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?
The Consumer Electronics Show (CES) this year was held virtually, with announcements revolving almost exclusively around the pandemic and addressing changing consumer needs. The evolving use of tech at home was a particular focus for brands as consumers are now demanding more of their homes than ever before.
Following a record 2020, ecommerce was a topic that garnered a lot of attention, with retailers emphasising the importance of a consumer centric 'digital first' strategy, accepting the fact that ecommerce is going to be bigger than it ever has been.
Amid increased tech use at home, moves to ban third-party cookies and impending regulatory changes to data collection in the US, the conversation around data and privacy was more prominent than ever before. First-party data is going to be more valuable, even if tracking restrictions limit what can be done with that data.
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.
Linear TV is ageing, and the largest channels are ageing fastest. There is an ongoing double-whammy effect of a growing older population, and the loss of younger viewers to social media and SVOD services.
The PSBs are suffering more than most, especially the BBC channels. 31% of the population is aged 55+, but over 60% of viewing to BBC1 and BBC2 is by those aged 55+.
The trend can be halted, and even reversed to some degree. There is no inevitability to this ageing process, but it will take concerted efforts to fight it.
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
The TV, the main screen in the house, is rapidly becoming connected to the internet, opening a new front in the battle for people's attention
Tech players, pay-TV operators, and manufacturers are all aiming to control the user interface, ad delivery and data collection, leaving incumbent broadcaster interests less well represented
To protect their position, and the principles of public service broadcasting, broadcasters will have to work with each other at home and in Europe to leverage their content and social importance
In a display of chutzpah, Mediapro acquired the Ligue 1 domestic broadcasting rights from 2020-24 in what is the most disruptive shock to the French broadcasting industry in a generation; one that is likely to accelerate Canal+’s decline, force a review of the outdated regulatory framework, and possibly spur an M&A spree.
The Mediapro move only makes sense as a highly speculative bid to resell the rights, or a dedicated channel, to French platforms in 2020. The odds are high that the broker ultimately fails to fulfil the contract, as just happened in Italy, where Sky is now expected to get the Serie A licence.
Precedents of new entrants acquiring domestic top-flight rights bode poorly for Mediapro, and for the league. The Ligue 1 may live to regret the introduction of a ‘re-sell right’ into its licensing terms.
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 rights auction for France’s Ligue 1 will be held on 29 May. With Altice’s struggling subsidiary SFR unlikely to bid, Canal+ and BeIN Sports may not offer enough to meet reserve prices, triggering a postponement of the auction
In Spain, stiff fixed-line competition is shifting battlegrounds from football to scripted content. The Champions League has yet to sign up a platform for next season, while the upcoming 2019-22 La Liga rights auction may well fail to increase domestic revenues
With just 12 weeks before next season kicks off, Italy’s Serie A is also yet to secure a broadcaster, although we expect the league to back down and settle with Sky. In this deflationary environment, top clubs are eyeing a new Club Word Cup as an extra revenue stream – running the risk of further widening the financial chasm between themselves and smaller clubs