Law 2 – The Digital Dozen Will Dominate
A dozen or so multinational, multi-platform media companies will dominate global news and information.
Jun 13, 2013
Hearst’s strategy here is one to watch. There are good reasons (more on that below) why daily newspapers have opted to go for door number one and get more money from long-time subscribers while making new subs a largely second priority. But they know that’s a two- to three-year strategy. As 10,000 baby boomers turn 65 every single day through 2031, the older-reader market inevitably winnows and must be refreshed with new, paying customers. For daily newspapers, getting younger (yes, younger means under 55) readers to pay is mostly phase two.
So let’s see what Hearst learning, as it leads both newspaper companies in that quest and its fellow magazine chains as well.
There’s a lot to like about the demographics of the digital audience. According to the company’s data, the readers are 10-20 percent more affluent, 10 years younger, and more educated. Wilkes acknowledges that those good demographics may be skewed by early tablet demographics themselves, but they are directionally vital.Read More »
Jun 6, 2013
The new board’s mandate, of course, is to maximize its take on the sale. Tribune newspaper profits run at the roughly $200 million level, maybe a third of which comes out of L.A. So, take the market multiple of 3 or 4 times that number as a price — or $600 million-plus — for the eight papers, even though underfunded newspaper pensions put a drag on that number. Then, if the inflamed passions, stoked by the Koch bid, produce a higher selling price, so much the better.
The board clearly is aiming for a single deal. One deal reduces transaction costs and deal risk, and speeds closing. So who’s likeliest to play in a single auction for the eight Tribune papers, which also include two non-metros in Newport News, Va., and Allentown, Penn.?
The likeliest four: the Brothers Koch, Rupert Murdoch, the B group from L.A. (Eli Broad, Ron Burkle, and Austin Beutner, a well-connected trio of moneyed liberal lineage), and Aaron Kushner’s 2100 Trust.
For the Kochs, the purchase would be a seem to be an extension of their political wars by other means. Of course they protest that notion, and the only track record we have to go on is their profound influence on conservative activist American politics over the last several years.
Murdoch’s L.A. TV licenses come up in 2014, so the cross-ownership issue is immediate and real, and with the FCC in appointment limbo, he’ll not get the waiver relief his lobbyists had hoped to win by now. Flip a coin and I say Rupert goes with his gut and bids.
If he indeed goes for the Times (and other titles, if necessary), consider that Murdoch couldn’t ask for a better competitor than the Koch Brothers. No one’s out in the streets protesting a Murdoch takeover of the L.A. Times or Chicago Tribune. Even Koch opponents whisper that Murdoch would be better — the gray, if not white, knight, to the black hats of the Kochs. It’s a new parsing in the post-Sam Zell era: How do you judge potential ownership these days, except on a relative basis?Read More »
May 31, 2013
Digital advertising is all about technology in 2013, and you’ll see lots of talk of the ad-tech stack, and who owns it. Google, of course, owns much of it, through its successive AdWords/Doubleclick/AdMob and more creations, acquisitions and integrations. Its stack is so efficient that many publishers feel compelled to use it, though they are wary of getting their businesses tied ever more directly to Google — or the Google “Death Star,” as some critics call it.
For most publishers, Google is the classic frenemy. They work with it when they think the advantages outweigh the hazards, even as top publishers build their own programs. In fact, expect to soon see U.S. news publishers transition their Newspaper Consortium partnership with Yahoo into something intended to be broader, something that allows publishers to opt into and out of the ad programs of multiple portals — not just Yahoo — harnessing the ad tech of the day.
Six-month-old Smart Match is one of the FT’s latest innovations to stay “premium.” In brief, the content of an advertisement is matched, dynamically, to that of an article. The technology: semantic targeting of both article content and the FT’s current “ad library” for the best matches on the fly, as compared to standard keyword targeting.Read More »
Apr 25, 2013
As the Times Company readies its sale of the Boston Globe (at the Nieman Lab today, I further explore the sale of the Globe and Tribune metro properties), it’s clear the Globe is underperforming the Times. It was down 6.7% in overall revenue, as its reader revenue lost 1.9% and advertising declined 10.1%. Two takeaways here: 1) the new owners of the Globe face a tough challenge in getting back to growth, given those numbers; 2) as the Times emerges as essentially a standalone entity, its own reader revenue strategy looks better. Without the Globe, it was up 8.2% in circulation dollars.
The national ad market movement from print to digital may be faster than the regional one. As Gannett, the largest newspaper company reported yesterday, it announced a 4.5% decline in ads. Gannett’s ad revenue is more heavily tilted to retail advertisers,, whose movement from print to digital is slower than either classifieds (largely gone) and now national. Significantly, Gannett, also reported a 14.5 percent increase in local market circulation revenue.
In sum, paywalls are working, but will they be enough to turn the industry from red ink to black?
Mar 22, 2013
The top five digital ad companies — none of which is owned by a newspaper company — took in 64 percent of all digital ad spending in the U.S. in 2012. That’s Google — with an astounding 41 percent of all that ad money — and then Yahoo, Facebook, Microsoft, and AOL. Facebook is most ascendant among those four. Of Facebook’s $5 billion in 2012 revenue, at least $4 billion of that is in the U.S. That means Facebook’s out-sold the entire U.S. newspaper industry, which took in about $3.5 billion in online advertising.Read More »