Up, down & sideways: Boom time at The Sun, stability at Trinity Mirror and cuts at The Times

Posted by Peter Kirwan on 13 May 2010 at 17:36
Tags: Johnston Press, News Corp, Times Media, Trinity Mirror

So Sly Bailey’s regionals experienced an 8% decline in ad revenues between January and early May. This mirrors the 7.1% decline at Johnston Press over the same time period.

There was no forecast of a return to growth among the regionals in this morning’s trading statement from Trinity Mirror. Management expects “month-on-month volatility” to continue across the company.

Turn to the company’s nationals, however, and things get interesting. The language here was muted, almost downbeat. Ad revenues are “flat” and “relatively stable”: up 1% in January-February, but down 1% in March-April. Circulation revenue fell by 6% across the period.

This feels like a marked contrast with News Corporation, which unveiled its quarterly results last week.

News Corp reported a 10% YOY increase in ad revenues at Wapping during Q1. During the conference call, James Quinn, the Telegraph’s US business editor, got a word in edgeways with Murdoch about this.

Q: “Any sign that the 10% increase will be sustained?”

A: “At the moment, every sign. We’ve had many weeks when the London Sun has had all-time records in revenues. I’ve got to say I’m surprised. But it’s very welcome.

A: Are there specific titles? Is it all display?

A: It’s all display, yes.

Q: Just the Sun or is it across all four papers?

A: The Sun has been the leader, but across the four papers, we’re up.

The contrast in tone with Trinity Mirror is stark. And yes, something interesting does seem to be going on at The Sun. In early April, Media Week described ad sales for the Easter period as follows:

Among trading highlights for the week are a 50% year-on-year increase in spend from the big four supermarket retailers as they focus on Easter dining as well as their expansion into new categories such as electrical and gaming.

Among the biggest spenders for The Sun, in a sector reported to be up 50% up year on year, are B&Q, DFS, Argos, Wickes and Furniture Village.

Perhaps a fleeting 50% increase on top of last year’s collapse isn’t much to write home about. But Murdoch did seen genuinely surprised — his word, not mine — about The Sun’s ability to break “all-time records” in terms of revenues in such a weak market.

Note, too, those final few words, in which Murdoch suggests that trading is up YOY “across” The Sun, News Of The World, The Times and the Sunday Times.

At the Telegraph, James Quinn interpreted this to mean that each of these newspapers is doing better than it was last year.

It would be churlish to suggest otherwise. But if The Sun really is soaring away into the upper atmosphere, what’s happening at The Times and The Sunday Times?

You have to wonder. In Scotland, the Sunday Times has axed its marketing team. By one account, 16 out of 20 journalists could be let go. There’s a suggestion that the Scottish edition will now be produced “from England, with regionalised pages”.

Today, we got the main act: a 10% cut in editorial budgets that could cost 80 jobs at the Times and the Sunday Times in London.

When it comes to cuts like these, one quarter’s trading performance is neither here nor there.

Like HM Government, Times Newspapers Ltd is trying to cut its structural deficit. In the year to June 2009, pre-tax losses came in at £87.7m, up from £50.2m the previous year.

Perhaps management is taking action before News Corp’s shareholders rise up to demand it. In any event, the logic seems remorseless. Two years ago, Wapping offloaded 100 out of 450 sales staff after merging its tabloid and broadsheet advertising teams. Here’s how Harding describes thinking at the moment:

our losses are unsustainable. We cannot ensure the long-term future of this paper and our futures in journalism if we cannot make a viable business out of The Times.

Up, down and sideways. The good news at The Sun and ITV (ad revenues up by 8% during Q1) is balanced out by the bad news elsewhere.

The IPA’s recent Bellwether Report suggested that media budgets rose during Q1. The last time this happened was Q307, two and a half years ago.

But note that only 21% of marketing bosses increased their total spend during the quarter. As yet, the recovery is patchy and weak. It’s not hard to imagine a pull-back.

Common sense, a decade late: James Murdoch cuts 20% of sales jobs at News International

Posted by Peter Kirwan on 9 July 2008 at 16:40
Tags: News Group Newspapers, News International, Times Media

James Murdoch’s decision to merge the separate sales teams that used to service Times Media and News Group Newspapers might sound a bit radical.

In reality, it’s hard to describe the move as anything other than common sense, implemented a decade late in a sector well-known for its old school approach.

From September, News International’s sales teams will flog space through “agency-focused hubs, each housing between six and 10 people”.

The stated aim, of course, is for sales folk to build deeper relationships with the big agencies that generate most of NI’s ad revenues.

The unstated aim involves cutting perhaps 20% of the employment costs out of NI’s sales organization. News International is planning to make 100 out of 450 sales staff redundant.

From a bean counter’s point of view, the timing is excellent. The reorganization was worth doing anyway. But no doubt Murdoch Jr. has grabbed the chance to add a bundle of recession-related job cuts into the total.

The anonymous jeers from rivals quoted in Media Week cut very little ice. One suggests that asking the same team to sell space in both The Sun and The Times is “not a natural fit”.

Why not? Despite demographic differences, both papers trade in the same currency of eyeballs. By selling across a portfolio of titles, News International will hope to generate more incremental revenues than it will inevitably lose by demolishing title-focused sales teams.

The second complaint from an anonymous competitor goes like this:

“I am not convinced it is the best way to go forward. The changes will not grow their revenue base, but it will be a more efficient way to generate sales. This is about cutting out costs.”

. . . Which, last time I looked, seemed to be a perfectly sensible response to recession.

Welcome to The Great Unbundling, Mr Rusbridger

Posted by Peter Kirwan on 25 June 2008 at 17:11
Tags: Associated Newspapers, Guardian Media Group, Independent News & Media, Telegraph Media Group, Times Media

Scientists say that falling in love alters our brain chemistry, and therefore the way in which we perceive the world.

Presumably, it’s the same with losing.

Last week, the Mail Online overtook the Guardian and the Telegraph to become the UK’s most-trafficked national newspaper site.

Now, suddenly, the Guardian is suggesting that it’s becoming increasingly “anachronistic” to compare ABCe data for newspaper websites.

Yes indeed. That’s because the Mail’s great surge in online visitors hasn’t been generated by what Mike Butcher, the author of the piece, would call “news”.

No — it’s all down to Keira Knightley’s “razor sharp” collarbone and pictures of an emaciated and distressed Amy Winehouse wandering around the streets of London in the small hours dressed only in her underwear.

Butcher argues for a purist view. He accuses the Mail Online of playing fast and loose with link bait (which is patently true).

Sites like the Mail Online and The Sun — with its three lane pile-up of tits, bingo and fantasy football — aren’t really news sites at all, he argues. They have more in common with the US celebrity site TMZ.com.

As for The Guardian, well, it seems tempted to pick up its toys and walk away. Now that the Mail Online has bested it, Butcher tells us that:

guardian.co.uk. . . will be more interested in how it is faring against the Huffington Post, a liberal US blog network, than comparing itself to other domestic newspapers.

Of course, tinkering with competitive sets in the wake of commercial defeat has a long and venerable history within sales organizations. It goes on everywhere, and it’s symptomatic of denial.

Commercially, no-one will be fooled. That’s because the web’s animating force is all centripetal, not centrifugal. Competitive sets are getting bigger, not smaller.

In terms of advertising revenues, the Guardian must compete directly with the Mail Online as well as Google, MSN and Yahoo — and a host of others.

In the absence of pornography, violence and racism, the quality of news coverage that brings in the punters simply doesn’t matter to advertisers.

That said, Butcher’s piece does point to something important.

The Mail Online’s successful experiments with link bait are a prime example of what the author Nick Carr calls the “unbundling” of news content.

No longer do we have to pay a set fee to buy a newspaper that contains a mix of highbrow and lowbrow content.

Zooming in from Google in 0.25 seconds, we can get our fix of “+keira +knightly +baftas” and exit just as rapidly as we arrived, leaving any “serious” content undisturbed.

The real question for editors at the Guardian and the Telegraph is how to preserve resources for the news content that Rupert Murdoch calls “boring”. They need to do this in a digital world where 20%-30% annualized growth is a minimum requirement.

The pressure to unbundle, to encourage links with bait, is enormous. It can only grow. For better or worse, it will influence news agendas.

If mentally cordoning off a bit of cyberspace and labeling it “serious news sites only” helps editors to manage the pressures, fair enough.

But let’s not pretend that this will influence the ad market.

Because it won’t.

Succeeding together with passion and trust: James Murdoch sends in the secret policemen

Posted by Peter Kirwan on 13 June 2008 at 16:08
Tags: News Group Newspapers, News International, Times Media

There are times when the role of management consultants is akin to that of the Stasi.

The classic example involves the arrival of a new chief executive in an organization that has grown used to doing business successfully under a long-lived predecessor.

The consultants are told to fan out, get under the surface, find out what’s going on and report back. Woe betide any manager whose pitch to the new CEO is contradicted by the consultants’ findings.

The other day, a News International journalist told me that “everything at Wapping is in flux”.

On the commercial side, I fancy it’s worse. According to Media Week, News International has entered a “consultative process”. Whether that means consultants doing their jobs, or consultation prior to redundancies, remains unclear.

What’s clear enough is the belief that James Murdoch wants to knock down the walls that separate NI’s publications into title-specific silos.

Instead, the talk is of “three separate units across News Group Newspapers and Times Media comprising commercial, digital and operations”.

In other words: a big restructuring, in which jobs will be lost as high-level commercial folk apply for new roles.

Take Paul Hayes, managing director of Times Media, and Mike Anderson, managing director of News Group Newspapers. Media Week suggests that these two are likely to find themselves competing to run operations, digital or commercial matters across the whole of NI.

Mike Gordon, deputy managing director of Times Media, seems likely to be caught up in the same contest.

And don’t even get me started on marketing, where the likely outcome of BCG’s review is a new chief marketing officer’s role.

Presumably, both Roland Agambar, News Group Newspapers’ sales and marketing director and Katie Vanneck, sales and marketing director for Times Media, will end up competing for that particular plum.

At Boston Consulting Group’s web site, the firm lists its mission as “succeeding together with passion and trust”.

No doubt there’s plenty of both circulating around Wapping at the moment.