The Young French Are Attracted To Paid-For Newspapers – As Long As Someone Else, Like The Taxpayer, Does The Paying

Philip M. Stone November 11, 2010 Follow on Twitter

French taxpayers subsidize newspapers to the tune of some €600 million annually – a government report said it’s like keeping the press in a state of “permanent artificial respiration” – but the newest initiative, aimed at getting the young to read print again, seems to be working.

The idea was simple. Anyone aged between 18 and 24 could sign up online to receive one copy a week  of any of 59 listed titles, with the cost split between publishers and the government. After one year the target of 200,000 was exceeded by 50%. Target for the second year is 210,000 new readers choosing from 62 titles.

And a survey indicates the scheme’s success goes beyond getting one newspaper a week into the hands of the young. Trust in the printed word has grown, more than half say they actually buy other newspapers and more than 60% now say they read their newspaper of choice online on days they don’t get the free copy – that might not be so great since after their one year of a free newspaper they may well ask why pay for print when its free online, but at least they’re interested enough to access. And considering the government subsidy for this is about €5 million annually when looked at within the total €600 million annual subsidy it’s really petty cash.

The French are not great newspaper readers, coming in near the bottom of the European newspaper readership table with just 46% reading a daily newspaper. In Germany the figure is closer to 80%. The French much prefer their weekly fashion and news magazines (with lots of pictures) -- readership per 1,000 population is said to be the world’s highest at near 60%. They are also among Europe’s most avid radio listeners.

When they do opt for newspapers it is usually for regional and local news which is why the largest circulation French newspaper is not a national newspaper but rather the regional Ouest France, published in Rennes, with a circulation of around 750,000.  Compare that with Bild in Germany with more than 3 million and The Sun in the UK with just under 3 million and even with the 300,000 circulation of the free Metro in France and you get the picture. One reason for low circulation may be the increasing closings of newsstands leaving France today with only about 30,000 news vendors whereas in Germany that figure is closer to 115,000, but, still, French magazines continue doing just fine.

Legacy union agreements mean newspaper publishers have extraordinarily high distribution and production costs. Distribution, for instance, is controlled by a monopoly organization, Presstalis, and it doesn’t take much to stop the trucks from rolling if there is a union grievance. The unions know they can hardly be touched and the cost of firing just one long-time worker can come close to €500,000. 

So the government does its part by providing one way or another about 10% of a newspaper’s revenues via such diverse subsidies as very low postage rates, huge amounts of government advertising, reducing social taxes for newspaper delivery workers, and providing large tax breaks for investing in digital media and capital investments.

Even with the massive state subsidies national newspapers still have had to be bailed out in the past few years by French billionaires. This month the sale of the prestigious Le Monde was finalized to three French billionaires who will have around 60% of the company for their joint €110 million investment. One of the investors is Xavier Niel, who is the majority owner of the hugely successful broadband provider Free, so that in itself points to digital being at the forefront of a new business model. For all of its prestige, Le Monde’s circulation is only 288,049.

Le Figaro, the leading general news national, has a circulation of 314,947and is in the safe hands of French industrialist Serge Dassault, who runs France’s most important defense industry that carries his name. In 2004 he bought around 80% of Socpresse, which owns the right-of-center Le Figaro among other notable titles, for €1.5 billion and he has since invested in a couple of redesigns and a new printing plant in southern France.

Then there’s investment banker Edouard de Rothschild who has made three major investments in the left-of-center Libération worth around €40 million but the newspaper still has financial troubles and it continues to hemorrhage circulation, down 9.5% last year to 111,854.

Three years ago Bernard Arnault, the boss of the LVMH luxury goods maker, bought Les Echos financial newspaper from London’s Financial Times for €230 million. The other French financial newspaper, La Tribune thought it had been saved a couple of years ago when media baron Alain Weill took over but this year he gave up the ghost, handing over 78% of the ownership to the newspaper’s managing director for €1.

And newspaper valuations are way down. Just last week the Amaury family withdrew from sale Le Parisien and Aujourd’hui (Today),  because there was no way to overcome that potential buyers put the value of the newspapers at around €50 million whereas the family thought €200 million was closer to the mark.

The two tabloids are virtually the same except Le Parisien is obviously circulated in Paris whereas Aujourd’hui goes out to the regions with localized editions. If they were a single title their circulation would be around 475,000 making it the largest national circulation paper. The newspapers remain in safe hands for the Amaury family also owns L'Equipe, the biggest sports newspaper, and the extremely successful Tour de France and the Paris-Dakar car rally.

And to show what can happen to a newspaper when it is not well looked after –France Soir used to be France’s most popular newspaper but after various owners it fell into bankruptcy in 2005. In 2009 Alexander Pugachev, son of Russian banking and shipbuilding oligarch Sergey Pugachev who is now threatened with bankruptcy, bought the newspaper for some €50 million. He expanded the newsroom from 40 to 100 reporters and he spent another €20 million on an advertising blitz. He’s looking for circulation around 150,000 – 200,000, a far cry from the 23,000 before his purchase, and according to figures given to the French Bureau of Circulation he’s now up to 76,078 through September.

But that growth apparently wasn’t fast enough and this week Pugachev fired the newspaper’s deputy general manager, saying he was “personally taking on the general direction” of the newspaper. In August he had fired the managing editor with a replacement made a month later.

Hard to believe that in its prime some 50 years ago France Soir’s circulation was around 1.5 million.

See also in ftm Knowledge

Media in France – new

French audiences are moving fast to every new platform. Mobile and Web media challenges the old guard while rule makers seek new directions. Media life in France... and a few secrets. includes updated Resources 140 pages PDF (November 2011)

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