Hot topics click link for more
Ever since big US telecom Verizon said it’s buying ISP AOL for US$4.4 billion speculation has brewed over the parts of AOL likely to be spun off or out. After all, “the principal interest was around the ad tech platform that (AOL CEO) Tim Armstrong and his team have done a really terrific job building,” said Verizon COO John Stratton to the spell-bound financial analysts. Verizon is certainly not excited by AOL’s 2.2 million dial-up internet customers. AOL’s “brand” businesses, including HuffingtonPost and TechCrunch, don’t really fit with mobile advertising technologies.
Seeping into the rumor mill, largely through tech-biz wired Kara Swisher at Re/code (May 13), is the possibility of big German publisher Axel Springer negotiating for HuffPo, most likely in some sort of joint venture. Arianna Huffington, HuffPo founder, sold out to AOL for US$315 million in 2011 and became chairperson of the Huffington Post Media Group subsidiary. Reports that she’s been talking to prospective investors suggest an existing buy-out agreement.
HuffPo has expanded internationally with the same basic business model of ad traffic driven by (mostly) low-cost blog posts and entertainment click bait. When it pays for journalistic content, it wins awards like, recently, a Pulitzer. The German edition is a joint venture with Hubert Burda Media, an Axel Springer competitor. The French edition is a joint venture with Le Monde. The Spanish version is a JV with El Pais, Australian version with Fairfax, Italian version with Gruppo Editoriale L’Espresso.
The suggested retail price for HuffPo is US$1 billion, far more than Axel Springer has paid for anything. It is now in the process of digesting the acquisition of real estate portal Immowelt at €133 million. And Axel Springer CEO Mathias Döpfner is a big supporter of paywalls, not part of the HuffPo business model.It's joint venture with Politico for a European edition is launching a subscription-only service at astronomical rates. But expanding that global footprint is enticing, which might explain Axel Springer publications Bild and Der Spiegel joining the Facebook Instant Articles plan.
Journalists at French national daily Le Monde voted this week not to accept Jerome Fenoglio as editorial director, seen as a slight against the current main shareholders. Under terms of the company’s organization journalists, collectively a minority shareholder, have approval rights on who gets the top editorial job. “We are in the unknown,” said an unidentified Le Monde journalist after the vote, quoted by public television news channel France 24 (May 15).
In April Le Monde’s main financial shareholders - Pierre Bergé, Xavier Niel and Matthieu Pigasse - rejected the three candidates seeking the job, surprising insiders and outsiders, and named M. Fenoglio, a long serving editorial employee and managing editor, as their choice. A year ago the proprietors forced out Natalie Nougayrède, who had served as both editorial and managing director for just a year, complaining about management style. Gilles van Kote has been acting editorial director since Mme Nougayrède’s departure and was one of the three candidates rejected specifically by M. Bergé, supervisory board president. Since the new owners bailed out financially strapped Le Monde in 2010 it’s had five editorial directors. (See more about media in France here)
Announcing its decision the editorial committee Society de Redacteurs du Monde (SRM), representing 450 current and recently retired editorial staff, noted "disapproval of the way in which the shareholders behaved,” reported by AFP (May 14). Le Monde jurnos have been seething since M. Bergé complained about “populism” in reporting the HSBC “Swissleaks” naming and shaming several French billionaires and told him, literally, to mind his own business. Governing statues require 60% approval by SRM members for major editorial appointments. The well-liked and respected M. Fenoglio received but 55%. Le Monde jurnos were also miffed at being informed of M.Fenoglio’s appointment by email.
Other legacy newspaper publishers have similar statutory barriers between editorial decision making and the business side. Guardian and Observer (UK) jurnos approved the appointment of Katharine Viner as editor-in-chief in March to replace Alan Rusbridger, who moved to owner Scott Trust as chairperson. Luciano Fontana received overwhelming endorsement in April from Corriere della Sera journalists to take over as the Italian newspaper’s editor-in-chief.
Quite common in Europe are debates on reforming public broadcasting with funding almost always the top talking point. The underlying issue in the digital age is, of course, the relationship between the State and its media sector. That being enormously complicated policy makers prefer limiting the discussion to license fees and general governance.
Unique in the world, arguably, voters in Switzerland will next month (June 14) share their views on proposed revisions in the Law on Radio and Television (LRTV/RTVG). The referendum, brought forward by the association of small and medium business (USAM), has raised unexpected attention; polls showing the Swiss electorate roughly split. A vote for the measure will see the radio and TV license fee changed to a universal tax at a reduced rate for individual householders (CHF 400 annually from CHF 460). More people - including small businesses - will be paying a bit less; total revenue raised remains in the vicinity of CHF 1.3 billion, about €1.25 billion.
Private sector broadcasters operating local radio and TV stations generally support the referendum as it increases, slightly, a financial contribution to struggling operators. "We need this breath of fresh air," said BNJ Multimedia owner/operator Pierre Steulet, quoted by agency ATS (May 12). "For national advertisers, the Jura region means nothing. All that’s left is crumbs.” His three local radio stations operate in the French-speaking region in west-central Switzerland. When rights fees were increased he was forced to drop music programming between midnight and five in the morning.
If the referendum succeeds he plans to use the modest contribution to offset digital platform costs, CHF 130,000 a year. If it fails - the position generally supported by newspaper publishers - LRTV revision could include blunt cuts to SSR-SRG services and budgets. "If one day (SSR-SRG) lost 20% of its budget, this would benefit foreign channels, not us,” he fears.
Poland’s media regulator KRRiT is in the early stages of reviewing the relationship between ad revenues and public broadcasters TVP and Polish Radio. An RFP from appropriate consultancies, deadline just passed, asked to clarify the “concept of the implementation of restrictions on the advertising activities of public service broadcasters in Poland.” About two-thirds of TVP’s annual revenues come from advertising, sponsorships and content licensing, the remaining third from the household license fee. For Polish public radio the percentages are, effectively, reversed.
Revenue streams for European public broadcasters follow several models, most include advertising. Privately-owned commercial broadcasters have lobbied long and hard for reductions or outright elimination hoping to snatch that money. This appeal resonates among politicians advocating free-market economics hoping to squeeze public broadcasters into dependency.
As Poland’s household license fee changes into a universal audiovisual charge, KRRiT, a politically appointed agency, is taking the opportunity to review the financing of public broadcasting. Several opinions from the media sector were gathered by media portal Wirtualnemedia.pl (May 11) with the general thrust being that old adage: be careful what you wish for. (See more about media in Poland here)
Citing the near-universal trend of online media cannibalising TV advertising, “digital media will surely be one of the main contenders to increase profits thanks to advertising money withdrawn from TVP, said media buyer Starcom MediaVest strategist Szymon Sliwinski. “There is nothing to suggest a rapid resolution to this matter, particularly in the context of an election year and competition for the TVP presidency.”
Eliminating advertising on public radio and TV would likely cause price inflation, said media buyer easymedia director Marek Wochna. “For some advertisers television advertising costs would become too high. Big advertisers wouldn’t suffer too much… for smaller advertisers this would be a big blow and these are largely local Polish companies.”
Digital giants Google, Facebook, Baidu, Yahoo and Microsoft increased their collective take of global ad spending to US$71 billion, reported media buyer ZenithOptimedia’s Top Thirty Global Media Owners 2015, released this week. Google’s portion is a hefty US$50.5 billion, bigger than number two, Walt Disney Company, and number three, Comcast, combined. ZenithOptimedia (ZO) has been compiling ad revenue data by company for several years and the methodology was changed for this report to exclude non-advertising revenues, largely affecting pay-TV operators.
While the ZO presser was a bit light on details, presumably clients can skip to the good bits, the thrill of mobile advertising propelled Facebook as the fastest growing, up 63% year on year and now ranked 10th overall. Next fastest growing is China’s search giant Baidu, up 43% and ranked 14th, followed by Brazil’s Grupo Globo, up 15% and ranked 17th. (See more about ad spending here)
“The rapid growth of digital media and emerging ad markets has strengthened the position of media owners such as Google, Facebook, Baidu and Globo, at the expense of traditional media owners in developed markets,” wrote ZO forecasting chief Jonathan Barnard for the presser. “The top digital media owners currently maintain a strong grip on the digital ad market, but they face the constant threat of displacement by disruptive innovators. While some emerging-market media owners face challenges in expanding their businesses in the short term, we expect to see more media owners from emerging markets enter the top 30 over the next few years.”
Bertelsmann, presumably including RTL Group, ranked 6th in the world. Murdoch family owned TV and film entertainment company 21st Century Fox placed 4th while their newspaper company News Corporation placed 9th. China’s state-owned broadcaster CCTV ranked 20th.
|
