Published in Business Spectator (Melbourne), 29 November 2012
It was a different era: Vague prospects of making money on the internet were enough to mobilise billions of dollars. Political scientists still believed in the end of history and the final triumph of liberal democracy. The ‘Millennium Bug’ had not catapulted us back to a pre-digital stone age. And Europe prepared for the launch of its shiny new currency, the euro.
In short, the year 2000 was one of great optimism. Appropriately, it was also the beginning of an ambitious project: to launch a new business newspaper for Germany. Meant to be a local version of the distinguished Financial Times, the Financial Times Deutschland first hit newsagents’ shelves on February 21, 2000.
What few people at the time would have predicted: The FTD was the last traditional, national newspaper to be established in Western Europe. Ever since, it has never been profitable, costing its owners an estimated €250 million over the course of its life.
Now the publishers have had enough. The Friday, December 7 issue will be the FTD’s last. More than 300 business journalists are losing their jobs.
The FTD is, of course, not the first newspaper to go under in recent times. In fact, in Germany alone the number of published newspaper titles has declined from 426 in 1992 to 333 twenty years later. At the same time, the total number of newspapers sold daily has collapsed from almost 27 million copies to just over 18 million.
What makes the failure of the FTD so spectacular, however, is the stark discrepancy between the considerable resources it commanded and the poor commercial outcomes it achieved. If not even a super-ambitious and well-endowed project like the FTD can succeed, what are the prospects for other newspapers?
It certainly was not for a lack of either money or talent that the FTD never took off. Its founding editor-in-chief was none other than Andrew Gowers. Fluent in German, the experienced FT journalist Gowers had moved to Hamburg in 1998 to create a carbon copy of the FT original – or rather a salmon pink copy (literally).
Apparently, the FT’s publishers were so impressed with Gowers’ work that he took over as editor-in-chief of the FT in October 2001. (Poor Gowers later became head of PR at Lehman Brothers before the bank’s collapse and then presided over BP’s ill-fated communications strategy during the ‘Deepwater Horizon’ disaster, but these are different stories and not necessarily the curse of the FTD.)
Among Gowers’ successors at the FTD were some of Germany’s most talented journalists, including FT columnist Wolfgang Münchau. Yet none of them managed to turn the newspaper into a profitable business.
It was only thanks to the patience and the financial fire-power of its owners that the FTD managed to survive for 12 years: After the publishers of the London FT sold their stake in the business in 2008, the FTD was mainly owned by Bertelsmann AG, one of the largest media companies in the world.
Bertelsmann are also among the most established and experienced publishers of print products in Germany. Through their subsidiary G+J, they own a number of business magazines, although these too have been suffering from poor profitability for many years. To turn all of them around, Bertelsmann merged their newsrooms in 2009 to improve efficiency and utilise synergies.
All this was wishful thinking – just as the policy to move some of the FTD’s articles behind a pay wall. There was hardly any online strategy the FTD had not tried: Electronic newsletters, smartphone apps, podcasts, blogs. Despite all this, it never surpassed its more traditional business newspaper rival Handelsblatt, the German equivalent of the Australian Financial Review – not even online.
To add insult to injury, towards the end of its business life most copies of the FTD were not sold but given away. Just about 3400 daily copies were actually sold at newsstands, compared to 42,000 subscriptions and a staggering 54,000 copies distributed freely to airline travellers. Apparently, the only way to make people read what many observers still regarded as a high quality business newspaper, you had to provide it free of charge – and, by the way, almost free of any ads. For advertisers the FTD had almost become a no-go area. Nobody wants to advertise in a dying newspaper that nobody is prepared to pay for.
Despite being usually well written, and often remarkably humorous for a serious newspaper, the main problem with the FTD’s content was its sometimes bizarre political orientation. A typical article in the early 2000s would have criticised the Germans for reforming their economy while other euro countries were not doing the same. Any more traditional business paper would have had it the other way around.
The FTD always begged to be different, as a matter of principle and sometimes reminiscent of puberty. It was a newspaper not so much written for the new economy but for old Keynesians. In one of its last leaders, it even managed to explain why the French economy is far more robust than most analysts, or The Economist magazine for that matter, believe. The FTD’s typical headline: Vive la résistance! But then again, even if you disagreed with it, the FTD usually provided food for thought.
So it was not for want of money, ambitions, talent, people, patience, creativity or humour that the FTD failed in the end. It failed because it really marks the end of traditional (print) newspaper publishing. The youngest, least established papers like the FTD are among the first victims of the death of print. The more established print products will follow when their readerships die out. If current trends continue, the last printed paper in Germany will be sold sometime around 2030.
Does this mean the end of journalism? Of course not. The FTD only demonstrates the end of an old, traditional business model. A model that still looked promising in those optimistic days of the dawning new millennium but its time was already up back then. They just didn’t know it.
If only a fraction of Bertelsmann’s FTD investment had been dedicated to establishing a quirky, real-time, 24-hours-a-day business news and commentary website, the results might have been very different.
And by now Germany would have had its own version of Business Spectator – rather than a failed, and soon defunct, copy of the FT.