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Analyst: Downturn And Intransigence Pushing French Papers To Web, Oblivion

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Reuters (NYSE: TRI) has this remarkable and brutal story of how France’s rickety news business, which relies heavily on state subsidy, is about to get worse…

  • “France’s printing and distribution costs remain roughly 30 percent higher than in neighboring countries.”
  • “Unlike in the UK and the U.S. where press bosses broke powerful unions in the 1980s to sharply reduce printing costs, France has not gone through such a painful reckoning.”
  • “Direct state aid to France’s press will total 580 million euros ($759 million) next year.”
  • “Paid newspaper reading has fallen from 43 percent of the populace (1989) to 29 percent (2008).”

Some recent occurrences…

  • “Tabloid France Soir and business paper La Tribune are teetering on the brink of liquidation and may soon kill their print editions to go Internet-only.”
  • “Leading financial daily Les Echos announced a cost-cutting plan to trim nearly 10 percent of its 430 staff.”
  • “Family-owned media group Hersant is locked in painful negotiations with its creditors.”
  • “In October, co-operative bank Credit Mutuel bought two regional papers.”

Reuters’ insight is based on pessimistic readings given to it by Jean-Marie Charon of France’s National Centre for Scientific Research.

The rise of good-quality free daily newspapers has been one impact on daily paid circulation.

Instead of wholesale reform for the digital age, France’s government has tried propping up the still print-centric industry. This year, it is giving away 210,000 free newspaper subscriptions to citizens aged 18 to 24 in an annual scheme costing €15 million over three years. One French newspaper publisher last year described it to paidContent as “permanent artificial respiration“.

But the government is also in the middle of a similar, two-year programme to stimulate paid digital music retail by giving citizens half the cost of a €50 million digital music gift card, totalling €50 million.

In the current European economy, Charon expects such schemes to bite the dust.

Le Monde avoided bankruptcy in 2010 by agreeing to a controversial takeover.