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Germany

Axel Springer print sell-off could be risky strategy

Germany's Axel Springer publishing house has sold several of its top-selling publications to a competitor, Funke media group. The deal has been criticized by experts, who see many jobs - and a philosophy - on the line.

It's the headline of the summer in Germany: publishing house Axel Springer AG is moving away from its traditional print media – including magazine television program guide, Hörzu, the Hamburg evening newspaper and the Berliner Morgenpost.

The Funke Media Group – formally the WAZ media group - is set to buy the print publications for around 920 million euros ($1.22 billion). “I was very surprised, just like the rest of Germany's media industry," Hendrick Zörner, spokesman for the DJV Journalists' Union, told DW. “No one expected it, especially the titles they are selling off to Funke.”

According to the company, which publishes the daily, Die Welt, and the mass-circulation tabloid Bild, these made a 514.4 million euro profit for Springer last financial year – or about 15-percent of total sales.

”The plan is definitely to give more of an online focus – not only to its news portals, like bild.de, but entertainment pages where Springer really makes its money,” says Zörner. Springer already operates several online portals: autohaus24, finanzen.net, immonet and StepStone., as well as shopping portal idealo and private accommodation website, airbnb.

Ein Zeitungsregal steht am 23.10.2012 in Berlin auf der Pressekonferenz des Verbandes Deutscher Zeitschriftenverleger. Auf dem deutschen Zeitschriftenmarkt gibt es 1511 Titel - so viele wie noch nie. Damit habe sich die Summe der Publikumstitel in einem schwierigen Marktumfeld seit 2009 um 133 erhšht, teilte der Verband Deutscher Zeitschriftenverleger(VDZ) am Dienstag in Berlin mit. Foto: Robert Schlesinger/dpa

In addition to two newspapers, well-established magazines are also being sold off

One stop digital shop

It is this trend that has German media professionals worried. While the business weekly, Wirtschaftswoche, called the decision a "logical step", critics have been less praiseworthy. The company now is just a one-stop digital shop, lamented Editor-in-Chief of the Süddeutsche Zeitung, Kurt Kister. Spiegel editor, Janko Tietz said he suspected the sale would come back to haunt them. It is a turning point, because Springer is moving away from journalism and from its roots,“ wrote Tietz in the media magazine, Vocer.

But the decision wasn't made lightly. Selling now makes economic sense, communication science professor Wolfgang Donsbach told DW. This is important for the online direction of the company. “This seems to be the message: we are headed deeper into a digital world, but will keep a few key print products, like Welt and Bild, as we consider how to respond in future to the further digitalization [of the media]."

Wolfgang Donsbach, Professor für Kommunikationswissenschaften an der Technischen Universität Dresden. Copyright: privat

The decision to sell wasn't made lightly, says Donsbach

According to the latest study by media research group, Arbeitsgemeinschaft Media-Analyse (AGMA), the number of print publication readers is steadily declining. Springer’s papers reach about 45.5 million people across Germany daily, almost one million fewer people than in 2012. Young readers have switched to searching for free information online.

Workforce implications

The DJV journalists‘ union, however, does have one concern – future jobs. “I don't want to cause panic, but there is, of course, no guarantee of employment at the present time,” says Zörner. In recent months, the Funke Media Group received some negative publicity when it made public its decision to close the editorial department at the Westfälische Rundschau newspaper and laid off 150 staff members.

Even media expert Donsbach, says downsizing is not out of the question. “At the moment, publishers are covering both bases, but when you think about it there always comes that somewhat euphemistic word, synergy. That means they want to save money, especially on things that are expensive and that is, human resources.”

Anti-trust concerns?

The Funke group has until summer 2014 to pay 660 million euros. Springer granted the remaindefr as a loan. But, even if both parties agree – Germany's cartel office has to approve the move. They have to determine whether it puts the overall media landscape in Germany at risk.

“Our secret hope is that the Federal Cartel Office won't give the go-ahead,“ says Zörner of the DJV. From a scientific point of view, this wish is rather unrealistic. Communications professor Donsbach doesn't believe the sale will be stopped. He expects a green light by the end of the year.

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