The Telegraph’s carefully executed outsourcing of print advertising sales to Mail Metro Media fine-tunes its subscriber-first strategy.
Consolidation and collaboration are inevitable in a highly-competitive, structurally-shrinking news industry.
Reader-first models have emerged as the consistent theme for quality publishers, but the trade-offs, investment approaches and executions are highly differentiated.
Capital-rich DMGT has offered a £70m cash consideration, c.10x EBITDA, for New Scientist.
DMGT has tightened its portfolio in recent years, and recent acquisitions firmly push the core business back towards consumer media.
Why New Scientist?
In a challenging media marketplace, quality online news services generated hundreds of thousands of new buyers in 2020, perhaps inching ahead of print in terms of UK household propensity-to-pay.
But reader-first models are not only about subscriptions. The UK’s first national print title to go online-only, The Independent, has achieved operating profits since reconfiguring its cost base in 2016.
The Independent defies many investor assumptions about news. Solutions for smaller businesses may diverge more from industry giants than is commonly expressed, and without distribution change, editorial, product and commercial transformation is slower.
National World Plc, David Montgomery’s investment vehicle founded in 2019, will buy JPI Media for £10.2 million, a tiny 1.7x EBITDA.
Disposals by JPI Media shifted its operating model towards digital, National World will shift this further.
This acquisition kicks off what is likely to be a busy period for M&A, though local consolidation remains hindered by the local media mergers regime.
The decline in demand in print presents trading challenges, but the more immediate pressures are on the supply side, with a 15% rise in paper prices accentuating the burden of production and distribution costs
With digital advertising growing at stubbornly low rates, UK publishers need to return to their fundamental consumer-centred strengths by switching their strategic attention towards strong brands, curation, and community
The case for specialist, branded publishing media remains robust: products, services, and consumers are still best brought together in an authoritative, trusted media environment. Advertisers and agencies (and also media) have undervalued the effectiveness of those environments, and direct-to-consumer opportunities have been exaggerated by many brands
The Telegraph, The Guardian and News UK (The Times and The Sun) will jointly invest in The Ozone Project to develop a state-of-the-art platform to sell their digital inventory
Ozone will add value to news digital inventory and seek to win back advertiser expenditure on Facebook and Google’s various properties, (indirectly) reigniting interest in placement next to quality news media content
Each JV participant operates a distinct business model, which risks friction, but this digital reboot is crucial. By 2020, Ozone could add circa £30 million per annum – not a trivial contribution to a national newspaper newsroom
Bleak prospects for digital advertising leave no choice to news publishers but to generate revenue from readers, and the lack of widespread frictionless micropayment options means there is no alternative to subscription — the vast majority of western ‘quality’ newspapers have rolled out paywalls; meters and registrations are the most promising approaches
Recent politics have increased demand for quality journalism and readiness to pay. Despite clumsy commercial models the rise in subscriber numbers is encouraging, but current price points may be too low for a sustainable digital transition. Churn is high, publishers have yet to fully develop and optimise ecommerce
The transition to an audience-centric model is a shift away from click bait, with distinctiveness, curation and news agenda hierarchy among the most important factors. Leveraging data to optimise audience engagement remains challenging
The Competition and Markets Authority (CMA) halted the merger of the publishing assets of Trinity Mirror and Northern & Shell, and is inquiring into the merger’s likely impact on competition in the national newspaper market
The CMA will take into account efficiencies of £20 million in newsrooms, printing and advertising sales, which if realised could help sustain national news provision in a failing print market transitioning to digital services
Secretary of State (SoS) Matt Hancock has issued a Public Interest Intervention Notice (PIIN) citing newspaper public interest (PI) grounds, on concerns the TM/N&S merger may be contrary to the public interest
At the end of January 2018, the acquisition of Time Inc. by rivals Meredith Corporation closed for $2.8bn. Time Inc. had already been in the process of selling its UK arm, which completed on March 19 to private equity fund Epiris LLP for an estimated £130m
The Time Inc. UK portfolio is a reasonably diverse one, with the following categories: Entertainment, Fashion & Beauty, Home & Design, Sport & Fitness and Specialist
Within the consumer magazine sector as a whole, oversupply remains the core issue, and we expect to see further closures of weaker titles benefiting category-leading brands
Trinity Mirror’s proposed acquisition of Northern & Shell’s newspapers (Express and Star) and magazines reflects a hunger for consolidation among corporate media, creating scale positions while entrepreneurs step back
The deal makes strategic sense for Trinity Mirror, with material cost savings in printing and back office, and some scale benefits in advertising: important developments if the industry is to generate a differentiated digital offering
DCMS’s announcement of a review to sustain quality national and local news provision sets some welcome mood music for the sector, but the Trinity Mirror acquisition may still face regulatory hurdles