Israeli newspapers struggle to survive in digital world

By Tova Cohen

TEL AVIV, Oct 4 (Reuters) - Workers at Haaretz, a leading liberal Israeli newspaper, held a one-day strike to protest plans for layoffs and for the first time in nearly 30 years the daily was not distributed on Thursday.

Haaretz's financial woes follow last month's agreement by conglomerate IDB to sell heavily indebted tabloid Maariv to the publisher of the right-wing newspaper Makor Rishon. The sale would lead to the sacking of a large part of Maariv's 2,000 workers and underscores the plight of the printed media in a news-obsessed Israel.

While Israeli newspapers - like the print industry worldwide - are struggling to compete in an increasingly digitalised world, their situation has been aggravated by the entry of the free Israel Hayom newspaper.

Israel Hayom is funded by American casino magnate Sheldon Adelson, a high-profile Republican donor and close ally of Prime Minister Benjamin Netanyahu.

"People tend to invest in media not just to get a proper return on investment," said one industry analyst in Tel Aviv who asked not to be identified. "So the fact that you have a paper like Israel Hayom, which is probably not just for making profits but (is backed by) someone with deep pockets who has an agenda, makes it difficult for the others to survive."

The problems of Israeli newspapers are compounded by the failure of advertising revenue in Israel to keep up with the growth in the economy and population. Advertising revenue is not enough to support three television broadcasters, four mainstream newspapers and three business dailies, analysts say.

Other than loss-making Maariv, Israeli newspapers are privately held so their precise financial situation is difficult to gauge.

At Haaretz, management is seeking to lay off at least 100 journalists out of 400 workers, said workers' committee member Uri Tuval.

"Haaretz did not reach subscribers and the streets this morning and this is a sad day for us all," he told Army Radio. "Clearly there have to be cuts but we think the Haaretz (management) needs to see how to increase income and not only to cut workers."

Haaretz's own journalists admit that in the long run things will have to change drastically.

"The end of the print media is just a matter of time," columnist Amir Teig wrote on the website of TheMarker, Haaretz's financial newspaper. TheMarker's employees also were on strike.

Teig said the digital medium must quickly become the focus of newspapers if they are to survive and pointed to the example of Israel's Yellow Pages, the maker of printed phone directories that reinvented itself as a successful Internet-based business.

Maariv deputy editor Shay Golden on Thursday called on the government to aid his paper as well as Haaretz in order to survive the current crisis as they adapt their business models.

"Under our noses one of the greatest threats to democracy in Israel since its founding is taking place. The printed newspaper industry is collapsing," he wrote on the front page of Maariv.

(Additional reporting by Ori Lewis)