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FM AMEMBASSY LISBON
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INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 LISBON 000029 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV SCUL ECON SOCI PO
SUBJECT: PORTUGAL'S NEWSPAPERS SHOW SURPRISING STRENGTH 
 
¶1.  SUMMARY.  Newspaper readership may have declined in 
recent years in the U.S. and other western countries, but in 
Portugal circulation of daily newspapers increased by six 
percent from 2007 to 2008.  Media consolidation has only 
started here in recent years, but those newspapers that are 
part of the Controlinveste chain are doing even better than 
their competition.  We attribute the growth in daily 
newspaper sales to a combination of social factors:  rising 
income and education, as well as internet usage that is still 
low by European standards.  We would expect that, in coming 
years, as more Portuguese turn to the internet for their 
news, newspaper sales will peak and then decline.  END 
SUMMARY. 
 
PORTUGUESE DAILIES INCREASE CIRCULATION 
--------------------------------------- 
¶2.  The newspaper trade group Portuguese Circulation 
Association (APCT) has released statistics showing that the 
five major Portuguese daily newspapers increased their 
circulation by an average of 6% from 2007 to 2008, a bump of 
21,000 copies per day.  Portuguese dailies now sell 346,000 
copies per day (which does not count the 425,000 copies of 
free newspapers distributed daily).  The Portuguese market 
has two large dailies (Correio da Manha and Jornal de 
Noticias) with daily sales over 100,000, plus three smaller 
players (Publico, Diario de Noticias, and 24 Horas) all in 
the 40,000 range.  All these papers grew last year, with the 
sole exception of Publico, which showed no change.  All five 
are tabloid format, but they vary in content and tone from 
high-brow Publico to scandal-and-soccer 24 Horas. 
Separately, the business dailies Diario Economico and Jornal 
de Negocios also showed healthy growth rates. 
 
Copies sold daily:    2007      2008     change 
 
Correio da Manha      117,164   119,692      2% 
Jornal de Noticias-x   92,610   104,419     13% 
Publico                41,913    41,912     ... 
Diario de Noticias-x   37,226    41,437     11% 
24 Horas-x             36,221    38,288      6% 
 
TOTAL                 325,134   345,748      6% 
x = Controlinveste assets 
 
JOAQUIM OLIVEIRA LEADS CONSOLIDATION 
------------------------------------ 
¶3.  There are no Gannett-style media monoliths here, nor 
significant foreign ownership of Portuguese media, but a 
recent consolidation trend is setting the standard.  While 
his media holding group Controlinveste has been around since 
the 1990s, Joaquim Oliveira became Portugal's answer to 
Rupert Murdoch in 2005 when he bought another holding company 
called Lusomundo and created Controlinveste/Global Noticias. 
Controlinveste owns three of the big five dailies listed 
above -- perhaps not coincidentally those with the greatest 
growth rates.  The strong showing of Oliveira's empire 
suggests that this is a model for the future.  Oliveira's 
assets include traditional newspapers (Jornal de Noticias and 
Diario de Noticias), tabloids (24 Horas), soccer papers, a 
free daily (Global Noticias), an all-news radio station 
(TSF), and three cable TV sports channels.  Oliveira also 
owns stakes in telecom leaders Portugal Telecom and ZON 
Multimedia. 
 
BUCKING THE TREND 
----------------- 
¶4.  By contrast, U.S. daily newspaper circulation continued a 
longer term trend by falling 4% last year, with ad revenue 
losing 3%.  Nearly every major paper except the two largest 
(USA Today and Wall Street Journal) reported circulation 
declines.  Editors cite online news sources as their primary 
competition, noting that total readership (i.e., print plus 
online) actually grew by 2% last year.  European print 
circulation also fell by 2% last year, but editors see their 
key competition coming from free dailies, which account for 
23% of circulation in Europe (and 55% in Portugal).  But the 
healthy Portuguese print media are not the outliers they 
might appear at first glance.  Worldwide print newspaper 
readership is, in fact, rising -- particularly in developing 
countries like India, China and Brazil.  While there is not a 
straight-line correlation, many of the European countries 
whose economies were historically poorer than the EU average 
(e.g., Estonia, Ireland, Romania, Turkey) are showing 
increased print media readership.  Portugal falls into this 
category. 
 
¶5.  However, the free dailies offer a cautionary note:  after 
explosive initial growth, Portugal's free-distribution 
dailies are now retrenching.  Among the major free papers, 
year-old weekly "Sexta" suspended publication effective 
January 9 while investors assess its future.  "Meia-Hora", 
which targets upper-class readers, will be distributed 
exclusively in offices.  Meanwhile, business-themed free 
 
LISBON 00000029  002 OF 002 
 
 
weekly "Oje" (circ. 22,000), which was voted "Best Free 
Paper" of 2008, is now sold for one cent on newspaper stands. 
 Among the generalist free dailies, Controlinveste's "Global 
Noticias" (circ. 200,000) is likely to maintain its 
readership and increase its distribution areas, while smaller 
competitors will have to work hard to maintain the ad revenue 
that keeps them viable. 
 
SOCIAL FACTORS AND INTERNET PENETRATION 
--------------------------------------- 
¶6.  Portugal's population of 11 million has a literacy rate 
of 93% (eight points higher than in 1990); Portuguese GDP has 
climbed from 42% of the EU average in 1960 to 77% today; but 
only about one-third to one-half of Portuguese are internet 
users (in most EU countries this figure is over 50%), and one 
recent survey put "digital illiteracy" here at 54%.  Thus the 
Portuguese are becoming better educated, wealthier, and more 
interested in and linked to the world around them, but they 
are not getting their news from internet sources as 
frequently as citizens in richer western countries.  As a 
result, daily print newspapers have enjoyed a steady growth 
in demand.  We would anticipate that as internet usage 
becomes more widespread, and with the continued growth of 
free dailies throughout Europe, that sales of paid print 
newspapers would peak in coming years and then show the 
inexorable decline seen in other western nations. 
 
COMMENT - REACHING HEARTS AND MINDS 
----------------------------------- 
¶7.  Portuguese newspapers will, for the coming years, remain 
at the core of anybody's strategy to impact and change public 
understanding of key issues.  Decision-makers and 
opinion-leaders here are keenly aware that the media 
environment in which they operate is a few years behind the 
the technological changes defining the US market.  But for 
now, Portuguese get their news from traditional sources:  TV, 
radio, print newspapers and magazines. 
STEPHENSON