Showdown in Stockholm
Commuter Newspapers: What Zurich is about to experience with the express launch at the end of March has already been raging in Sweden’s capital for five months: a free newspaper war with all its tricks and subtleties.
Commuter newspapers What Zurich is facing with the Express launch at the end of March has already been raging in Sweden's metropolis for five months: a free newspaper war with all the tricks and finesses.One thing the Swiss and Swedish top dogs have in common: they sleep well, and they only defend their territory when it comes to the living, but then all the more aggressively. While Tamedia, after three and a half years, is still preparing to make 20 Minuten into a takeover candidate, Bonnier has waited twice as long to dispute the original market of Metro, the inventors of the "free commuter newspapers": Stockholm City, Scandinavia's most powerful media house far ahead of Schibsted (see box), launched its own commuter newspaper, which - in contrast to Metro, long since nationalized by regional editions in Malmö and Gothenburg - presented itself from the outset entirely as the organ of commuting city dwellers.
Aggressive numbers pokerSuch and other structural analogies between the announced Zurich and the current Stockholm competition has made the local counterparts sit up and take notice. "Yes, we have been observing this market very closely for some time now, despite its limited comparability," says Express publishing director Marius Hagger and his 20 Minutes colleague Rolf Bollmann in unison. No wonder, after all, its development provides not only visual lessons but also one or two argumentation aids to convince skeptical board members of their own (forward) strategy. Hagger should be pleased with the newcomer's constant increase in reach - after a brief slump due to distribution logistics (see chart). All the more so because, according to Bonnier spokesman Erik Mansson, Stockholm City still distributes "only the initial circulation of 240,000 copies" every working day. At the beginning of 2003, however, for cost reasons, the number of the initially 600 (!) colporteurs who distribute the paper, which has an average of 32 pages, in public places and in front of the subway and commuter train stations, which are under exclusive Metro contract until 2005, was cut in half.
The fact that the mother of all commuter newspapers is said to have lost a whopping 22 percent of its reach on its home turf since October, according to a survey commissioned by Stockholm City from the Swedish equivalent of Wemf, Sifo, would be even more grist to the Express managers' mill. If it weren't for the official figures from the same institute for the fourth quarter of 2002, which give Metro Stockholm an average of 679,000 readers.
Those who - like Bonnier - see the reason for this match-deciding discrepancy solely in "differing survey data and
-In this explosive market situation, it should not be surprising if the other side accuses it of "amateurish attempts at manipulation. According to the operational head of Metro International, Jens Torpe, Bonnier has also accused his first and still most important branch of "exorbitant" circulation increases. He admits to having increased circulation "by 40,000 to 50,000 copies" since October. However, the competition is talking to advertising customers and the trade press about twice as much. Together with the simultaneously suggested loss of coverage, this deliberate misinformation "constitutes business-damaging slander," Torpe told Werbewoche.
Daily 50000 francs loss
Nevertheless, it is undisputed that Stockholm City is making faster progress in the reader market than local observers expected. In its latest issue, the trade journal Resumé speaks of a "surprisingly clear stage victory" in this respect. However, this victory came at a high price: Insiders estimate the deficit of the solid but unspectacularly produced quick-read title at CHF 40,000 to 50,000 a day. Despite dumping prices - the current page rate of just under 4,000 Swiss francs undercuts Metro's by a factor of five - advertising business is sluggish, to say the least. Not so with the competition: according to official statistics, Metro was able to win 20 percent of the Stockholm advertising business in the high-turnover month of December; the challenger, on the other hand, only managed one percent.
Even if these extreme values have come closer together in the meantime: The top dog in the showdown with the (now well-established) poacher in the advertising business obviously does not seem to be concerned with the profitability of its own product. Three theories are currently circulating among Swedish experts about Bonnier's motives for his massive investments.
Room for two providers?
The most plausible: Stockholm City is aiming to succeed Metro as the exclusive partner of the capital's public transport operators in 2005 and is being systematically positioned for this.
The conspiratorial one: Bengt Braun, Bonnier CEO and ex-president of the World Newspaper Association, wants to make an example of international appeal in Stockholm and, with Metro, would prefer to put an end to the entire commuter newspaper genre right away.
The television one: Bonnier wants to gain control of Sweden's largest private broadcaster TV 4 (in which both rivals hold just under 20 percent) and is merely using Stockholm City as financial leverage to get MTG shares more cheaply.
The first speculation is supported by Bonnier's rather cynical assessment that the Stockholm commuter newspaper market, which Metro has built up in exemplary fashion, offers "space enough for two providers" (Mansson). However, it is clear that a direct product presence on buses and trains is indispensable if the company is to be in the black. Accordingly, it is easy to conclude that the current bickering over figures is merely strategic skirmishing and that the decisive battle will not be fought for another two years.
With this Pippi Longstocking - "a real Stockholm girl" - Stockholm City is wooing readers and advertisers.
Harry Potter's publisher: Bonnier in profileWith annual sales of 2.8 billion Swiss francs (2001: 2.7 billion Swiss francs) and around 10,000 employees, Bonnier SA - ahead of Metro's parent company Modern Times Group (2002: 967 million Swiss francs) - is by far the largest media company in Sweden. Despite a downward trend, the daily newspapers are still the most profitable business segment of the family-owned company, which was founded in 1804 as a book publishing house. In addition to Dagens Nyheter, Expressen and the new commuter newspaper Stockholm City, which are published in the capital, these include Sydvenska Dagbladet from Malmö and the Gothenburg tabloid GT. Internationally, Bonnier has been active in the business press, magazine and book publishing sectors since the 1980s. In Germany, Bonnier Media Deutschland GmbH owns the book publishers Ars Edition, Piper, Carlsen (Harry Potter) and K. Thienemann. (oc)
Oliver Classen
Aggressive numbers pokerSuch and other structural analogies between the announced Zurich and the current Stockholm competition has made the local counterparts sit up and take notice. "Yes, we have been observing this market very closely for some time now, despite its limited comparability," says Express publishing director Marius Hagger and his 20 Minutes colleague Rolf Bollmann in unison. No wonder, after all, its development provides not only visual lessons but also one or two argumentation aids to convince skeptical board members of their own (forward) strategy. Hagger should be pleased with the newcomer's constant increase in reach - after a brief slump due to distribution logistics (see chart). All the more so because, according to Bonnier spokesman Erik Mansson, Stockholm City still distributes "only the initial circulation of 240,000 copies" every working day. At the beginning of 2003, however, for cost reasons, the number of the initially 600 (!) colporteurs who distribute the paper, which has an average of 32 pages, in public places and in front of the subway and commuter train stations, which are under exclusive Metro contract until 2005, was cut in half.
The fact that the mother of all commuter newspapers is said to have lost a whopping 22 percent of its reach on its home turf since October, according to a survey commissioned by Stockholm City from the Swedish equivalent of Wemf, Sifo, would be even more grist to the Express managers' mill. If it weren't for the official figures from the same institute for the fourth quarter of 2002, which give Metro Stockholm an average of 679,000 readers.
Those who - like Bonnier - see the reason for this match-deciding discrepancy solely in "differing survey data and
-In this explosive market situation, it should not be surprising if the other side accuses it of "amateurish attempts at manipulation. According to the operational head of Metro International, Jens Torpe, Bonnier has also accused his first and still most important branch of "exorbitant" circulation increases. He admits to having increased circulation "by 40,000 to 50,000 copies" since October. However, the competition is talking to advertising customers and the trade press about twice as much. Together with the simultaneously suggested loss of coverage, this deliberate misinformation "constitutes business-damaging slander," Torpe told Werbewoche.
Daily 50000 francs loss
Nevertheless, it is undisputed that Stockholm City is making faster progress in the reader market than local observers expected. In its latest issue, the trade journal Resumé speaks of a "surprisingly clear stage victory" in this respect. However, this victory came at a high price: Insiders estimate the deficit of the solid but unspectacularly produced quick-read title at CHF 40,000 to 50,000 a day. Despite dumping prices - the current page rate of just under 4,000 Swiss francs undercuts Metro's by a factor of five - advertising business is sluggish, to say the least. Not so with the competition: according to official statistics, Metro was able to win 20 percent of the Stockholm advertising business in the high-turnover month of December; the challenger, on the other hand, only managed one percent.
Even if these extreme values have come closer together in the meantime: The top dog in the showdown with the (now well-established) poacher in the advertising business obviously does not seem to be concerned with the profitability of its own product. Three theories are currently circulating among Swedish experts about Bonnier's motives for his massive investments.
Room for two providers?
The most plausible: Stockholm City is aiming to succeed Metro as the exclusive partner of the capital's public transport operators in 2005 and is being systematically positioned for this.
The conspiratorial one: Bengt Braun, Bonnier CEO and ex-president of the World Newspaper Association, wants to make an example of international appeal in Stockholm and, with Metro, would prefer to put an end to the entire commuter newspaper genre right away.
The television one: Bonnier wants to gain control of Sweden's largest private broadcaster TV 4 (in which both rivals hold just under 20 percent) and is merely using Stockholm City as financial leverage to get MTG shares more cheaply.
The first speculation is supported by Bonnier's rather cynical assessment that the Stockholm commuter newspaper market, which Metro has built up in exemplary fashion, offers "space enough for two providers" (Mansson). However, it is clear that a direct product presence on buses and trains is indispensable if the company is to be in the black. Accordingly, it is easy to conclude that the current bickering over figures is merely strategic skirmishing and that the decisive battle will not be fought for another two years.
With this Pippi Longstocking - "a real Stockholm girl" - Stockholm City is wooing readers and advertisers.
Harry Potter's publisher: Bonnier in profileWith annual sales of 2.8 billion Swiss francs (2001: 2.7 billion Swiss francs) and around 10,000 employees, Bonnier SA - ahead of Metro's parent company Modern Times Group (2002: 967 million Swiss francs) - is by far the largest media company in Sweden. Despite a downward trend, the daily newspapers are still the most profitable business segment of the family-owned company, which was founded in 1804 as a book publishing house. In addition to Dagens Nyheter, Expressen and the new commuter newspaper Stockholm City, which are published in the capital, these include Sydvenska Dagbladet from Malmö and the Gothenburg tabloid GT. Internationally, Bonnier has been active in the business press, magazine and book publishing sectors since the 1980s. In Germany, Bonnier Media Deutschland GmbH owns the book publishers Ars Edition, Piper, Carlsen (Harry Potter) and K. Thienemann. (oc)
Oliver Classen
