Media melancholy

Israel's media are facing a financial crisis that is threatening the existence of veteran news outlets.

Ma'ariv workers protest impending layoffs 370 (photo credit: ben hartman)
Ma'ariv workers protest impending layoffs 370
(photo credit: ben hartman)
The Israeli media is in chaos, its major organs shedding jobs as if so many leaves falling from trees. Haaretz (daily circulation: 65,000), the left-leaning “New York Times” of Israel, and the most critical of Prime Minister Benjamin Netanyahu’s policies, has gone through labor turbulence as employees held a one-day warning strike on October 3.
Another newspaper in grave financial trouble is the country’s third largest, the 64-year-old Maariv with a daily circulation of 160,000. The current proprietor, cash-strapped business tycoon Nochi Dankner, agreed to sell the paper to rival publisher and West Bank settler Shlomo Ben-Tzvi in September for 85 million shekels ($21 million), a move that will see the struggling newspaper likely dismiss 1,600 of its 2,000 employees. Maariv has lost half its readers in the past decade, a significant cause of its financial crisis.
Worried about large layoffs and losing severance pay, hundreds of Maariv employees demonstrated in Tel Aviv in mid-September, even burning tires and blocking roads. As of October 4, management had offered the employees a chance to purchase the newspaper themselves.
A two-hour protest at Haaretz in September was followed on October 3 by a one-day warning strike, which brought both the newspaper and its Internet editions to a standstill. Haaretz employees have taken as their battle cry: “There is no paper without journalists.” The 94-year-old newspaper, Israel’s oldest, has been having cash problems for years, leading owner Amos Schocken to sell off percentages of the organization piecemeal.
Adding to the Israeli media’s woes is the close to failing eight-year-old Channel 10, one of two private television stations, which is teetering on the edge of bankruptcy, having racked up an $11 million debt. American businessman Ron Lauder appears ready to step in to save the crippled channel, but that solution may be only temporary.
Nor has long-time circulation leader Yedioth Ahronoth escaped the wave of media layoffs. The newspaper is about to take streamlining measures, including the firing of dozens of journalists, some of them senior correspondents and editors.
The chaos has many journalists concerned about whether they will be able to hold on to their jobs for much longer, a concern that was alien to the profession for decades when the local media was sacrosanct and largely free of labor difficulties.
Things have indeed changed. The chaos is reaching a crescendo now in no small part due to the digital revolution that has resulted in readers, in particular the younger ones, migrating to online news sites.
The other factor has been the surprise success of free mass tabloid Israel Hayom (Israel Today), funded by American Jewish billionaire and casino mogul Sheldon Adelson, with a daily circulation of 375,000. Despite Adelson’s mild denials that the newspaper’s ambition is to reelect Prime Minister Benjamin Netanyahu, Israel Hayom is unswervingly right-wing and pro-Netanyahu.
Speaking in 2009, Adelson said, “I started the newspaper to give Israel, Israelis, a fair and balanced view of the news and the views. That’s all. It is not ‘Bibi-ton.’” (This is a reference to the term used to suggest that Netanyahu and Israel Hayom are inextricably linked, based on Netanyahu’s nickname “Bibi” and the Hebrew word iton for newspaper.) Employing a seemingly suicidal business model, Israel Hayom has done what its predecessors could only have dreamed of doing. Until 2007, when the newspaper was founded, free publications distributed outside supermarkets, at train stations and on street corners were routinely thrown in the trash unread. But Israel Hayom has claimed in the past year the largest circulation of any Israeli newspaper, a remarkable accomplishment.
Adelson, worth $7 billion, has injected $70 million into the free tabloid.
The sight of distributors dressed in red overalls handing out Israel Hayom has become a familiar part of the landscape. Selling ads on the cheap, digging deeply into Adelson’s pockets, the newspaper’s employees tear away at the economic viability of the other newspaper giants. To those giants, Israel Hayom offers no apologies. “The readers prefer us and we thank them,” Israel Hayom officials said in a statement recently.
To Steve Leibowitz, head of the Israel Broadcasting Authority’s English news department, what hurt Maariv and what will hurt Yedioth Ahronoth, largest circulation newspaper until Israel Hayom came along, is the professionalism that Adelson’s newspaper displays. “It has a surprisingly lot to read,” he tells The Jerusalem Report. There’s a lot of worthwhile stuff in it. It has some top-notch journalists on board.”
Once disparaged as too unprofessional to look at, free newspapers, if done professionally, as Israel Hayom is, and backed by super wealthy patrons seeking political influence, could become a new business model for print newspapers both in Israel and elsewhere in the world.
The smaller Israeli print newspapers – in languages other than Hebrew – are also feeling the pinch. But with smaller staffs, they feel less urgency to make the massive staff cuts of the larger newspapers to keep balance sheets in line.
One such editor told his reporting staff recently, “We have to pay you smaller salaries today than you would like, but at least we are not dismissing very many of you. Wait five years – when digital websites, including ours, start to make money, and we will be able to give you raises.”
Some commentators, however, feel that print newspapers will simply fade away in the relatively near future. “Trends suggest that print newspapers won’t be around in 50 years,” Prof. Yoel Cohen, of the School of Communication at the Ariel University Center in the West Bank settlement of Ariel, tells The Report.
A recent survey of Israelis from the ages of 25 to 34 asked if they could manage without newspapers. An astonishingly high figure – 71 percent – said yes.
Though Israel Hayom appears the main culprit in unhinging the local print media, the digital age is undoubtedly playing its part. Gadi Wolfsfeld, professor of Political Communication at the IDC in Herzliya, tells The Report, “There’s no inherent advantage of having a paper edition now that is not updated frequently, that is inconvenient, that you have to go out and buy or you have to get it outside your house in the early hours of the morning. Once you go online, you get a far broader set of newspaper choices that you can look at 24/7 and that’s what people, especially young people, want these days.”
Adds the IBA’s Steve Leibowitz, “Internet sites are going to become the norm. I’m quite happy to read online. There’s no reason to buy a newspaper. My son will be online and look at four news sites. He won’t open a print newspaper.”
Cohen has a caveat, however, with regard to the economic viability of the news websites: they may not be as financially sound as they appear. “While advertising – which has provided some 90 percent of the earnings of Israeli newspapers – has moved online as advertisers seek out younger target audiences,” says Cohen, “much of the advertising revenue is spent at non-news websites.” Newspapers who move online could have a fight on their hands for sponsors.
Long before the Internet, long before Israel Hayom, local readers got their news largely from the morning newspaper Haaretz, two afternoon newspapers, Yedioth Ahronoth and Maariv, and the 9 p.m. television news delivered by the state-owned station Channel 1. During the 1950s and 1960s, Maariv reigned supreme in circulation, until surpassed by Yedioth Ahronoth in the 1970s. By the 1990s, as elsewhere in the Western world, the Internet began to cut into print subscriptions and advertising among the local media.
As the crisis within the Israeli media gathers steam, a new impassioned debate focuses on whether the government should act to preserve media diversity or stand down..
Netanyahu says for him the question of whether to allow the government to intervene in order to save media jobs is perplexing, recently telling the Israeli economic newspaper Globes, “On the one hand, I’m told leave the media alone, and on the other hand, I’m told intervene to save this outlet or another.” Although so many news organizations are in dire straits, a country about to launch austerity measures causing hardship to other industries is unlikely to step in where the newspaper moguls have failed.