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Big Revenue Drop For Springer
German publisher Axel Springer, Europe’s biggest media company, saw its 2009 net income fall a whopping 45% in 2009 with its main powerhouse national newspapers, Bild and Die Welt, seeing overall revenue down 8%.
National newspaper circulation revenue increased 1% from price increases but national newspaper advertising declined by more than 12%. The international print division had a hard time, too, with eastern Europe in particular seeing very heavy advertising drops and the division as a whole down by 24%. So diversifying internationally, but within the same business, does not necessarily work when the whole world is in an economic slump.
Springer has been active for the past few years trying to build its digital business and that revenue improved 24%, but like other media companies around the world, digital’s gain is not near enough to cover print’s declines.
The company has been looking to expand outside Germany, and outside print, but last month announced that because of the tax battle-royal going on between Turkish government and the Dogan Group that it was not going forward in taking a 29% stake in the Turkish company’s media business. Springer already holds a 25% holding in Dogan TV that Turkey claims violates laws limiting foreign ownership of Turkey’s broadcast industry.
Now Variety Gets Sued!
We’ve been detailing the current woes at Variety, the US showbiz trade bible, and the plot just keeps getting juicier and juicier -- now the film company that was in the midst of a $400,000 ad and marketing campaign in the newspaper only to be shocked by a sharply negative editorial review of the movie being promoted is doing what just comes naturally in America – its suing.
It’s an interesting legal point –can editorial be held legally responsible and are damages liable for going against the grain of an advertising and marketing campaign in the very same newspaper. The ad campaign’s goal was to find a distributor for the film and to get it nominated for Academy Awards, but the film’s maker says it was such a “scathing review that it effectively destroyed the promotion to distributors and any chance for award nominations for the 2009-2010 awards season.”
When the filmmaker complained about the review it was pulled from Variety’s subscription web site but it had already appeared in the New York and Los Angeles daily print editions and the filmmaker says, “The damage was done”. How much damage? That’s why they have courts.
Internet access, fundamental rights
...and obligations
The internet is interesting, helpful and entertaining but should access be a fundamental right? A poll conducted for the BBC World Service concludes that for a clear majority of people around the world internet access should be a fundamental right.
Four in five adults, according to poll results released March 7), “regard internet access as their fundamental right.” Among internet users, nearly nine in ten agree as do seven in ten non-internet users. South Koreans, Mexicans and Chinese top the list among 26 countries surveyed.
Forty-four percent of those surveyed worldwide said they “couldn’t cope without the internet.” That percentage is substantially higher among Japanese, Mexicans and Russians. Survey respondents in Pakistan, the Philippines, Turkey, Brazil, and India said they’re better able to cope without the internet.
Asians, Africans and people living in the Americas are most adamant about keeping government out of their internet while Europeans, generally, approve of some government control. The survey results make fascinating reading from several points of view and could keep a sociologist awake for days. (See BBC World Service press release here, including country by country summaries)
Conspicuous is the term “fundamental right.” Last June the French Constitutional Court ruled internet access to be “fundamental human right” in striking down the infamous anti-piracy Hadopi law. Legislatures in Finland and Estonia have enshrined internet access as a right.
Rights watchers expect the United Nations to formally add internet access to free speech rights, education and privacy rights. “Communicating is part of freedom,” said Daniel Warner, Director of the Centre for International Governance at the Graduate Institute of International and Development Studies at the University of Geneva in an email. The caveat is, he added, “for every right there is an obligation on someone.”
Within the media world the internet is, largely, embraced with the recognition that people, more and more, choose it to find news, video, music and entertainment. To say the internet and the World Wide Web have been transformational is gross understatement. It is neither frivolous distraction nor mere business opportunity.
The BBC WS poll shows with clarity the degree to which people, particularly those outside the developed West, are coming to rely on the internet as a safe-harbor for information essential to their lives. It also shows how this particular digital divide cannot be easily bridged. (JMH)
This Is The Year US Companies Spend More on Digital Than On Print
If the Web research company Outsell has it right this year will be one of fundamental change in the US advertising business – companies will spend more on online and digital advertising and marketing than on print.
And to show how much direct marketing has entered the fray, Outsell said it expects some 53% of total online advertising will be by companies on their own web sites.
Outsell expects online and digital to rake in $119.6 billion while newspapers, magazines and other print platforms will garner $111.5 billion.
Outsell says that publishers who have a large share of traditional media in their mix will experience a pretty flat but survivable year although costs will need to continue to be contained.
Variety Fires Chief Film Critic, Chief Theater Critic
Well, you know things must be pretty grim if Variety, the so-called showbiz bible since 1905, fires its chief movie reviewer and its chief theater reviewer. Reviews are mostly what Variety is about -- it had more than 1200 film reviews last year -- and the trade paper’s headlines are legendary for a language all their own.
Variety says it is asking the fired critics to continue working as freelancers. No word yet if they will, but the reaction in Tinsel Town could probably be best described as “disbelief”.
Editor Tim Gray says the publication is making a profit, but apparently to do that there have been four serious editorial culls in the past 18 months. And that’s not all. Just last week bloggers criticized Variety for allegedly pulling a negative movie review – written by a freelancer – while at the same time the movie was spending some $400,000 on a Variety advertising campaign. The advertiser allegedly complained and within a very short time that review disappeared from the Web site. A blogger asked Variety publisher Brian Gott what was going on, only to be allegedly told, “Unfortunately Variety does not comment on internal matters. I hope you understand.” Well, no, actually we don’t.
Variety may be best known for Army Archerd, a Hollywood columnist for more than 50 years who died in September last year. The Academy of Arts and Sciences thought enough of him that he was included in their homage at this year’s Oscar ceremony for leading industry personnel who had died in the past year. If he saw what was happening at his newspaper these days he would probably turn in his grave!
Mad Hatter Takes Over The LA Times Front Page
The L.A. Times last Friday ran a fake front page cover featuring a large portrait of Johnny Depp as the Mad Hatter of Alice in Wonderland fame – yes, Tribune has walked that fine line yet again between editorial and advertising but when the economy is this bad and you’re in bankruptcy and you stand to make more than $100,000 ….
The promotion was for Disney’s Alice in Wonderland film but the newspaper allowed the fake cover to still have the newspaper’s logo and a couple of headlines from February, with the large Mad Hatter right there in the middle. But then $100,000+ is $100,000+.
The purists will question, of course, how many people thought that was the newspaper’s real front page. Well, $100,000+ is $100,000+. But if you think not too many people would have been fooled, CNN reported on its web site that some of their people when they first saw the front page thought it was the real front page. Well, CNN is CNN.
As for Disney, Alice in Wonderland is said to have done better in its first week than Avatar, the highest grossing film of all time, so you just know the Disney folks are crying all the way to the bank over their $100,000+.
Armed Robbery Live On TV
Live TV doesn’t get much more exciting than this – an armed robbery during the global telecast of a European Poker Tournament in Berlin. Too bad TV producers told their crews to cut away – it could have given a whole new meaning to reality show.
It was pretty brazen – four, or maybe it was six depending on who tells the story --, armed men with guns, machetes, and grenades burst into the Grand Hyatt Hotel yelling, “Don’t move, we have bombs”. They made for the rooms where players had paid their cash in return for chips and they got away with around €200,000. TV showed every-one running for cover.
Police said they had loads of evidence, they called the thieves “stupid” and said they were amateurs, not least because of the telecast and all the closed circuit footage, too. On the other hand, as of 48 hours after the robbery the thieves were still free and they still had the money.
“Homeless billionaire” invests in Spanish media giant
a “complex deal”
It’s a “complex deal” deal, said Reuters (March 5). Sure enough, Liberty Acquisition, not related to John Malone’s Liberty Global, will inject €660 million (about US$900 million) in Spanish media conglomerate Prisa. At the end of the transaction Prisa will absorb Liberty.
Prisa CEO Juan Luis Cebrián has been working off a mountain of debt, about €5 billion. Just before the bank crisis hit, he was forced by covenants to buy shares of Sogecable he didn't already own. (See more on Prisa's debt reduction here) Last year Cebrián sold nearly all of television channel Cuatro and 44% of Digital+ to Mediaset.
Liberty Acquisition is an investment fund of Nicolas Berggruen, refered to by the Financial Times (March 6) as the “homeless billionaire” as he gave up all his worldly possessions, save the private jet and art collection, and lives in hotels and Martin Franklin. Both Berggruen and Franklin will join the Prisa board. Mr. Berggruen had previous dealings with Prisa, off-loading his stake in Portuguese media company Media Capital in 2007. (JMH)
Popular program inspires radio channel
More digital ideas but FM rules
When it comes to digital radio, Denmark’s public broadcaster DR jumps the shark in programming. It will yet again add a new DAB channel, one inspired by popular P3 channel program Unga Bunga. Dropped will be DR Electronica.
“It’s about adding something kicking,” said DR’s digital radio director Ole Molgaard, quoted by mediawatch.dk (March 4). DR recently gained new spots on the DAB multiplex when commercial station 100FM fell into bankruptcy.
Since jumping into digital radio with both (all?) feet, DR’s strategy has been to try different program ideas then try a few more. By consequence, uptake for digital radio by Danish listeners has been far quicker than in other countries. (More on digital radio here)
Danish politicians have suggested DR’s P3 channel move entirely from FM to DAB, an idea rejected by DR Director General Kenneth Plummer. “P3 is one of the last Danish public service channels, which is strong among the younger generation - and we can not afford to push them away from us,” he said on P3 quoted by Arbejderen (March 5). (JMH)
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