Kristine Lowe

The year the media died

I can't resist sharing this intriguing version of Miss American Pie (The year the media died) here.

I found it via Peter Kirwan and Adam Tinworth, so have a suspicion it's been making the rounds online recently - but I've been rather handicapped this week due to my Toshiba crashing Friday last week, my mobile phone going to the dogs and the new laptop I bought this Friday flashing those blue screens of death at me, so I really don't know for sure. Still, lots of bits to think about in this video, whether you agree with the refrain or not:

Who's robbing us now, Mr Montgomery?

So, Mecom boss David Montgomery has pulled it off again: another covenant extension, his fourth this year, and prospects of raising new equity to the tune of £140 million, despite presenting grim preliminary financial results for 2008 this morning.

Yet it seems the company is still treading water, and yesterday The Norwegian Journalist Union (NJ) was up in arms (in Norwegian) over news Montgomery would transfer roughly £80 m from the saving funds of his Norwegian papers to help appease the company's creditors. As NJ was holding its annual conference yesterday, it reminded me of Montgomery's visit to the same conference in 2007 (which I covered for Propaganda) and this exchange of words:

Moderator: "Many feel you are robbing Edda Media papers: you are emptying the coffers, aren't you?

Montgomery: "That is simply not the case. I don't own the company, the shareholders do, and the shareholders are the pension funds of Europe... Mecom is a conventionally listed company. Money goes back to pension funds, which means ultimately it goes back to you and me."

Moderator: "We are being robbed by pension funds then."

That's only one of many colourful anecdotes from following this company closely for years. Of course, the journalist union has campaigned against Mecom owning Norwegian papers since it first emerged as a potential buyer for Orkla Media in early 2006 - partly because of its high gearing. Some will see proof of "the folly of believing that newspapers can be successful on a sea of debt" in Mecom's recent woes, others will be cheered the company's steered clear of isolvency yet again - but I can see no cheers from the smalltime shareholders so far today...

Update 09:55 CET: news that Independent News & Media (INM) has failed to reach a deal with its bondholders and says there's a "strong likelihood" it will breach its covenants without a deal, brings me another flashback from that 2007 NJ conference.

I asked Montgomery if it really was his opinion, as The Telegraph had suggested the previous day, that there was no rationale for The Guardian or The Independent to exist: "I didn't say that. The Telegraph did. But in general I think companies should make money. I think it's demeaning for people to work for companies that don't," he said.

Update 11:14: CET: Actually, looking over my transcript just now (I always try to find time to type up my notes), that was the conference, and we're talking April 2007, when Montgomery also told the audience that Mecom was a very well-funded company and didn't have enough debt at the moment....

 

Montgomery reading one of his Norwegian newspapers, Drammens Tidende (original photo by Martin H. Jensen, edits by me).

Hurray, seems I get to continue reading those Press Gazette blogs after all

At least I hope today's news about Press Gazette being saved after a buyout by New Statesman owner Progressive Media (via Journalism.co.uk), implies that  I will be able to continue following those blogs. I'm also, of course, happy for the staff who get to stay on. I will however not take out a subscription for the print magazine because I'm a rather poor journalist myself; it's ancient news before it reaches these foreign shores and Roy Greenslade's explanation of the abrrevation Pdf as equalling Pretty Damn Futile brilliantly sums up my view on Pdf. Actually, I don't think I can remember when I last read a print magazine - books and newspapers, yes, mostly over the weekend - but magazines? It must have been some issue of Economist, perhaps the New Year one, I picked up for a flight...

Update 11:45 CET: and, of course, I was just reminded that Jon Slattery predicted PG might be rescued from its deathbed.

"The depressing but inevitable demise of Press Gazette"

Today, Wilmington Media announced that Press Gazette, the UK’s journalism trade mag, will be closing.

In a statement this lunchtime, proprietors Wilmington Group announced that next month's edition of the magazine would be the last hard copy edition, reports Holdthefrontpage. Dave Lee, from whom I, stuck for time as I'm in the middle of a few other stories, have stolen the title and intro, has more. I will only add that hiring Martin Stabe back in 2006 or so was a brilliant move and what got me reading Press Gazette's online in the first place (keeping in mind that I only know Martin via his blog, which I stumbled across via a former tutor, Andrew Grant-Adamson's, blog).

On a less positive note, a key industry player recently told me he felt former PG-man Jon Slattery's blog was at times doing a better job of covering the media industry than PG these days as Slattery was calling people up to get tidbits rather than just reproducing press releases - a fact I mention only because it's a trap too many news sites seem to fall in these days.

I will also add to Dave's thoughts on Media Guardian playing such a dominant role in the UK's media journalism market that there are aspects of that I find a bit odd: I would for instance have expected FT to cover especially the European media market better, and yet they're beaten again and again by Media Guardian - even on M&As and company results, issues where FT long has been heralded for having the market leading coverage. That said, The Independent also has good media stories from time to time, though they tend to "hide" them in the business section, and The Telegraph has been doing a better job of covering the media industry since they hired Amanda Andrews (or since they set up a seperate RSS-feed for media and technology, not sure which). I also get many of my favourite UK media tidbits from Journalism.co.uk, Paid Content and media bloggers.

On that note, if not even an online shred of Press Gazette will be kept alive, I shall thoroughly miss Peter Kirwan's blog - even though I was not entirely happy about a piece he interviewed me about Mecom for, I've come to really enjoy his writings on Media Money as it covers one of my favorite aspects of the media industry so well. 

For the record: of the sites mentioned here, I've been paid for article commissions from Press Gazett, The Independent business section and I'm a regular contributor to Journalism.co.uk (and, if I shall be really strict on disclosures, I've also been paid for articles I wrote for The Guardian/Observer)

Update 07.04-09, 13:00 CET: On this topic I also enjoyed reading Press Gazette Insider’s View: Why Journalism’s Trade Bible Failed by Patrick Smith 16:55 CET: and Jon Slattery's Old Bell tolls for Press Gazette via Thoughts of Nigel

17:07 CET: isn't it interesting how many people, like here, say they will miss the blogs? I singled out Media Money above, but I shall miss the other blogs too.

Norwegian press saves money by abandoning all attempts at serious reporting on April Fool's Day

'The financial crisis is forcing media to implement unusual cost cutting measures,' the female leader for the country's journalist union has admitted to The Norwegian Office of Enlightenment after the blog's investigations revealed all yesterday's Norwegian newspaper stories to be April Fool's Day's spoofs (via Sonitus) (in Norwegian).

 "This year, all Norwegian newspapers have joined forces to support this model to save our jobs. These are turbulent times and many fear for their jobs, especially the former horse riding news boys who were retrained as ink stirrers, retrained again as printers, reschooled to be scanners, then retrained as culture editors and now preparing to reschool yet again to become Twitter surveillors," the union boss, quoted under a bogus name, says in what must be my favourite April Fool's Day story this year.

At this stage I should probably admit, that in all my single-mindedness, I was planning to use 1. April to speculate about Metro International's mystery bidder and report that the real reason for Peter Chernin's fallout with Rupert Murdoch was how the latter's insatiable appetite for print led him to court the world's largest freesheet publisher, or that the desperate times on Iceland led the archrivals Jon Asgeir Johannesson and Björgolfur Gudmundsson to join forces, team up with the latter's old Russian business associates, and submit a proposal to buy Metro from 1 krone (roughly 10 pence) under which conditions the new company would take over all liabilities and move the headquarters to St Petersburg where Jon Asgeir had sought exile and Putin had vowed to protect him from his debtors granted Metro would expose the anti-Russian bias of Western Press. The Icelandic deal would mean Frettabladid would become Metro Iceland, and Jon Asgeir was also rumoured to look into launching a new range of Russian supermarkets called Бонус.

Or, or, or...but lost between meetings, the lack of superimposed deadlines and an inability to make up my mind about which scenario to put forward, which might have been good seeing how all of the scenarios I had in my mind would only be bordering on funny if you were intimately familiar with this particular part of the media industry, it never happened.

So, big fail on my account there, which brings me back to the Norwegian Office of Enlightenment's spoof (somehow that name reminds me of the Enlightened Tobacco Company which once produced Death and Death Light, the slower death, cigarettes): great stuff (any awkwardness in the translation is down to me and lack of time as I'm preparing for ... another meeting:-) )

What did I say?

Pleased to come out of a meeting and find, as I predicted would happen yesterday, that Mecom has secured another covenant test date extension from its banks - this one until 30 April. Not that you had to be a wizard to see that coming, but following the company closely helps. Now for the bigger question: which asset(s) will Mecom sell next? Its minority stake in Dutch AD Niewsmedia, its majority stake in Polish PressPublica, or something else entirely? 

Update 02-04/09, 10am CET: The Telegrahp has an interesting take on yesterday's RNS.

Another newspaper bites the dust

Edda Media-owned Sarpsborgsavisa will cease publication 28 May, it was decided yesterday.

The freesheet is the third newspaper in the county of Östfold to see its owners pull the plug within less than seven days. Only last Tuesday, Norwegian newspaper group A-pressen announced it would close local newspaper Moss Dagblad and local freesheet Halden Dagblad with almost immediate effect.

Meanwhile, it is expected Mecom, Edda Media's mother company, will get yet another covenant test extension today - this one to the end of April. The media group headed by former Mirror boss David Montgomery has been struggling to to get its debt back within agreed limits for some time now (last time I checked the lending agreements dictated a debt to EBITDA ratio of 3.25 and 3.75). The sale of Mecom Germany was completed yesterday, but this tidbit from Platforma Mediowa Point Group, one of the two companies who bid for the the Polish state's 49 pc stake in Presspublica, does not bode too well for the price Mecom can obtain from its majority stake in the company.

Schibsted's top man, Kjell Aamot, to resign

Kjell Aamot, Schibsted's CEO, will step down by 1 March 2010 it was announced when Oslo Stock Exchange opened today.

An online enthusiast, Aamot has come under fire recently for predicting the demise of print newspapers, but has since insisted he was only talking about the business model for paid-for print papers. Like most media companies, Schibsted, which owns market leading paid and free papers all over Europe, has seen its share price, and more recently its revenues, fall drastically in the wake of the financial meltdown.

However, during a press conference this morning Aamot said only the economic crisis prevented him from announcing his resignignation already in the autumn of 2008. He explained that 20 years as a CEO had taken its toll. "I have to admit one does get pretty exhausted," he said, and added that he had found himself struggling to recharge his batteries and find the motivation to go on last summer.

"Kjell Aamot has held the position as CEO of Schibsted ASA since the Group was formed in 1989. He is one of the CEOs with the longest tenure among listed Norwegian companies. He will continue in his position until the Board of Directors has appointed his successor and the successor has assumed this position, but no longer than 1 March 2010. With a new CEO in place, Aamot will be at the Group's disposal until his 60th birthday, 7 September 2010," the company said in a press release. 

Analysts my colleague Martin H. Jensen spoke to said it had been expected that Aamot wanted to scale back when he turned 60, and, as it's obvious that Schibsted has a major job to do in view of recent events, it made sense that the resignation came now.

'I would say that Aamot more than anything is a visionary. This has benefited Schibsted immensly, exactly because the company has not been just sitting on the fence as other media companies have. He has also been criticised for perhaps pursuing expansion and innovation too aggressively at times, but all together I think he has made the right moves for Schibsted,' said Atle Vereide in Enskilda.

See also:

• Comments and news on Twitter about his resignation

• My other recent post on Schibsted: "Freesheets may be in the frontline trenches of this war, but it's only the tip of the iceberg"

• Insignificances: Schibsted head saves face : "You really can’t blame the man for his reluctance to go down in history as the boss who brought about the inevitable Schibsted newspaper onslaught – as well as, undoubtedly, massive cuts in other media operations."
  

   

This rather blurry pic of Aamot is from a results presentation I just happened to step by on the spur of the moment, it's Q1 2007 I believe, and the camera I had in my pocket is not great for taking pictures indoors - especially not under spotlights like here.

Newspaper Death in Norway

Two of Norway's local newspapers will close next week, it was announced today.

A few hours ago Norwegian media group A-pressen, who among other media assets owns 50 of the countries regional- and local newspapers, announced Moss Dagblad, a local newspaper, and Halden Dagblad, a local freesheet, will publish their last editions this month (remarkably, the Norwegian edition of Wikipedia was updated immediately for both the former and latter paper).

Moss Dagblad is the number two newspaper in Moss and has roughly 28,000 readers. The closures come in a Norwegian county, Östfold, where it was feared A-pressen's once expected acquisition of Mecom-owned Edda Media would result in closures and job losses due to media ownership regulations (For one, Edda owns the most read newspaper in Moss: Moss Avis). Now it turns out we get some the same results even without A-pressen succeeding with its efforts to scoop up Edda Media, which must be a huge disappointment.

It is also ironic that A-pressen, a media company often portrayed as more bevolent owner than Mecom, has the Labour Union (LO) and partly privatised Telenor (the Norwegian equivalent of BT) as its two majority owners. However, the executive in charge of local media in A-pressen, told Journalisten closing the 97 year old Moss Dagblad was not a result of the financial crisis but of years of losses which, despite cost cutting measures such as having its publishing days reduced to only three a week, had made the paper dependent on financial support from its owners to survive.

I'm also reminded of the CEO of Verdens Gang (VG), Torry Pedersen's, assertion that the good financial times Norway enjoyed until disaster hit the world economy has masked the structural challenges newspapers face. Norway prides itself of being one of the most newspaper reading countries in the world, but the financial crisis will be a test of how sustainable its record number of newspapers really is...

Calling out the next stops towards recession central

These are desperate media times. Late Friday night, news broke Mecom was planning a rights issue within the next month. The story surfaced just as the ailing pan-European company was preparing for a crucial week, with its EGM taking place today and its covenant test extenstion expiring early next week. 

Earlier this month, Norwegian media speculated another pan-European media player, Schibsted, may be forced to consider to ask shareholders for a capital injection, a move which would be less than straighforward due to its coroporate bylaws. However, Schibsted's CEO Kjell Aamot denied such a move was on the agenda, and said the company was instead looking to sell assets - such as taking a partner into its lucrative classified media online advertising business.

In today's market such moves look rather desperate, but so far Mecom's share price is certainly on the rise - perhaps aided by this bit of news.    

On approaching recession central
"Ladies and gentlemen, fasten your seatbelts. We're making our final approach to recession central," wrote Peter Kirwan in early February as we were coming closer to the financial reporting season with all its expected doom and gloom.

I was quite taken by that metaphore, and thought it would be a great way to visualise the history of events later: a ghost train moving relentlessly forward, making unwelcome stops at most media companies along the way. Except it's still a bit of a mystery train, and we don't quite know when we'll reach recession central or what it'll look like.

Interestingly, as we're currently debating why financial journalism failed to spot the storm brewing, if the nature of the meltdown was not forewarned, at least 247wallstreet.com's Jon Ogg blogged about how tired he was of predictions about recession central in December 2007 - not long after we had started to see the footprints of the subprime induced ghost in the share prices and results of European media companies. Framed that way, it's not been such a speedy train at all, and, as I've said before, I thought we would have seen the downturn much earlier, but because I was focusing narrowly on key cyclical indicators such as (ads for) property and jobs and the media industry I was not prepared for the scale.

 
Photo by Ben McLeod from Flickr, published under a Creative Commons license

Freesheets may be in the frontline trenches of this war, but it's only the tip of the iceberg

Yes, freesheets are challenged, but that's down to the collapse in the print classifieds market, and Mecom is hardly the best example of a company brought down by its frees.

In an article yesterday, The Financial Times (FT) suggested the freesheet model could be the first victim of the current newspaper crisis. Now, I'm not sure if I should have a go at FT or Trinity Mirror CEO Sly Bailey here, but this article elegantly skirts around the newspaper industry's bigger, structural problem, and some of its facts are at best misleading.

Freesheets hardly at the heart of Mecom's problems
"...Companies with the most serious threats to their existence have a strong element of free newspapers in their portfolio," the FT article says - and cites Mecom as its first example. This smacks of lazy reporting. The key problem for the pan-European newspaper group headed by former Mirror boss David Montgomery is high gearing or leverage. In short: scooping up too much, too fast at the top end of the economic cycle, using borrowed money to facilitate its acquisition spree. That, combined with operating in a sector which is both cyclically and structurally challenged, makes it the perfect example of the kind of company whose shares are receiving the worst hammering in the current downturn.

Of course the downturn in the advertisement market is hitting Mecom like all other newspaper companies, but I'm not convinced Mecom is the best example of a company brought down by its frees. If you're not familiar how much of its business is made up of freesheets, here's a quick run down:

Mecom's freesheet portfolio
In Denmark, Mecom rushed out a new short-lived freesheet, Dato, at the start of the Danish freesheet war in 2006 - but as this closed in 2007, it shouldn't affect Mecom's 2008 financial results - and still has the loss making youth-oriented free Urban in its portfolio, which recently reduced its circulation to 203,000, but has merged all its content production. In Norway, the British based company has a small network of non-daily frees in Oslo; in Poland, it has Moje Miasto running on a similar model to the Norwegian frees - which leaves The Netherlands, where free newspapers comprises the biggest part of the British based company's operation. Every week its Dutch divison publishes about 8.6 million copies of free door-to-door distributed papers in addition to seven paid for titles.

However, in contrast to UK newspapers, Mecom also has remarkably high subscription rates for most of its paid for papers which must be of some comfort amid all the current advertisement gloom. From what the British company has indicated about its 2008 earnings so far, it seems Mecom is worst affected by the advertisement decline, not in The Netherlands but in Denmark and hardly at all in Poland (I'm omitting Mecom Germany here as it's not big on frees and practically sold - just need the shareholders to approve the sales agreement).

A more disturbing case
Now, it is true that companies with a strong element of free are struggling - it will certainly be interesting to see how Metro International, the world's biggest publisher of freesheets will fare in the times ahead - but rather than Mecom, I would have used Norwegian-based Schibsted as an example here.

Not only because, in contrast to Mecom, it's a market leading freesheet publisher in several big markets, such as Spain, France and Sweden (the latter in partnership with Metro) and, to a lesser extent, Eastern Europe, but because it illustrates the larger, structural problem at work so much better. In a way, Schibsted is also a much more disconcerting example.

It's freesheets, especially in places like Spain where the property market is in a dire state, are being hammered, but that's also happening to Aftenposten, Norway's newspaper of record, a daily paid for national newspaper which traditionally has relied heavily on print classifieds.

That I believe, is the bigger problem qua business models here, at least in my part of the world: we're seeing the market for print classifieds emigrate online and not necessarily to online newspapers. In contrast, Schibsted's other national Norwegian print newspaper, Verdens Gang (VG), which gets its ad revenues from brand advertisement rather than classifieds, has not, at least until new year, done as bad as Aftenposten (though if we're talking circulation decline, the relationship is reverse).

So yes, frees may be head of the queue, or "in the frontline trenches of the war," as Baily says to FT, but national and big regional dailies relying heavily on print classifieds make a good number two. And that's still only part of the story, I'll return to why I think Schibsted is such a disconcerting example in a separate post a bit later.

Axel Springer pulls out of race for Rzeczpospolita

No Polish partnership between Mecom and Axel Springer.

After months of speculations the German newspaper giant was vying for both Rzeczpospolita and Mecom Poland, it emerged yesterday that Axel Springer had not submitted a bid for the Polish state's 49 pc stake in Rzeczpospolita - where Mecom is the majority owner.

Czech publisher Respekt Media, who along with Springer was reported to be one of four bidders provided access to undertake due diligence tests, also abstained from submitting a bid, which means only two companies, United Business Entertainment (Zjednoczone Przedsiebiorstwa Rozrywkowe) and Platforma Mediowa Point Group, are still competing for the stake. The Polish Treasury is expected to announce its decision next week according to tvn24.pl (and Google Translate). A source at Axel Springer told Reuters the German group now had no interest in Rzeczpospolita.

Predictably, running a media company together with the Polish government has been a rather troublesome affair for Mecom, as it was for the previous owner Orkla Media. Among other things the former Communist state has accused the company, run by David Montgomery who was renowned for his brutal cost-cutting regime while at The Mirror, of not delivering good enough financial results. As Mecom's recent agreements to sell its German and Western Norwegian divisions are not enough in their own right to solve the  company's covenant issues, many have wagered that its Polish arm, made up of Media Regionale and the 51pc stake in Rzeczpospolita, will go next.

However, despite Montgomery pledging long term commitment to what's left of its Norwegian arm, Edda Media, when talking to employee representatives in Oslo early this month, industry sources keep telling us Mecom is actively pursuing further sales in Norway. Now, not long ago, when Norwegian media was abuzz with speculations about A-pressen or others acquiring Edda, a newswire reporter asserted all leaks media had received during this... eh... courtship had been from the prospective buyers, and, obviously, all parties have their agendas. In short, for those who emailed me asking about that Oslo meeting: I suggested upfront, based on previous such meetings, it would be interesting and confrontational - I was wrong about confrontational, both sides denied it had been, but it was certainly interesting....

Update 21-03/09, 11:50 CET: do check Krzysztof Urbanowicz' post which contains additional information and analysis, here with Google Translate if your Polish is as bad as mine.

Mecom secures another covenant test extension

I have a feeling Mecom-boss David Montgomery will have a very interesting visit to Norway next week.

After selling off its operations in North-Western Norway, the pan-European newspaper group today announced it had won a further reprieve from its lenders and now has until the end of March to get its finances back within agreed limits.

I can't imagine union reps, some of whom were rather hoping the troubled media company would sell all its Norwegian newspapers to the national newspaper group A-pressen, will take to well to the news of yet another month of uncertainty. Nor does it bode too well for Mecom's share price, down 16 per cent at the time of writing, at least in the short term.

For more thoughts on the shareprice, check this bit of analysis - it concludes that only two events would propel the SP any higher from here: (1) Further sale of assets (Polish assets are next in line, but timescale is uncertain, and (2) A covenant pass at the end of the 'extension' period - which rings true to my ears (latter via Searcher, no link available).

But, back to Montgomery's scheduled visit to Norway next week: it's a good thing he has become so used to taking abuse from Mecom journalists these last few years.

Talking to the Norwegian Journalist Union's annual convention in April 2007, he was told "I have to warn you this is a very hostile crowd, and they have been drinking 'til 4am, so this is a pretty mean bunch... Now, Norwegian journalists think you're a ruthless stranger who just rode into town to upset all that has been built over the last 60 years. How do you feel about that?"

"In the round of my career I've created more jobs than what I've destroyed," he answered then. However, I'm sure he'll be met with plenty of questions in a similar vein next week, and even though the audience will probably not have been drinking til 4am, I doubt it will be any less hostile.

(For the record: I covered this debate as a journalist, though I'd much rather have (live) blogged it, as I did with this debate, and the quotes here are previously unused ones from my private transcripts)

Ex-Mecom bosses condemn Norwegian sale, while the divested operations vow not to become Redneck papers

"This is yet another sad chapter in Mecom's short and tragic history as a media owner in Norway and other countries," Kjell Johnsen, the former CEO of Mecom's Norwegian division, Edda Media, told Dagens Naeringsliv.

Johnsen breaks his silence
His comments in the wake of yesterday's disposal of Edda's North-Western operations, is a departure from his usual reluctance to comment on his former employer's dealings, a reluctance he has maintained since leaving Mecom in protest against David Montgomery in 2007.

However, speaking to Dagens Naeringsliv, he asserted that buying media operations in Norway and other countries at the top of the business cycle, paying a premium price with borrowed money, as Mecom has done, was a recipe for disaster.

Disappointed ex-CEO
"It is sad to see Edda Media being dismantled," Jan Moberg, who resigned just after Mecom's German deal at the start of this year, told the paper. Moberg was relieved of his administrative duties as CEO of Edda Media in October 2008 "in order to focus on new ownership solutions" for Edda, and it was rumoured it was his opposition to breaking up the Norwegian media group that spurred his resignation.

Moberg and Montgomery in happier times (photo copyrighted to and courtesy of Martin H. Jensen), edits by me

From Mecom's point of view, yesterday's deal with Polaris Media should help the ailing media group meet its debt covenant test this month, and also puts an end to speculations that Norwegian media group A-pressen was poised to take over Mecom's entire Norwegian division, which is the most profitable divison in the pan-European company.

No moustaches
Meanwhile, my favourite take on yesterday's news was Sunnmørsposten's management vehemently denying that being acquired by Polaris would turn the paper into a "Trønder" newspaper - which I, for lack of a better word, has translated to "Redneck newspaper" (have a look at this photo of a typical "Trønder" and see if you think my translation fits the bill).

Polaris, which submitted an indcative bid for Mecom's North-Western divison as early as 29 September 2008, has its power centre in Trondheim in "middle Norway" (still far north if you look at the map, much further north than I've ever been).

The region is associated with a typical "redneck" look, a prominent part of which is a moustache. Hence, Sunnmørsposten's fabulous illustration photo of yesterday, indicating that Polaris' takeover won't lead to moustaches coming into fashion among its management. For pictures of Mecom-boss David Montgomery visiting the North-Western newspapers he's now agreed to sell, check the links in the last paragraph here.

As a quick search doesn't turn up any photos on Flickr of a typical "Trønder" with a Creative Commons lincense, here's a moustache man from deneyterrio:

Now, as soon as the news of Mecom's latest divestment hit the wires yesterday, I got an email from a long-time reader who suggested I take a look at the story, "When you're ready with the snowstorm" (alluding to my dateline).

Well, it's still snowing heavily where I am, and I'm afraid I had my head down in another project yesterday, hence the delay, but since I've followed this company so closely for such a long time I can always add more context and colour than the wires...;-)

What I've been reading and pondering of late

Obviously, this is not a complete list. Usually I just save my favourite links to delicious, but, since this blog revolves around the many facets of how the communcations industry is changing, here's a few really interesting links to chew on:

Eirikso: "Free, but not that free…" Eirik Solheim's contribution to the blograce leading up to Wednesday's Media Evolution 2009 where they're dicussing Chris Anderson's thought on the economics of free.

Mediainfluencer: "Brand as identity and branding as behaviour", excellent as always from Adriana on branding and its role in business strategy. "..the bad news for the branding folks is that messages and projections are not what they used to be. The good news is that a company can define its identity and behave according to who they want to be. That sounds like a good trade-off to me."

Richard Burton: Is Fleet Street a Dead End or the New Super Highway? The former editor of the Daily Telegraph online, now managing editor of The JC, on the challenges of getting the Telegraph to embrace the online mindset and opportunities, and on the media future. Richard warned me this was a transcript and as such not entirely accurate, but that the general gist was correct. It does make for fascinating reading (I may still find time to post some of my thoughts on it later).

Handbook for Bloggers and Cyber-Dissidents
Not so much a link to ponder perhaps, but still an interesting development: Reporters Without Borders has published a Handbook for Bloggers and Cyber-Dissidents (pdf, 81 p.), intended for citizen reporters in countries where the mainstream media is censored or under pressure. According to Gisle Hannemyr, it provides some rudimentary technical advice on how to to remain anonymous and how to get around certain types of censorship.

Icelandic media: "like alcoholics on detox"

So, Icleand has a new government, this one headed by Johanna Sigurdardottir.

Who's controlling who? Interestingly, what struck me the most when I was in Rekjavik in mid-December was the lack of agreement and uncertainty I encountered over who were actually running the place: you could call it lack of regulation of course, but it came across as a more fudamental uncertainty about who controlled the watchers and who controlled those who were supposed to watch the watchers.

Surreal After I described my visit there as "surreal" in this post, Ashok asked me in which way, and I answered surreal as in walking into a bad dream wide awake or into a surrealist painting where familiar forms are melting before your eyes into something unrecognisable: not necessarily malevolent, but dizzying perhaps; disturbing. Now, this impression could of course have something to do with the fact that it was my last reporting trip in a very busy year; the fact that neither of the three editors I met with while there seemed to know who owned the newspapers they were charged with running - or a combination of the two. 

Who owns what? As I got off the bus from Keflavik airport my emninent photographer, Hari, kindly picked me up and drove me to my appointment with Ólafur Stephensen, editor-in-chief of Iceland's second biggest newspaper, Morgunbladid. Ownership status at the time: the paper's mother company, Posthusid Arvakri, was technically broke, the editor was among several employees who hadn't received their December salary and they were in talks to find new owners.

Then, it was straight on to Frettabladid, who had been in talks to merge with Posthusid Arvakri, but a reporter told me Baugur's Jón Ásgeir Jóhannesson had paid off a big debt for the paper (also previously controlled by a Bagur-led consortium) and now probably owned it. I was asked to verify the situation with the editor-in-chief, Jón Kaldal, who said he was uncertain about the actual ownership structure and could I please check with his boss Ari Edwald (clarified here).

Editor-in-chief Reynir Traustason of DV, a tabloid, was also rather unclear on the specifics of the ownership issue, but said the paper was working to cut all its connections to Baugur.

"Our sugar daddies are dead"
"In Iceland we are a split nation," the DV-editor explained: "there are those who follow David Oddson [head of the central bank] and those who are against him. Same for Baugur's Jón Ásgeir Jóhannesson. We have our own word for those who follow Jón Ásgeir: Baugsmidlar.

Incidentally, the taxi driver who recommended I get in touch with Traustason in the first place, claimed Iceland was controlled by Baugur - due to its dominant role in Icelandic media.

"You know, the sugar daddy behind DV and Fréttablaðið was Baugur, but the sugar daddy behind Morgunbladid was Björgólfur Guðmundsson? Every media here has its problem. We had Jon Asgeir, they have Björgólfur, said the tabloid editor:

Like alcoholics on detox
"Cross-ownership has been a big problem in the media here. Now everyone is on his or her own because our sugar daddies are dead. Every company which gets money out of the blue gets sick, so Icelandic media was very sick. Now we have to stand on our own feet. We are like alcoholics on detox," he asserted.

Some would of course argue that is descriptive of the state the entire country is in, due to easy and high-risk credit (such as foreign currency loans), but my mind also jumped to a similar sentiment by Clay Shirky, from this interview:

A lot of working journalists, and especially print journalists, are in the position of being sort of kept women. They don’t really understand where the money comes from but, you know, their particular sugar daddy seems pretty flush, so they just never gave it much thought. And then one day the market crashes and they suddenly discover, “Wait a minute, we were a business? And our revenues had to exceed our expenses every year? Why wasn’t I informed?"

In DV's case, Traustason explained that with its sugar daddies dead, the tabloid had to downsize from 48 to 24 pages and cut about ten journalists. "Now we can probably live," he said, adding that 40 per cent of the paper's revenues came from advertisement, and it was hard to get as companies were collapsing, falling over, all around them.

Who's to blame?
Also, like all over the Westerns world, the Icleandic are asking why the media didn't spot the storm brewing - except, with the country in such a mess, much more so than in other countries. "Only in May, we covered the government's report on the good health of the economy," said Kaldal, who admitted media was guilty, but said; "We are guilty of believing hype, but that's a guilt the whole society should shoulder. The state is the one who really failed."

Still, it is perhaps no wonder the country's population increasingly turning to social media such as political blogs and Facebook to inform each other and vent their frustrations, as I describe in this article (I also  reported on the story in Norwegian here before Christmas, but this blog post contains additional thoughts and previously unused material)

Postludium:
It must be said that everyone I met and talked to on Iceland were very helpful and accomodating: both to see me on very short notice and to give me so much of their time.

After I got back to Oslo and my story was published, a journalist I'd been in touch with emailed me to tell me about a new development:

He: "You might be interested to know that editor xx have come under fire since you were here. A reporter came forward and told the public how he had buried his story regarding a former manager of Landsbanki, the bank responsible for the Icesave debacle. At first he denied this but the reporter played a recording of a conversation where the editor tries to explain that if they run the story the newspaper will be 'killed'."

Me: "Interesting. Thanks for the tip. Seems the cross-ownerships /cross-interests of Icelandic media makes for the most fascinating intrigues, twists and turns."

He: "That´s true. Somtimes it feels like a bad soap opera."

The David Montgomery Appreciation society

Mecom shareholders launch fan club for David Montgomery on Facebook.

Fed up with all the negative media coverage of former Mirror boss David Montgomery's struggling pan-European media group, Adam Billiald, a small shareholder in Mecom, has set up nothing less than The David Montgomery Appreciation Society (thanks to Christoph for alerting me to the fan club on Twitter).

At the time of writing, some eight hours after the group launched, it has 40 members.

In an email, Billiald explained to me that he was tired of the markets and press slating Montgomery and wanted to show that the Mecom-boss has support, a point he claimed was proved by the first few comments on the group's Facebook wall.

"I am sure he can get them through this mess and wipe the debts. We are all also (small) shareholders... but we are all supporting him, as did the major ones..." he said. Billiald, who works for Yell Group when he's not dabbling in shares, is an active contributor to this Mecom Group Share Chat Forum where the news of the new group was met with much praise.

Reacting to the news on the chat board, another regular contributor, petertee, whom I'm guessing is the same person as the Facebook profile Peter Robert Tee, wrote: "Hope we get many more members - search Facebook under Mecom - David Montgomery Appreciation to join - its free and you can add comments, news, whatever - anything relating to Mecom under DM leadership. He is like our modern day Buzz Lightyear, and he will lead MEC to infinity and beyond!"

In a Facebook message, Billiald told me he hoped Montgomery himself would be in touch at some point.

For the record: I have followed the discussion on the chat forum on and off since some time around Christmas, and Billiald emailed me his thoughts on Mecom's forthcoming disposals last week in response to this post.Several of the people who contribute to the forum follow the company very closely, so closely that Christoph has been kind enough to set up a Yahoo Pipe which provides an RSS-feed for the news articles they share with each other as we all know, at least those of us who've followed the company for a long time, that UK media coverage of the group tend to be patchy and limited.

On the Icelandic government's collapse

Today Iceland's coalition government collapsed under the strain of an escalating economic crisis, finally some would say (thanks to @lauraoliver for alerting me to this story)

I was in Reykjavik to do story in December, on media of course, and it was a surreal experience. The sense of doom and gloom was not helped by Iceland's barren "moon landscape", nor by these weird sculptures along the road from Keflavik airport to Reykjavik (this photo was taken from behind a dirty bus window, click on the pictures to see them in full size):

"Welcome to the sinking Iceland," wrote Andri Snær Magnason, the author of «Dreamland: Self-help for a frightened nation»," when I contacted him by email (photo below snapped from the airplane when taking off.)

"I'm not so sure Bjørgólfur Guðmundsson, or anyone else in Landsbanki were criminal: they could drive in 250 km/hrs and they did," said DV's editor-in-chief Reynir Traustasson, with reference to the Icesave scandal. But if Traustasson did not think the bank directors and others criminal, a large portion of the population certainly do, with signs comparing prime minister, Geir Haarde, and the head of the central bank, David Oddson, to bin Laden and worse flourishing at the weekly demonstrations.

I truly felt like a stranger in a strange world while I was on Iceland, and if we think we're having a bad time here due to the struggling economy it's nothing compared to the situation there. However, I was told one upside for journalists, who're facing massive job cuts, is the fact that the financial woes of the island has attracted so much interest from international press that some journalists have been able to compensate for loosing their Icelandic jobs by working as stringers for international agencies such as Reuters and AP (by the way, these photos are all my own haphazard shots, but I worked with a great photographer, Haraldur Jónasson - highly recommened: very professional, flexible, knowledgeable and fun to work with - while there)

Bonus link (added 27/1-09 8pm CET): Is this the most hated man in Iceland? (via Andrisig on Twitter)

How the web is changing newsreading habits

I should perhaps have entitled this post "How the web is changing newsreading habits, chapter xxx", but I've quite forgotten which chapter we're on. In any case, here's an interesting snapshot from Fred Wilson:

The Gotham Gal has been religious about reading the NY Times in paper and doing the crossword as 'dessert' as long as I've known her (28 yrs now)... So this past year, during the presidential election, when she went online 5x per day to see what was going on, you'd think shed have gone to the nytimes.com.

But she didn't. She went to Huffpo. And that habit has not changed since early November. She reads the paper in the morning as always and then checks in with her trusted blogs and web news services throughout the day and evening, like the trader who reads the WSJ in paper form on the train in and then hangs out on his/her Bloomberg all day long. I've asked her to post on all the online news sources she checks every day and she just did that. Here it is. ....

...it teaches me some important things. First, the mainstream newspaper reader is just making this transition to intraday news consumption now. Second, they will not blindly follow their offline brand loyalty when they go online. And most importantly, publishing news online is fundamentally different from publishing news offline. Do check out the full post here.

Summing up the Scandinavian media year 2008

No, this is not one of those summaries xxx weeks after the events: if anything, I put together the usual summary of the region's key media events a bit too early in 2008 (my deadline was mid-October).

Then I got a bit too busy, forgot to be on the lookout for when it went oline, and ended up stumbling across it by chance recently. Surprisingly, the summary still holds up pretty well, the only events that took a slightly different turn from when I wrote it were Baugur pulling out of the proposed merger of Frettbladid and Posthusid Arvakri, the publisher of Morgunbladid, and bailing out the media arm of 365media, which owns Frettabladid.

Of course, Iceland is not strictly a part of Scandinavia, although foreigners often think so, but this story was so intertwined with developements in Danish media last year that it was decided to put it all under the same headline.

The focus of the summary is largely on structural changes, like mergers and acquisitions and new laws affecting the region's media industry, but there's also a bit on online development in there.