Paper chase

German publishers cozy up to weather social media storm

All snuggled up. Source: DPA

Seven of Germany’s largest publishers unveiled a new powerhouse alliance that they hope will bolster print media against the growing dominance of social media.

Three of Germany’s three largest media groups — Burda, Bauer and Funke Group — have joined forces with other well-known imprints such as Axel Springer and Spiegel Publishing, behind the investigative magazine Der Spiegel, in what’s being called a “publishers coalition”.

Under the guise of the German Association of Independent Press Distributors, the publishers have negotiated a new five-year contract that bulks up an earlier, less detailed agreement that ran out at the start of this year. It will represent three-quarters of Germany’s print media market.

Essentially, they have agreed to cut costs by working together in advertising and sales, and to a degree of consolidation. The move sets aside a historic rivalry that was unsustainable in the current, competitive environment.

It’s no secret that social media platforms such as Facebook, Instagram and YouTube have critically changed the nature of the newspaper business, becoming much more attractive spaces for marketers in terms of cost and outreach.

Only few details are available about the plan thus far, namely that Burda subsidiary BCN would be acquired by Bauer and Funke each for a 10 percent stake. BCN would be run by the Hamburg-based Bauer while the other two groups would take stake in Bauer’s companies, creating a tie-up worth almost €6 billion if it succeeds.

According to Burda boss Philipp Welte, who spearheaded the movement to collaborate more closely, the watershed deal already has the green light from German antitrust authorities.

“Our industry is fit as a fiddle,” Mr. Welte told Handelsblatt in an exclusive interview, adding that it was about time for publishers to “strongly re-emphasize the power, fascination and value of their products.”

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