Fewer and fewer newspapers sold
The press division's share of K-Group's revenue is steadily declining
Press's share of K-Group sales declines steadilyBy Markus Knöpfli Sales of daily newspapers at newsstands are falling more sharply again. The K-Group sees the main reason in the relatively heavy discounting of the subscription price compared to the retail price. The publishers, on the other hand, give other reasons or play the ball back to Kiosk AG.
Valora's half-yearly report for the first half of 2001 nevertheless indicated that newspaper sales at the kiosks had continued to fall, but that the decline was leveling off. By contrast, magazine sales had almost stabilized. This is not the case in the current half-year report: there is no mention at all of developments in the press at K-Group kiosks (see box).
On inquiry, Valora spokeswoman Stefania Misteli merely states that the press division accounts for some 30% of K-Group sales in Switzerland and has only just matched the previous year's result. This means that the share of press sales in K-Group's total sales in Switzerland has continued to fall; last year it still accounted for around 33%.
The reason: a "sharp" decline in sales of daily newspapers and special-interest titles, according to Misteli. For seven unspecified daily newspapers that K-Group regularly monitors, the average drop in sales was 6%. There is no longer any talk of a flattening decline. Magazines, youth magazines and comics, on the other hand, had increased.
Inquiries with the major dailies confirm these figures. Blick publishing director Bruno Blaser did not give any figures for newsstand sales of his title in the first half of 2002, and Dietrich Berg, Tages-Anzeiger publishing director, also spoke only of "almost identical numbers of copies sold as a year ago". At the Neue Luzerner Zeitung (NLZ), on the other hand, the decline compared with the corresponding period last year was 0.59%, at the Basler Zeitung 7.1% and at the NZZ 10%. The only positive report came from the St.Galler Tagblatt (SGT): 8% more newspapers were sold at newsstands.
But why are fewer daily newspapers being bought at newsstands again overall? Misteli cites a bouquet of reasons. The two most important ones are that because publishers have not raised the subscription price to the same extent as the retail price in the past, the newspaper subscription has become even more interesting for buyers. In addition, newspaper mergers would reduce the supply and thus also the retail sales (EV). And because of the negative economic development, fewer newspapers are being bought and the individual papers are being used more than once. Finally, Misteli also mentions electronic media.
Better support at the kiosk would be desirable
WerbeWoche presented these theses to the publishing directors of the major dailies - Blick, SonntagsBlick (SoBli), BaZ, SGT, NZZ, Tages-Anzeiger and NLZ responded. However, they did not want Misteli's theses to stand. One thing, however, should be said here in advance: If one compares the subscription and EV price development of the above-mentioned titles over five years (from 1998), it becomes apparent that the EV price was indeed increased more - by an average of 15.5% - than the subscription price (+ 11%).
But there are also exceptions: Blick and SGT's EV prices have remained constant since 1998 (1.50 and 2 francs, respectively), while their subscriptions have become more expensive by 5.38% and 12.1%, respectively. This and the fact that the SGT, of all titles, with its constant price since 1998, was the only one to increase by 8% this year, at least support Misteli's main thesis.
While Daniel Ehrat, head of the SGT publishing house, did not want to comment on this, Berg sees hardly any correlation between subscription price/EV price and newsstand sales and points to Germany: "Although subscriptions are traditionally 20 to 30 percent more expensive there than here, declining trends in EV can also be observed." NZZ Publishing Director Tobias Trevisan takes a different view: although he believes a connection is possible, he does not give it much weight. After all, the NZZ's EV price has remained constant for three years, yet it has lost money at the newsstand. At the same time, however, the NZZ gained subscribers, even though the subscription price was increased annually. The BaZ argues similarly.
"We see the main reason for the circulation shift from EV to subscription in the more intensive market cultivation in the subscription channel, which is due to better cost efficiency," Trevisan writes. Which - interpreted somewhat pointedly - probably means: K-Group is doing (too) little for daily newspapers. Bettina Schibli, press spokeswoman of LZ Medien, expresses herself more neutrally: "The NLZ is a subscription newspaper ... the EV is not specifically advertised, since we concentrate on the subscription market." On the other points, Schibli roughly follows Misteli's arguments. Daniel Fasnacht of BaZ primarily cites competition from free newspapers and the negative economic development. And he describes the other reasons cited by the K-Group as "not applicable.
Hardly any numbers
Valora's half-yearly report for the first half of 2001 nevertheless indicated that newspaper sales at the kiosks had continued to fall, but that the decline was leveling off. By contrast, magazine sales had almost stabilized. This is not the case in the current half-year report: there is no mention at all of developments in the press at K-Group kiosks (see box).
On inquiry, Valora spokeswoman Stefania Misteli merely states that the press division accounts for some 30% of K-Group sales in Switzerland and has only just matched the previous year's result. This means that the share of press sales in K-Group's total sales in Switzerland has continued to fall; last year it still accounted for around 33%.
The reason: a "sharp" decline in sales of daily newspapers and special-interest titles, according to Misteli. For seven unspecified daily newspapers that K-Group regularly monitors, the average drop in sales was 6%. There is no longer any talk of a flattening decline. Magazines, youth magazines and comics, on the other hand, had increased.
Inquiries with the major dailies confirm these figures. Blick publishing director Bruno Blaser did not give any figures for newsstand sales of his title in the first half of 2002, and Dietrich Berg, Tages-Anzeiger publishing director, also spoke only of "almost identical numbers of copies sold as a year ago". At the Neue Luzerner Zeitung (NLZ), on the other hand, the decline compared with the corresponding period last year was 0.59%, at the Basler Zeitung 7.1% and at the NZZ 10%. The only positive report came from the St.Galler Tagblatt (SGT): 8% more newspapers were sold at newsstands.
But why are fewer daily newspapers being bought at newsstands again overall? Misteli cites a bouquet of reasons. The two most important ones are that because publishers have not raised the subscription price to the same extent as the retail price in the past, the newspaper subscription has become even more interesting for buyers. In addition, newspaper mergers would reduce the supply and thus also the retail sales (EV). And because of the negative economic development, fewer newspapers are being bought and the individual papers are being used more than once. Finally, Misteli also mentions electronic media.
Better support at the kiosk would be desirable
WerbeWoche presented these theses to the publishing directors of the major dailies - Blick, SonntagsBlick (SoBli), BaZ, SGT, NZZ, Tages-Anzeiger and NLZ responded. However, they did not want Misteli's theses to stand. One thing, however, should be said here in advance: If one compares the subscription and EV price development of the above-mentioned titles over five years (from 1998), it becomes apparent that the EV price was indeed increased more - by an average of 15.5% - than the subscription price (+ 11%).
But there are also exceptions: Blick and SGT's EV prices have remained constant since 1998 (1.50 and 2 francs, respectively), while their subscriptions have become more expensive by 5.38% and 12.1%, respectively. This and the fact that the SGT, of all titles, with its constant price since 1998, was the only one to increase by 8% this year, at least support Misteli's main thesis.
While Daniel Ehrat, head of the SGT publishing house, did not want to comment on this, Berg sees hardly any correlation between subscription price/EV price and newsstand sales and points to Germany: "Although subscriptions are traditionally 20 to 30 percent more expensive there than here, declining trends in EV can also be observed." NZZ Publishing Director Tobias Trevisan takes a different view: although he believes a connection is possible, he does not give it much weight. After all, the NZZ's EV price has remained constant for three years, yet it has lost money at the newsstand. At the same time, however, the NZZ gained subscribers, even though the subscription price was increased annually. The BaZ argues similarly.
"We see the main reason for the circulation shift from EV to subscription in the more intensive market cultivation in the subscription channel, which is due to better cost efficiency," Trevisan writes. Which - interpreted somewhat pointedly - probably means: K-Group is doing (too) little for daily newspapers. Bettina Schibli, press spokeswoman of LZ Medien, expresses herself more neutrally: "The NLZ is a subscription newspaper ... the EV is not specifically advertised, since we concentrate on the subscription market." On the other points, Schibli roughly follows Misteli's arguments. Daniel Fasnacht of BaZ primarily cites competition from free newspapers and the negative economic development. And he describes the other reasons cited by the K-Group as "not applicable.
Hardly any numbers
K-Group figures for the first half of 2002 are sparse in Valora's half-year report. K-Group sales in Switzerland and Germany rose by 9.9% to CHF 965.27 million, accounting for 64% of Valora's total sales. In addition, 900 new customers have purchased goods from the K-Group since the beginning of the year. That's it. Sales figures for Switzerland are not available even on request. Valora spokeswoman Stefania Misteli merely adds that the increase in sales was achieved despite a tense market situation and subdued consumer spending in Germany. This means that the 9.9% increase in sales was generated exclusively in Switzerland.
