In the previous quarter of the year, nearly twenty printed titles have disappeared from Czech newsstands. Others are going to cease to exist within a few weeks. Big television stations have cut their production costs and the small ones are even working out plans for new, low-cost programme schemes.
According to Aktuálně.cz findings, the first quarter of 2009 was a dramatic period for traditional publishing houses – the company CME, the owner of television station Nova, is dealing with a 30% sales fall against the plan, and another giant Mafra is just a few percentage point better. The regional giant VLP, the owner of the daily Deník, among others, showed a dramatic first-quarter decline against last year, according to internal information. The management gave almost 30% as the official figure.
But large publishers had very conservative plans, mostly for a moderate decline or a zero growth.
While the traditional media market in the Czech Republic is now busy with a wave of unprecedented discounts on advertising (reaching as many as 90%), job cuts and extensive cuts in other costs, the position of the internet in the advertising market is reinforcing. For example the market leader Seznam has announced a growth between 10% and 15%.
Slimmer newspapers, broader checks
“The situation is much more dramatic than it was in the autumn, even though it is not so obvious on the outside. Most printed titles have experienced a fall in advertising revenues in the order of dozens of per cent in a year-on-year comparison,” said Daniel Köppl, editor-in-chief at the weekly Marketing & Média.
The position of traditional media businesses is being complicated by the fact that they fail to keep demand from viewers and readers at the time of strengthening economic stagnation.
Viewing rates at the biggest television stations have been decreasing for a long time. And for instance the daily Mladá fronta Dnes saw the monthly average circulation drop by 19,000 copies in January and even by 38,000 copies year-on-year, according to data from the Audit Bureau of Circulations. This is also a reason why the publishing house Mafra is now going to issue “slimmer newspapers” at the same price. The company has cut several dozen jobs since last year – according to unofficial figures, it has laid off as many as seventy people.
Mafra management has been unwilling to comment on the operation issues. “No major job cuts have been announced. However, a maximum possible efficiency of individual products and projects is something we have always tried to achieve,” Mafra board member Roman Latuske said some time ago.
Economia, the publisher of Hospodářské noviny and Ekonom, is undergoing major changes as well. The company reacted to the market development with a delay, and the more dramatic were its austerity measures at the end of the quarter – the firm has reduced operation costs of the editorial staff to a minimum level and also cut external content and travel budgets.
The publishing house Ringier has suspended the planned change of its Sunday tabloid newspaper Nedělní Blesk. It wanted to introduce the changes at the turn of February and March, but now is waiting to see how demand from advertisers will be shaping up.
The tabloid daily Šíp is no longer available at newsstands. As of February, it has been transformed into a magazine published once weekly. “We were losing so much money on Šíp that it forced me to think about it thoroughly again. The second reason was that we failed to raise circulation and the volume of advertising enough to be able to publish the title effectively,” head of the publishing house Vltava-Labe-Press (VLP), Miroslav Pavel, told Lidové noviny recently.
Another wave of changes
Some experts predict that especially the printed media can now fall much deeper than had been expected. “I assume that somewhere in April or May a second wave of restructuring will come in large publishing houses,” said Daniel Köppl.
For instance the television station Nova dismissed a number of people from television production as well as from its online division on the last day of March. The lay-offs also concerned well-known presenters.
Nevertheless, the decline in advertising will be very risky especially for publishing houses that are not so strong financially and that depend on a success of a few printed titles. “There can be even a turnaround: Relatively small domestic publishers can get to the top at once. Large publishing houses with foreign capital will be influenced to a greater extent by the development in the home countries of their parent concerns and that can strip them up,” said Köppl.
The fact that even performance of such established titles as the magazine Reflex and Týden was far below the plan in the first quarter shows how the traditional media market is volatile.
For example, Bauer Media discontinued the magazine Femina just a few months after its launch was announced. The publishing house Sanoma has stopped six titles, and the free Prague daily 24 hodin published by the concern Ringier has disappeared as well.
Internet as a rescue
Other titles, such as Yop!, Svět mobilů and Mobilhry – published by Mafra, and PC World published by IDG Czech, have lost their “paper” versions and are only available on the internet.
It’s the online world where large Czech media companies see the future now. Print publishers expect the drop in circulation to continue – just for comparison, already now the number of people buying the quality dailies Hospodářské noviny and Lidové noviny makes up only about a quarter of those who consume the news at the online daily Aktuálně.cz (published by Centrum Holdings, number two on the Czech internet) every day.
The publisher of Hospodářské noviny expects a lot from a relaunch of the paper scheduled for the beginning of summer. Along with a change in graphic design and a new editorial system connected with the web, teams of journalists will focus on publishing information online. The company wants the same editorial staff to be more or less able to serve both media.
Its rival Mafra announced a reinforcement of its online strategy at the turn of March and April. To help it with the objective, it has a new board member Dalibor Balšínek, who lead Týden in the past. Instead of the main brand Mf Dnes, the pilot project will be Lidové noviny whose website should always publish information before the printed version. The fact is that the publisher already declared the “internet first” strategy two years ago, but after a few weeks everything returned to the “traditional way” again.