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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).
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, state-participated 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.
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.
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 pre-selection 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 article-associated 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 medium-specific. 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
non-textual 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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