Tagi splits in price war
Regional Press: The prices for the *Tages-Anzeiger*'s regional editions covering the Zurich area have now been announced.
Regional press The prices of the regional splits of the Tages-Anzeiger in the Zurich area are now also known. It is still unclear how the new regional editions of the Tages-Anzeiger will affect its competitors, the Tages-Anzeiger main paper and the Tagblatt der Stadt Zürich. It remains to be seen whether the Tamedia strategists will also launch a large circulation for the regional editions of their flagship. There are too many daily newspapers." This is Tamedia's press credo for the canton of Zurich, expressed by Rolf Bollmann, publishing director of the Tages-Anzeiger, in an interview with the Zürcher Landzeitung (ZLZ) on October 11. There, Bollmann also made it clear how, in his opinion, the Blätterwald should be cleared. In 20 years' time, there would still be "the Tages-Anzeiger as the only major newspaper in the greater Zurich area, with many small local papers alongside it", he said. And the NZZ would play "a special role" as a nationally oriented paper. Not a word about the ZLZ.
Tariffs for regional editionsThis is not a new idea. But expressed so bluntly and without the slightest blink of an eye in the ZLZ, it leaves no questions unanswered. Tamedia has already underpinned its power play with the rates for the regional editions. Accordingly, a full-page, four-color Tagi split page costs between 7 and 71 francs less per thousand readers than with the corresponding ZLZ partners. With one exception: in the district of Meilen, the Tages-Anzeiger has set its rate significantly higher than the local Zürichsee-Zeitung.
However, caution is required when making such comparisons, as the distribution areas of the ZLZ partners are not always identical to those of the corresponding Tagi regional editions. Here is just one example: the Tagi split on the left bank of the lake serves all municipalities in the district of Horgen, whereas the left-bank edition of the Zürichsee-Zeitung (ZSZ) is different: it is not distributed in the municipalities of Rüschlikon, Kilchberg and Thalwil and only partially in Oberrieden. The Zürcher Landzeitung association therefore has a blind spot there. In order to cover these four municipalities, the Thalwiler Anzeiger must be booked in addition to the ZSZ or ZLZ.
Nevertheless, it is obvious that the Tagi regional editions can hardly refinance their costs with this pricing strategy. Nor do they have to. "The regional editions will never be profitable on their own," said Bollmann in the aforementioned interview. The reason: the splits support the overall Tagi circulation, which in turn cross-subsidizes the splits thanks to its income from the national market.
Despite this pricing policy, Tamedia does not like to hear the word dumping: "We are not pursuing a dumping strategy, our prices are in line with the market," defends Christoph Zimmer, the new Head of Tamedia Communications. However, the split prices should give the regional and local economy "the opportunity to be able to afford advertising with us", explains Zimmer.
In the jungle of tariffsThe simple handling and clarity of the Tages-Anzeiger tariff policy is also striking. In this region, this is a welcome development, because although the ZLZ system is highly flexible, it is also complicated. The ZLZ partners can be linked not only in a trio, but also in pairs, each with a combined discount and, depending on the customer, also with a regional tariff. In addition, individual ZLZ titles can be combined with numerous third-party titles.
The Tages-Anzeiger is different: its splits can be freely combined with each other, but without a combination discount, according to Christoph Zimmer. Combinations between any split and third-party newspapers, such as the Landbote, the Uster Nachrichten or the Tagblatt der Stadt Zürich, do not exist either, says Zimmer.
The ZLZ rate jungle is becoming even denser due to a large circulation offer that is difficult to keep track of, while the Tagi regional editions are starting without a large circulation. If, for example, Tamedia follows suit with a large print run from 2007, this will also enrich the rate documentation with figures.
But how have sales of the Tagi splits got off to a good start? If you ask the ZLZ partners, they feel little of the new competition. "On the left bank of the lake, where the Tagi has had a regional edition for a year and a half, we haven't noticed anything so far," says Jost Kessler, Head of Advertising at ZSZ. "In terms of advertising income, we are above budget this year and also above last year." On the right bank, however, some customers have told him that they will advertise with the Tages-Anzeiger on a trial basis. Despite this, Kessler says that his customer advisors have not returned in recent weeks with a flood of rejections.
Erland Herkenrath, Managing Director of ZSZ and Zürcher Unterländer, confirms: "I'm confident, because we haven't lost a single customer so far, but rather gained some." He also notes that Tagi sellers are "cutting their teeth in our regions." Konrad Müller, Publishing Director at Zürcher Oberländer, adds: "I've heard from indignant advertising customers that the Tages-Anzeiger is making offers that are up to 50 percent below its official split rates." But despite the price advantage, customers would not appreciate this. "Ultimately, they don't want a monopolist in the Zurich Oberland," explains Müller.
Cannibalism at Tamedia? In the city of Zurich, on the other hand, sales of the Tagi split are reportedly going well. According to reports, the local edition is a real bestseller - albeit at the expense of the Tagi main paper and the Tagblatt der Stadt Zürich. Tamedia also owns 60 percent of the latter, with NZZ holding the rest. It also serves as the city's official publication organ, for which the two publishers have to pay a concession fee that is partly dependent on turnover.
At Tamedia, however, Christoph Zimmer is relaxed: "It is obvious that the Tages-Anzeiger regional edition for the city of Zurich and the Tagblatt are competing in the advertising market. However, we believe in the future of the Tagblatt." However, it is still not clear what this will look like two weeks before the start of the split. "We are in constructive talks with the NZZ and the city. It is still too early for further information about these talks at the moment," says Zimmer.
And what does he think about the possible cannibalization of the Tages-Anzeiger by the in-house regional split? That's not the case, he says. On the contrary, the city split offers those SMEs for whom the Tagi was previously too expensive and associated with too high a scatter loss an advantageous advertising opportunity. Nationally active companies, on the other hand, would continue to occupy the entire circulation in future. "So there will be no loss of sales, but a gain in sales," says Zimmer.
Confident Züriland budgetKonrad Müller from Zürcher Oberländer
has just completed its budgeting phase. "Due to the introduction of the integrated color millimeter rate, we increased our advertising volume by 4.3 percent compared to 2005, while advertising sales grew by 2.2 percent. I have now estimated sales at the same level for 2007," he says. The previous Züriland-Kombi has also been able to increase sales and volume by around 3 percent each. The Neue Bülacher Tagblatt will be added in 2007, which is why the combined rate will be increased slightly - despite competition from the Tagi. "We have estimated sales growth of 5 percent for the Zürcher Landzeitung," says Müller confidently.
Markus Knöpfli
Tariffs for regional editionsThis is not a new idea. But expressed so bluntly and without the slightest blink of an eye in the ZLZ, it leaves no questions unanswered. Tamedia has already underpinned its power play with the rates for the regional editions. Accordingly, a full-page, four-color Tagi split page costs between 7 and 71 francs less per thousand readers than with the corresponding ZLZ partners. With one exception: in the district of Meilen, the Tages-Anzeiger has set its rate significantly higher than the local Zürichsee-Zeitung.
However, caution is required when making such comparisons, as the distribution areas of the ZLZ partners are not always identical to those of the corresponding Tagi regional editions. Here is just one example: the Tagi split on the left bank of the lake serves all municipalities in the district of Horgen, whereas the left-bank edition of the Zürichsee-Zeitung (ZSZ) is different: it is not distributed in the municipalities of Rüschlikon, Kilchberg and Thalwil and only partially in Oberrieden. The Zürcher Landzeitung association therefore has a blind spot there. In order to cover these four municipalities, the Thalwiler Anzeiger must be booked in addition to the ZSZ or ZLZ.
Nevertheless, it is obvious that the Tagi regional editions can hardly refinance their costs with this pricing strategy. Nor do they have to. "The regional editions will never be profitable on their own," said Bollmann in the aforementioned interview. The reason: the splits support the overall Tagi circulation, which in turn cross-subsidizes the splits thanks to its income from the national market.
Despite this pricing policy, Tamedia does not like to hear the word dumping: "We are not pursuing a dumping strategy, our prices are in line with the market," defends Christoph Zimmer, the new Head of Tamedia Communications. However, the split prices should give the regional and local economy "the opportunity to be able to afford advertising with us", explains Zimmer.
In the jungle of tariffsThe simple handling and clarity of the Tages-Anzeiger tariff policy is also striking. In this region, this is a welcome development, because although the ZLZ system is highly flexible, it is also complicated. The ZLZ partners can be linked not only in a trio, but also in pairs, each with a combined discount and, depending on the customer, also with a regional tariff. In addition, individual ZLZ titles can be combined with numerous third-party titles.
The Tages-Anzeiger is different: its splits can be freely combined with each other, but without a combination discount, according to Christoph Zimmer. Combinations between any split and third-party newspapers, such as the Landbote, the Uster Nachrichten or the Tagblatt der Stadt Zürich, do not exist either, says Zimmer.
The ZLZ rate jungle is becoming even denser due to a large circulation offer that is difficult to keep track of, while the Tagi regional editions are starting without a large circulation. If, for example, Tamedia follows suit with a large print run from 2007, this will also enrich the rate documentation with figures.
But how have sales of the Tagi splits got off to a good start? If you ask the ZLZ partners, they feel little of the new competition. "On the left bank of the lake, where the Tagi has had a regional edition for a year and a half, we haven't noticed anything so far," says Jost Kessler, Head of Advertising at ZSZ. "In terms of advertising income, we are above budget this year and also above last year." On the right bank, however, some customers have told him that they will advertise with the Tages-Anzeiger on a trial basis. Despite this, Kessler says that his customer advisors have not returned in recent weeks with a flood of rejections.
Erland Herkenrath, Managing Director of ZSZ and Zürcher Unterländer, confirms: "I'm confident, because we haven't lost a single customer so far, but rather gained some." He also notes that Tagi sellers are "cutting their teeth in our regions." Konrad Müller, Publishing Director at Zürcher Oberländer, adds: "I've heard from indignant advertising customers that the Tages-Anzeiger is making offers that are up to 50 percent below its official split rates." But despite the price advantage, customers would not appreciate this. "Ultimately, they don't want a monopolist in the Zurich Oberland," explains Müller.
Cannibalism at Tamedia? In the city of Zurich, on the other hand, sales of the Tagi split are reportedly going well. According to reports, the local edition is a real bestseller - albeit at the expense of the Tagi main paper and the Tagblatt der Stadt Zürich. Tamedia also owns 60 percent of the latter, with NZZ holding the rest. It also serves as the city's official publication organ, for which the two publishers have to pay a concession fee that is partly dependent on turnover.
At Tamedia, however, Christoph Zimmer is relaxed: "It is obvious that the Tages-Anzeiger regional edition for the city of Zurich and the Tagblatt are competing in the advertising market. However, we believe in the future of the Tagblatt." However, it is still not clear what this will look like two weeks before the start of the split. "We are in constructive talks with the NZZ and the city. It is still too early for further information about these talks at the moment," says Zimmer.
And what does he think about the possible cannibalization of the Tages-Anzeiger by the in-house regional split? That's not the case, he says. On the contrary, the city split offers those SMEs for whom the Tagi was previously too expensive and associated with too high a scatter loss an advantageous advertising opportunity. Nationally active companies, on the other hand, would continue to occupy the entire circulation in future. "So there will be no loss of sales, but a gain in sales," says Zimmer.
Confident Züriland budgetKonrad Müller from Zürcher Oberländer
has just completed its budgeting phase. "Due to the introduction of the integrated color millimeter rate, we increased our advertising volume by 4.3 percent compared to 2005, while advertising sales grew by 2.2 percent. I have now estimated sales at the same level for 2007," he says. The previous Züriland-Kombi has also been able to increase sales and volume by around 3 percent each. The Neue Bülacher Tagblatt will be added in 2007, which is why the combined rate will be increased slightly - despite competition from the Tagi. "We have estimated sales growth of 5 percent for the Zürcher Landzeitung," says Müller confidently.
Markus Knöpfli
