Thursday, August 03, 2006

A crazy project

Beginning of this week the news was leaked that about 1 million selected Dutch households would receive a free newspaper in the near future. Financing would be done by an investor, not familiar with the newspaper world. The editing would be done by an experienced magazine editor-in-chief. It looks like a crazy plan with five ingredients: starting a broadsheet in the Netherlands, circulation of 1 million selected households, for free, a flamboyant editor-in-chief and an investor.

Starting a newspaper in the Netherlands is not an easy job. Most of the national newspapers with a total circulation of 1,8 million copies are in decline. Regional newspapers are not very popular. House-to-house distributed newspapers are seen as dirtied paper. And who wants to start a newspaper in this high-tech era? Is there still a future for printed paid and free newspapers?

The circulation would be about 1 million households. Given that in the Netherlands there are 6,4 million households, only selected areas will receive the newspaper. I guess that the segmentation will match the advertiser and the ZIP code. You may suppose that it will be distributed in prosperous neighbourhoods in urban areas.

The newspaper will be for free. National and regional newspapers have always been paid; their subscription prices are becoming very hefty; the distribution of the newspapers is very expensive. Up to 1995 only house-to-house broadsheets were for free. But then Metro and Sp!ts were introduced; Metro being sponsored by the National Railways Corp. (NS) and Sp!ts being set up by the newspaper company De Telegraaf as an advertising competitor of Metro.

So, starting a free newspaper circulated among a selected audience of 1 million people is a crazy plan. Who are the people behind it?

The financing will be done by Marcel Boekhoorn. He got rich as a dealmaker, buying and selling companies. He scored a hit when he sold a start-up telecom company to incumbent KPN for about 1 billion euro. But his investments are not always successful; he and Mr Roel Pieper, ex-Compaq and ex-Philips, invested in a company The Fifth Force downsizing video volumes to only a few Ks. But he has no experience in the newspaper world.

The editor-in-chief will be Jort Kelder, presently still editor-in-chief of Quote, a glossy monthly for businessmen with an annual edition of the Forbes-like list of millionaires, in this case the Dutch millionaires, including the Queen. Besides his editorial activities he has become a national VIP, presiding forums and leading television discussion. But as the company, holding Quote, has been sold to Hachette Fillipachi, Jort Kelder wants to get out. He is afraid that Hachette will change the management style and will abolish his Maserati from his pay pack. And after being an editor-in-chief for about 13 years, he needs another challenge. But editing a free newspaper, distributed house to house. That is not exactly what can be called glamorous. In fact the free house-to-house distributed newspapers are seen as the lowest rank in the newspaper hierarchy.

All in all, it is a crazy plan with some unusual people at centre stage. Will it succeed? Looking behind the scene, there is a remarkable advisor to Mr Boekhoorn, Mr Cees van der Hoeven. He has been the boss of the Dutch grocery Ahold until he was forced to leave for pumping up the profits. Grocery shops have weekly flyers advertising their offer. This might indicate where the money will have to come from eventually.

It is a crazy project. You will hear more about it.


Blog Posting Number: 462

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