Friday, August 11, 2006

Analysis of a newspaper dying

The Dutch newspaper Algemeen Dagblad (AD) used to be a national newspaper. Its profile was that of a popular newspaper, the second after De Telegraaf. It was part of the PCM newspaper group, the owner of NRC Handelsblad, de Volkskrant, Trouw and some regional newspapers.

But AD lost a lot of subscribers (newspapers in the Netherlands are hardly sold on the street), which led to the usual actions of dismissing personnel and pimping up the strong points, in this case sports. A daily sports section was introduced, but it did not stop the rot.

By 2004 PCM was ready to start administering the last rites for this newspaper. But an intervention from Wegener brought another perspective. The Dutch publisher of regional newspapers had also a problem with its circulation. So a combination paper was dreamt up with AD as the figure head. The newspaper would have a national edition and seven regional editions. Wegener would take 37 percent in the venture and PCM would have the lion’s share.

A year ago AD was launched with a lot of enthusiasm and a new tabloid face. A loss of some subscribers of the national AD edition and the seven regional editions was expected, but this would stabilise; at least this is what the owners thought. By the beginning of January 2006 the owners expected to have had the worst part and hope that they would grow from 550.000 copies upwards. Cost cutting measures were taken and a regional section, which could be taken out, was introduced.

But AD and the regional editions did not grow. Worst of all the newspapers did not pick up enough advertisements either. It was logical that the newspapers would loose subscribers, but as far as advertisements AD and the regional newspapers thought to have a strong proposition: national coverage with regional penetration. But the advertisers would not have it. They clearly indicated that the newspaper was neither a national nor a regional newspaper.

This week partner in the AD venture, Wegener, announced heavy losses, partly caused by the AD joint venture. And again another cost cutting exercise was announced: 75 more journalists to be dismissed. In the meantime vultures (local newspaper initiatives in Rotterdam and Utrecht) are appearing on the horizon, promising to create more regional newspapers.

It is clear that the formula of a national newspaper with regional newspapers does not work. Internet was seen as a supporting act for these newspapers, but despite its popularity, it does not bring in money. So, is there any medicine other than the cost cutting for the terminally ill patient? Not much. The company can attempt to stress more the regional advertisements (go to the butcher around the corner) and upgrade its general offer to the advertisers, if they still consider newspapers a real channel. The editorial staffs should understand that they should be serving their regional readers by positioning the newspaper as a regional paper and of course with more and better regional news. Of course the newspaper management should have also understood the signs of the time and have forged bonds with regional television and radio stations.

When AD was launched last year, I wrote in a blog posting that they formula of AD would not make it. AD is now a terminally ill patient. The venture failed on two accounts: a loss of subscribers as the newspaper did not pay enough attention to the region and an unexpected loss of advertisers. Drastic medicines are needed, while the reverend (Montgomery?) waits in the wings to administer the last rites to AD and Wegener.


Blog Posting Number: 471

No comments: