INM Results

JTMan

H1 2016 results for INM are here.

Positives:
- Distribution revenue up.
- Digital advertising up.*
- Profits up.

Negatives:
- Newspaper circulation revenue down.
- Newspaper advertising revenue down.
- Pension liabilities up.

*But not nearly enough to cover the decline in newspaper advertising.

The surprise is how much growth there is in newspaper distribution revenue.

Szero

In a nutshell, INM's bread and butter of newspaper sales and newspaper advertising is declining rapidly.

What is keeping INM going, is new distribution contracts (Irish Times), cost cutting (redundancies, closure of print press in NI etc) and increased digital advertising (but not nearly covering print losses).

You can only cut so much (although INM still looks fat versus other newspaper groups) and you cannot cut your way to long term success.

IRE60

More cost cutting in IN&M:
http://www.irishtimes.com/business/media-and-marketing/inm-plans-to-outsource-newspaper-production-to-pa-1.2773277

Just on the distribution: the papers do supply a level of growth, but diversity in their distribution had been a real winner. Newspread has over a number of years been gathering pace outside the core newspaper industry distributing products to multiples.

JTMan

Are Newspread distributing groceries along with newspapers?

L1011

JTMan wrote: »

Are Newspread distributing groceries along with newspapers?

Apparently so:

Newspread Website wrote:

In recent years, Newspread has broadened its service offering beyond newspapers and magazines to offering a highly effective and efficient route to market to all suppliers of products to the retail grocery trade.

Elmo

One think I don't understand is why Newspaper groups haven't proven their advertising track record.

INM and other Irish publications are aimed at a directly Irish audience online, find they will have a few international viewers (mainly from the disapora), surely their is a certain type of premium for such advertising over international service providers.

I think locally this is certainly something that Local radio stations could take an advantage off, I am not sure how well local publications do online over the local broadcaster.

L1011

Local publications typically have brutal online presences. Some are co-owned with the local broadcaster either entirely (Connacht Tribune/Galway Bay FM) or slightly (Kildare Post freesheet and Kfm have some River Media involvement)

IRE60

@ Elmo: The advertising is a conundrum – and remember, sold programmatically - when you are sitting on your RoI IP address and are fed ****ty (massive broadband hogging) ad’s for Centra or the Lottery – Sean in upstate New York might be seeing something totally different and both looking at the same website!


@L1011: I am wholly convinced that the local media hold the jewels in the crown. They have really really unique content. Say you were from Tipp and pucked a ball for Ballyhale Shamrocks. You’re now sitting in Holburn Circus waiting for the tube and you can read the latest match report from the weekend when they played Mooncoin – you’re not going to get that in the Indo.


It’s a trivial example but one that shows that unique content is the king. If the Regional papers were in any way cohesive they would be looking at that

JTMan

Local press is suffering though in a major way. Circulation is down, advertising is down, digital revenue is meager and closures are commonplace. The UK press industry is plagued by constant stories of the closure of local newspapers, sacking of staff and never ending cuts.

Meanwhile, INM have acquired the publishing division of Celtic Media. This is another consolidation cost cutting ploy.

IRE60

Very interesting. CMG was acquired by Frank Mulrennan some years back who was the Business Ed of the Indo way back.

CMG had a really interesting proposition - they knocked on the doors of a few regionals and gave them a one stop shop option for their pre-press and printing. It was a great way for some of the regionals to piggyback on scale.

They bought the Conn Trib last year (I think i remember they were owed a few quid by them for pre-press so that was part of the deal).

I'm a little surprised that there's no mention of competitions authority? I'm not being glib about the acquisition but it increases their grip on the print market. There's no figures publicly available for the regionals any more so its difficult to estimate.

JTMan

The deal is subject to CCPC approval:

The deal announced yesterday is subject to approval from the Competition and Consumer Protection Commission and the Minister for Communications, Energy and Natural Resources. The value of the transaction was not publicly disclosed.

Will the government and the CCPC allow DoB to have links to more media companies? Probably, this deal will probably go under the radar with little fuss thus far.

JTMan

The Sunday Times have a piece on how this deal, if approved, will strengthen DoB's links to Irish media. (As did the acquisition of Wireless Group by News UK).

Overall, a very low level media reaction to DoB extending his links to Irish media.

IRE60

JTMan wrote: »

The Sunday Times have a piece on how this deal, if approved, will strengthen DoB's links to Irish media. (As did the acquisition of Wireless Group by News UK).

Overall, a very low level media reaction to DoB extending his links to Irish media.

Which one of his publications is going to slam the deal!

L1011

IRE60 wrote: »

They bought the Conn Trib last year (I think i remember they were owed a few quid by them for pre-press so that was part of the deal).

Connacht Telegraph? Named in the article. If they own the Tribune there will be severe competition issues as the Tribune own GBFM and Communicorp are pretty much at their limit station wise. Also GBFM use the Newscorp stations to sell their agency ads and the other Galway licenced station while independent already uses Communicorp.

JTMan

Laura Slattery has an article here querying if the deal will pass the CPCC.

JTMan

Media Guardian have an article on this (Should Ireland allow Denis O'Brien's media empire to get larger still?) today here.

Elmo

What would happen these newspapers if they are not bought?

IRE60

Elmo: I believe that Celtic was profitable so they could have continued. I'd say that they saw the future heading to breakeven and then the inevitable loss thereafter.

I'd say the plan is that joining the ranks of IN&M will give the 6 Celtic titles scale and some decent cost savings - allowing the new owners to suck more blood from the stones than Celtic would have been able to do on their own.

It's hard to get a handle on the magnitude of the deal as the regionals, in the main, don't audit their sales of late (more cost cutting).

In order to get a grip on the deal I had to resort to Publishers Statements - and the risk factors that entails as we have to add in the 'embellishment factor' in those numbers.

I resorted to the regional title list housed on Media Live and, as a leap, take the total of all the papers there as the universe - the total regional sales in the Republic.

Should the deal go through it would mean that IN&M would have a 26% share of the regional Newspaper Market.

The is on top of a current 54% share in the Sunday Market and a 44% share in the Morning (32% if you exclude the Daily Star).

I don't presume to know the rules of the Comp authority - but the above sounds a bit meaty to me.

C

JTMan

On top of all that you have the radio market share that Denis O'Brien has with Communicorp.

8.6% with Today FM,
6.6% with Newstalk,
7.2% with SPIN 1038 and
6.7% with 98FM.

At what stage is the line in the sand drawn and someone says that Denis has too much media ownership?

Do the CPCC have the balls to say no to this acquisition?

IRE60

JTMan wrote: »

Do the CPCC have the balls to say no to this acquisition?

My money is on 'No'!

JTMan

Your money was on the winning side.

The CCPC have approved the INM acquisition of Celtic Media Group newspapers.

The DoB empire is about to get that bit bigger.

IRE60

Using what data is available on the regionals (as they don't do audits anymore) I estimate that without Celtic IN&M have a 20% share of the regional market, Celtic currently have 11%.

The combined means that IN&M have a 31% of the regional market. That's a big increase.