Last year there were dramatic changes for many media owners. The
establishment of digital television, the launch of interactive TV, the
debut of Metro and a host of imitators, the arrival of digital radio,
the Trinity Mirror deal and the proposed merger between Carlton and
United News & Media are among some of the developments in 1999 that will
shape the media landscape for years to come.
But the most seismic shift came in the field of new media. One media
company stands out from the crowd of internet brands jostling for
attention and justly deserves the title of medium of the year.
Freeserve, the free internet service owned by the Dixons Stores Group,
had an extraordinary year, forcing a change on the UK internet market
which left it unrecognisable.
Having launched in late September 1998, by February 1999 it had signed
up its millionth subscriber, demonstrating a phenomenal rate of growth
and leaving the former market leader, AOL UK, looking slow and
unresponsive to market change. Almost 16 months on, Freeserve remains
the most talked-about UK internet company and rightly so. Its founder
and chief executive, John Pluthero (left), was previously corporate
development director at Dixons.
Few could have predicted that Freeserve would change the market so
radically, forcing a major change among its rivals and spelling the end
for most of the subscription-based internet services.
The company has achieved this partly through its efforts to improve its
service and by adding new elements to the Freeserve.net website. It
struck agreements throughout the year with a host of leading players in
the UK internet market, beginning with a deal with Emap Online early in
Further deals were struck with UK Plus, Fantasy League, Motley Fool,
Music 365, Datanet to deliver Sportszine and Cricketline, and, finally,
The Freeserve year and, by extension, the UK internet business, was
dominated by the internet service provider’s flotation in July 1999.
Freeserve’s shares first leapt and then fell, encouraging the sceptics
who had earlier predicted trouble for the company which, valued at
around pounds 1.5 billion, many considered woefully overpriced.
By year-end, the sceptics had been proved wrong as Freeserve continued
to invest and develop. On top of content deals it embarked on an
acquisition programme, buying babyworld.co.uk and a stake in the online
music retailer, InFront. Other investments were made in US and
It followed these investments with the announcement of an online share
trading service in a deal that could set the spark to the next phase of
the UK internet revolution. Freeserve, with its populist touch, could be
just the vehicle to bring internet share trading cheaply and easily to
However, it was its agreement with BT Cellnet at the beginning of
December which really made people sit up and take notice. The two are to
work together to deliver a range of personalised mobile information
ranging from share prices and sports results to enhanced
e-mail. The deal enables Freeserve to benefit from a future where
internet and mobile communications technology will converge. But more
than that, the deal with BT Cellnet transformed the company at a stroke
in many people’s eyes, giving both sustenance to the almost blind faith
of investors and perhaps bringing the prospect of real profits a little
Associated Newspaper’s freesheet paper, Metro, made a dramatic impact on
the newspaper market in 1999.
Last March the London edition of Metro hit the tube and mainline
stations and, in a short space of time, has built a dedicated following
among commuters in the capital. It has an estimated readership of more
than two readers per copy and in November 1999 achieved an ABC of
342,153. Since then, the newspaper has launched in Manchester, the West
Midlands and Scotland, sparking off a freesheet war as other major
newspaper groups, including Trinity Mirror and the Guardian Media Group,
battle for a share of the market created by Metro.
Metro has given the free newspaper market greater credibility, and is
giving regional newspapers a run for their money where it is a direct
challenge. For a product which at launch was dismissed as a short-lived
project, Metro has proved that it has every reason to plan for its
Sky Digital was also a strong contender for the prize, not least because
of its glitch-free launch at the end of 1998, its success in driving
subscriber numbers up towards the two million mark and its strong
performance against its rival, ONdigital. Aided by a hefty marketing
budget, Sky Digital rapidly established itself as the brightest and most
comprehensive digital TV service, offering viewers more channel choice,
a superb electronic programme guide and free digital satellite set-top
boxes. Sky Digital has fundamentally changed the viewing habits of
millions of households.
Also worthy of a mention in this category is the Financial Times, which
has steadily increased its circulation in the broadsheet market. Changes
to the newspaper in the autumn, including a new weekend magazine, The
Business, have broadened its appeal and in November the paper achieved
its highest sales figure for almost a decade, with circulation up almost
12 per cent year on year to 436,771.
Recent winners: Daily Mail (1998); FHM (1997); Sky TV (1996); Daily Mail
(1995); Classic FM (1994).