A large proportion of the discussion and innovation with regards to monetise newspapers' online content has come out of the United States, possibly unsurprisingly considering the intensity of the economic downturn there, and arguably the American entrepreneurial spirit. But the US is not alone in its contemplation of the issue, which could potentially 'save' newspapers, and the Editors Weblog took a look at the situation in France and the ideas that are emerging, based on two recent studies.

Masters student Matthieu de Vivie carried out a major research project entitled "Can online news be profitable?" in which he analysed the sectors' sources of income, along with debates that have taken place on French media blogs over the past few months. The Institute of Audio-visuals and Telecommunications in Europe (IDATE), a market analysis and consulting firm, has produced several reports on online strategies for the press.

The French situation

In France, printing and distribution costs are high, partly due to state regulation and to a very powerful printing union, meaning that print profits tend to be lower. However, papers do benefit from much public aid, and this was increased in January when president Nicolas Sarkozy offered the press a 600million euro bailout. Many media outlets are owned by groups which do not actually specialise in media, but are looking for "prestige and influence within it," according to de Vivie. He gives financial daily Les Echos as an example, which is owned by Bernard Arnault, LVMH. Groups such as Dassault which owns national daily Le Figaro, or Lagardere which owns the magazine Paris Match, Journal du Dimanche and part of Le Monde, have leaders who are friends with Sarkozy. Many journalists have protested at what they see as threats to the independence of their papers.

Related to this issue of possible government influence, the French press is suffering from a lack of reader confidence, similar to that in the US. A 2008 survey showed that 46% of people did not believe a large part of what they read in newspapers. The Internet has "done away with journalists' monopoly over the production of information," states de Vivie. The increased presence of other fonts of information and aggregators has encouraged people to look far and wide for news, as in other countries.

De Vivie concluded that today, it would be impossible for a major French newspaper to survive online-only, due to the abundance of information available online and weak advertising revenue. IDATE's reports also suggest that traditional advertising is not going to support a newspaper on its own. So what are the options for newspapers as their readers migrate online?

Charging readers

The most basic option is to charge readers for online content, as newspapers have done in print for many decades. IDATE believes that the pay wall model is extremely limited. However, leading newspaper Le Monde seems to have successfully adopted a part-paid, part-free model online. It is a rare feat for a general interest paper, at least compared to the English-speaking world, where only financial giants such as the Financial Times and the Wall Street Journal seem to have accomplished this. Articles are free for three days after publication, after which they go behind a pay wall. They can then be purchased individually, or basic and premium subscriptions are available, the premium option including access to digital copies of the print paper. Subscriptions represented about 35% of LeMonde.fr's revenue, while advertising accounts for 65%, according to figures obtained by de Vivie in November 2008. LeMonde.fr still has high readership, suggesting that the site's traffic has not been damaged too much by the pay wall, and that the model makes sense.

De Vivie also looks at French site Mediapart, a participatory, paid venture without advertising, launched in 2008 but Edwy Plenel, a former Le Monde editor. It is free to read other citizen participation, but a subscription gives users the right to write articles or leave comments, and to read articles from the Mediapart team. The site, however had not captured its target number of subscribers in 2008.

Alternatives to advertising?

But if papers do not succeed in persuading users to pay for their news: what are the other options? In terms of advertising, the Internet has allowed new measures to develop, as well as the CPM, pay-per-click and pay-per-action rates offer a more accurate assessment of an advertisement's effectiveness. It also allows for targeted advertising, however this is not much used in France. CPMs are also considerably lower in France than in the UK or US: according to de Vivie, a CPM of $10 is considered good in France, compared to $30 elsewhere. Part of this is due to lower investment in advertising, as well as lower Internet penetration.

IDATE's report on the future of the press considers below-the-line advertising as "essential" for a newspaper's online advertising strategy, and also recommends e-commerce as a distinct possibility: "the media now have the opportunity of developing into veritable media stores by incorporating e-commerce offers into their editorial content. IDATE suggests that newspapers form alliances with book sellers to market the books that they review, or with ticket sellers to market plays or other events. Another option is to get involved with products that target a newspapers' readership, such as the Wall Street Journal's partnership with Wine.com. The Lagardere group has signed an agreement with Sumitomo, a Japanese leader in online commerce. The firm sees advertising and e-commerce as the main revenue streams from mobile news, rather than making users or telecoms operators pay for content.

De Vivie also believes that for larger media groups, diversifying online can be profitable. He cites the example of the Washington Post's ownership of profitable education service Kaplan Inc. which he feels "is allowing the Washington Post to survive." The French Le Figaro group includes numerous commercial websites such as Evene, Sport24, Cadremploi, BazarChic ou TickeTac, which represent "an important source of revenue." LeFigaro.fr is not currently profitable but it has an important audience. One of the problems with such a strategy, however, is that it risks diluting the brand's value, which is already a fear of many papers as reading habits change online.

Potential of online-only

De Vivie is does see some potential in online-only sites, but only in certain conditions. Firstly, he believes that small "supple" organisations which offer content with significant added value, focussed on specific niches and gathering a large community, are a good approach. "This equilibrium is nonetheless precarious," he added, particularly in France where advertising brings in less revenue than in the US and it is often necessary to develop alternative sources of income.

One French success story is Rue89, which combines the skills of journalists with the knowledge of experts and the participation of citizens. Amateur contributions are checked and edited by the site's reporters. De Vivie explains that the site quickly acquired "strong journalistic credibility," offering exclusive stories and investigations. He estimates that the site could quite feasibly become profitable, especially as Rue89 does not make all of its income from advertising, but also develops websites for others, which makes up an estimated one third of its revenue. He believes that other online players also have potential to break even, due to their low fixed costs and overheads.

The impression that emerges from the studies is that online news has great potential and possibilities continue to evolve. It is therefore advisable that newspapers continue to innovate and do not resign themselves to relying on print income for as long as possible.