Criterion Global: International Media Buying Blog

From NYTIMES: As the death toll in the American newspaper industry mounted this month, the German publisher Axel Springer, which owns Bild, the biggest newspaper in Europe, reported the highest annual profit in its 62-year history.

At Springer’s headquarters in Berlin, there has been no desperate talk of how to survive the recession and the digital revolution, the daily preoccupation of many U.S. publishers. Instead, Mathias Döpfner, Springer’s chief executive, said he was looking for opportunities to expand, scouting around for acquisition targets in Germany, Eastern Europe and maybe — in what would be a first for the company — the United States.

“I don’t believe in the end of the world; I don’t believe in the end of journalism,” Mr. Döpfner said. “On the contrary, I think the crisis can have a positive impact. The number of players will diminish, but the strong players may be stabler after the crisis.”

Viewed from Europe, “there is a certain irony” in the plight of the U.S. newspaper industry, he said: America created the companies that dominate the Internet globally, yet its newspaper companies have struggled to adapt to the technology. Perhaps because there is no homegrown European equivalent to Google, Amazon or eBay, he added, “there has been more pressure on European publishers to change in a more progressive way.”

Around the world, American newspapers are often held up as the gold standard of quality journalism. But now that the business of American newspapers has tarnished, could those papers learn a thing or two from their European counterparts?

Perhaps so. In Europe, some publishers — not just financial newspapers like The Wall Street Journal — have figured out how to raise money from their readers, reducing their reliance on fickle advertisers. Others have created successful new Web sites from scratch, giving their Internet divisions the heft that many American newspaper publishers’ online units lack. And still others have taken maverick approaches to competing with the likes of Google, which in many countries mops up more online ad revenue than all newspapers combined.

In some European countries, newspapers are in worse shape than in the United States. In France, for instance, several papers are kept alive by public subsidies, which the government of President Nicolas Sarkozy recently moved to increase. In the ultracompetitive British market, national papers struggle to make money and local newspapers are folding at an accelerating rate.

But there are other signs of life in the European newspaper scene. Yes, circulation is falling, but not generally as fast as in the United States. Newspapers have been less affected by the recession, because they generate more of their revenue from readers, who tend to be more loyal than advertisers.

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Axel Springer generates 14 percent of its revenue online, more than most American newspaper publishers, even though the markets in which it operates — primarily Germany and Eastern Europe — are less digitally developed than the United States.

One reason, Mr. Döpfner said, is that Axel Springer has dared to compete with itself. Instead of trying to protect existing publications, it acquired or created new ones, some of which pump out largely the same content to different audiences.

At one newsroom in Berlin, for example, journalists produce content for six publications: the national newspaper Die Welt, its Sunday edition and a tabloid version aimed at younger readers; a local paper called Berliner Morgenpost, and two Web sites.

“We have always said it’s better to cannibalize ourselves than to be cannibalized by others,” Mr. Döpfner said.

Though advertising has slumped in Germany, Axel Springer has been able to offset the shortfall by raising the price of publications like Bild, which sells more than three million copies. Now, with revenue growing and almost no debt on its books, Axel Springer is looking for “undervalued assets” to snap up, Mr. Döpfner said.

Might European publishers like Axel Springer come to the aid of American newspapers more directly — by buying them?

Mr. Döpfner said the company would continue to focus on its core markets of Germany and Eastern Europe but would have a look in the United States “if a meaningful position arises in a significant market.” Article condensed. Full version available here.