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Europe's Largest Newspaper Publisher: 'A Bankrupt Media Company Is Better Than a Government Funded One'

In a SPIEGEL interview, Mathias Döpfner, the 46-year-old CEO of Germany's Axel Springer, Europe's biggest newspaper group, discusses the press crisis in the United States, whether governments should subsidize ailing media and the future of journalistic quality on the Internet.

SPIEGEL: Mr. Döpfner, in its lyrics (the German rock band) Die Ärzte (The Doctors) describes your company's daily newspaper Bild as a blend of "fear, hate, tits and the weather report." When was the last time your publishing house's flagship publication was an embarrassment?

Döpfner: It's a shame that Die Ärzte doesn't read Bild. I think it's in particularly good shape, and that the move from Hamburg to Berlin was very good for the newspaper.

SPIEGEL: Bild defines itself as a mass-circulation paper, but circulation keeps shrinking.

Döpfner: Well, that puts Bild in pretty good company. Given the many additional media offerings -- from private television to the Internet to mobile phone communication -- I think this development, though not welcome, is unfortunately relatively normal.

SPIEGEL: Circulation is crumbling almost across the board in your core newspaper business. And you accept this as a natural course of events?

Döpfner: Rising circulation would be preferable, of course. What's important to me is that we do not lose any market share, and that we have made the transition into the online business quickly enough and are able to keep the circulation of our publications profitable. I don't want to sugarcoat it, because the circulation trend is upsetting to us, but it isn't a tragedy. Bild's reach has been growing for the past 20 years. Just under 12 million readers a day -- now that's something not even television can beat. And the returns it produces are enough to make us turn bright red -- if the logo weren't red enough already. The Welt Group (eds: Springer's quality daily newspaper) made money for the first time in 2007 and increased its profits in 2008.

SPIEGEL: Mere return on investment should be a deceptive number for publishers.

Döpfner: Isn't return already a swear word today? Perhaps profit isn't everything, but nothing works without profit. Profit is the basis for independent journalism. We make up for the decline in circulation by increasing prices. Bild costs 50 or 60 cents today, depending on the region. Now that's a steal.

SPIEGEL: That's what you say. But perhaps the declining circulation is evidence that the reader simply doesn't want to pay more for the paper.

Döpfner: The tabloid newspapers in other countries are significantly more expensive. Newspapers are still very inexpensive. Nowadays people pay 10 cents to send a text message, just to tell someone something like: "I'll be there in a minute."

SPIEGEL: It isn't just circulation that's been sinking. Because of the economic crisis, advertising revenues are down everywhere, because companies aren't advertising as much anymore. Would you hazard a prediction for this year?

Döpfner: I know better than to do that. The developments in 2009 are completely unpredictable. We too are sensing that the year is getting more difficult. But I believe that we can be among the winners in the end.

SPIEGEL: Now that's a fervent hope.

Döpfner: In 2008, we increased our sales by 5.8 percent, achieved the best performance in the history of Axel Springer and are proposing the highest dividend of all times, at €4.40 ($5.50) a share. Employees benefit from this as a result of profit sharing. But we too are subject to the law of gravity, which is why we will proceed with caution throughout the year.

SPIEGEL: Will Springer be able to avoid layoffs?

Döpfner: We have not had to make any harsh cutbacks so far, and none are planned. In all the years I can remember, there have never been any business-related layoffs at Axel Springer. Many people are exaggerating with their apocalyptic doomsday mood. But even I cannot rule out anything completely in this environment.

SPIEGEL: In the United States, the economic crisis has accelerated the rapid decline of newspapers. Even venerable papers like the New York Times are maneuvering their way from one debt rescheduling to the next shady investor. Could German publishers face the same thing?

Döpfner: One should never say never. But there are a few important differences. Although I must, unfortunately, include our competition in my assessment, German newspapers are simply better, and a few German publishing companies have adjusted to the Internet much more quickly. Many publishers are still quite profitable. In other words, the complaints are coming from a position of strength. But those who find themselves caught in a vicious circle of pressure to be profitable and declining quality should not be surprised when things go downhill. Moreover, nervous journalists contribute to their own disenchantment.

SPIEGEL: Who are you talking about?

Döpfner: It amazes me to witness the masochism with which some journalists characterize their industry as a dying species. The future belongs to citizen journalism and blogs. Granted, these are fantastic assets, but they have nothing to do with journalism. Someone must have confused something here. Newspapers and magazines are still the most effective and powerful media -- both for readers and the advertising industry.

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