Archive for November, 2009

All together to the Web

November 27, 2009

It is interesting this article from The New York Times in which the author writes about the merger of several companies for the Web. That means two things:

Firstly, as we said in a previous post, media are trying to fight against economic crisis through joint ventures. Advertising investment is still decreasing and does not seem that is going to stop in short term. Companies have to save costs and sharing expenses is a way to do it. If media enterprises work together they will be better afterwards.

Secondly, print circulations are going down and this is not only a temporary situation but a very deep structural damage related with new technologies. More and more people are getting used to obtain the information on Internet through iPhones, BlackBerrys and e-book. Now publications have to develop not only contents for Internet, but software standards for contents viewing on these platforms.

20 Minutos and Metro join forces

November 25, 2009

The economic crisis is forcing free dailies to become partners. Metro International and 20 Minutos closed a deal wherebythe Swedish Company will manage the international advertising of SchibstedSpanish free daily.

The agreement means that every advertising campaign managed byMetro in the world could include Spain as a country and 20 Minutos as a medium. Until now, international campaigns had very little representation in the Spanish paper.

During the third quarter of 2009, the advertising income of 20 Minutos shrunk 12.5%. These figures complicate the future of Schibsted in Spain. Even though the free daily reduced costs dramatically, including staff, the effects are still not evident.

Schibsted and Metro International maintain good relations since May 2008,  when Metro divested 35 percent of MetroSweden to Schibsted, who then decided to close their title

The deal with Metro will not only support advertising incomes of the Spanish free daily, but will also allow it to trade with important European brands. The same agreement was signed by Metro UK (Associated Newspapers), so Global Sales of Metro International will negotiate the international advertising packages of both publications. This is one of the strategies free dailies are implementing to fight the crisis.

52% would pay for online contents

November 19, 2009

Yesterday I asked some students if they would be disposed to pay for online contents. They said “no”. But today I read that a Boston Consulting Group research affirms that, in Spain, 52% of Internet users would pay for those contents.

Rupert Murdoch, who is convinced that the future of Internet depends on charging for the contents, is gaining more and more supporters. London Times already charges for their contents in its portal and many other editors are planning to do the same.

Boston Consulting Group has studied nine countries and in every one of them the results have been positive in favor of paying. The nature of the contents for which people would pay is especially local, although in EE.UU and U.K. Internet users prefer to pay for the breaking news service.

However, Boston Consulting Group research explains that even though a lot of people would give money for those contents, they are not disposed to pay a lot. In Spain, people would pay four Euros per month for “premium contents” on Internet, and only 11.3% of the Internet users would reach to ten Euros for them.

One of the walls that difficult the operations is that people do not like online transactions through credit card, because they have to give some bank details.

The New Regulation of Spanish TV

November 16, 2009

The Spanish TV legal framework has experienced relevant changes during the last 15 months:
– Acoording to the law 8/20009 about the financing of public television, TVE will not broadcast more advertising from 1 January 2010. That decission will means that the 700 million euros of TVE’s advertising income will go to other media.
– A decree dated 14 August 2008 allows TDT operators to launch pay channels. Therefore, six private operators can increase the level of competition in a market where Sogecale has a dominant position (with 2 million subscribers and more than 70% of the pay TV market). The public operator TVE will be able to own also two pay channels. The first mover after the decree has been La Sexta: the owners of this young commercial channel have launched Gol TV, a pay channel that broadcast soccer matches.
– The Telecommunications Law 7/2009 has relaxed the limits of concentrations: now two commercial chanels can merge, provided the combined audience does not overcomes the limit of 27%.
On top of that, a general TV law (Ley General de la Comunicación Audiovisual) is currently under discussion. This new piece of legislation will deal with controversial issues like sports rights, obligations for TV channels concerning Spanish films, and protection of children and young audiencies. That law, which will be aproved by the Spanish Parliament in 2010, will reagulate a very competittive market which is suffering a deep crisis: advertising decreased 11% in 2008 and it will go down around 24% in 2009.

Murdoch’s delays…

November 9, 2009

Despite the promises of Murdoch of establishing “pay walls” very soon, he is finding harder than expected to introduce charges for readers in his cyberpapers.

He has admitted that the schedule was slipping for the start of online charging at papers including the Sun, the Times, the New York Post and the Australian. Although he declined to give reasons for the delay, he recognised he was talking to some rival groups, such as Telegraph Group in Britain.

The most revealing consequence of all this is the need of consensus in the industry to be able to take the risk. Murdoch does not want to take the first step unless he is certain somebody else is going to take the second one. Therefore, it is not just a matter of finding the most profitable business model for yourself. In this industry, as it has happened before with El País in Spain, it’s a matter of what we agree to do.

The same crisis for everyone?

November 5, 2009


It is a recognised fact that the advertising industry is crossing a deep period crisis due to the economic crisis faced by the different world economies. In fact, the world advertising investment has fallen during the first semester of 2009 in 16.4%. However, a detailed analysis of the data leads us to conclude that the effects are not the same for all countries and all media. As long as geographical areas are concerned, America and Europe are the most influenced ones.

Regarding media, we find that conventional media are being influenced to a greater extent than non conventional media. Among conventional media different responses before crisis are found. For example, the Internet is the only medium that where the total advertising expenses have not declined, but experienced a slight growth. The medium most influenced by the crisis has been the cinema, with a fall of 63.3% from January to September 2009. Next follows the investment in magazines, falling in a 37%. Investment in advertising in newspapers and television has fallen in a 28%, whereas expenses in radio have been reduced in a 17%.

This leads to conclude that the crisis has not been the same for all the media. Research suggests that in a period of crisis advertising in audiovisual media is less influenced than investment in printed media. Data from the current recession period seem to confirm it. Radio has emerged as a more resistant medium in crisis times and advertising expenses have experienced a strong decline. The surprising data can be found in the fall in advertising investment in television. Its share in total investment has declined and during two quarters in a row in 2009 has lost more investment than the industry average.

Digital Terrestrial TV in Europe

November 3, 2009

At the end of 2008, coverage of digital terrestrial television in Europe reached 92,38% of households in Spain, 90% in Germany, 89% in France, 85% in Italy and 80% in United Kingdom.

To be able to receive digital signals, househlods should have a
digital television set with an internal digital decoder (an “integrated digital TV”) or a digital set-top box to convert the digital transmission before its gets to the analogue television set. Acording to EGM, in June 2009 only 45,2% Spanish househols have done such transition, but that figure is an increase of 93% from previous year.

The digital switchover will mean more choice, better picture quality, and more diversity. It will create more oportunities for creativity and innovation. But to make the most of such options, media managers should be focused on long term projects which will provide brand prestige and consumer satisfaction.

The role of the contents producers

November 2, 2009

Mercedes Medina.

I would like to share some comments with you. There are many changes that affect the media and are transforming them. I´ve heard this morning in a Conference in Neuchatel, Switzerland, about Media Interactivity: Economic and Managerial Issues, that the revenue from interactive services of the television channels, Mediaset and BSkyB, has grown in the last years. On the other hand, users of media are now dialoguers, debaters, messengers, testers and content producers. Furthermore, in El País, October 28, there was a report about the DTT where was said that the future of television goes through the interactive services such as income tax statement, taxes payment, medical services, shopping, that overcome the digital divide of households without Internet access.

With all these changes, media companies are not any more companies that only deliver contents. Media managers have to set departments of marketing, retailing, and stores, or to signed agreements with external firms. So, in this new context what is the role of the content producers? How do they have to produce or create media goods? What is going to be the core business of media companies? Will be still important to have good contents that satisfied the information and entertaining needs of the audience?