In 1990, Robert Maxwell made a double swoop on the Hungarian newspaper business - acquiring the morning paper Magyar Hirlap and 40 per cent of the evening daily Esti Hirlap. At the time, it seemed proof that the newly emerging economies of Eastern Europe were top targets for foreign investment by print owners.
Ten years on, the going has proved slower than expected. With the exception of Hungary, which is dominated by foreign companies, international presence in the Eastern European newspaper market is limited. The Swiss publisher Ringier - which is active in the Czech Republic and Slovakia - is one of the few to have made headway (though it continues to lose money). This contrasts with the region's TV business.
Western media owners such as News Corp, SBS Broadcasting, Modern Times Group, RTL Group and Canal+ are scrapping over every inch of turf from the Baltic to the Black Sea.
Small territories, combined with strong local media players, political sensitivity and limited ad revenue have been enough to put off the West's newspaper barons.
The markets with greatest appeal to western media owners are the Central-European states of Hungary, Poland and the Czech Republic - which boast large populations and growing prosperity. Russia's size makes it another attractive target - although corporate cronyism has made it a minefield for foreign investors.
Poland, with a population of 38.5 million and economic growth of between 4-7 per cent for the past five years, has been a magnet for foreign investment - but is dominated by locally owned newspapers.
The market-leading daily is Gazeta Wyborcza - a subsidiary of Poland's leading media company Agora. Agora has its roots in the Solidarity movement - which goes some way towards explaining its appeal. Although Agora remains in control of its own fate, it did sell the US media group Cox Enterprises a 12.5 per cent stake in its newspaper business in order to fund expansion.
Gazeta sells 443,000 copies a day and, according to Zenith Media, takes 50 per cent of adspend in the dailies market. This domination has been aided by an aggressive expansion strategy, which involved the launch of 18 local editions and a range of thematic supplements. The paper also has substantial interests in radio and the most sophisticated online strategy in Central Europe.
According to Zenith, the market for newspaper advertising is only a quarter of the size of television in Poland. But it has been growing fast. Car makers in particular have boosted the medium's prospects with Fiat, General Motors and Ford all among the top ten newspaper advertisers during 1999.
Edward Korbel in MindShare's Warsaw office confirms this view. 'TV still takes 56 per cent of adspend but we have noticed increased use of the press in recent years,' he says. One of the biggest factors working against the press, however, is the low price of TV airtime. As a result, 'newspapers look over-priced.'
Aside from Gazeta, the biggest national dailies are Super Express and Presspublica's Rzeczpospolita. Although Rzeczpospolita sells fewer copies than Super Express it takes more ad revenue (19 per cent of the newspaper market) 'because it appeals to an upmarket business audience', says Korbel. 'Super Express is downmarket by comparison.'
Part-owned by Norway's Orkla Media, Rzeczpospolita is the best Polish newspaper from a non-domestic company. However, Korbel does not expect more papers to launch in the near future. 'Zyice, the most recent daily paper to launch, is only selling around 50,000,' he says. 'That shows it is tough to conquer this market.'
That said, Poland's regional press is doing well. Polskapresse and Orkla Media are the biggest players and have 'worked hard to make their products appeal to younger readers', Zenith observes.
Although Hungary has a population of just 10 million, it is the most westernised of the former Soviet Bloc countries. The biggest publishers in the market are VNU and Axel Springer - which owns a portfolio of regional newspapers. However, the foreign influence goes much deeper. The market-leading daily title Nepszabadsag is majority- owned by Germany's Bertelsmann while Switzerland's Ringier also owns two of the top five daily papers, Blikk and Nemzeti Sport.
Although the Germans and Swiss are ideally placed to break into Central Europe, Hungary is also a target for Associated Newspapers, which owns Hungary's biggest selling regional paper Kisalfold (80,000) and the English-language weekly The Budapest Sun. Over the summer, Associated was reported to be on the verge of acquiring the local papers Delmagyarorszag and Delvilag (combined circulation 60,000) from Bertelsmann.
The profile of the Czech Republic, which also has a population of 10 million, is in marked contrast to Hungary. Although Ringier is the publisher of the daily newspaper Blesk (circulation 284,000), the only other foreign player of note is a Handelsblatt/Wall Street Journal Europe joint venture called Economia.
WSJ Europe is also in Russia as a joint owner of daily business newspaper Vedo Mosti alongside the Financial Times and Independent Media - a local company backed by the Dutch publisher VNU. MediaCom's Russia-based media director Gavin Duke says Vedo Mosti has introduced a new sophistication to Russian newspapers - which tend to be run by oligarchs 'more as political vehicles than commercial businesses'.
According to Duke, few advertisers use Russian newspapers because 'they are not high quality and have low national coverage. The likes of Mars and Unilever are most likely to use TV, which has widespread coverage and offers good value for money.'
If advertisers do use print, then glossy magazines are a better option, says Duke. 'All the big western titles are here. IM publishes Cosmo and Men's Health and they are similar in quality to their western counterparts.' IM has also launched an online portal called estart.
One rumour regarding Russia is that Rupert Murdoch may acquire a stake in Media Most - the empire built up by the exiled media baron Vladimir Guzinsky. Although Murdoch's key target is Media Most's free-to-air and pay-TV business, NTV, he would also inherit a share of the Moscow newspaper Sevodnya. However, Duke is not alone in saying he would be 'shocked' if Murdoch were allowed to control such an influential Russian media business.
Most Eastern European newspapers have limited circulations - which makes them of less appeal to clients than TV. MindShare's John Oakley, who co-ordinates Eastern-European activity from the company's Vienna office, also says a shortage of adequate research is discouraging advertisers.
Outside the major territories, foreign investment in the newspaper market is sporadic. In Romania, Bertelsmann's Gruner & Jahr has launched a free paper called Metropola with an 80,000 circulation. Other than that, the main focus of companies like Axel Springer, Hearst and VNU has been women's magazines.
In Bulgaria, Germany's WAZ owns three of the four top daily papers. However, the advertising outlook does not look good for print. Newspapers take 23 per cent of the ad cake but Zenith expects this to decline in the face of TV's expansion. News Corp is poised to launch the country's first commercial TV network and is likely to build that business at print's expense.