Death of newspapers: Do you desire your own downfall?

Declining editions. Reduced advertising revenues. For years, reports have been drawing an almost habitually sad picture of the condition of printed newspapers.

Time and time again reports are published, repeating themselves for the umpteenth time and making themselves virtually interchangeable, saying “The consolidation of the newspaper landscape is progressing,” when one newspaper has taken over another or when the red pen has been applied and one or the other regional newspapers have been eliminated. One of the most recent cases: The not so uncontroversial German “Huffington Post” was discontinued. But wait a minute, that’s not a newspaper, is it? No, it’s an online news portal that after five and a half years, in March 2019, will become obsolete. When news media talk about a crisis today it is not just about printed newspapers. But rather it is a general problem of the news media.

For years, editorial offices have continuously shut down throughout the country, with editorial positions going unoccupied or being completely eliminated. The bankruptcy of the “Frankfurter Rundschau” as well as the suspension of the “Financial Times Deutschland” are still well remembered by many. Publishers today complain that the printed newspaper has little chance of survival against the faster medium of the Internet and, in desperation, have come to rely on online offerings.

Many newspaper publishers are experimenting with “Digital First” or “Digital Only” – and some, such as Springer Publishing House, may even succeed. The Axel Springer media house increased its sales last year by around 4% reaching 3.18 billion euros. The news media business, which includes the newspapers “Bild” and “Welt”, declined slightly, while its digital business now accounts for 70.6% of consolidated revenues. Profits climbed by 14% to 737.90 million euros. Essentially, only the Classified Media division, with its job and real estate portals, contributed to the increase in sales with a growth of around 20%.

However, it seems that the claim that the Internet is competition is only a pretext. The Cologne-based media researcher, Dr. Andreas Vogel, proved as early as 2014 in his study, “Talfahrt der Tagespresse” (Downturn of the Daily Press), that the claim of the Internet being a “newspaper killer” was simply wrong. Since the early 1980’s Vogel has collected data that shows a linear trend in the number of readers – primarily downwards. At that time, the Internet did not yet play a role, and the reunification of Germany had even led to an increase in circulation of newspapers. And so, the discussion about what newspapers have to do differently in order to keep their readers was once again buried in a drawer.

“Those who thin out the print editions of their media in terms of content or physicality are depleting themselves of their own life force, including their profitability, and must be aware that readers’ consumer habits are shifting towards digital media, social networks or the big aggregators. Readers who are daily deceived, disappointed and bored by their printed newspaper are turning away.” – Bernd Zipper

In 2018, there were still 327 daily newspapers in Germany with a total daily circulation of 14.7 million copies. In 1991, the recorded newspaper circulation was 27.3 million. The acceptance and sales problems of daily newspapers (114 journalistic units already show a clear concentration) in Germany are in fact much older than the success story of the Internet. And according to Dr. Vogel’s reasoning, the weakness in sales has little to do with media change itself, but even more with a radically changed society. Unfortunately, many newspapers have either missed this change or have only dealt with it in their feature pages.

In addition, overly simplified calculations have been made in the accounting departments of publishing houses leading to less content, fewer pages, less paper, and lower costs. But readers are not interested in these figures. Nevertheless, newspapers are still tinkered with in a “cost-optimizing” way until the reader becomes tired and cancels their subscriptions. If the number of readers then decreases again, long-term subscribers are punished for their loyalty by raising the subscription prices even further.

Now many publishers are evidently pulling the rip cord on newspapers. They fear a slowing economy in an already desolate situation. At the same time, the monopolization of digital advertising by Google and Facebook continues to progress at a great rate, and the publishers’ hope of being able to compensate for advertising losses in the print sector with digital advertising is dwindling more and more.

Publishers seem nervous and many see their chances going down the drain. This is evidenced by recent announcements:

  • An announcement that nearly shocked the industry: The newspapers of DuMont Publishing are now up for sale. The package as a whole would be a really big chunk. DuMont is currently the sixth largest newspaper group in Germany, comprising of the Cologne newspapers “Kölner Stadt-Anzeiger” and “Express”, the “Mitteldeutsche Zeitung” in Halle, the “Berliner Zeitung” and the “Berliner Kurier” and as well as the “Hamburger Morgenpost”. Together, the newspapers have a paid circulation of 700,000 copies per day.
  • The Funke Media Group will close their printing house in Essen and concentrate the company’s printing activities on their larger Hagen site. The closure is connected with repeated restructuring measures, which also provide for cost savings. According to a press release, due to the declining circulation of daily newspapers the printing plants in Essen and Hagen are only about half full and therefore are no longer a fit for the future. In addition, investments in Hagen are “in the low double-digit millions”. The result is a highly efficient operation that is optimally geared to future requirements.
  • The dispute at the “Weser-Kurier”, in which management and shareholders have been having very different opinions as to whether the newspaper printing plant should be closed, modernized or restructured, demonstrates just how absurd the struggle over the orientation of newspaper production is at the present.

But there are still other examples. The Styria Media Group in Graz has invested 30 million euros in Industry 4.0 and a new highly automated newspaper printing plant. The market is already reacting to the expanded, modernized range, says the managing directors. They report that they have had a “very good first quarter and have received new orders in the newspaper and advertising sector”.

My Take: The newspaper industry in Germany is currently presenting a more than desolate picture. And it seems that it’s no longer a question of abandoning journalism and free press, which for some publishing houses in the past was like a license to print money. Now that economic difficulties have arisen and the repeated restructuring attempts have not proved to be a solution to the problem, publishers appear to be being sacrificed as they are not seeing enough return on their printed newspapers. But what they want to earn their money with in the future remains just as open of a question as the media diversity in the German republic. In his editorial in the latest “Spiegel”, Markus Brauck even speaks of a democratic “press twilight”.

2019-03-13T13:57:39+01:0013.03.2019|Market|0 Comments

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