The media market Buy new, get rid of the burdensome

Media companies make less and less profits with programme and women’s magazines.
Media companies make less and less profits with programme and women’s magazines. | Photo (detail): © Do u remember / (cc-by-sa 2.0)

Stagnation looks different: the German media market is on the move – through take-overs, partial sales and realignments. One group seems to have taken this very much to heart and caused a stir in the industry.

When the news made the rounds in July 2013, responses in the media industry were fierce – and varied considerably. Opinions on the multi-million deal ranged from “only logical” to “a watershed” and “fairly disastrous”. What had happened? The Axel-Springer Group had sold its regional newspapers and its programme and women’s magazines to the Funke Group. The sales price: 920 million euros.

The Axel-Springer Group, a German media company steeped in tradition, which publishes the widest circulation daily print media in Europe, the tabloid BILD, thus bade farewell to its roots. Among the items sold were traditional papers such as the daily regional newspapers the Hamburger Abendblatt and Berliner Morgenpost as well as the most successful women’s magazine in Europe Bild der Frau and the television programme magazine Hörzu.

The deal exemplifies two developments on the German media market: first, the attempt of the Springer Group to secure itself financially outside the field of journalism with other sources of capital, especially through the digital business. Springer now operates the real estate portal immonet and the car market site autohaus24, and secures with these non-journalistic websites money that can no longer be earned with journalism. Second, the Springer-Funk deal further attests to the continuing consolidation on the German newspaper market: with this purchase the Funk Media Group advanced to one of the largest regional newspaper publishers in Europe.

Fewer ads, declining circulation

The German regional newspaper market is now dominated by a few companies that buy up more and more newspapers. In addition to the Funke Group, the Madsack Media Group, for example, is one of the largest German regional publishers. Madsack now has 18 regional newspapers in its portfolio. Its strategy: economies through pooling editorial staffs. In this way parts of a newspaper that need not differ regionally are delivered by a central editorial office, some articles appearing in all the papers of the publishing group while their local sections continue to be different.

That this could lead to a loss of quality is denied by the media companies. „But pooling is in any case done at the expense of a diversity of voices – which could be worrying“, says Frank Lobigs, Professor of Journalism at the Technical University of Dortmund. In his estimation the regional newspaper market, even with progressive consolidation, does not have a particularly long future before it. “Depending on the degree of market consolidation allowed, you can perhaps still earn good money on regional newspapers for another ten or fifteen years.” At present the earnings of publishers are in many places still very good. But overall there are fewer and fewer ads and circulation is declining. Fewer and fewer people are using print media; more and more get their information on the internet.

Online journalism as a testing ground

In the online business, many providers are currently trying to establish web content for which users are willing to pay money. Again, here too the Axel Spring Group has acted: the web portal offers certain, sometimes elaborately produced content only for a price. Other portals, as, for instance, attempt to persuade the user to make a voluntary payment for the use of the contents.

Online journalism resembles a testing ground: no one yet seems to have found a definitive solution for the problem of financing. Multi-medially upgraded, Springer is seeking to establish itself in the digital industry. Part of this strategy was its purchase of the news broadcaster N24. Videos are becoming more and more popular on the web and Springer’s purchase of the television broadcaster is part of its plans to strengthen this division.