Sunday, December 26, 2010
Wednesday, December 22, 2010
Yisroel Hayom
Israeli Papers Battle
By JOSHUA MITNICKTEL AVIV—At a time when American dailies are shutting down, Israel has a full-blooded newspaper war on its hands. And by at least one measure, a U.S.-bankrolled start-up is winning.
Just three years after hitting the newstands, U.S. casino mogul Sheldon Adelson's Yisrael Hayom recently nudged ahead of former leader Yedioth Ahronoth in readership by combining a patriotic Israeli bent with cutthroat pricing.
Reuters
The newspaper Yisrael Hayom, owned by mogul Sheldon Adelson, is making inroads among Israeli readers.
"We have changed some common beliefs that were held by the media, for example, that Israel was always wrong," says Yisrael Hayom's editor in chief, Amos Regev, a photo of himself with then-U.S. President George W. Bush on the wall.
The paper's newsstand price—free—has helped as well, making Israel among the latest countries to join a decade-long rise of free dailies that are giving traditional paid newspapers a run for their money. And Yedioth Ahronoth, which costs about $1.35 weekdays at the newsstand, has cut its advertising rates in the last year, likely spurred in part by Yisrael Hayom.
Yisrael Hayom, which means "Israel Today," still faces plenty of challenges. Allegations of political bias have put the newspaper in the cross hairs of several lawmakers. Meanwhile, Yedioth Ahronoth owner Arnon Mozes has a substantial media empire behind him and won a newspaper war against another rival in the 1990s. The unprofitable Yisrael Hayom, part of Israel Today Newspaper Ltd., also still must contend with the same pressures from the Web that all newspapers face.
For the time being, however, Mr. Adelson can afford to support the newspaper. The 77-year-old, whose wife is an Israeli, controls Las Vegas Sands Corp., which owns the Venetian Resort Hotel Casino and the Sands Expo and Convention Center in Las Vegas as well as resorts in Macau.
Israeli media-research company TNS-Teleseker reported that 35.2% of Israelis read Yisrael Hayom in this year's first half, up from 26.9% a year earlier. That put its reach a tad higher than Yedioth Ahronoth's 34.9%, up from 34.2%, though within the survey's margin of error of 1.5%.
Yisrael Hayom is catching up on circulation, too. Newspaper circulation isn't independently audited in Israel, but Yisrael Hayom says it prints 300,000 copies daily. The circulation of Yedioth Ahronoth, which means "Latest News," is about 300,000, according to World Press Trends, which tracks newspaper-industry data world-wide.
Yisrael Hayom has made these gains with an editorial staff about one-third the size of Yedioth Ahronoth's 324 people, according to Israeli research company Ifat Business Information. And Yisrael Hayom's roughly 48 pages each weekday is less than half the size of Yedioth Ahronoth.
Yisrael Hayom has prospered as several U.S. newspapers have filed for bankruptcy or stopped printing in recent years, including the Seattle Post-Intelligencer and Denver's Rocky Mountain News. But Yisrael Hayom's success mirrors the growth of free daily newspapers globally. The number of free daily newspapers hit 196 this year from just a handful in 1997, according to Piet Bakker, a journalism professor at Utrecht University of Applied Sciences in the Netherlands.
The growth of Yisrael Hayom, which promises on its inside cover "to remember that we are Israelis," also coincides with a rightward shift in public opinion that lifted Benjamin Netanyahu last year to a second term as prime minister. During complaints in Israel that the government was ill-prepared to handle a recent massive forest fire, Yisrael Hayom ran a page-one column by Mr. Regev, the editor in chief, under the headline, "Netanyahu Stood the Test of Fire." Mr. Adelson has called himself an "ideological" skeptic of peace talks with the Palestinians.
As readership of Yisrael Hayom has climbed, critics have accused the paper of slanting its coverage in favor of Mr. Netanyahu, a friend of Mr. Adelson. Yisrael Hayom "has an editorial line characterized by blanket, one-sided, and unmitigated support of Netanyahu, while leveling sharp criticism at his rivals," Yoel Hasson, a member of Parliament from the opposition Kadima Party, says by email. Member of Parliament Marina Solodkin took aim at Yisrael Hayom this year with a bill, ultimately defeated, to force nationally distributed free dailies to charge readers after a year. She plans to introduce a revised version in the current session.
Mr. Adelson in a prepared statement says "there is no truth whatsoever'' that Yisrael Hayom is a vehicle for the prime minister.
Yedioth Ahronoth owner Mr. Mozes is no stranger to newspaper wars, having fended off a challenge in the 1990s by then-No. 2 Ma'ariv. Mr. Mozes is the controlling shareholder of one of Israel's largest corporations, Yedioth Media Group, which has magazines; a book publisher; Israel's largest Russian-language paper; Ynet.co.il, Israel's most popular news website; and a stake in Israel's only cable-TV provider.
But Yedioth Ahronoth, which declined several requests for comment, has been challenged by Yisrael Hayom. Yedioth Ahronoth started a free daily of its own in 2008 but closed it within a year. Advertising space in Yisrael Hayom surged 65% in the first half from a year earlier, according to Ifat, boosted by the rollout of the paper's weekend section this year. Meanwhile, Yedioth Ahronoth's ad space rose just 10%.
Yedioth Ahronoth also has been forced to lower its ad rates by about 20% over the last year, according to ad buyer Rony Aran, who heads the Israeli branch of media firm OMD. Mr. Aran says the decline reflects the competition from Yisrael Hayom as well as the migration of advertising to the Internet.
Now that Yisrael Hayom is catching up with Yedioth Ahronoth, the challenger can focus on turning a profit, though that could still be years off.
"The key to their success is that they have very deep pockets, and can live with quite substantial losses from three to five years, says Prof. Bakker, at Utrecht University. "And if Adelson wants to sustain it until the end of his life he can do it."
Yisrael Hayom Publisher Asher Barahav declines to predict when Yisrael Hayom will become profitable, though he insists that Mr. Adelson expects to get a return on his investment—without charging readers.
Mr. Barahav says that when Mr. Adelson entered the Israel newspaper market several years ago, he acknowledged the challenge of newspaper readers migrating to the Internet. "He said that, 'I think that the future is going to be with a real newspaper that will be free and covered by advertising,' " Mr. Barahav recalls. "Sheldon was right, like he is always right."
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