Customers Disrupted, Behavior Changes Quickly

Michael Hedges March 30, 2020 Follow on Twitter

Disruption has many masks. Digital disruption has been with the media world for nearly a generation and has offered challenges and opportunities. Publishers wasted many of those years railing about change, lobbying to stop it. Readers cared nothing about this or the cash-flow issues. Brand disruption is striking now.

Beginning this week French postal service La Poste is limiting mail delivery to three days a week as a social distancing precaution. The effect is another blow to regional and weekly newspapers, not to forget readers relying on those publications in printed form for news and, just as important, comfort. The announcement comes as Presstalis, the major French newspaper distributor, is headed for bankruptcy protection.

The reduction in postal service will “affect up to 500,000 subscribers to the daily press and 450,000 subscribers to regional weekly press,” said publisher trade body Alliance de la Presse d’Information Générale (APIG), quoted by nouvelobs.fr (March 27). The group also noted the decision by La Poste was “taken without notice or consultation.”

"Postal distribution, an essential public service mission, is central for many titles and its interruption, even partial, poses a problem of access to information for all,” said APIG president Jean-Michel Baylet in a statement. “It creates a major economic risk for an already very fragile sector. The most fragile territories are affected.”

“La Poste abandons us,” wrote regional daily La Montagne (March 29). “La Poste is flouting its contractual commitments both to publishers and to the State and taxpayers, who pay it €100 million per year to ensure distribution.” La Montagne is published by Groupe Centre France and has served Clermont Ferrand in central France since 1919. The same open letter appeared in each of the publisher’s newspapers.

Presstalis has seen better days. Digital transition has disrupted consumer behavior. The distribution cooperative of major magazine and newspaper publishers services three-quarters of point-of-sale outlets in France. The company postponed a bankruptcy filing last week.

The “procedure would have resulted in the liquidation of the entire industry at the worst time,” said company president Cédric Dugardin, quoted by Les Echos (March 25). Cash on hand will be gone in about two weeks, he added. There is a cash-flow problem; payments to publishers delayed.

It is not a new problem for Presstalis. Several months ago the government agency for industrial restructuring set about to divide the company into two units, one for financial management, another for basic logistics. That accomplished, the company would exit the next level of distribution, delivery truck drivers. This being France, differences arose between magazine and newspaper publishers. Then the coronavirus epidemic broke out; social distancing and lockdowns removed French people from the streets and the kiosks.

To be sure, nearly every newspaper offers a digital edition. And digital subscriptions have been on the rise. “Sales of digital products have been growing for years, but now they are growing disproportionately,” said a spokesperson for German publishers association BDZV to media portal meedia.de (March 25). “That can certainly be attributed to the coronavirus.”

Publishers generally credit paywalls that squeeze news-insecure readers for bolstering that digital revenue. This is helpful as media buyers and the brands they represent drastically reduce ad spending. Some newspapers - but certainly not all - have pulled down paywalls, selectively, to allow access to the latest scary news about the coronavirus.

See also in ftm Hot Topics

• Hot Topics - Media in France

• Hot Topics - Digital Transitions