Increased loss of reality
The reader market is sluggish but saturated. The advertising market, on the other hand, behaves in an early-cycle manner, i.e. it anticipates the assessments of the economy and the expectations of entrepreneurs in all sectors. Those responsible in publishing houses have no choice but to act, and to act quickly. Guest commentary by Karl Lüönd, freelance journalist and author.
Trade unionists protest against austerity measures and redundancies. Intellectuals and politicians are calling for the Confederation to be preserved. Why isn't anyone protesting against the cold snap and calling for spring in January?
What is going on in the media in these times of crisis is to a large extent staging with a heightened loss of reality. Those responsible at publishing houses have no choice but to act, and quickly. Newspapers, for example, move much more money per employee than industrial companies, for example. That means increased risk. Now the whole event is taking place in an industry that has to generate its income from two partially opposing markets. The reader market is sluggish (or to put it more politely: stable), but saturated. The advertising market, on the other hand, is early cyclical, i.e. it anticipates the economic situation and the expectations of entrepreneurs in all sectors, which is reflected not only in the job advertisements. Marketing (and therefore advertising expenditure) is one of the expense categories that can be influenced most quickly. And since the majority of managers do not do what is necessary and important when saving money, but rather what will have the quickest effect, communication and advertising budgets are cut early or even as a precaution during a crisis. This mechanism means that advertising, and therefore the media industry, is hit early in every crisis.
At the Epiphany Conference, the range of possible courses of action could be clearly measured by comparing the appearances of NZZ Chairman of the Board of Directors Conrad Meyer and Tamedia CEO Martin Kall, for example. Kall revealed the details of the synergy projects between Bern and Zurich with an openness that surprised me. It was said that many of his own employees had learned more from this presentation, which was peppered with informative consultant charts, than they had previously been told in-house. (I was no longer surprised that the charts were no longer available on the website). Kall demonstrated on a 1:1 scale the business style that enables not only survival but also market leadership, even in difficult times: Everything is questioned, everything is re-examined from the outside, and everything is implemented at a rapid pace. This is "ruthless", one hears grumbling from within Tamedia. That is correct. Consideration for ingrained habits and expensive traditions is no longer affordable in these times. The man does what he is paid to do, and he explains his actions publicly without beating about the bush. Chapeau!
Conrad Meyer's presentation, which once again began with the 18th century messenger on horseback, left me with only one figure: a target value of 31 percent, the proportion of the NZZ's total costs that should be covered by editorial costs. Elsewhere, this figure is 22 to 25 percent. Anyone who can set such targets is suffering at a high level.
But whether it is 31 or 21 percent, there is no getting around the fact that editorial costs are largely personnel costs, meaning that savings are not possible without reducing this cost block. The associated risk is obvious, and the trade union and intellectual critics are right. Journalism and the downstream subjects of form production are intellectual services and as such can only be rationalized to a very limited extent (like architecture or pastoral care). Staff cuts quickly (but not inevitably) have repercussions on editorial quality. The fewer qualified people in the editorial team, the less work on the dossiers, the less in-depth coverage (which would actually be the survival strategy of paid newspapers!), the greater the influence of the interest-driven communications industry, whose growth is already enormous, crisis or no crisis.
If anything, the Basler Zeitung's approach, as far as we know, is preferable: a major cut, withdrawal from an entire segment that no longer works (weekend supplement), concentration on its own strengths. Protests would be of little help, they would be protests against the laws of reality. What would be the alternative?
David Montgomery, the aggressive newspaper investor, has just sold his German holdings and exited the business - presumably at a high loss. Fast money apparently no longer finds the media sector as "sexy" as it used to be. And who got involved? Neven du Mont, another one of the old publishing families who stick to their business in the face of adversity because they have no other.
What is going on in the media in these times of crisis is to a large extent staging with a heightened loss of reality. Those responsible at publishing houses have no choice but to act, and quickly. Newspapers, for example, move much more money per employee than industrial companies, for example. That means increased risk. Now the whole event is taking place in an industry that has to generate its income from two partially opposing markets. The reader market is sluggish (or to put it more politely: stable), but saturated. The advertising market, on the other hand, is early cyclical, i.e. it anticipates the economic situation and the expectations of entrepreneurs in all sectors, which is reflected not only in the job advertisements. Marketing (and therefore advertising expenditure) is one of the expense categories that can be influenced most quickly. And since the majority of managers do not do what is necessary and important when saving money, but rather what will have the quickest effect, communication and advertising budgets are cut early or even as a precaution during a crisis. This mechanism means that advertising, and therefore the media industry, is hit early in every crisis.
At the Epiphany Conference, the range of possible courses of action could be clearly measured by comparing the appearances of NZZ Chairman of the Board of Directors Conrad Meyer and Tamedia CEO Martin Kall, for example. Kall revealed the details of the synergy projects between Bern and Zurich with an openness that surprised me. It was said that many of his own employees had learned more from this presentation, which was peppered with informative consultant charts, than they had previously been told in-house. (I was no longer surprised that the charts were no longer available on the website). Kall demonstrated on a 1:1 scale the business style that enables not only survival but also market leadership, even in difficult times: Everything is questioned, everything is re-examined from the outside, and everything is implemented at a rapid pace. This is "ruthless", one hears grumbling from within Tamedia. That is correct. Consideration for ingrained habits and expensive traditions is no longer affordable in these times. The man does what he is paid to do, and he explains his actions publicly without beating about the bush. Chapeau!
Conrad Meyer's presentation, which once again began with the 18th century messenger on horseback, left me with only one figure: a target value of 31 percent, the proportion of the NZZ's total costs that should be covered by editorial costs. Elsewhere, this figure is 22 to 25 percent. Anyone who can set such targets is suffering at a high level.
But whether it is 31 or 21 percent, there is no getting around the fact that editorial costs are largely personnel costs, meaning that savings are not possible without reducing this cost block. The associated risk is obvious, and the trade union and intellectual critics are right. Journalism and the downstream subjects of form production are intellectual services and as such can only be rationalized to a very limited extent (like architecture or pastoral care). Staff cuts quickly (but not inevitably) have repercussions on editorial quality. The fewer qualified people in the editorial team, the less work on the dossiers, the less in-depth coverage (which would actually be the survival strategy of paid newspapers!), the greater the influence of the interest-driven communications industry, whose growth is already enormous, crisis or no crisis.
If anything, the Basler Zeitung's approach, as far as we know, is preferable: a major cut, withdrawal from an entire segment that no longer works (weekend supplement), concentration on its own strengths. Protests would be of little help, they would be protests against the laws of reality. What would be the alternative?
David Montgomery, the aggressive newspaper investor, has just sold his German holdings and exited the business - presumably at a high loss. Fast money apparently no longer finds the media sector as "sexy" as it used to be. And who got involved? Neven du Mont, another one of the old publishing families who stick to their business in the face of adversity because they have no other.
