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Publisher to feed the digital beast
no treats investors

Investors punished big German media house Axel Springer in spite of good, and expected, year-end financial results. The reason, it seems, was rather basic: CEO Mathias Döpfner isn't sharing returns from selling off local publishing units. The dividend payable remains unchanged. The share price dropped to €54, roughly 6%, after the Wednesday (March 4) announcement.

“In the digital business, there is no publisher in Europe larger than Axel Springer,” said Herr Döpfner at the post-results press conference, quoted by (March 5). Rather than making smiley faces at investor's piggy banks, he's spending evermore on digital acquisitions. “Our company has changed structurally and culturally. We will continue to invest in digital expansion this year.” (See more about media in Germany here)

Gross sales in 2014 were up 8.4% to €3.0 billion, the largest portion being from advertising, up 10.8% to €1.8 billion, three-quarters (74.5%) of that from “digital activities.” In the 2014 fiscal year Axel Springer earned 43.1% of sales revenue outside Germany, €1.3 billion, up 12.4%. Shedding local newspapers, women's magazines and titles in the Czech Republic owned by the joint venture with Swiss publisher Ringier added about €650 million to the investment kitty.

Digital subscriptions for legacy print brands Die Welt and Bild exceed 300,000 with serious money from employment, automobile and real estate portals. The planned joint venture to produce a European version of political news portal Politico, to be based in Brussels, hit a snag when the German trademark owner came forward looking for - and receiving - the obvious.

E-books aren't physical things, says Court

An e-book isn't “physical” and, therefore, sales cannot be taxed at a rate lower than printed books, judged the European Court of Justice (ECJ). The European Commission had referred France and Luxembourg to the ECJ for reducing VAT (value added tax) rates for e-book sales, 5.5% in France and 3% in Luxembourg, quite bit less than the normative 20% VAT rate. You can't do that, said the ECJ, because “electronically supplied services” aren't in the Annex of the VAT Directive that lists goods and services on which a reduced rate can be applied.

VAT reductions can be applied to books “on all physical means of support,” says the VAT Directive but, said the ECJ, the “physical means” to access e-books would be devices like computers, smartphones and tablets that aren't part of the transaction. The e-book VAT reductions in France and Luxembourg have been in place since 2012. Since then, Italian and Spanish authorities have also dropped VAT rates on e-book sales in line with rates applicable to printed books.

“I expected this decision,” said French Culture Minister Fleur Pellerin on public radio channel France Inter (March 5), “as did many publishers and authors. What counts is the work, not the medium.” E-book VAT rates were dropped, in part, as a reaction to pricing policies of online retailers such as Amazon. “With other countries, we will continue to advocate for so-called technological neutrality; to apply the same taxation, be it digital or hard copy.”

Rumors rumble, shareholders grumble
changes certain, maybe and never

The disposition of the few remaining foreign shareholdings in Russian media has been subject to considerable speculation since a law to reduce foreign holdings and editorial control was passed last fall by the Russian State Duma. Television broadcaster CTC Media, registered in the US State of Delaware and traded on the NASDAQ exchange, would be effected by the law due to come into effect at the first of 2016 and, hence, watched carefully by financial and media watchers. The CTC Media board recently engaged the Zurich-based UBS investment bank and tax specialist KMPG to figure out a solution, the announcement of which caused stress on the company's traded shares.

Citing unnamed sources, the usually reliable Russian business publication Vedomosti reported (March 4) that Modern Times Group (MTG), the largest single shareholder in CTC Media (about 39%), had "received an offer" from the second biggest shareholder, Cyprus-domiciled Telcrest, principally owned by Russian billionaire Yuri Kovalchuk, which currently holds a 25% stake. Vedomosti is similarly under pressure as it is jointly owned by the Financial Times, Dow Jones (News Corporation) and Sanoma. (See more about media in Russia here)

A statement from CTC Media, hours after the Vedomosti lede was published, denied that MTG is "pursuing any separate process." CTC Media, offering four entertainment channels in Russia, has been quite profitable, benefitting all shareholders. Changes in the ownership and management structure or suggestions of such would affect already suspicious investors. MTG is also publicly traded with Investment AB Kinnevik as major shareholder.

Several big European publishers, including Bauer Media, Axel Springer, Sanoma, Bonnier and Egmont, appealed directly to Russian Federation president Vladimir Putin (February 24) for a one year extension in implementing the ownership and control law. A law restricting advertising, invoked at the same time as the ownership law, was subsequently amended, after which Time Warner allowed news channel CNN International to return to Russian distribution. Russian media and political watchers have noted a tide toward a similar amendment of the ownership law.

The news, moving fast, breathless even
Somebody died, just not him

Among global news agencies Agence France-Presse (AFP) is acclaimed, prestigious and factually rigorous. Mistakes, of course, can happen. To err is human, right?

Over the weekend AFP ran with an item announcing the death of Martin Bouygues who, it turns out, had not passed on. A simple correction would have sufficed had this been a mere mortal but Martin Bouygues is a very important French person, CEO of industrial house Bouygues Group, owner of television broadcaster TF1 and Bouygues Telecom. AFP executives have been scrambling with apologies and explanations.

"This case is very serious," said AFP spokesperson Michéle Lèridon, quoted by news portal Rue89 (March 2). Dutifully, AFP released an explanatory narrative detailing, quite obviously, basic reporting errors one after another. Simply put, a reporter tried to follow a rumor and, being the weekend in France, the best sources available would only confirm that somebody died in the little village where M. Bouygues has a house.

"The journalist asked me if a Mr Martin was dead and I said yes," said the mayor of a nearby village. The deceased "Mr Martin" was not Martin Bouygues. The fire brigade also confirmed that "someone" had died. The Bouygues Group press contact wasn't available.

The AFP reporter attempted to communicate with the chief editor of the French national desk, who was not available. An assistant decided to run the item, in the spirit of being fast and furious. M. Bouygues was, then, presumed dead, the item picked up by other news outlets and, of course, social media. Half an hour passed - a lifetime figuratively - before somebody at TF1 communicated M. Bouygues' true state to somebody at AFP.

Everything all the time is the future, just not guaranteed
review pending

With great regularity public broadcasting chief executives set out in a chosen venue their view of the institution's future. In recent years the universal themes have been "the future is digital" and "the future is threatened." BBC director general Tony Hall offered a dose of both in a speech at New Broadcasting House.

"In future, we will have a new tool: individual data," Lord Hall revealed. "We'll give you your own BBC app, which will remember all your favorite programs, artists, music, interests, DJs and sports teams. All in one place." The BBC app will, of course, remember and recommend "public service" content, not to be confused with that other stuff, "not telling you what customers like you bought, but what citizens like you would love to watch and need to know."

"The BBC's future - and the UK's future - in the internet age are not guaranteed," he concluded. "We must take on the notion that the old ideals of public service broadcasting may become irrelevant. Because that notion affects what we decide now." (See more about the BBC here)

The deciders are, of course, the politicians. Last week the Culture, Media and Sport Select Committee of the UK Parliament issued its equally regular assessment of the future of public broadcasting, the BBC in specific. Topping their list is ditching the BBC Trust, seen by politicians as too much cheer and not enough spanking. The BBC's Royal Charter comes under review after the May general elections and will expire at the end of 2016. MPs also want BBC spending regularly and publicly audited.

Always filling a certain need during the political season is the license fee. UK MPs like the idea of scrapping the device-dependant fee for a household tax, potentially adding contributions of a half million folks. Both proposals - unitary governance and a household tax - borrow heavily from Germany's public broadcasting system, new since 2013.

From Last Weeks ftm Tickle File

All about the base, er, coverage
tunnels and vision

Supporters of DAB digital radio platform have lobbied long and hard for coverage competitive with FM distribution. Multiplexes offering digital radio - DAB in some countries, DAB+ in others and something altogether different in France - have sprung to life with a variety of radio channels, often changing. And, so, folks have been buying those digital radio receivers, more often for the kitchen, less often for the automobile.

DAB+ receiver sales in Switzerland hit 382 thousand in 2014 bringing the country's total digital radio receiver supply to 1.9 million, reported Zürich-based digital broadcast development consultancy MCDT (February 26), 250 thousand of which are in automobiles. DAB+ signals now cover 99% of the Swiss population, "the world's highest coverage, except for Denmark and the Netherlands." In the Swiss-German speaking region listeners can find about 60 DAB+ radio channels.

"Compared to FM and internet radio, DAB+ is democratic, economical and environmentally friendly," said MCDT, which has strong ties to Swiss public broadcaster SSR-SRG, a major financial supporter of DAB/DAB+ development. Swiss media regulator BAKOM recently indicated transition from FM to DAB+ platforms will take place around 2024. (See more about digital radio here)

Moving more quickly to digital radio transition are the Norwegians, all but local radio stations to vacate the FM band in 2017. The coverage requirements set out by broadcast and telecom regulator NKOM have been achieved. "If the other criteria are met, Norway is ready to turn off the FM band, as I see it," said executive director Torstein Olsen, quoted by Telemarksavisa (February 17). "The vast majority now have access to digital radio and it's time to also introduce modern technology for this media as wee did for TV in 2009."

The big sticking point remaining in Norway is, understandably, automobile access. Existing digital multiplexes are focused on urban areas highways, particularly highway tunnels, are dead-DAB spots. "Of course, we had hoped that the development went faster here," said Digital Radio Norge managing director Ole Jørgen Torvmark. "The State highways (department) said the tunnels, which currently have FM (repeaters), will be DAB-ready by 2017."

Young people aren't like old people
what to do?

German audience research institute released this week top line data on radio listening for the second half 2014. After a week's pause, the details will follow. Until then German broadcasters and certainly media buyers will feast on a significantly leaner market. Radio's daily reach fell by about a million listeners.

Among listeners most coveted by media buyers - 14 to 49 year olds - time spent listening Monday through Friday dropped by 11 minutes compared with the previous survey. Those under 29 years spent 15 minutes less with radio stations, 2 hours 6 minutes, compared with 30 to 50 year olds listening 3 hours 42 minutes. It's a pattern seen across Europe. (See more about radio audience here)

Young people typically resist just about every life pattern established by, well, older people. Forging their own way is, therefore, their way. None of this is new. Plato complained about it once upon a time.

Following the Radio MA 2015 I audience estimates detail by a week will be a new survey of internet listening, presumably where young people will be found.

News channel gets needed cash injection
"no comment"

Egyptian telecom billionaire Naguib Sawiris has acquired a majority stake in TV news company Euronews, first reported by Le Figaro (February 25). Euronews was formed in 1992 by a group of European public broadcasters, organised by the European Broadcasting Union (EBU) and funded in part by the European Commission (EC) to compete with CNN. Over these two decades Euronews, based in Lyon, has been through several changes in shareholding. Last year CEO Michael Peters enlisted investment bank Lazard to identify possible new investors.

Mr. Sawiris, founder of Orascom Telecom and investor in a variety of enterprises, is acquiring a 53% stake in Euronews for €35 million. Public statements, widely reported, indicate the European Commission has given its blessing so long as "European public interest is preserved" and editorial separation maintained. Ubiquitous in European hotel rooms, Euronews is best known, arguably, for its "No Comment" video segment. (See more about TV news here)

The standing of legacy shareholders is unclear. French public TV broadcaster France Televisions has been the largest stakeholder with 23% followed by Italian public broadcaster RAI (21%), Russian State broadcaster VGTRK (17%), Turkish public broadcaster TRT (15%) and Swiss public broadcaster SSR-SRG (9.9%). Neither the BBC nor German public broadcasting have participated. Ukraine's State broadcaster NTU walked away from its 1% stake in Euronews in January, reported Telekritika, for lack of ready cash as shareholders were asked to cover a €17 million short-fall.

Previous weeks complete Tickle File

Week of March 2 2015

In Sports & Media

TV Sports Defies Gravity, Heat And Friction
balloon The transcendent advantage of live events, and competition for them, has the complete and full attention of television broadcasters. This means, for most broadcasters, sports. Acquiring rights to the biggest events is evermore costly as is the expense of maximising every produced second. The thrill of the unexpected, surprising and even shocking attract huge audiences to live sports, perhaps more than victories and defeats. It is a television broadcaster's major prize.

Encore Une Fois - This Week Last Year in Big Business

Old Dogs Don’t Need New Tricks, Young Ones Do
dog and laptop Video portal YouTube just had an anniversary. The undisputed global market leader is nine-years old, almost qualifying as an old dog in the media-tech world. What YouTube did for the web, it’s now doing for television. Competitors would like to breath the same air.


Encore Une Fois - This Week Last Year in The Numbers

Shuffling The News And Changing The Channel
those deck chairs The news is the news is turning. Privately-owned broadcasters are challenging public radio channels known for news and information. Public broadcasters – and the politicians who run them – are reading the ratings and do not like what they see. But changes are just so negotiable.


new ftm Knowledge

The Curtain Falls - Media Rises – new

This updated set of essays focuses on the dramatic changes in Europe's media that began with the fall of the Berlin Wall and Iron Curtain thereafter; Germany in 1989, new media rules,transition of State broadcasting to public broadcasting, refocus for international broadcasting, the rise of commercial broadcasting and the importance of youth culture. PDF (December 2014)

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Media in the Baltics - New World Order

By the time Estonia, Latvia and Lithuania joined the European Union they were known as the Baltic Tigers. The media sector grew spectacularly with big multi-nationals investing. Times have changed. This ftm Knowledge file reports the changes, new opportunities and lingering ghosts. 63 pages PDF (October 2014)

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The Privacy Issue

The privacy issue touches every aspect of media. From consumer protection and the rights of individuals to news coverage privacy is hotly debated. New media and old media stumble and the courts decide. ftm offers views from every side of the Privacy Issue. 68 pages. PDF (July 2014)

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News From You

ITU - World Radio Day broadcast focuses on Youth and Innovation - February 13, 2015


Internews - 5 Reasons to Celebrate World Radio Day - February 12, 2015

VPRT zum Welttag des Radios - February 12, 2015

EBU - Australia to compete in 60th Eurovision Song Contest - February 10, 2015

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EBU - Public service collaboration for European TV series - January 28, 2015

WAN-IFRA - World's Press Condemns Attack Against Charlie Hebdo - January 7, 2015

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