The end of print media? More like the end of the print crisis…

The Romanian print advertising market has decreased, since the beginning of the crisis, from roughly 80 million to a value estimated between 24 and 27 million in 2011 (Mediaedge:cia and Initiative Media for The Industry). 2011 is the first year when print spendings will go below the Internet budgets. Titles such as “Gândul” have closed their paper edition (April 2011), while “Adevărul” lost more than two thirds of its sold circulation, since the first months of 2010. The crisis stroke badly the print segment of the media market, because economic fragility became an open door for the politicians’ and political parties’ influence and tabloid content got mixed in every publication’s formula.

In other words, things appear as they could not look any worse. Both newspapers journalists and their managers are depressive, quality titles have very little prestige left and even tabloids can complain about sold circulation.

Logo of the Romanian newspaper Adevărul, as us...

An old logoplate of the "Adevărul" newspaper

Is it the extinction then? Not really. More like the bottom point. Or, in other words, more like the end of the crisis than the end of the print media. Obviously, print will cease to exist in its traditional form. Or it already ceased. But it’s more about a change of a business model. The decrease of the advertising spendings in the segment is only roughly 10%, 2011 versus 2010. So hopefully the market has settled down to 25-30 million euros/year. Sold circulation decrease, which also brings a decrease of the revenues, is more manifest for titles deprived of aggressive marketing (books and DVD’s inserts) such as “Adevărul” than for the rest of the market. It is organic, dealing with the consumers’ interest, to a smaller extent. So these days the issue is more the discovery of a new business model/sustainability recipe than about losing even more speed. 

Things are happening from this point of view too. On the magazines segment, the recent acquisition of Edipresse Romania by Ringier is a game changer. Glossy women magazines, the second richest print segment in Romania after dailies, included roughly 19 titles several years ago. I always thought many of them should and would close down. The Ringier-Edipresse transaction is a life saver for most of them. While doing a story about it for The Industry, I’ve realised that the Ringier and Edipresse portofolios were hardly similar. Similarity can be discussed only when it comes to two segments: “Unica” versus “Avantaje” and “Bravo” versus “Popcorn”. And the transaction, evaluated for The Industry by two sources at roughly 2,5 million euros, is an important move in the light of the collaboration Ringier started last year with Axel Springer. The joint venture announced in march 2010 only refered to Poland, Czech Republic, Serbia, Slovakia and Hungary and included a payment of 125 million euros to Ringier, because of the highest volume of its business included in the plan.

Romania was left out of it due to the bad financial situation at Ringier Bucharest, and the Edipresse acquisition is a significant business improvement. Another industry source, which evaluated the transaction at slightly more than 2,5 million (between 3,5 and 4), said another takeover or fusion move is likely to follow on the magazines market this year. The Axel Springer entry on the Romanian market in a leading position would have the significance of the a really big player actively involved in the Romanian market. A.S., Bertelsmann or WAZ had been only present before either temporarily, or as silent partners.

In other words, the magazines market is in the process of downgrade to a size and a shape suitable to the decrease of advertising to 1/3 of what it was before the crisis. Ringier-Edipresse, which might become Axel Springer in the near future, will have as main competitors Sanoma Romania and, to a lesser extent, Burda. The aspect of the market is close to a a duopoly.

Similar things happen on the daily newspapers market. There are two strong tabloids, “Click” (180,000 sold copies), and “Libertatea” (103,000 sold copies), according to the Romanian ABC data (BRAT). “Jurnalul naţional” (31,000) and “România liberă” (41,000) appear to be the most solid of the so-called quality newspapers left, with “Adevărul” continuing its steep decline down to 40,000 copies (compared to 120-130,000 at the beginning of 2010). It’s hard to figure out where Dinu Patricu’s newspaper will settle down, in spite of the vigorous cutbacks in terms of people, editions and other resources. Titles such as “Ziua”, “Gardianul” or “Cotidianul” are history, while “Gândul” is gambling on the digital-only market, in spite of its very interesting content. More or less, a 2 tabloids + 2 qualities market could be a formula adapted to the post-crisis landscape. Other two sports dailes, “Gazeta Sporturilor” and “PRO Sport”, seem to have resisted the crisis too, as well as “Ziarul financiar”, a business newspaper which managed to keep its prestige and slightly more than 10,000 sold copies.

Is this the future? More so in terms of magazines than newspapers. It is difficult to make predictions about daily titles such as “Puterea” or “Curierul naţional”, which sell less than 5,000 copies. They would be likely to disappear if three elections years didn’t follow. 2012, 2013 and 2014 might bring some extra confusion on the political content market, which doesn’t only mean print, but also Internet and rolling news televisions. So the clarifying process might reverse. This is also bad news for the healthy titles, which could be disturbed by makeshift propaganda vehicles. On the other hand, Axel Springer’s intentions are transparent and very likely to take shape on the Romanian market too: the consolidation of the new joint venture with Ringier will soon be followed by an emphasis put on digitalization. In other words, the life buoy could take the print media to other waters.

But, in the end, it’s all about profit and loss. The 2 magazines groups + 2 tabloids + 2 qualities formula is just a sketch easy to modify because of various factors. What is less likely is only that the print media will continue its abrupt dive. And that looks like good news in the present context.

 

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