Archive for December, 2009

The Media in Spain: Forecasts for 2010

December 30, 2009

Usually, this blog presents data and trends about several media markets. We are focused in Spain, but we also analize other European and American markets. Today we will do something different: we will be bold enough to forecast what will happen during the next 365 days. Here is our forecast.

– After two years of strong decrease, advertising will be flat. That will means that the crisis of the media industry will end, but the recovery will be slow. The non-leading companies will keep fighting for survival.

– TVE 1 will be the leader of the Spanish television market. The public broadcaster will take advantage of its new business model: the audience will like a channel without advertising.

– Both SER and Onda Cero will be the winners in the radio industry. Onda Cero will add new listeners -mainly from Cope- and the distance with the dominant SER network will decrease.

– Circulation of newspapers will go down between 1 percent and 3 percent. Editors’ new marketing strategies will not be efficient enough to avoid the competition of online services.

– The internet stars will be the most popular social networks and, of course, Google. But TV channels will be also very active: their webs will provide new services which will be integrated with other platforms (mainly broadcasting and mobile phones).

Mergers and TV companies: is media like cheese?

December 22, 2009

Last week two Spanish broadcasters, Telecinco and Cuatro, announced that they will merge. It seems that other two, Antena 3 and La Sexta will do the same quite soon. Each new audiovisual group will have between 21 percent and 23 percent of the audience market share (the legal threshold is 27 percent).

Telecinco’s main shareholder is Silvio Berlusconi, while Cuatro is owned by PRISA, a media company closely linked to the Spanish Socialist Party. On the other hand, Antena 3 has a right wing orientation and La Sexta has the opposite position.

During the last days, managers of the four TV companies concerned said that each channel will preserve its identity. But… is media like cheese? A cheese company can produce Gruyere, Emmetal, Gorgonzola or Roquefort: different options for different tastes. But can we apply this model to media? Will the journalists be happy if they know that the new owner is only interested in profits because he has not a pourpose of making a positive impact on society? Will the company keep the standards of quality and innovation if their most creative people are not motivated? The future will give us the right answers.

2010: A Year of Mergers in the Spanish TV Market?

December 15, 2009

2009 has been a year of dramatic changes in the Spanish television market: a new legal framework, a decrease of advertising income close to 24%, and a more fragmented audience. Other issues have been less innovative: during the last 12 months we have seen again several controversies about the quality of programming and about the role of the public television. Also, in spite of the launching of new entertainment substitutes, TV consumption remains high.
Spanish television companies are feeling the pinch because of both the advertising decline and the launching of new channels. Only two operators -Telecinco and Antena 3- will be profitable in 2010 and their margins probably will be below 12% of their income.
In this context, mergers and acquisitions seem inevitable: a majority of competitors are not profitable and the law allows consolidation of companies with a limit of 27% of audience’s market share.
What are the barriers for implementing such deals? Firstly, the small TV companies have big debts. And secondly, two merged companies only can have one boss: that last fact will be the main obstacle for consolidation of companies in the Spanish TV market next year.

Could the Crisis be an Oportunity for Media Groups?

December 1, 2009

Media groups all over the world are feeling the pinch. Almost everything is going down: advertising incomes, profits, share’s prices, circulation figures, size of staffs, managers’ expectations…

In periods of prosperity it is not easy to discover companies’ failures because profits usualy hide managers’ mistakes. But now the crisis has helped us to identify some strategic errors: most part of media groups have been short term oriented, have take to much financial risk, have been obsessed with maximizing profits and increasing size, have had weak editorial projects, and have not paid enough dedication to motivate their teams.

The crisis remind us that good management requires strong leadership, a culture of innovation, balance between short term focus and long term goals, a highly motivated team, good understanding of new technologies, the ability to protect brands’ value and a coherent editorial project.

Companies can not avoid the crisis -which is deep, long and almost universal- but at least can learn from it.