Horizons newsletter – Week 08 // 2018
Horizons is a bi-monthly Dasym Research initiative to show you how the Dasym themes have been in the news. We publish the Horizons on our website and as an email newsletter. If you wish to receive the email, please contact Investor Relations.
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News institutes are turning the tide
The New York Times digital subscription business is growing as fast as Facebook and faster than Google. Although this is a tricky comparison, it indicates that after years of decline, some old news institutes are faring better on the ongoing wave of digital disruption in the media landscape. Digitalization hit print journalism hard, but it has also led to new, viable business models. Illustrative is The Guardian’s hope to break even this year with its successful digital membership model. Moreover, newspapers are targeting new groups, such as kids: Norwegian BT Junior successfully launched a news service for children and the NYT will devote two pages to a monthly kids’ section. Finally, during live events such as the Olympic Winter games, newspapers innovate around content. The Washington Post offers an augmented reality experience to users, while the New York Times offers a personalized messaging feed to keep readers up to date. These examples are demonstrating that some traditional news institutes are capable of turning the tide and can be more resilient than anyone might have thought.
Warmth at the Winter Olympics
After a heated year during which North Korean missile launches were met with American threats of “fire and fury”, the Pyeongchang Winter Olympics brought a sudden thaw in international relations. At the opening, the teams of both Koreas marched together under the flag of a unified peninsula and a delegation of North Korean officials and cheerleaders added to the suddenly warmer relations. This revival, however, will probably not continue in the future, because structural geopolitical tensions remain. Global concern about the speed of North Korea’s nuclear missile program is mounting and the U.S. already announced tougher sanctions on the country. Regional powers such as China, Japan and South Korea are developing new security policies. Communist countries often attach great prestige to sports events and it is likely that North Korea will become defiant again after the Olympics. However, history shows that sports can contribute to better global relations: in the 1970s the exchange of table tennis players improved the rapprochement between China and the U.S.. Perhaps some ping-pong diplomacy could also break the ice in Korea.
Europe’s resurgent South
With €2.3 trillion in debt, or 135% of its GDP and 20% of the Eurozone’s total debt, Italy’s upcoming elections next month will be crucial to the Eurozone’s survival. Currently, the ECB’s expansive monetary policy keeps Italy’s debt sustainable while hurting frugal consumers in Northwestern Europe. However, for the first time in a decade, and after years of recession and fierce austerity, Portugal, Italy, Spain and Greece – previously dubbed as the Eurozone’s ‘PIGS’ – now post accelerating growth. Paradoxically, a stronger Southern Europe could mean the internal cohesion in the Eurozone might deteriorate: although price, wage and income levels will converge across the Eurozone, Southern European member states might find themselves in a stronger bargaining position on the Eurozone’s financial future (i.e. less stringent budget rules and/or extending the ECB’s QE program). As a result, differences between Northwestern and Southern member states on the Eurozone’s financial future might increase in the medium-term. And since Italy is ‘too big to fail’ for the Eurozone, a victory by a Eurosceptic party would accelerate political rifts within the Eurozone.