Zuvo relies on power play
Newspaper Distribution: Zuvo, the delivery company for NZZ and Tamedia, is putting massive pressure on other organizations—because it is facing the same challenges itself.
Newspaper distribution The delivery company of NZZ and Tamedia, Zuvo, is putting other organizations under massive pressure, because it itself is no different, whether in Aarau, Basel, Bern, Chur, Lucerne, Schaffhausen, Solothurn, St. Gallen or Zurich - larger publishing houses each have their own early delivery service for their daily newspapers. In most cases, these also work well together. For example, Prevag, the early delivery company of Basler Zeitung Medien, distributes NZZ, Tamedia and Ringier titles as well as its direct competitor Mittelland Zeitung in north-western Switzerland. Zuvo - Switzerland's largest delivery company and a joint venture between Tamedia and NZZ - bought into other distribution organizations in order to better coordinate such cross-regional distribution orders. Today, Zuvo holds a 50 percent stake in Luzerner Pressevertriebs GmbH, a 35 percent stake in Südostschweiz Pressevertrieb AG and a 25 percent stake in AZ Vertriebs AG. There are also shareholdings via the Zuvo parent companies: Tamedia holds a direct stake in the Swiss Post subsidiary Bevo in Berne and the NZZ Group holds an indirect stake in DZO, the organization of the Züriland newspapers.
Zuvo's aggressive policyFor several years everything went well, but for the past year Zuvo has been pursuing a new, increasingly aggressive policy. This began when Tamedia acquired a stake in Landbote and when the Zurich-based company later also took over Thurgauer Zeitung. This enabled Zuvo to secure the delivery organizations of both publishers. But this put NZZ under pressure: in order to remain an equal Zuvo partner, it had to contribute a similarly large area. It did this by simply spinning off the early delivery from the St. Galler Tagblatt, which is part of the NZZ Group, and handing it over to Zuvo from October 2006. As a result, the number of households served by Zuvo increased by around 50 percent within a year. The whole of eastern Switzerland was now in its hands.
The whole of eastern Switzerland? No, in the Munot city, one small publisher is still putting up resistance: Norbert Neininger, publisher of Schaffhauser Nachrichten (SN), refused to cede his own delivery organization to Zuvo. As a result, Zuvo unceremoniously terminated SN's distribution contract for around 5,000 copies of the NZZ and Tagi in economic area 42 and has had these distributed by its own carriers since January 1, 2007.
Zuvo also acted brashly elsewhere. In May 2006, it attempted in vain to prohibit its partner Südostschweiz Pressevertrieb AG from delivering the first Südostschweiz Sunday edition in court - because the internal distribution of costs was not regulated.
In the summer, Zuvo also approached Basel, where it apparently wanted to force a stake in Prevag, the early delivery company of Basler Zeitung Medien (BZM). BZM CEO Beat Meyer confirms: "Zuvo approached us four months ago. It also exerted a certain amount of pressure. But Prevag is a 100% BZM subsidiary and will remain so." Meyer does not want to say any more.
Another Zuvo action is directed against the SonntagsBlick from Ringier: Zuvo terminated the paper's early delivery at the end of 2007 - according to Ringier sales manager Walter Lütolf "for no apparent reason". However, he suspects that Zuvo, which now also distributes magazines, is targeting the distribution of Ringier periodicals and is now trying to exert pressure in this way.
These brash individual actions by Zuvo may seem disjointed at first glance. But they fit in quite well with the new corporate strategy. Although Jürg Brauchli, Chairman of the Board of Directors of Zuvo and member of the Tamedia Group Management Board, is willing to provide information about this, he does not want to know anything about a more aggressive approach or attempts to exert pressure. "Zuvo and other delivery companies are faced with the problem that the circulation of daily newspapers is tending to fall, which is making early distribution increasingly expensive," says Brauchli. Zuvo is countering this by acquiring new customers and thus increasing capacity utilization. It is also making its organizational structure more efficient and is also considering a daytime delivery service as a second mainstay.
Since the beginning of the year, Zuvo has been gradually getting serious about increasing its capacity utilization. In addition to daily newspapers, it is now also taking magazines that were previously sent by post. Tamedia is making a start with its own business title Finanz und Wirtschaft (FuW). The twice-weekly newspaper is currently only distributed early by Zuvo, and from February it will also be distributed by Bevo. "There is a precise timetable as to when which Tamedia newspaper goes into early distribution and where," says Brauchli. The aim is to gradually reduce the circulation sent by post and at the same time to find out what additional volumes can be expected of the early distributors without compromising delivery quality.
Should the volumes one day exceed the scope of early delivery, the establishment of a daily delivery service could certainly be worthwhile, says Brauchli. However, this would require Zuvo to find large-circulation third-party customers such as the member press of Migros, Coop or TCS in addition to Tamedia magazines. This in turn depends heavily on the specific form of the new press promotion law, the new postal tariff system and the liberalization of the postal market.
What is striking about the Zuvo concept is that it is very similar to that of the former AZO: NZZ, Tamedia, Ringier, Südostschweiz and Valora had commissioned a committee in 2004 to set up an alternative delivery organization for magazines in competition with Swiss Post. AZO was ready to launch at the end of 2005, but was then put on ice in order to wrest tariff concessions from Swiss Post. "I find it rather strange that the project has now resurfaced at Zuvo and other delivery organizations, as various parties financed the AZO feasibility study," says Walter Lütolf, who was in charge of the AZO project at the time. "AZO was also shut down primarily at the instigation of Tamedia CEO Martin Kall," he adds.
When asked about the AZO parallels, Jürg Brauchli does not deny them. "AZO was a construct with cumbersome structures and too many contact persons," he says. "In order to manage additional orders, you need an efficient organization across all the delivery companies involved - and this can only be achieved through takeovers and shareholdings," Brauchli is convinced.
Friendly Zuvo - at least when it appears on the InternetAt www.zuvo.ch
there are no aggressive tones to be heard. Here are a few quotes: "Our thoughts and actions should be characterized by a high sense of responsibility - towards customers, partner organizations, employees and the environment."
"In a typical win-win situation, all partners working with Zuvo AG benefit: Tamedia and NZZ make their distribution network and delivery expertise available to all partner publishers and in return benefit from the denser distribution network themselves."
"The steadily growing cooperation with many large and small publishers not only makes newspaper distribution more economical, but also more environmentally friendly thanks to the savings in car kilometers."
"Zuvo AG aims to be the leading company for the early delivery of newspapers and periodicals on weekdays and Sundays in German-speaking Switzerland."
Markus Knöpfli
Zuvo's aggressive policyFor several years everything went well, but for the past year Zuvo has been pursuing a new, increasingly aggressive policy. This began when Tamedia acquired a stake in Landbote and when the Zurich-based company later also took over Thurgauer Zeitung. This enabled Zuvo to secure the delivery organizations of both publishers. But this put NZZ under pressure: in order to remain an equal Zuvo partner, it had to contribute a similarly large area. It did this by simply spinning off the early delivery from the St. Galler Tagblatt, which is part of the NZZ Group, and handing it over to Zuvo from October 2006. As a result, the number of households served by Zuvo increased by around 50 percent within a year. The whole of eastern Switzerland was now in its hands.
The whole of eastern Switzerland? No, in the Munot city, one small publisher is still putting up resistance: Norbert Neininger, publisher of Schaffhauser Nachrichten (SN), refused to cede his own delivery organization to Zuvo. As a result, Zuvo unceremoniously terminated SN's distribution contract for around 5,000 copies of the NZZ and Tagi in economic area 42 and has had these distributed by its own carriers since January 1, 2007.
Zuvo also acted brashly elsewhere. In May 2006, it attempted in vain to prohibit its partner Südostschweiz Pressevertrieb AG from delivering the first Südostschweiz Sunday edition in court - because the internal distribution of costs was not regulated.
In the summer, Zuvo also approached Basel, where it apparently wanted to force a stake in Prevag, the early delivery company of Basler Zeitung Medien (BZM). BZM CEO Beat Meyer confirms: "Zuvo approached us four months ago. It also exerted a certain amount of pressure. But Prevag is a 100% BZM subsidiary and will remain so." Meyer does not want to say any more.
Another Zuvo action is directed against the SonntagsBlick from Ringier: Zuvo terminated the paper's early delivery at the end of 2007 - according to Ringier sales manager Walter Lütolf "for no apparent reason". However, he suspects that Zuvo, which now also distributes magazines, is targeting the distribution of Ringier periodicals and is now trying to exert pressure in this way.
These brash individual actions by Zuvo may seem disjointed at first glance. But they fit in quite well with the new corporate strategy. Although Jürg Brauchli, Chairman of the Board of Directors of Zuvo and member of the Tamedia Group Management Board, is willing to provide information about this, he does not want to know anything about a more aggressive approach or attempts to exert pressure. "Zuvo and other delivery companies are faced with the problem that the circulation of daily newspapers is tending to fall, which is making early distribution increasingly expensive," says Brauchli. Zuvo is countering this by acquiring new customers and thus increasing capacity utilization. It is also making its organizational structure more efficient and is also considering a daytime delivery service as a second mainstay.
Since the beginning of the year, Zuvo has been gradually getting serious about increasing its capacity utilization. In addition to daily newspapers, it is now also taking magazines that were previously sent by post. Tamedia is making a start with its own business title Finanz und Wirtschaft (FuW). The twice-weekly newspaper is currently only distributed early by Zuvo, and from February it will also be distributed by Bevo. "There is a precise timetable as to when which Tamedia newspaper goes into early distribution and where," says Brauchli. The aim is to gradually reduce the circulation sent by post and at the same time to find out what additional volumes can be expected of the early distributors without compromising delivery quality.
Should the volumes one day exceed the scope of early delivery, the establishment of a daily delivery service could certainly be worthwhile, says Brauchli. However, this would require Zuvo to find large-circulation third-party customers such as the member press of Migros, Coop or TCS in addition to Tamedia magazines. This in turn depends heavily on the specific form of the new press promotion law, the new postal tariff system and the liberalization of the postal market.
What is striking about the Zuvo concept is that it is very similar to that of the former AZO: NZZ, Tamedia, Ringier, Südostschweiz and Valora had commissioned a committee in 2004 to set up an alternative delivery organization for magazines in competition with Swiss Post. AZO was ready to launch at the end of 2005, but was then put on ice in order to wrest tariff concessions from Swiss Post. "I find it rather strange that the project has now resurfaced at Zuvo and other delivery organizations, as various parties financed the AZO feasibility study," says Walter Lütolf, who was in charge of the AZO project at the time. "AZO was also shut down primarily at the instigation of Tamedia CEO Martin Kall," he adds.
When asked about the AZO parallels, Jürg Brauchli does not deny them. "AZO was a construct with cumbersome structures and too many contact persons," he says. "In order to manage additional orders, you need an efficient organization across all the delivery companies involved - and this can only be achieved through takeovers and shareholdings," Brauchli is convinced.
Friendly Zuvo - at least when it appears on the InternetAt www.zuvo.ch
there are no aggressive tones to be heard. Here are a few quotes: "Our thoughts and actions should be characterized by a high sense of responsibility - towards customers, partner organizations, employees and the environment."
"In a typical win-win situation, all partners working with Zuvo AG benefit: Tamedia and NZZ make their distribution network and delivery expertise available to all partner publishers and in return benefit from the denser distribution network themselves."
"The steadily growing cooperation with many large and small publishers not only makes newspaper distribution more economical, but also more environmentally friendly thanks to the savings in car kilometers."
"Zuvo AG aims to be the leading company for the early delivery of newspapers and periodicals on weekdays and Sundays in German-speaking Switzerland."
Markus Knöpfli
