ONZ ceases operations

The Board of Directors of ONZ Obwalden und Nidwalden Zeitung AG has decided to close the company for economic reasons and to initiate an orderly liquidation, according to a press release issued on Thursday. The 17 employees of ONZ were given notice at the end of February, whereby all contractual obligations will be fulfilled. The employees were informed of this decision by the Board of Directors on Wednesday morning, having already been informed of the company's financial situation in the weeks beforehand.

The closure has become necessary because the commercial development of the newspaper has taken longer than originally anticipated, the statement continues. Although expenditure had always remained within budget, advertising revenue and income from subscriptions had fallen well short of expectations, meaning that ONZ Obwalden und Nidwalden Zeitung AG was facing over-indebtedness. In order to be able to meet all its obligations, the Board of Directors has therefore decided to liquidate ONZ Obwalden und Nidwalden Zeitung AG in an orderly manner. This liquidation would enable the company to meet its obligations to employees, business partners and customers. Subscribers to ONZ would also have the opportunity to request a refund for services not provided in full.

No trend reversal despite numerous measures

The last printed edition of ONZ will be published on Friday, March 2, 2012, after which the online channels will also be switched off. More than 400 ONZ shareholders bought shares worth CHF 3 million within a few weeks at the beginning of 2010 and made the launch of ONZ possible in the first place. The liquidation of the company means that all contributions made will be lost. The fact that the share capital will be exhausted after two years was already stated in the 2010 subscription prospectus. ONZ Obwalden und Nidwalden Zeitung AG will convene an Extraordinary General Meeting at short notice, at which the Board of Directors will propose the dissolution and liquidation of the company.

As there have been no signs of a positive trend reversal on the revenue side despite numerous measures in the areas of marketing, pricing, advertising and personnel, the Board of Directors no longer considers it expedient to continue investing in ONZ, the company said. The Board of Directors deeply regrets that it has not been possible to establish ONZ Obwalden und Nidwalden Zeitung as a long-term journalistic voice and to generate profits for its shareholders with the company.

A publicity success, economic goals not achieved

In journalistic terms, the newspaper has been a success, it continues. In the almost two years of its existence, ONZ has developed into a highly respected voice that has achieved a high level of recognition in Obwalden and Nidwalden and beyond. The newspaper had more than 3,000 subscribers, who followed the reporting twice a week in the printed edition. In addition, ONZ reached more than 30,000 online users every month who used the various channels to find out about what was happening in the two original cantons.

Economically, ONZ was unable to achieve its goals from the outset. According to the business plan, the aim was to gain around 4,000 subscribers in the first financial year and to increase this figure to 8,000 by the third financial year. However, the number of subscribers leveled off at 3,000. Income from advertising was always around a third below expectations. The figures for the Jungfrau Zeitung in the Bernese Oberland, which is published according to the same concept, were used as a benchmark.

Advertising customers had been very hesitant to commit to ONZ right from the start, and the very active sales team had repeatedly been put off placing advertisements until a later date. Obviously, ONZ Obwalden und Nidwalden Zeitung had not succeeded in building up sufficient trust in the market to be able to significantly increase advertising revenues. This was despite the fact that the quality of the product had never been questioned by potential advertisers. In addition, the competition had also reacted well and quickly in the commercial sector, which had made it even more difficult for ONZ to establish itself in the market.