* France Soir, La Tribune may go Internet-only
* Les Echos to cut nearly 10 pct of workforce
* Sector saddled with higher costs than EU neighbours
* Some family-owned regional titles in trouble
By Leila Abboud and Gwénaëlle Barzic
PARIS, Dec 14 France's press is facing a
run of bad news as declining readership, slumping advertising
sales and structurally higher printing and distribution costs
take their toll on once-proud national titles.
Tabloid France Soir and business paper La Tribune are
teetering on the brink of liquidation and may soon kill their
print editions to go Internet-only, while leading financial
daily Les Echos announced a cost-cutting plan to trim nearly 10
percent of its 430 staff.
Such travails have become familiar as print media outlets in
the United States and across Europe have struggled in the past
decade as the Internet stole chunks of ad revenue and readers.
But France's press had until now been somewhat protected by
a generous system of state aid that prolonged the lifespan of
otherwise doomed titles and delayed painful reforms to
manufacturing and distribution to bring down costs to levels in
line with other countries.
Such aid was boosted temporarily in 2008 during the last
economic crisis and accounts for roughly 10 percent of revenue
for the press, and an even higher proportion for niche opinion
titles, according to Jean-Marie Charon, an expert on the press
at France's National Center for Scientific Research.
"The aid acted as a shock absorber, but now we've come to
the end of the system since the state can no longer afford it."
"We are not going to be able to avoid a brutal period of
deep restructuring and probably will see the death of some
titles or their shift to Internet-only models," he said.
In 1989, 43 percent of France's population reported reading
a paid daily paper, falling to 36 percent in 1997 and 29 percent
in 2008, according to a French government report.
Some readers likely shifted to free dailies like 20 minutes
and Metro, distributed in metro stations and on street corners,
while others get their news online.
Although attention this week has focused on France Soir,
where angry unionists occupied its offices and dumped thousands
of papers on Paris' Champs Elysees, the probable end of the
tabloid's print edition may be a relatively minor development
given its circulation of less than 60,000.
In its 1960s heyday, France Soir had 1.5 million readers,
but a revamped version created by Russian businessman Alexander
Pugachev in 2009 never took off.
Beyond the symbolism of France Soir's demise, cracks are
emerging at other magazines and regional papers across France.
Family-owned media group Hersant is locked in painful
negotiations with its creditors to renegotiate its heavy debt
load and pave the way for a possible merger with a Belgium
competitor or an outright sale.
It has already shuttered its classified ads publications and
laid off 1,650 people.
Hersant's regional newspapers such as La Provence, in
Marseille, Paris-Normandie and Nice Matin have also struggled to
woo younger readers and are behind on shifting to the Internet.
Such pressures have fuelled concentration among regional
papers as traditional family-owned groups weaken and give way to
new power players.
In October, co-operative bank Credit Mutuel bought two
regional papers, L'Est Republicain and Dernieres Nouvelles
d'Alsace, which were once owned by the Lignac family.
Credit Mutuel has scooped up nine such regional newspapers
in recent years, turning the bank's chief executive, Michel
Lucas, into an unlikely media baron who has said little about
his ambitions for his press holdings.
Amid these changes, industry experts say the key issue of
high printing and distribution costs needs to be resolved for
the press to have a chance of prospering in the Internet era.
Unlike in the UK and the U.S. where press bosses broke
powerful unions in the 1980s to sharply reduce printing costs,
France has not gone through such a painful reckoning.
Each time labour conflicts with its unions came up, the
government stepped in to try to negotiate compromises and
pledged aid, said press expert Charon, delaying true reform.
Direct state aid to France's press will total 580 million
euros ($759 million) next year, government statistics show.
France's printing and distribution costs remain roughly 30
percent higher than in neighboring countries, Charon said. The
press has had to invest heavily to upgrade printing facilities
in the past decade, but some titles have not done enough.
The International Herald Tribune told a government
commission in 2008 that the cost of printing 30,000 copies of a
22-page edition came to 3,854 euros in France, 2,334 euros in
London and Madrid, and 2,350 euros in Belgium.
The IHT, owned by the New York Times Co., saw its
deliveries interrupted by a strike for more than two weeks in
November when it sought to cut costs by moving its printing
operation from France to Belgium.
A spokeswoman for the IHT did not return a call for comment.
"In France, newspapers have been paying far too much for
production and have not invested enough in their content," said
Charon. "Many of them today are in a fragile state and not well
positioned for today's tough environment."
($1 = 0.7641 euros)
(Editing by Helen Massy-Beresford)