizing the French media for following as a matter of policy the lead of the French government in opposing the US-led coalition invasion of Iraq.

Publishers also must deal with very strong labor unions. The unions have not been “broken” as they were by Rupert Murdoch in the UK. They often decide, by walkout threats, what work practices, if any, may be changed and how. When AFP, which loses substantial amounts each year, tried to modernize itself and become profit-oriented a few years ago the unions simply would not allow it and the plan never saw the light of day.

So bottom line is that the national press has to get its economic house in order, and at the same time it must transform itself into a “must read”, and decide whether their readership is just Paris or is it the entire country?

The readership is there. The Metro and 20 Minutes tabloids have success with the young and being free doesn’t hurt. The nationals complain there are not so many kiosks any more selling their papers, but that didn’t stop L’Equipe’s dramatic circulation rise, nor did it hurt magazine circulation even though magazine bottom lines continue suffering from poor advertising.

The French buy Paris Match all over France. It is strong on pictures, strong on sex, scandal and sports and sold at the same kiosks that sell the newspapers. The public knows what it wants and buys it in droves.

Now if only the French had a national that severely criticized the government when it had it coming, and had a good dose of sex, scandals and sports.

Could The Sun ever shine in Paris?

It's Not Dan Rather, Rather It's US Journalism

By Philip M. Stone

Geneva, Switzerland, September 29 -- The fuss about RatherGate -- US news icon Dan Rather getting a slam at President Bush wrong -- is not so much about a veteran newsman making a mistake as much as it is about the public’s trust in US journalism. Bluntly, if you can't trust Dan Rather, then whom can you trust?

To understand how serious this is in the US you have to understand the way US journalism works: If you make a mistake you own up to it, make a correction and move on. In Rathergate, Rather said for some two weeks there was no mistake, his story, he said, was based on an unimpeachable source. Two weeks later his network said it could not prove the allegations and the story fell apart. The network and Rather apologized. That's not what millions of Americans expect from a man they let into their homes every weeknight and with whom they have built, over some 30 years, a bond of trust.

The unwritten rule between the US public and the US media is that the public expects stories to be truthful and without bias. That means, in addition that the facts are true, that the reader, listener, TV watcher, is not supposed to be able to tell from a news story the political belief of the writer/correspondent. The story should be played straight down the middle, backed up with specific quotes whenever possible, with all sides given the opportunity to comment. On a political story about the President during a US election this is doubly so. Presented with such facts, and assuming the media keeps to its trust that it is following the rules, then the public filters the facts and makes its own opinions.

Lose the trust and the public will look elsewhere, and that’s not good for business. CBS doesn’t want its news viewers going to NBC. The New York Times doesn’t want to lose readers to the New York Daily News. And that is why the media, as a business, is so worried about RatherGate.

GALLUP POLL

A recent Gallup Poll taken after Rather had made his report but before the apology, indicated the US public's trust in the press had reached its lowest point in some 30 years. The newspaper trade publication, Editor & Publisher, rather unkindly headlined its story, "Thanks, Dan: Gallup Finds Trust in Media at New Low". It could have just as easily headlined it, "Thanks New York Times, Thanks Washington Post, Thanks USA Today ..." for recent major editorial scandals within those publications. The point is the trust between the US media and the US public has received some severe jolts, and the blame lays squarely at the media's door.

The anchors at the three major US networks have been around a long time. Rather, at 73, is the oldest; Tom Brokaw at NBC is 64 (retiring in December,) and Peter Jennings at ABC (just turned 66) are still reading the news every weeknight. They are there because the public has gotten older with them and they trust them. The news division is an important revenue producer, and the popularity of the news anchor weighs heavily in that equation. Never forget that no matter how much journalists think they are providing a service, their masters know they are running a very successful business operation. And it is business rules that apply.

Those outside the US may not understand (or believe) the US system relies on such impartiality. They listen to an American news story on an all news station and they believe they detect bias; they read an American newspaper on the web and they say they know what the writer "really" thinks. Maybe, maybe not, but in truth US news organizations do work very hard to keep such bias out of their product, although when they get into stories about supporting the troops in Iraq or athletes at major sporting events those editorial lines do get blurred.

IT'S DIFFERENT IN EUROPE

Europeans, on the other hand, live in a different media world where opinions are rampant within the news pages. But you also know beforehand what you are getting. In the UK, for instance, you buy the Guardian and you know you are getting a "Labour" point of view; buy the Daily Telegraph and you know it is "Conservative" You understand the way things are written; indeed you buy the publication because you know of the way it is slanted. You know you will seldom find a correction unless someone has threatened libel and has a strong case!

With Europe's broadcasters it depends on the country. In the UK, most governments – Labour or Conservative -- have had their battles with the BBC but usually kept their hands off the organization over the years allowing the BBC to build an international news brand second to none. But the BBC was hung, drawn and quartered this summer by the Hutton Report, based on a public inquiry set up by the government which looked into the BBC's reporting that key allegations in the UK government's Iraq dossier were wrong even though the government insisted the BBC was wrong.

The BBC stood by its story, but because of the suicide of the BBC informant a public inquiry was held, and the government was cleared. The BBC was wrong. The BBC chairman, director-general and the journalist who broke the story all fell on their swords although the news management survived. The unanswered question is whether BBC investigative reporting of the government survived? BBC editors say it has, with new rules in place. Proof will be in the pudding yet to come.

At the other end of the scale, the Italian government sticks its fingers continually into the operations of RAI. A recent satire show made fun of Prime Minister Berlusconi. That show is now off the air.

So, back to the US, when you have Dan Rather getting it wrong, or scandals at the New York Times and Washington Post -- two of the most respected newspapers in the US -- admitting that journalists made up stories -- then the media has only itself to blame if it is losing its public.

Before RatherGate it was thought Rather would continue as CBS anchor until he decides he had had enough (and there were no signs of that). Today, the unspeakable is being spoken and the media questions whether Rather can survive or will it be other heads to roll. Ultimately it will be a decision based on advertising numbers. CBS has appointed its own "Hutton Inquiry" in the form of Lou Boccardi, retired head of the Associated Press, and Richard Thornbergh, former US Attorney General. CBS promises their report will be made public although, unlike Hutton, their inquiry will be private.

CAN RATHER SURVIVE THE RATINGS FALL?

One can expect the report will highlight various failings and management will agree to whatever procedural recommendations are made for the future. But the important CBS decision -- does Rather stay or go -- will rest on how the public continues to perceive Rather. If polls, ratings, and private soundings say he still has the public's trust then he remains. If they show he is a liability to the business then he's gone. If there is a need for a sacrificial lamb -- well that's why news divisions have a president.

The early soundings indicate Rather could be in trouble. According to the Nielsen ratings service, Rather's nightly news program ratings have dropped 10% in the past year. Since the Bush story, in the top 10 TV markets Republican viewers have apparently deserted the program in droves with ratings plunging. And in New York City, the country’s number 1 market, Rather’s program scored dead last on one day against all competition, including cartoon shows.

Lower ratings mean lower advertising dollars. Those are the CBS Reports the network will most likely review with the greatest care.

Size Does Count -- Small is Better (in Newspapers)

By Philip M. Stone

Geneva, Switzerland, September 17, 2004 -- The news that the once mighty Blick has been dethroned by a free tabloid as newspaper circulation leader in Switzerland is sure to have ramifications far outside Swiss borders. If ever there was a case of "If it can happen there, it can happen here" then this has to be it.

The free tabloid, 20 Minutes has only been on the Swiss scene since December, 1999. It is aimed at the young commuter with some 30 pages of short news items and lots of advertising suggesting where the reader should spent his/her money. Take a look here at their web site and you'll get a very good feel for the type of product it is (Automatic translate from Google, for instance, does an adequate job putting the site into English).

Blick, owned by Ringier, Switzerland's largest publishing house, couldn't compete on price but management did decide they could compete on size. And thus in June, after a six-week trial of printing both broadsheet and tabloid, it decided size did matter, and based on reader preference became a tabloid only. Ringier has not yet said what has happened to circulation in the two months since only the tabloid has been sold.

Tabloid is marching all over Europe. The most remarkable transformation is in the UK where the Independent switched from broadsheet to tabloid in May after a few months of printing both sizes. Circulation has increased 18% to 261,000.The Times of London is undergoing a similar exercise although it continues to print both sizes, a costly affair. Both The Times and Independent faced an obstacle they didn't expect -- that media buying agencies objected to the tabloid advertising rate card. At the Independent a new rate card has now been agreed but the squabble means the expected 2005 breakeven target for the Independent may get pushed back.

That fight with the media buying agencies has hit The Times even harder with advertisers angry over the added cost of putting ads into both the broadsheet and the tabloid. The Times took a small step just this week to stop straddling the fence by saying that The Times in Ireland and Scotland will now print only as a tabloid. But those decisions affect small circulations -- in Ireland, for instance, it has just 4,686 copies ands in Northern Ireland some 6,300 copies.

But perhaps the most interesting market for checking out tabloid success is Germany. For several years now the German newspaper market has been in the doldrums -- advertising seriously down that in turn has led to severe cost cuts and not much investment.

Rumors abound that Axel Springer, publisher of circulation leader Bild Zietung, is planning a tabloid version (could that be why a new editor was appointed this week?) Springer has had good success with Welt Kompakti, a tabloid version of the well respected Die Welt. Welt Kompakti has most of the articles of the broadsheet, but much shorter; it is 32 pages and it is aimed directly at the young reader.

But in an interesting twist, Welt Kompakti is NOT free like 20 Minutes and the Metro newspapers. It sells for 50 Euro cents (60 US cents) -- a 60% reduction over Die Welt's price -- but at least Axel Springer is showing you can charge the young to read newspapers -- but not too much and it still must be an interesting read.

Springer has declared the tests in Frankfurt and Berlin a success and started distribution in Munich this week. Cologne starts in October and other cities are to follow.

In Frankfurt the very respected business broadsheet daily Handelsblatt has launched the tabloid News. The News will use very shortened stories not just from Handelsblatt but also from Tagesspiegel in Berlin. To relate to the young, the newspaper plans to incorporate Internet voting and mobile phone messaging. It, too, sells for 50 Euro cents (60 US cents), again making the break from giving such a newspaper away.

And in Sweden no less than five long- established daily broadsheets are to become tabloid in October, including Bonnier's Dagens Nyheter in Stockholm (its PM sister, Expressen, a tabloid, always outsold the morning Dagens Nyheter by a very large margin). Goteborgs-Posten and Sydsvenska Dagbladet will also go tabloid in October and another eight newspapers have announced similar plans.

Meanwhile, back in England, The York Evening Press used the oldest of news purveyors, the town crier, to march through the streets of York to announce news of its new format -- tabloid.

The old and the new truly march together.

copyright: Philip M. Stone

For Republication rights please contact: info@astonesthrow.ch

More more daily news and analysis about European media please see followthemedia.com

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Free Tabloid Scoops Swiss Circulation Crown

By Philip M. Stone

Geneva, Switzerland, September 14, 2004 -- The Swiss are prolific media readers -- some 97% of the population read at least one newspaper daily and 94% read magazines. And if they read a free newspaper then many will also read a second newspaper. An Advertiser's paradise.

But strange things are happening in the Swiss market, and if they happen here they will happen elsewhere:-- The free newspaper 20 Minutten (20 Minutes -- about the time it takes to read it) has surpassed Blick to become the country's highest circulation newspaper at 782,000 copies representing a 13% annual growth. That follows a 40% circulation growth the year before.-- Edipresse, one of the country's largest publishers, shocked the markets this week with a 9% drop in H1 net profit while the markets had expected an 18% increase. Sales were down 2% in Switzerland and the overall figures would have been much worse but for strong sales success with its properties in Spain and Portugal.

So what does this all mean?Free newspapers are here to stay and they will continue to eat away at circulations of their comparable paid circulation papers. I doubt anyone thought the entertaining Blick would ever lose its daily circulation crown -- except perhaps its publisher, Ringier -- Switzerland's largest -- which turned Blick into a tabloid a few months ago (If you can't beat 'em, join them!).

It's not that Blick did that badly, circulation dropped some 10,000 during the year to 736,000, but 20 Minutes did amazingly well in a still very difficult market and added some 90,000. But will 20 Minutes continue to pull away?

It needs to because 20 Minutes depends entirely upon advertising for its revenue, and is said to still be awash in red ink, whereas Blick is in the black. But with 20 Minutes taking the circulation lead and by being able to charge higher rates for its advertising it will be an interesting to see how the agencies play this one.

20 Minutes follows the Metro style -- some 30 pages daily, of short national and international news stories, entertainment, sports and consumer affairs. Its readership is young and the circulation increase indicates the newspaper answers the information needs of its audience (and no doubt the price is right!)

So will free tabloids rule newspaper circulation globally? No. But they are going to steal away those readers advertisers most want their hooks into -- the young, free-spending, out for a good time guy and gal. And the truth is that while newspapers have been doing surveys for years on what their readers want from them, and everyone agrees, "Oh yes, we must go after the young affluent reader", the changes made from those surveys have been miniscule and seem to have focused more on style rather than substance.

As we said at the beginning, the Swiss are prolific newspaper readers and it is very likely many will read a tabloid (free or otherwise) and still buy another newspaper. But will that happen in less affluent countries or within cities with declining reacdership? Doubtful. Young commuters will be happy with what they get for free and if the advertiser wants that reader there is only one place to go.

The Swiss newspaper market is still weak. Most predictions are for the overall Swiss economy to grow by 2% in 2004, yet Edipresse advertising income dropped nearly 4% in H1, 2004 compared to the same period in 2003. There are few signs of improvements until 2005. Edipresse explained away its poor showing by saying it had high product launch costs and was investing heavily internationally for the long-term future -- and their international business looks quite healthy -- but its turnover in Switzerland showed a 1.7% decrease. It's a similar picture in the US with many newspapers seeing little, if any, advertising growth this year.

As Edipresse wrote in its annual statement, "It is advisable to be cautious about the outlook." Or, put into plain English, as we wrote in an earlier column directed at the publishing industry, "You still need to keep those spending floodgates closed."

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Traditional Media Still Preferred for News Than the Internet

By Philip M. Stone

GENEVA, Switzerland, September 1, 2004 -- Back in the days when New Media was THE buzz expression, there were a great many pundits declaring the end of traditional media as we knew it and that within just a few years the world would rely almost solely on the Internet for written news. The latest research by the Pew Internet & American Life Project today suggests that just plain is not so.

Traditional media lives and thrives. Yes, people certainly get some of their news from the Internet, but according to Pew, 45% of American Internet users get their news online and offline, with just 22% of that group accessing news more often online than off. Indeed, some 71% of Internet users get their news more often from newspapers, radio and television than they do online.

Sure, when a big event breaks, news internet sites can crash because of the heavy volume. But day in and day out the world still depends primarily upon the traditional media for its news.

At a World Association of Newspapers annual meeting in Amsterdam held at the height of the New Media boom at the turn of the century, Michael Bloomberg, head of the financial information agency that carries his name (but before he became the mayor of New York) had the assembled group of global publishers and editors eating out of his hand, telling them how the news business was going from one strength to another. But then he dropped his bomb -- as far as he was concerned the only thing newspaper publishers were really doing was killing trees needlessly! Within a few years, he suggested, the daily newspaper would no longer be a part of our lives.

I don't recall ever seeing a speaker lose his audience as quickly as Bloomberg did with that one line. But Bloomberg was not the only news executive to think that way.

In Reuters, the folks who spearheaded the New Media business from New York, and were being very successful at it, felt exactly the same. At a major meeting of global media heads held in the Reuters boardroom in London the plea was to turn all of the media business attention to New Media and to basically put traditional media into "care and maintenance" -- an expression which meant give it as little attention as possible.

That debate ended when yours truly grabbed a copy of the morning newspaper in his hand and told the assembled executives "If for no other reason, daily newspapers will continue to thrive because when I go to the toilet its is my morning newspaper I take with me and not my PC!" And off I went, newspaper in hand. Lots of laughter but the point was made and we moved on. But it was close.

Interestingly, traditional media has played it smart over the past five years, adopting a "If you can't beat them, join them" strategy. Within the list of the top 20 internet news sites in the US today you'll find Gannett Newspapers, Knight-Ridder, New York Times, Tribune Newspapers, USA TODAY, Hearst Newspapers, and the Washington Post, plus several major broadcast organizations.

But don't lose sight that it is the traditional product that most people still prefer. One of the main purposes of the Internet site should be promoting your traditional media product. Often it seems as if the two positions are reversed. It is the traditional newspaper, radio or TV station that people rely upon for most of their daily news fix.

Don't be surprised at the statistics showing internet usage is up, internet advertising is up, and the forecasts look good for the future. That's all true, but that doesn't mean that's happening because of news coverage. The statistics show news is not nearly as high as you might think as the reason people go on the internet (and of all the news they do look for the number one category is weather).

In these days where traditional media advertising revenues may be down, newspaper circulation may be down, and even viewers may be less, don't use the internet as the scapegoat for those declines. The traditional media audience is still there -- they just want an overall traditional product they find meaningful and with which they can identify.

There's more life in the old traditional dog than you may think.

For more media news and insight see followthemedia.com

copyright: Philip M. Stone

For republication rights please contact info@astonesthrow.ch

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