BPN 1609: One Dutch freesheet in the future

Last week the Telegraaf Media Group (TMG) announced the acquisition the freesheet Metro. TMG  already owns the freesheet, Sp!ts, since the launch of Metro in The Netherlands on June 21, 1999. TMG claims to keep both freesheets alive.

Why Metro was sold
Metro Holland had a turn-over in 2011 of 23.4mln euro. Its EBIT in 2011 was 451,000 euro (2%), a sharp decline as in 2010 Metro Holland still recorded an EBIT of 3.6mln euro (15%). The present goodwill of the brand is 3.6mln. This decline is due to the dip in the advertisements, which is being felt by all Dutch newspapers, paid or free. Besides the freesheet market has reached its saturation in The Netherlands.
Another reason for selling off the Dutch Metro is the strategy by Metro worldwide to sell off in the European titles and invest in Latin America, where the freesheet market is still growing. Editions have been launched in Guatemala, in Peru, Colombia, Mexico, Brazil, while an  edition in Argentina is being planned.

Is TMG allowed to buy the Dutch Metro

The Dutch Netherlands Competition Authority (NMa) has not yet been asked to look at the acquisition. It looks like the TMG did its homework. If both companies have a turn-over of more than  30 mln euro, the companies should inform the NMa. Both companies should have more than 113.450.000 euro in turn overs, before they are obliged to inform the NMa. The turn-over of the Dutch Metro had only been 23,4mln euro in 2011, so the NMa does not need to be informed so far, unless the turn-over of 2012 is dramatically higher.

Two freesheet titles in one company
There are few newspaper publishing companies in The Netherlands who liked to acquire a freesheet. The Belgian/Dutch Pressgroup already indicated not to be interested in freesheets. They had their try in 2008 with the launch of De Dag. Wegener terminated the freesheet De Pers in March of this year after failing to get sufficient advertisement volume. So why should TMG acquire  the Dutch Metro and keep both titles alive?
TMG immediately stated, that Metro would stay as an independent title. In fact one of the TMG managers stated that the differences between Metro and Sp!ts would increase. The advantages of the acquisition would be in the common printing, distribution and sales of advertisement.  And as TMG is the only one in the freesheet market, it can up the prices of the advertisements, the management stated.

Just a question of time

The arguments by TMG to acquire Metro sound reasonable, but are just cosmetic. If TMG wanted to create a difference between its own freesheet Sp!ts and another freesheet, it should have acquired De Pers; it probably would have been cheaper than Metro. Sp!ts is a throwaway freesheet, while De Pers had content. Now TMG has two throwaway freesheets, of which Sp!ts is the stronger brand. It will just be a question of time that TMG will kill one of the freesheets as both will go for the same advertisements and the editorial content will hardly differ.

IMHO, before 2015, Metro will be killed off and Sp!ts will survive as the only Dutch freesheet as there are not enough advertisements budgets with the ad companies and not enough budget for two editorial staffs of throwaway freesheets.

BPN 1156 A crazy project (continued)

When the project of the De Pers, a free newspaper was announced in the Netherlands during the summertime of 2006, I dubbed it crazy project. Now the project is live for more than a year. The title has gained respect as the top quality free newspaper among the two incumbent ones, Spits and Metro as well as the latest newcomer Dag.

But the newspaper is loosing its crazy traits and is returning to the economic laws of publishing. The editor in chief has confessed that he had exceeded the budget with no less than 60 to 70 percent. So now measures will be taken to reduce the editorial staff from 51 to 43 employees by discontinuing year contracts. On the other hand the turn-over will double this year and the daily loss is much less than 60.000 euro forecasted earlier in the year. In the business proposition two items will change. The Saturday edition, the only Saturday edition among the free newspapers, will be suspended due to distribution problems.

The editorial formula will change and financial and economic news will be increases in favour of art and culture. The newspaper will remain a general newspaper with an optimistic undertone. It will not become a head-to-head competitor of the financial daily Het Financieele Dagblad. At the end of April a pilot issue was produced with financial news.

The circulation ranking of the four free newspapers is: (1) Metro with roughly 550.000 copies, (2 and 3, ex equo) Spits with 550.000 copies and De Pers with 440.000 copies with Dag (360.000 copies) in last place. But this might change as the newspaper is changing to the target group of well educated hih professionals between 25 and 49 years. This will have a decrease of copies. In the summer months the circulation will go down to 300.000 copies, but by the end of August it will be up again to 350.000 copies. The management expects the newspaper still to grow. At the start the publisher said that he was aiming at 1 million copies, but this is now seen as ambitious. De Pers distributes 50 to 60 percent in public transport, a quarter in offices and the rest in shops. The pilot with home-to-home distribution is not likely to be continued as the number of readers per copy is too low.

Links:
New Dutch financial daily launched
Dutch free tabloids
PCM's DAG launched
Never a dull moment at PCM
Never a dull moment at PCM
Yes/No/Yes: a free newspaper for PCM, at last maybe
Never a dull moment at PCM (1)
A crazy project

Blog Posting Number: 1156

Tags: newspaper, free newspaper

BPN 1078 New Dutch financial daily launched

The newspaper came out of the blue. No rumour had been around about the launch of De Financiele Pers (the Financial Press). It is a sister publication of De Pers (the press), the free morning broadsheet. And the FP served this morning 32 pages of mainly financial news; yet the lead story, an interview with a representative of the animal front, was also available in De Pers. The physical paper will be distributed in financial centres like the World Trade Centre in Amsterdam, while the pdf edition is also available on the site of De Pers.

How does it look? The newspaper has a professional lay-out, as distinguished as that of De Pers. The stories are well written and illustrated with photographs and info graphics. As said, the editorial staff cooperates with the editorial staff of De Pers by borrowing stories; most likely De Pers will borrow stories from FP. This type of editorial co-operation has been recently demonstrated by De Volkskrant and its sister publication De Dag.

FP has been set up by De Pers and by the financial investment platform IEX. FP is the first real competitor of the paid daily Het Financieele Dagblad (Financial Daily, FD). FD circulates 60.000+ copies a day. FP has three challenges to distinguish itself from FD: focus, quality and distribution. Today the opening article bore the headline: It will be okay with the credit crisis (of course, this article is clearly intended for the Dutch market, which has not been hard hit by the crisis). Remarkable is the lack of pages and pages of stock quotes; while every professional investor is using internet for stock quotes FD is still printing list after list instead of filling up those pages with sensible stories. FP has just one page with quotes for funds.

Last year in August and September a dummy versuion of FP had been produced and shown around to advertisement bureaus and potential advertisers. For the reader market the launch was kept secret with no rumour in the market. The advertisers did not come in hords for the first edition. However three banks and a real estate investment company took out a full page ad.

FP is also the first free morning paper with a specific scope. So far, Metro, Sp!ts, De Pers and Dag are general consumer newspapers. De Pers and Dag are just over one year in the newspaper market as free morning broadsheet. Dag, a joint venture of the newspaper conglomerate PCM and ICT company KPN, has experienced its first reorganisation and its first restyling after a year. And the restyling was badly needed; it was unbelievable that a newspaper allowed such a rag to be published. At present it looks better and the quality of articles has gone up, as the publications borrows articles from its sister publication, the paid daily De Volkskrant.

De Pers and now FP have been started up by the multi billionaire Marcel Boekhoorn. His publishers recently told the Belgian newspaper De Morgen (The Morning), that De Pers costs Mr Boekhoorn 60.000 euro a day. In the first year De Pers suffered a loss of 20 million euro; this year the loss will be 10 million euro and the year after that 5 million euro. By 2011 or 2012 the first profit will show. Of course with FP now, the dawning of a profit might be even more extended.

Update 25 April 2008: The launch of the new Dutch finanicial daily was a live trial dir two days in order to test the reaction from the readers and adverterisers. The first reactions have been positive. Aboiut the future of the financial newspapers, no details were communicated by the publisher.

Blog Posting Number: 1078

Tags: newspapers,financial newspapers

Dutch free tabloids

2007 was an interesting year for the Dutch daily newspapers. Almost all of the newspaper kept in line with the world trend of loosing subscriptions. The newspaper conglomerate PCM bought out Apax, not having made any progress and loosing a hell of a lot of money. Royal Wegener was acquired by the media empire Mecom. And the companies did not move an inch on diversification of media to for example and radio and television; in fact PCM sold its radio operation. But against this back-drop of common newspaper happenings, the real new things happened in the sector of free dailies with two new titles on the market. On January 23, 2007 De Pers (The Press) published its first edition, while on May 8, 2007 the PCM fledgling DAG came onto the market.




Both of them have not been on the market for a full year. Yet they had to fight immediately against the two existing free tabloids, Metro and Sp!ts. Metro is well known throughout the world and has developed in the Netherlands to a daily with short bullets and a few spreads; not exactly a daily which presents news, but a perfect advertisement vehicle with a finely distribution network of public transport points. Sp!ts, the Telegraaf competitor of Metro, is also free daily tabloid with much of the same editorial formula; it also functions as an advertisement vehicle. In this setting, which exists since 1999, two new free dailies entered the market; one, which has no ties with a a newspaper publisher and one which come from the PCM nest. To make some impression on the market, both newspapers had to have their unique selling points, if only for the advertisers: an new editorial format, a new distribution network, a new proposition for advertisers and for the users a real attraction.

Both free tabloids have succeeded in that. De Pers is seen as the better intellectual free tabloid; its editor in chief Ben Rogmans received the press award recognising its quality. It was in fact the first time that a free tabloid won a journalistic award. DAG has made some impression with its visually oriented editorial format. It is full of photographs.

De Pers, a venture of multimillionaire Mr Boekhoorn, has fought for its place by quality. A distribution network and advertisements are basically instruments for competition and it does not make the daily stand out. The advertisement is not impressive, but this has to do with the time of launching. When the daily was launched, it still had to show and prove itself, while the advertisement budgets were already earmarked. So as for advertisements De Pers should be able to get a better market share. Also its distribution network is developing differently from the other free dailies as it is also delivered to the door in some zip code areas. The newspaper has built in less than one year a quality image.

Having talked with PCM about launching a free daily together, PCM broke off the talks with Mr Boekhoorn to start their own free daily in cooperation with the telecom incumbent KPN. And again it was the editorial format which should make the difference. The tabloid sports now daily pages full of photographs and highlights some headings in yellow. Compared to De Pers the printed edition of DAG is a rag, paper to wrap the fish in. And as for the distribution network started to use retail food stores for its distribution. Also DAG needs to attract advertisement for the coming year.

But the novice free dailies needed more USPs. Both free dailies have a website and have or are preparing a mobile service. Especially the owners of DAG the newspaper conglomerate PCM and the telecom operator KPN touted the term crossmedia wherever they could. Having an internet site with movies and mobile internet site is not yet enough to brand a product crossmedia. The newspaper has been unable to develop for example to introduce day parting, using various media at various times during the day, when the media fit the environment. A printed newspaper at the breakfast table or in public transport works. But when people arrive at the office they start using internet and should not get just a digital copy of the printed tabloid, but should get other feeds and stories. By midday they should be fed news on their mobile. This type of thinking has not been a principle from the beginning. So crossmedia has been an after thought rather than an integrating philosophy so far. As such PCM has not yet learned anything else but making a printed free daily and KPN has not yet come further than technology in this project and has systematically reduced the combination of its editorial and technical knowledge.

Overlooking the battle field De Pers has won the fight so far on editorial quality. Having set a standard for their content they can quietly build out their digital presence. DAG will have quite a difficult year ahead. The newspaper has costed 12 million so far and so far the management has been able to bring the costs down to 9 million in less than a full year. In order to control the costs, It has been announced that DAG will editorially work together with the PCM morning paper De Volkskrant. This will mean that it will copy or re-edit Volkskrant articles. KPN on the other hand is closing down the editorial operation of its content site Planet Internet and will be concentrating on the internet and mobile technologies.

Blog Posting Number: 962

Tags: newspapers, day parting, crossmedia newspapers, day parting, crossmedia

Free newspapers less appreciated

I knew it from my gut feeling: for-free newspapers loose from the paid-for newspapers. Market research from Newcom Research & Consultancy BV confirmed that paid-for newspapers get on average 7.9 points out of 10; for-free newspapers get an average of 6.6 out of 10. The survey is interesting as two more free newspapers started this year in the Netherlands. And my second gut feeling was also right: the most recently launched for-free newspaper DAG by the newspaper holding PCM and the incumbent telco KPN scores the lowest in appreciation.

In the Netherlands we have four national free newspapers: Metro, Spits, De Pers and DAG. Metro was the first one, set up by the international Metro chain in cooperation with the Dutch railway company NS since 1999. This publication was immediately followed by Spits, a publication from De Telegraaf, which was out to protect its advertisement share. On January 23 of this year a new free broadsheet was published, De Pers, to be followed by DAG on May 8. The survey publishes the first competitive figures in appreciation.

Metro and Spits score highly in the survey, respectively 6.9 and 6.8. But De Pers is the winner with 7.0. DAG is the absolute looser with 5.9. A discussion can be started about the fact that Metro and Spits are established for-free newspapers. But De Pers proves that it is appreciated even better than the long existing for-free newspapers. De Pers is seen as a newspaper with depth, while Metro and Spits are bullet news newspapers, aiming at young people as a target group. DAG is still trying to find its target group and format. So far it has proven to be publication with an aggressive lay-out, a lot of pictures and not much depth.

The appreciation is also partly related to recognition of the title and the penetration. Metro and Spits are well-known and well established. Their distribution is an oiled machine and the audience is mainly reached around the train and bus stations. De Pers and DAG still have difficulties with the distribution. De Pers is difficult to come by, while DAG made a smart distribution deal with a grocery retail chain. But both newspapers still have to do more before people recognise the title.

The conclusion is that Metro and Spits are well established in the market, but have gotten competition from De Pers as to its format and content. With a better distribution plan, De Pers could succeed Metro and Spits, but also challenge paid-for newspapers. DAG will have to make up a lot if it ever wants to be an established for-free newspaper; it will have to change its format radically to attract a target group (and advertisements) and survive. It is unbelievable that a newspaper holding as PCM with so much knowledge about newspapers, an experienced advertisement acquisition machine and a distribution network is putting out such a rag and all this with bragging adjectives as cross-media. PCM would have done better to make a joint venture with De Pers, which had no editorial experience, no ad acquisition machine and no experience in distribution.

But the survey shows another fact. For-free newspapers are less appreciated than paid-for newspapers. This looks like a contradiction. While the paid-for newspapers are going down in circulation figures, there is a great distance between the appreciation for the paid-for newspapers and the for-free newspapers. Paid-for newspapers get on average 7.9 points out of 10; for-free newspapers get an average of 6.6 out of 10.

And the opinion about paid-for newspapers is strong. Almost 70 percent of the respondents are of the opinion that for-free newspapers do not change anything for the appreciation of paid-for newspapers. Confronted with the statement: For-free newspapers are a full replacement for the paid-for newspapers, no less than 48 percent of the respondents disagree; 28 percent disagree, while 20 percent are neutral. Almost 45 percent of the Dutch indicate that they would not miss for-free newspapers as they would cease publication. I personally think that this statement is a nonsense statement as hordes accept for-free newspapers every day.

Blog Posting Number: 811

Tags: newspapers, cross-media

PCM's DAG launched

Wow. You cannot miss it between the other free newspapers, the new Dutch free daily DAG. It is colourful, it has an exciting lay-out, which changes on every page.



DAG was launched today and it is the fourth free daily in The Netherlands. In fact you can distinguish the free dailies in The Netherlands in two generations. Metro and Spits belong to the first generation. Metro, part of the worldwide franchise was the first to introduce free newspapers in 1999. It was financed by the NS, the Dutch railway company. Metro was a direct attack on the paid daily De Telegraaf, the largest newspaper in The Netherlands. De Telegraaf immediately reacted by publishing the free daily Spits. Metro and Spits form the first generation of the free dailies. Since this year the second generation has started. De Pers was the first one to appear on the market. This free daily is financed by the billionaire Marcel Boekhoorn. For a moment the Dutch national newspaper publisher PCM thought about stepping into this venture, but due to internal differences of opinion PCM left the negotiation table. Now PCM has come up with its own free paper DAG. De Pers and DAG form the second generation of free papers. And there is a difference between the generations. While Metro and Spits have become advertisement brochures for mainly mobile telephones with bullet articles and a few spreads, De Pers and DAG are more serious about the news. De Pers is almost academic, while DAG is more popular, mainly due to its lay out.

How does DAG distinguish itself? The lay-out of the newspaper is bold with colours. The articles are short with a few longer background articles. Photographs and infographics are abundant. But so far there is nothing new. But from the beginning the idea makers of DAG have stressed that it is not a paper, but a cross-media news service, of which the newspaper is one of its manifestations. The cross-media news service also serves the audience by internet and by mobile. Eventually DAG will also feed news into the narrow casting service used in the Dutch railways. A newspaper with an internet extension is no news any longer. All the free newspapers have their internet extensions as well as their digital counterparts to print. The distinguishing factor for the news eater will be the 24 hours news service.

The internet site of DAG has signs indicating that the editorial staff goes after a 24 hours continuous service. The headline sector has time indicators, while a ticker tape runs across the screen. The headline sector leads to short news items from the Dutch press agency ANP (as Dutch is the language the newspaper can not use feeds from Reuters or AP). The earliest time stamp I saw on the site was 12:00h. But I missed a page with the headlines of the last 24h.

How did realise the cross-media factor? As said DAG is a continuous news service with sub-services through print, internet, mobile and narrow-casting. The news is being spread through all these media, making use of the specific characteristics of the media. A printed newspaper has news in text, photographs and infographics. An internet news service has text, photographs, infographics, animations and movies. The same goes for mobile and narrow-casting. From what can be seen on the internet site, DAG uses all these characteristics. The movies are prominent on the home page. Two movies related to Dutch news items of the past 24 hours (celebration of Ajax winning a Cup, the long traffic jams due to the long awaited rain). As far as I can see, the principle of day-sharing (print in the morning, internet in the office, mobile during lunch has not been applied yet). So the cross-media concept still needs some fine-tuning.

Interesting is the co-operation of the newspaper with a high-tech news service Bright. This service first showed up on internet with a site and later on started a printed glossy magazine. Now the editors deliver a page on technology in DAG, which means quality for DAG and promotion for Bright as magazine and site. It looks like Quest a popular science magazine fits into the same formula.

Will DAG make it commercially? Before the launch, the management of DAG announced a deal with AH, a food retail store. Part of the deal is that the store chain will distribute the newspaper to some 700 stores. This is a smart move, as the other free dailies are fighting for their spot near the railway stations and bus platforms. Of course AH will also use the newspaper for advertising. But the deal will not stop here, as AH is experimenting with narrow-casting in its stores. DAG will eventually deliver content for narrow-casting broadcasts of AH. Leafing through the newspaper, there are a lot of advertisements; let us say that there are much more advertisements in DAG than there were in De Pers when that was launched. Of course DAG has a news paper company behind it. It would have been a shame if the advertisement had been scarce; still there was duplicate of Partners in perspective. But what was remarkable was the number of advertisements for mobile telephones and mobile telephone services. It looks like Metro and Spits will loose market share in this sector; even more as KPN is partner in the DAG venture.

Altogether, I guess that the competition in the free dailies world are studying now DAG. There is new competition, a new concept, a continuous news service with all media types ranging from text to movies and a newspaper with a bold lay-out which functions as a sign for the entire service.

DAG means in Dutch DAY and HELLO, but also GOODBYE. One of the free papers will have to say goodbye in this crowded market; I guess that it will not be DAG.

Blog Posting Number: 747

Tags: newspapers, cross-media, day-parting

iLiad: forthcoming research on Dutch newspapers

It has been in the air ever since the iLiad was under construction by the Philips spin-off iRex Technologies: Dutch language newspapers on e-Readers. This week the Dutch Press Fund awarded a consortium of Dutch newspapers a grant of maximally of 362.950 euro for practical research into e-Readers. Three newspapers will partake in the research: the free newspaper Spits, the financial daily Het Financieele Dagblad and the national daily de Volkskrant. The research will take two years and the results will be offered to the newspaper sector.

The practical research will not be directed towards the technology, but will focus on how e-Readers can assist the change-over from the classic, static newspaper to the digital, dynamic newspaper content.

This research objective is broad. Yet one can ask whether another research has to be started up. Internationally there is an IFRA eNews research project going on. Closer to home, Wegener and Philips have done research into the usage of e-Readers by regional newspaper readers. The use of the e-Reader was tested over against other information devices. Especially the difference in usage between internet services and e-readers was tested. Very extensive research was performed with the Belgian newspaper De Tijd. This newspaper is a Flemish financial newspaper. I reported on the results of the research project extensively in my postings. But so far there is no decision has been made public that De Tijd will continue will the service.

The research in The Netherlands will be interesting as Het Financieele Dagblad will be the Dutch language partner in it. So it will be possible to compare the results between De Tijd and Het Financieele Dagblad as language and subject are the same.

New for the Dutch/Flemish language will be the research into the free daily and the paid national newspaper. De Spits is the counterpart by de Telegraaf of the Metro. It aims at the young commuters in urban areas. For de Telegraaf the newspaper the newspaper is an ad vehicle. The national newspaper de Volkskrant direct itself towards young audience with a good education and good job; a substantial part of the audience consists of singles.

The interesting part of the research will be the comparison between professional usage, usage for paid news and usage for free news. From my experience with the introduction of new devices such as CD-ROM players and electronic books, I expect that professional usage will be the leader of the three.

Interesting will also be the content question. Will the newspaper editorial staffs just transmit the newspaper as the pdf files on internet once a day or will they provide an iLiad edition once a day, in a day parting mood (morning, midday, late afternoon editions) or continuously changing news. From the internet experience it is clear that pdf is not a favourite type of edition and that continuously changing news is much appreciated. Given the wireless facility of the iLiad e-Reader a continuously changing news feed can be transmitted.

Personally I would also include the Readius in the project. The two e-Readers could be tested over against each other. The iLiad would be a single functional information device with an A5 screen, while the Readius would be a multi-functional communication and information device with a mobile telephone and a small screen, dedicated to information.

I look forwards to participating in tests of this research project. Of course I should get my iLiad to the repair service first.

Blog Posting Number: 732

Tags: iLiad, e-Reader, electronic book, digital paper, electronic newspaper