Archive for October, 2009

The Spanish media in the NBA

October 29, 2009

Marca and NBA

*marca.com* has been publishing much information about NBA since last year:
videos, photos, statements of players, reports… The reason is that some amazing Spanish basketball players are playing there, the  best basketball league in the world.

Pau Gasol, after winning a ring, the European basketball cup and the MVP, attracts the attention of several media and many people who want to know more about the basketball star.

Rudy Fernández is another important Spanish player. Although he is not playing very much in Portland, the media loves him because he is a very good dunker and has a great personality.

José Manuel Calderón is currently one of the leaders in Toronto Raptors. He is the main guard and, after Gasol, is the Spanish with the best perspectives in this season. Marc Gasol is doing very good, but he has not team (Memphis Grizzlies) to win many matches. Sergio Rodriguez plays for Sacramento Kings and is trying to improve.

The point here is that the Spanish media (Canal +, Marca, As, El Mundo Deportivo, El Mundo) and the NBA have found a new market in each other. The basketball supporters in Spain are now looking forward to seeing the best Spanish basketball players playing in the best basketball league in the world. And that is something the NBA wanted to happen. The signing of European players gave them what they desired: the attention of the European media.

The Spanish Radio Market

October 27, 2009

The radio business in Spain has been very dynamic. Early deregulation and great creativity are behind the success stories of Spanish radio.  Most part of big networks and local stations have been quite profitable. Traditionally, radio advertising acounted for 11% of total above the line advertising.

But nowdays radio companies in Spain are feeling the pinch. Of course, one of the reasons is the crisis, but there are also some other problems: lack of reliability of audiences measurement systems; launching of new networks and fragmentation of audiences; new competition from Internet, pay TV and videogames…

Radio advertising income was 641 million € in 2008, 9% of total above the market advertising and 5,3% lower than the previous year. (The decrease in the US market was 7,4%). Managers of Spanish radio companies should look for new strategies to face the increasing competition. Consolidation, new distribution windows (like Internet), pay services and more innovation in programming are some options to pay attention to.

Facebook and Google insert music in their business model

October 23, 2009

Both companies expect to offer music as a part of their business on Internet. http://www.nytimes.com/2009/10/22/technology/internet/22google.html?_r=1&ref=media

Is advertising in crisis?

October 21, 2009

The question has a double answer. On the one hand, taken into account the current economic situation, we could say that advertising, as the rest of economic activities, is in the middle of a period of severe crisis. However, if the last data on advertising investments are analysed in detail, we can see that the situation of the advertising industry is much worse that what could be expected in this situation.

It is well known that advertising is a sector that overreacts to the economic cycle. When the economy grows, advertising expenses grow above the average. When recession is in place, the advertising sector suffers more strongly than the rest of industries.

The explanation is quite simple. When firms face bad times, one of the first expenses to be cut are those allocated to the advertising budget. This indicates that, in spite of the large importance given to communication in society, many companies consider that advertising is an expense and not an investment aimed to achieve better performance in the long term.

A good example of this behaviour is provided by the recent new on the cut in advertising made by Catalonian firm Freixenet regarding her Christmas campaign. http://www.abc.es/20091020/gente-tv-radio/freixenet-completo-200910192016.html

Post edited by Cristina Etayo.

Sarkozy and the French Press

October 20, 2009

Nicolas Sarkozy is concerned about the health of the French press. And he has good reasons: France appears on the 28 position in the ranking of newspaper readership in the world. The President wants to know why his country, which has been a worldwide leader in any field of culture, is so badly placed in terms of newspaper consumtion.

One year ago, Sarkozy launched an initiative to identify efficient ways to protect the French press. The project can ve visited at http://www.etatsgenerauxdelapresseecrite.fr

The French press is expensive (the price is 1,26 per copy, highier than in most European countries).  Paris papers are distributed by a no very innovative monopoly: the NMPP. And there are not truly French multimedia companies able to create synergies, economies of scale and profitable brand extensions.

On top of that, the owners of the most prestigious French newspapers are not “pure editors”: Rothschild, Dassault, Bolloré, Pinault and Arnaud are family names mainly linked with luxury goods, distribution, advertising and defense. Perhaps their newspapers are less focused at serving the readers’ interests than at protecting their main business. Mr Sarkozy should think about that risk.

Is Murdoch winning the battle?

October 19, 2009

It seems Murdoch’s strategy with “The Wall Street Journal” works. After a great controversy when he decided to charge for on line-subscriptions, figures say he was right.

In a period of tough crisis, the number of total copies sold has increased in 12,000, with a total circulation of 2.02 millions. In USA, the number of on line subscription is included in the circulation numbers, but not in Spain. This explains the growth. In fact, there were 350,000 on line subscriptions between January-March.

The growth of circulation of  “The Wall Street Journal”, taking together paper and on line subscriptions, tells us about the power of the brand. In times where charging is not considered the better strategy, the decission of Murdoch goes beyond the means. Regardless paper or Intenet, what matters is that there are people who are willing to pay for the information that “The Wall Stree Journal” provides. Brand and content are the key to succeed in the information business.

“elmundo.es”, the first digital newspaper in Spanish

October 15, 2009

elmundo.es” reached more than 23 million unique users in September, confirming this medium in the first place in the rank of digital newspapers in Spanish. Around 1.6 million people visit “elmundo.es” per day. 58,2% of the users of “elmundo.es” come from Spain, Mexico comes second with 10,1% of the visitors, followed by Argentina (3,8%), Venezuela (3,3%) and Colombia (3,2%).

elmundo.es” belongs to Unidad Editorial which also owns “marca.com”, with almost 20 million unique users, and “expansion.com”, with more than two million unique users. The group has a total of 41 million unique users in its different websites. Other important Spanish digital newspapers are “20minutos.es”, with more than nine million unique users per month and “telecinco.es”, with 6.7 million unique users per month; these two are the third and fourth digital information media in Spain respectively.

But the hegemony of the group on the Internet started with “elmundo.es”. The digital newspaper was launched in 1996. Then only a few people knew about the existence of the Internet. Much fewer had the possibility of using this media. In Spain, only 680.000 had Internet access; most of them used Internet only for the email.

A few number of journalists in El Mundo realized that Internet could mean a very important media in the world. Some of them started to upload some contents in the online version. The aim of “elmundo.es” consisted of informing quickly, constantly and permanently.

Four designers worked with several options considering the future of the Internet. Some of these options dropped and others made alterations. The project pursued the following ideas: more information, increased participation, better navigability, higher interaction and more services.

In June 2000, “elmundo.es” offered twenty million pages per month. From that date onwards “elmundo.es” didn´t stop growing. That same year “elmundo.es” became the leader of the digital information media in Spanish.

In early 2001 “elmundo.es” was redesigned but the most important episode, which changed the history of “elmundo.es”, happened on the 11th of September: the terrorist attack against U.S. That day “elmundo.es” competed against other media such as TV and radio, supporting an historical traffic figure of over ten million pages in a day.

The coverage of the terrorist attempt in Madrid on the 11th of March was another important moment that influenced in the impact of “elmundo.es” in the world.

The key facts which explain the success of “elmundo.es” are the following:

– They arrived first.

– “elpais.es”, their main competitor, did not manage its online business model very well and lost many users because it charged fees. When they changed this policy it was too late. Now, “elpais.es” is recovering.

– They addressed the international public, not only the Spanish one.

The aim now is to manage to make a profit with this business model. How to turn 23 million unique users into money.

The Future of Newspapers

October 13, 2009

Newspapers have been a very good business both in Europe and North America. The leaders in their markets usually got margins of profits above 20%.  The USA market is dominated by local papers. Continental Europe is mainly an addition of  regional markets. And the UK is the paradise of national newspapers. The three different models worked very well: those markets had high circulation figures, a lot of advertising income, strong entry barriers and excelent profits.

Internet and free papers have eroded the competitive advantages of paid newspapers. In 2008 newspaper circulation decreased 1.8% in Europe and 3.7% in North America. Advertising will drop 22% in North America in 2009 and a bit less in Europe.

European and American Publishers should change their busines models. They should forget about the “good old times” of mass market one-platform products. Newspapers should become multi-platform brands with several windows of revenue: print, online, mobile devices, and so on. They should take advantage of the power of their brands to capture the “every day more demanding consumer”.

Online charging helps quality

October 9, 2009

Charging fees for online content has been one of the most interesting debates for the last few years. The problem of how to make money through the Internet has taken publishers to consider the possibility of charging fees for their online content.

Companies that want to be profitable on the Internet currently need to atract millions of visitors because it is the only way to get good advertising contracts. However, many enterprises are anticipating a change of paradigm and rethinking their business model and planning a shift to getting money directly from the visitors, through micropayments or subscription (http://www.mediaweek.co.uk/news/944161/Online-charging-work-AOP-delegates-told/).

Charging for content would have a very positive impact on media industry because it would force the journalists and people who work producing and delivering information to make better products. When one competes against a company which distributes free information it becomes imperative to make an effort to differentiate one’s product and convince the public that it is worth paying for higher quality content.

US on line ads keep falling

October 7, 2009

The Interactive Advertising Bureau and PricewaterhouseCoopers released interesting data last Monday on the money spent on on line ad from April to June 2009 in US.  The $5.4 billion spent on Internet ads during those three months  compared with $5.7 billion at the same time last year, show the clear fall of advertising expenditure.

It marked the second consecutive quarterly decline in Internet advertising, the first time that has happened since the the dot-com bust at the beginning of the decade. However, half of the money totally spent has gone to search advertising, helping to further enrich Google Inc., which controls nearly two-thirds of the U.S. search market.

Nevertheless, the Web’s advertising prices also are generally lower than those offered in traditional media such as newspapers, magazines and TV, which are also dramatically suffering the economic crisis. This is why Internet ad specialists are confident revenue growth will pick up as the U.S. economy recovers.

It seems it is just time to wait and hope, but overall, it is time to explore new ways to make advertising spent attractive to advertisers. Times of ideas.