Comments by David Montgomery's group Mecom - which own a number of newspapers across Europe - about the threat facing traditional media from the internet have unsettled UK publishers.
Announcing a 3% fall in half year profits, Montgomery said: "It is increasingly apparent that the traditional newspaper model is under pressure. Whilst this can be mitigated in the short term by restructuring measures, we are continuing to work towards the implementation of a new business model of a modern content and consumer business … In the short term, such comprehensive change is requiring both fundamental reorganisation and investment in the business, with some impact on profits."
Analyst Jonathan Jackson at Killik Capital said Montgomery's warning had implications for other newspaper groups.
Jackson said in a note today: "We believe [Mecom's] statement sums up the issues facing the industry. Companies such as Trinity Mirror and Johnston Press are suffering the short-term pain of falling advertising revenues, but there is a good chance that they never experience a rebound as the economy recovers. Instead, we believe much of this revenue stream will continue to shift to the internet. Whilst the incumbent publishers can invest to compete in the new world, they will be faced by higher investment costs and increasing competition from powerful online providers."
All this left Mecom 11% lower at 19.5p, Trinity Mirror down 7.75p to 92.75p and Johnston Press off 3p at 51.5p.
