The search engine giant will today make the case that regional newspaper publishers should be allowed to merger, because of the impact of Google and other internet companies, in its submission to the Office of Fair Trading’s review of the existing newspaper merger structure.
The Office of Fair Trading (OFT) is seeking initial views on local and regional media mergers as part of a review following the UK government’s Digital Britain report.
Representatives of the Post and News have been discussing ways to combine certain ‘business functions’ of the two titles, in particular distribution and printing operations.
Norwegian media giant Schibsted this morning announced that it’s paying £30m to take a 35 per cent stake in the Swedish edition of Metro International’s free newspaper.
In what is a key freesheet market the former rivals have forged a partnership to collaborate on advertising sales with the new company offering advertisers the chance to reach 4.2 million readers across the Metro and Schibsted paid-for dailies Aftonbladet and Dagbladet.
In February, Metro International CEO, Per Mikael Jensen, discussed his company’s strategic goals with Journalism.co.uk saying that consolidation and online innovation would be key for the development of his newspapers, in what he called the ‘freesheet 2.0 phase.’
“We are entering a freesheet 2.0 phase where we are consolidating our core business and looking at more ways to attract readers,” said Jensen, who succeeded Pelle Törnberg as head of Metro in 2007.
In Sweden, this consolidation will mean Schibsted will stop publication of its free paper Punkt SE with immediate effect so that the new joint venture can focus print advertising around a single free title.
The deal has similarities with the one Metro struck at the end of 2007, when it sold 60 per cent of its Czech operation to its competitor Mafra.
The freesheet giant is currently undergoing a strategic review, and when Journalism.co.uk spoke to him, Jensen said we could expect more deals of this nature.
Today, Jensen refused to rule out further consolidations when questioned by Danish media and said he expected dramatic changes in the Danish newspaper market in the coming months (but refused to go into details).
“We do not just sit there and wait for the strategic review to be completed, but implement strategy from day to day. Strategy is something we evaluate each month. Those who believe the strategic review we now are in the middle of will become some sort of bible, will be disappointed,” said Jensen in the interview with Journalism.co.uk.
In addition, Metro is looking to attract more readers online. It’s launching new versions of its websites in all its markets – it recently launched online for the first time in France – and will consolidate some of its editorial activities by creating an internal news agency in London which will serve all its editions.
Jensen is behind Metro’s new developments and alliances but he remains as pessimistic as ever about the future of paid-for printed newspapers.
“I would be very surprised if more than 25 per cent of today’s paid-for newspapers exist in ten years. Of the newspapers that will survive, many of them will be published online only, or make its paper edition free,” Jensen said.
The two newspaper giants may have forged a partnership in Sweden but they remain embroiled in a head-to-head competition over their market leading freesheets in France and Spain.
However, Metro International still has a lot of work to do to convince investors that its business model – the company is still loss-making even though it narrowed its first quarter net loss to £5.1 m – has a profitable future.
News and information company Thomson Reuters has confirmed that it is cutting 140 journalist posts by the end of the year.
According to the Guardian, head of news David Schlesinger wrote an internal email which explained that areas of “natural overlap and duplication in coverage” existed between the two companies and that as a result jobs would go.
The cuts, which will take place later in the year, are expected mostly to be of editorial staff in Europe.
The European Commission has approved the acquisition of Reuters by Thomson – subject to certain conditions being fulfilled.
The Commission was concerned that range of information services – rather than the news side of the respective businesses – supplied by the companies would be reduced and that the creation of a sole provider of analytical market information would be detrimental to customers.
The companies therefore agreed to a range of measures to limit this impact.
“The merging parties have offered a remedies package that provides strong safeguards that users of financial data will not be harmed by this major consolidation,” Neelie Kroes, competition commissioner, said in a statement.
The Commission originally raised concern that markets for the distribution of certain reports and financial data would be ill served by the merger as it may reduce choice, encourage the ‘likelihood of price increases’ and a ‘severe risk of discontinuation of overlapping products.’
The statement from the Commission stated: “To remove the Commission’s competition concerns, the parties committed to divest the databases containing the content sets of such financial information products, together with relevant assets, personnel and customer base as appropriate to allow purchasers of the databases and assets to quickly establish themselves as a credible competitive force in the marketplace in competition with the merged entity, re-establishing the pre-merger rivalry in the respective fields.
“Therefore, customers of such financial information products would continue to have sufficient alternatives post-merger.”
The statement added that the US Department of Justice would propose a settlement agreement consistent with the remedies accepted by the Commission.