Good News for Publishers
PrintOnline is lowering its rates—in part to preempt a rival project
PrintOnline lowers rates - also to pre-empt an alternative projectBy Markus Knöpfli PrintOnline (PO) is lowering its prices for digital ad transmission as of 2002 by over
15 percent - this discount is justified by the increased volume. However, the free newspaper publishers, who were planning a cheaper PO alternative, are also likely to have played a certain role.
Finally some good news for newspaper publishers, who have been hit by falling advertising revenues: they will have more money in their own coffers next year from the proceeds of all advertisements that they receive digitally via PrintOnline (PO). The reason for this good news: PO, the "digital bike courier", is lowering its prices for next year.
In concrete terms, this means that the price per transmission order will be reduced from CHF 13 to CHF 11 for the larger publishers that pay an annual connection fee of CHF 15,000 to PO. This corresponds to a cost reduction of 15.4 percent. For the smaller and medium-sized publishers without a connection fee, the price will fall from the current CHF 50 to CHF 36 (minus 28 percent) per order.
In both cases, however, the price per megabyte of data will remain at CHF 2. This is not the first time PO has lowered its tariffs: the price per order was already reduced by 17 percent at the beginning of this year.
PO Managing Director Kurt Obrist justifies the lower tariffs with the increased volume: while PO forwarded 58,971 individual advertisements via dedicated lines in 2000, this year it will already be around 80,000 (up 35.7 percent). "PO wants to offer an industry solution and is not profit-oriented. We have said from the outset that the price for the individual publisher will become more favorable as the volume increases," says Obrist.
Free newspapers threatened with a complaint to the Competition Commission
Nevertheless, there are doubts about the selflessness of PO, in which Ringier, NZZ, Tamedia and Publicitas each hold a quarter of the shares. With the massive reduction in rates, PO probably primarily wanted to take the wind out of the sails of the announced competition from smaller publishers. The Association of Swiss Free Newspapers (VSGZ) wanted to set up an alternative project that would have transmitted advertisements for 25 to 30 francs. VSGZ President Willy Grüninger criticized the fact that the PO costs were too high and that publishers were left with "practically nothing left over" after deducting the consultancy and VSW commissions and the PO fee, especially for smaller advertisements.
The VSGZ project progressed relatively well, but when it came to harmonizing the technical standards with PO in order to avoid creating any new hurdles for advertising clients, PO and Publicitas blocked it. When the VSGZ then threatened PO with a complaint to the Competition Commission at the end of October, the aforementioned price reduction came immediately. Ernst Grab, Director General of Publicitas and member of the PO Board of Directors, is convinced that "this substantial reduction in rates will calm the discussion about our prices".
He also assumes that the price will fall again as volumes continue to grow. "In view of the current market situation, however, not at the same pace," he adds. But you have to ask yourself "whether the VSGZ's investment is still worthwhile". So is the announced tariff reduction primarily for tactical reasons, at least in terms of its extent? Grab is evasive: "We also want to take the concerns of the smaller partners seriously," he says.
Free newspapers are now burying their own project
Be that as it may, Willy Grüninger also sees the end of the VSGZ project coming. "It's getting very tight for our project," he says. But he is not sad about it. "Our goal was a reasonable price - and we've come closer to that," he says. In addition, PO has also signaled concessions with regard to the problem of small advertisements, says Grüninger.
This is confirmed by Obrist. "We are thinking about other pricing models," he says. He also wants to "channel" the advertisements so that only those are sent via PO "that are useful to both the client and the publisher."
15 percent - this discount is justified by the increased volume. However, the free newspaper publishers, who were planning a cheaper PO alternative, are also likely to have played a certain role.
Finally some good news for newspaper publishers, who have been hit by falling advertising revenues: they will have more money in their own coffers next year from the proceeds of all advertisements that they receive digitally via PrintOnline (PO). The reason for this good news: PO, the "digital bike courier", is lowering its prices for next year.
In concrete terms, this means that the price per transmission order will be reduced from CHF 13 to CHF 11 for the larger publishers that pay an annual connection fee of CHF 15,000 to PO. This corresponds to a cost reduction of 15.4 percent. For the smaller and medium-sized publishers without a connection fee, the price will fall from the current CHF 50 to CHF 36 (minus 28 percent) per order.
In both cases, however, the price per megabyte of data will remain at CHF 2. This is not the first time PO has lowered its tariffs: the price per order was already reduced by 17 percent at the beginning of this year.
PO Managing Director Kurt Obrist justifies the lower tariffs with the increased volume: while PO forwarded 58,971 individual advertisements via dedicated lines in 2000, this year it will already be around 80,000 (up 35.7 percent). "PO wants to offer an industry solution and is not profit-oriented. We have said from the outset that the price for the individual publisher will become more favorable as the volume increases," says Obrist.
Free newspapers threatened with a complaint to the Competition Commission
Nevertheless, there are doubts about the selflessness of PO, in which Ringier, NZZ, Tamedia and Publicitas each hold a quarter of the shares. With the massive reduction in rates, PO probably primarily wanted to take the wind out of the sails of the announced competition from smaller publishers. The Association of Swiss Free Newspapers (VSGZ) wanted to set up an alternative project that would have transmitted advertisements for 25 to 30 francs. VSGZ President Willy Grüninger criticized the fact that the PO costs were too high and that publishers were left with "practically nothing left over" after deducting the consultancy and VSW commissions and the PO fee, especially for smaller advertisements.
The VSGZ project progressed relatively well, but when it came to harmonizing the technical standards with PO in order to avoid creating any new hurdles for advertising clients, PO and Publicitas blocked it. When the VSGZ then threatened PO with a complaint to the Competition Commission at the end of October, the aforementioned price reduction came immediately. Ernst Grab, Director General of Publicitas and member of the PO Board of Directors, is convinced that "this substantial reduction in rates will calm the discussion about our prices".
He also assumes that the price will fall again as volumes continue to grow. "In view of the current market situation, however, not at the same pace," he adds. But you have to ask yourself "whether the VSGZ's investment is still worthwhile". So is the announced tariff reduction primarily for tactical reasons, at least in terms of its extent? Grab is evasive: "We also want to take the concerns of the smaller partners seriously," he says.
Free newspapers are now burying their own project
Be that as it may, Willy Grüninger also sees the end of the VSGZ project coming. "It's getting very tight for our project," he says. But he is not sad about it. "Our goal was a reasonable price - and we've come closer to that," he says. In addition, PO has also signaled concessions with regard to the problem of small advertisements, says Grüninger.
This is confirmed by Obrist. "We are thinking about other pricing models," he says. He also wants to "channel" the advertisements so that only those are sent via PO "that are useful to both the client and the publisher."
