sábado, 23 de abril de 2016

Financial Times: ‘We are facing daunting conditions’


Financial Times: ‘We are facing daunting conditions’
Warning of ‘tough times ahead’ as UK newspaper industry hammered by advertising slump.

By ALEX SPENCE 4/22/16, 1:01 PM CET Updated 4/22/16, 7:09 PM CET

LONDON — The Financial Times is braced for “daunting trading conditions,” its managing editor has warned, in the latest sign of the severe challenges hitting the U.K.’s newspaper industry.

Newspapers including the Guardian, Independent and Times have announced drastic moves in recent weeks as they search for ways to secure their futures amid vast changes in media consumption. The FT, which appeared to be better positioned to weather the storm than many of its Fleet Street peers, is also feeling the squeeze.

“We are facing some daunting trading conditions in 2016,” the managing editor James Lamont warned FT staff this week in an internal memo seen by POLITICO.

Despite its high-value readership, the financial newspaper has not been immune to the painful trends afflicting its general-interest rivals: Print advertising has had another bad start to the year, while the digital news business is also proving to be precarious.

The FT’s commercial team is “braced for tough times in the months ahead,” Lamont said.

The memo indicated four areas where costs will be cut back: There’ll be a delay in filling job vacancies. Travel and entertainment expenses will be slashed. Casual staff will only be brought in when “strictly necessary.” And there’ll be more pressure to streamline production of the print edition.

“It’s far better to take precautionary measures than find ourselves playing catch-up later in the year if the trading conditions do not improve,” Lamont said. “We will review our performance at the end of the second quarter.”

The warning will raise eyebrows elsewhere in London media circles, since the FT had been perceived as one of the leaders among the traditional newspaper businesses at repositioning itself in a rapidly-changing landscape.

With the advantage of a well-off audience and specialized financial content, the FT has been able to build a base of paying digital customers — and reduce dependence on the print versions — more quickly than its general-interest competitors. While most newspapers still rely on their print editions for the majority of their income, even though they’ve built big online readerships, the FT now gets as much revenue from its digital products.

According to figures released last month, the number of digital subscribers reached 566,000 last year, driving an 8 percent year-on-year increase in the FT’s total paid-for sales to 780,000.

Even then, the FT isn’t immune to the challenges battering the rest of the news industry.

Print advertising has “been far softer than expected in the first quarter of this year,” Lamont said in the memo.

Some of that is because companies are jumpy about the potential impact of the upcoming European Union referendum and the U.S. Presidential election, which is making them delay spending decisions.

More worrying for the publishers in the long term is that some of the downturn is because companies are pulling out of newspapers altogether, putting their money into other formats such as the Internet and TV. The fear is: Many of those companies won’t come back.

This year’s print advertising slump mirrors a sharp, unprecedented fall in the first half of 2015, which analysts at Enders attributed at the time to the sector hitting a “structural wall.”

Between 2010 and 2018, the press’s share of U.K. display advertising will have fallen from nearly 30 percent to under 10 percent, Enders said. That represents hundreds of millions of pounds of income flooding out of the market, while print circulation revenues are also falling.

Publishers have been desperately trying to make up for the shortfall through their web editions, but that, too, is a tough business. Google and Facebook take by far the largest share of spending on online advertising, leaving publishers to compete with a vast array of other sites and services for what is left. A growing number of users are adopting software to block advertisements.

“Some of our traditional peers in the UK market have announced hefty redundancies and a retreat from print in recent months,” Lamont said, referring to the Guardian, which is cutting about 250 jobs to stem heavy financial losses, and the Independent, which closed its print versions last month.

He added: “In the digital realm, you will have seen last week’s [reports] that BuzzFeed had slashed its revenue forecast in half for 2016.”

The FT’s editor Lionel Barber and chief executive John Ridding will meet staff next Thursday to give an update, the memo said.

Authors:


Alex Spence  

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