DRAFT# Portugal. From State-Subsidized to ...

DRAFT# Portugal. From State-Subsidized to Corporate Synergy-Based Media Pedro Pereira Neto and Gustavo Cardoso

Much has changed in the Portuguese media sector in the last thirty years. Government censorship of media content ended with the 1974 Revolution and strong state subsidy policies soon followed, allowing for the emergence of a free market economy and concentration of private media companies. In the last few years, however, the sector has come to a standstill. The market context is not expected to fully recover from the current pessimism maybe for the next three years, thus major changes are not expected in the near future. The media concentration trend is likely to continue, as is the image of online versions of print papers as mere territorial markings. In Portugal, Internet-specific features with potential interest to newspapers tend to be used sparingly in quality general-interest dailies, with Público as a notable exception. The differentiated use of these features is the contingent result of four interdependent factors. Market trends – declining advertising and sales revenues, and resulting adjustment processes – lead to aggressive business group strategies, with companies focusing on horizontal and vertical integration and downsizing online-specific newsrooms and investment (if any). The national Internet access infrastructure also plays a role. With most of the household Internet access still based on dial-up connections, there is limited demand for features that require considerable bandwidth. Fourthly, outlet-specific decision-making processes are important. Many times outlets favour investments in gifts and by-products associated with paper editions rather than promoting online hits.

From Political Dependence to an Open Market Portugal, a 10.5 million inhabitants nation, has had a democratic political system for only thirty years, and has been a member of the European Union since 1986. It is experiencing a consistent transition from the mainly agricultural society of the 1970s (Viegas & Costa 2000:17-43) to an information-based economy, and its media sector has gone through changes unseen in any other period in its past (Faustino 2004:2-7). GDP in 2003 is 130.5 billion Euro; or 12,460 Euro per capita.

Following the 1974 Revolution, the main national dailies became state property, given the nationalization of the banking and insurance sectors, its previous owners. Between 1974 and 1986 the media remained indirectly dependent on political parties and pressure groups. High illiteracy indexes and low reading habits determined low circulation figures and low advertising income. As a consequence, government officials considered subsidies to the sector an imperative, delaying not only technical modernization and personnel re-skilling in media operations but also private investment from taking an interest in the media sector (Agee & Traquina 1984:48-71). It is only with the Portuguese accession to the European Economic Community in 1986 and the reforms it prompted in the country that reprivatization and sector liberalization policies came to be, stimulating private investment in media. With real market competition comes the need for implementing new management practices, namely the creation of scale economies and synergies, which lead to a new form of media concentration – this time in private hands, with economic groups that will soon assume a multimedia nature. By the early 1990s, investment in alternative media products starts, including the first newspaper online presence (Faustino 2004:5).

The last decade Almost all Portuguese media ventures, including the state-participated ones, are nowadays managed as businesses in which profitability – and not technological availability – is the main driving factor. In this domain, the Portuguese print media sector has, for some time now, been showing signs of crisis. Newspapers’ circulation figures – that mostly concern single copies – have decreased over the past four years, while the number of titles has stabilized. And in the advertising expenditure context – second to sales as an income source – television broadcasters are still – and have been for the past decades – getting the best of newspapers, in an overall market showing decreasing figures (WAN 2004; OBERCOM). At the same time, one stable feature of the Portuguese media scene is that the media diet of Portuguese citizens clearly favours TV over newspapers. One way of tackling the crisis has been promoting different business integration strategies. Thus, the Portuguese media industry is increasingly concentrated in only a few business groups. In 2002, the six biggest media groups accounted for 86% of all print circulation figures, and the biggest three alone gather 80% of the sector's advertising income (Correia 1999:3; Correia 2001; http://www.fipp.com/141).

INSERT TABLE 1 HERE Among the major types of news services in the country are several daily newspapers. The most popular newspapers are Jornal de Notícias, Correio da Manhã, Público and Diário de Notícias, together accounting for about 30% of all newspaper sales. Other important news services are the weekly newspaper Expresso, the radio stations TSF and Rádio Renascença, and the country's only news agency Lusa. Three TV channels – state-owned RTP and privately owned SIC and TVI – provide lunch- and dinner-time newscasts. In addition, the public broadcaster RTP has established a news-oriented channel – NTV (now news-only RTPN), with hourly updates – and SIC offers the news-only channel SICNotícias.

Four Quality Dailies on the Internet There are four major national dailies in Portugal: Público [Public], Correio da Manhã [Morning Courier], Jornal de Notícias [News Journal], and Diário de Notícias [News Daily]. The latter two – Jornal and Diário de Notícias – belong to the same economic group, stateparticipated Lusomundo. Four other newspapers with significant circulation figures exist, which will not be discussed in this chapter: the three national sports papers (Record, A Bola, and O Jogo) – which are among the most updated and visited websites, and in which online reader comments are not only frequent but encouraged – and the leading weekly newspaper Expresso, the most renowned paper in the country, and the one with the most commented online news articles and most dynamic online forums. In retrospective terms, two leading print papers established their online editions in late 1995 (Público and Diário de Notícias), while the best-sellers, Correio da Manhã and Jornal de Notícias, did so in late 1998 (Granado 2002). Online versions of print newspapers are popular among cybernauts, but less so than portals and search engines. In the second quarter of 2000, the most popular online edition, Público, achieved a 16.7% share of cybernauts (the overall fourth in the top-ten of most visited websites), amounting to 19.3% two years later (overall fifth) (OBERCOM; MARKTEST). At the same time, while only three national generalist online editions (Público, Diário de Notícias and Expresso) made that top-ten in 2000, only two (Público and Jornal de Notícias) did in 2002. INSERT TABLE 2 HERE

Although the online versions are among the most visited and referred-to websites, their brand names do not seem to be strong enough for the establishment of a solid presence on the Internet that can directly generate revenue on its own. Most dailies still hold free-access websites, almost all contents are free, and a very low percentage of front/homepage space is conferred to ads – though all online versions use pop-up ads. However, these figures hide significant variations from paper to paper. Público is the only one that actually doubles its ad percentage on the online environment, an income much needed because of its separate online newsroom. Jornal de Notícias and Diário de Notícias show signs of deeper rooting within their economic group (see below). These facts underline the thinness of the online newspapers’ advertising market: since self-promotion takes up more space than the other advertisements, these online ventures seem to be used mainly as a window for promoting the activities of economic groups as a whole – with the exception of Público.

Cautious By-Standing over Ground-Breaking All four print newspapers discussed in this chapter have a compact format with front pages encompassing mostly headlines and photos, and include supplements for classifieds, business, culture or sports. Their first and last pages are in colour as are some of the articles in the inner pages, and their front pages’ layout consist mainly of one main story. Supplements excluded, size ranges from 48 to 56 pages, and prices from 0.55 to 0.80 Euro. As far as these print papers’ online counterparts are concerned, Público’s online edition is by far the most complex of the four: it is the only one which has its own online newsroom, the only one with a frequent update policy tout court (automatic every five minutes), the only one with editions on platforms other than HTML, and the only one with a comprehensive archive practice, apart from compiling and maintaining issue dossiers. The other three online versions of print papers, although not having online-specific newsrooms, make use of their horizontal economic integration, providing links to news contents within corporate-linked news services. Correio da Manhã’s web edition makes the best of its inclusion in the IOL portal, including cross-reference routines with other media such as TVI. Diário de Notícias’s illustrates the integration logic by replacing its own updates’ section with permanent news updates taken from TSF. Jornal de Notícias’s website is the least complex of the lot, neither benefiting from

TSF’s news updates nor producing its own, but simply linking to other publications’ websites within its group – due to problems with its website hosting service. As for the news agenda for the 8th of October, the main story was the resignation of Foreign Affairs’ Minister Martins da Cruz, in the wake of a political scandal around the benefiting of his daughter's university application by his fellow Minister of Education.

Content and news types Looking at the types of content offered on the print and online front pages of the four selected quality dailies on 8 October 2003, a first striking aspect is that none of them presented any entertainment items. Secondly, none of the print versions’ front pages offered any service information, found only in interior pages. Thirdly, the number of textual pointers is much higher in the online environment than offline, for all four newspapers. Special note should be taken of Público's website that showed two-and-a-half to three times the number of pointers found in the other papers. These essentially point to news items and service information, underscoring a portalesque nature common to all four online papers. INSERT TABLE 3 HERE Furthermore, the number of news items is significantly higher in print editions than in online versions – the highest contrast going to Público and the least contrasting case being Diário de Notícias. The latter, in fact, offers more news items on its homepage than on its front page. At the other end, Jornal de Notícias only offers about half. Público excluded, there is an emphasis to present the news as headlines in print editions and as teasers in online editions. The vast majority of these headlines and teasers link to basic news stories; other types of news items like editorials or commentaries are largely missing. The main differences in terms of geographical frame are found between newspaper titles and not so much between medium types: Público focused both on international and national/regional affairs, while all others dealt mainly with national/regional matters.

Observed use of the Internet-specific potentials for journalism

Some authors argue that the main feature distinguishing print and online journalism is the use made by the latter of Internet-specific traits such as immediacy, multimediality, hypertextuality and interactivity (Deuze 2001:4/5; Parker 1998:1). As far as the news update frequency is concerned, Lusomundo's titles remain the least adventurous. Jornal de Notícias is the newspaper with the lesser number of total and visible breaking news items (on a Java-based headline roll bar, where only one headline at a time is visible) and with all online news items copied from the day’s print edition. Diário de Notícias benefits from a synergy with TSF radio, presenting a long sidebar with updates. Correio da Manhã holds a Java-based section on the front page, where two breaking news are visible at a time. It is, however, Público, that provides the most updated news of all four. Referred to as 'latest' rather than 'breaking news', news items included in Público’s 'Últimas' section are automatically updated every five minutes. Multimedia, potentially one of the staple features of journalism on the Internet, can only be realized when structural and professional limitations in the quality of the available bandwidth and the availability of skilled human resources are tackled (Heinonen 1999:70; Deuze 2001:4/5; Kamerer & Bressers 1998:4). Although cable and DSL accesses are growing at a quick and steady pace, the most common form of Internet access in Portugal is still dial-up access. Consequently, bandwidth is limited. This is an important explanation for the reluctant use of multimedia in the main Portuguese newspapers. Video footage and animation are absent, and all papers, except Publico, present fewer photos online than in their print editions. An exceptional case is Diário de Notícias, a newspaper that in print adds no photos to news items, but online offers sound clips, provided by the news update sidebar of sister company TSF, a radio station owned by the same economic group. The use of hypertext, a fragmented and nonlinear writing format, has been found to be very helpful in making information available in a concise way, so that too big a clutter is prevented and potential readers are not deterred. However, all four online editions opt to use only side or bottom hyperlinks and not in-text ones, thus reproducing the print text layout. Second, considering that hyperlinking also allows for fact cross-checking practices, no outward links to additional information exist, suggesting there is a strict self-referencing strategy in Portuguese mainstream print media. Interactivity can refer both to content interactivity and interpersonal interactivity. As for content interactivity, Público stands out as the only one where front-page content preselection was observed. In terms of format selection, Público also offers a full copy of its daily print edition in PDF format as well as a newsletter, the latter also offered by Correio da

Manhã. These two online editions are also the only ones that allow for articles to be commented by readers. There is a clear distinction between off- and online front/homepage strategies regarding reader-outlet communication. With the exception of Público (which provides links on its front page to a general newspaper address, letters-to-the-editor and comment sections), offline versions tend to present no addresses on their front pages (details being referred to in interior pages) while all online editions present links to section-specific addresses and interaction sections. It should be noted, though, that none of Lusomundo's titles show any articleassociated interaction tools. On the other hand, no e-mail or other kinds of addresses are provided for contacting each article’s author. This means either that journalists do not consider readers as a source or that no time is available to deal with such feedback. In this sense, interactivity does not seem to be a trait in which a great deal of investment is made by mainstream media newsrooms.

The Impact of the Internet on Print Media in Portugal All things considered, the impact of the Internet on mainstream Portuguese dailies resulted in the establishment of online editions that differ from the print ones. Print editions' front pages present more news items, more headlines (as opposed to teasers in online editions), higher percentages of self-promotion and advertisement space, and more photos (except in the case of Público) than online front pages. Many other observed differences, however, are much more outlet- or company- than mediumspecific. For example, Correio da Manhã is the online newspaper that refers in its items the least to itself or its economic group, and the one that is apparently more ad-dependent. Lusomundo's titles – the Jornal and the Diário de Notícias – show more references to themselves and their economic group, although their business integration does not produce homogeneous news-update routines. Only Público displays platform and content personalization. At the same time, no apparent changes have been prompted by the Internet in regard to the topic and authorship of news items subjects, the provision of contact information for journalists or the inclusion of hyperlinks in texts. Thus, the print newspaper seems to remain the driving metaphor behind online journalism in Portugal. Público, the first Portuguese newspaper to fully adapt its production process to computers is, not surprisingly, the most complex of the four online versions. It has its own newsroom,

content and platform personalization, it provides the most frequent news updates and the most comprehensive archives, and is the first of the four outlets to charge for some of these features. At the other side of the spectrum, Jornal de Notícias fully repurposed its print edition content in October 2003, although in 2004 it has assumed the same layout and tools that the other Lusomundo title offered.

A Crossroad of Trends and Strategies With all of this in mind, the use of Internet-specific features with potential interest to newspapers has, apparently, not one configuration in Portugal. This seems to be the result of four different variables. First, the national Internet bandwidth infrastructure, with most of the household Internet access still based on dial-up connections, renders the use of heavy bandwidth-dependent contents unattractive and constrains the provision of innovative nontextual material. Second, current market trends, in particular declining advertising and sales revenues, are hazardous to the newspapers and prompt strong business concentration and cost-cutting practices. These market adjustments determine the business group strategy under which each newspaper operates. The emphasis is on scale economies (the other name for repurposing content), downsizing and synergy consolidation (the other name for the disappearance of online-specific newsrooms), all of which dramatically reduce the amount of online-only content, and interaction- and personalization-oriented tools. Furthermore, gifts and extensions associated with the paper editions find more support in outlet-specific decision-making processes, than initiatives to promote online hits. So what is the strategy pursued by Portuguese newspapers on the Internet? Mostly it is keeping an online edition going while waiting for the market to become more supportive of such endeavours in terms of advertising revenue and readership, and for the right technological infrastructure to become available. For Público, the only outlet discussed in this chapter that invests in a separate newsroom, the strategy consists of providing a real complementary service to the print readers and offering stand-alone content appealing enough to online subscribers. In the longer run, it bets on a new computer-skilled generation to take up an interest and to become familiar with newspapers’ online editions. Thus, only Público's management shows interest in investing in an innovative and ambitious online edition. Most journalists seem to have little leverage for – and in some cases show little interest in - changing their news production routines. So the future of this sector in Portugal is

likely to reproduce the current situation. The market context is not expected to fully recover from the current pessimism for the next two, maybe three years. The media concentration trend is, then, likely to continue. Management and journalists will stick to the core print product, where the money comes from. Hence, the image of online versions of print papers as mere territorial markings will remain for some time.

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