For many years it's been well known that newspaper readership is in
decline. So when the daily city freesheet Metro started to make waves in
Stockholm in 1995, bringing new, young readers into the market, there
was a collective rush of blood to the heads of newspaper publishers
Metro now has 21 editions in 15 countries. It can boast a combined
circulation of nine million or so, making it the fifth-biggest newspaper
in the world.
The only other European titles in the top five are the UK's The Sun and
In Europe, the circulation totals almost 2.5 million. There are Metros
in Sweden, Finland, Denmark, Italy, Spain, Switzerland, Holland,
Hungary, Poland, Greece and the Czech Republic. All operations, apart
from Greece, have been started from scratch, giving Metro International
control and ensuring that the Metro concept isn't watered down. In
Greece, where Metro bought up a local paper, it has used this to plumb
in its own publishing model and reach profit in a speedy ten months. It
is, by any standards, a phenomenal publishing success story.
But it hasn't all been plain sailing. As the Italian example shows (see
box), even in the markets where Metro International has done a good job
at rooting itself, it can struggle against indigenous competition.
Other markets have blocked Metro International's path before it could
get a hold. The UK is a good example, where Associated Newspapers saw
that the Swedish publisher had London in its sights and launched using
the same name, tying up a deal with the London Underground and then
finding ways of launching in other cities. Metro International didn't
give up at first. It took the opportunity of launching in Newcastle. But
despite putting up a good fight, it eventually backed off and decided to
give up and go elsewhere, retaining an office in Newcastle to generate
material for its various editions across the world.
So it is testament to Metro International's seemingly inexhaustible
tenacity that it has come so far. In September it launched in Madrid, so
it now has coverage in both the Spanish capital and in Barcelona.
Similarly, in Italy there's an edition in Rome and in another key
In other countries it claims national coverage. Apart from its homeland
of Sweden, those include Hungary, the Netherlands and Switzerland.
In Hungary, the majority of copies are distributed in Budapest, but it
goes out to 14 other cities. In Holland, where Metro Holland was first
launched in the summer of 1999, it now goes to five other centres and is
the country's fourth-biggest newspaper. In Switzerland it has moved from
its Zurich base to cover German-speaking areas.
It is in Switzerland that Metro International has come up against the
only other international city freesheet operation that it might consider
as a competitor on the grand scale. 20 Minutes Holdings is a venture
backed by Norwegian publisher Schibsted, which has so far launched
editions of a free daily in Switzerland and Spain. The company's chief
executive officer, Dr Ekkehard Kuppel, makes no bones about the close
rivalry: "20 Minutes is based on the Metro concept with a series of
modifications. First, we are localised to a greater extent than Metro,
which turns out to be an important competitive advantage. Then we have a
stronger focus on a younger, urban and active target group, not just the
Kuppel says recent readership figures in Switzerland have proved that 20
Minutes is stronger. Given the newness of Metro's launch in Madrid he
says it is too early to predict success in Spain, but: "We are pretty
optimistic that we will be able to replicate our success in
Yet it hasn't all been sunshine and roses for 20 Minutes Holdings. Its
push into Germany was halted after its first edition, published in
Cologne, had to be closed down, putting paid to its ambitions to publish
in other German cities. Its demise was largely put down to opposition
from the German publishing giant Axel Springer.
Metro International has not even got past the German borders. The same
goes for France, where it has no presence. The two markets are
notoriously hard to penetrate. "Both have got very regional newspapers,
that's the first thing," Christine James, the managing director of CIA
International, says. "You tend to find that they already have local
newspapers and you have one of the highest levels of newspaper
readership in Europe which is a compounding factor."
With Germans already tucking into a paper, why would they need
In France there's the opposite problem. "In Paris the readership of
daily papers is relatively low which may deter someone from moving in,"
CIA's James says. On the other hand, this could be seen as a pool of
potential new readers. "If I was Metro, I would be looking at the French
market before the German market."
Actually, Metro International is busy outside Europe launching titles in
the US and deciding whether to have a crack at Asia. The fact that it
does not have either national coverage in some European countries or
international coverage across the continent is not, after all, a big
stumbling block. "It's not a problem," James says. "It's very rare for
multinational advertisers to look for equal coverage across countries.
It tends to be more retail driven and the advertising tends to be
specific to whatever's happening locally."
But is European expansion off the agenda? "No, definitely not," Metro
International's chief operating officer, Jens Torpe, says. "There is
organic growth in the markets where we already are - we see a lot of
opportunities there." Ideally, Metro International likes to break even
in a country and have advertisers behind them before launching a second
or national edition.
"Of course there are still some countries where we're not present at the
moment. Two major countries - Germany and France - still remain." Torpe
won't be drawn on any specific plans, but points out that the Schibsted
venture in Germany has already come to an ugly end. The group would not
consider launching there without a partner to give it both credibility
Does the low readership of newspapers in France put him off? "I don't
think that would pose any special problems," Torpe says, pointing to
other countries with similarly low newspaper readership, such as Italy
and Greece, which have already come up trumps.
Revenues have been healthy to date with most advertisers using Metro as
a local vehicle, although Torpe thinks there's promise for national and
international advertising. "With adding more and more cities we will be
very well suited for global advertisers," he says. He points out that
those cities with the newspaper are generally the most important in each
country. Of course the audience is also an alluring one, with a strong
showing of young readers and female readers.
Wherever the revenue is coming from the available figures look
impressive, with the Stockholm operation still reporting a 37 per cent
operating profit, despite the general downturn in the economy. But with
all this success it's worth remembering that, with a three-year schedule
to break even, only four of the Metro International operations are
actually in profit.
Similarly, Schibsted's titles are not actually bringing in money. There
are bound to be plenty of paper corpses across Europe before the
freesheet wars are over.
ITALY: AN AFFAIR WITH FREE PRESS
The Italian affair with the free press is a colourful example of how
European cities have been taken by storm with the success of city
dailies The affair started two years ago in October 1999. The Swedish
Modern Times Group began talks with the management of Metroferro, the
public company that operates the underground in Rome and negotiated a
licence to distribute a daily freesheet. It launched in July 2000.
After Rome, the next city on MTG's hit list was Milan. The capital of
fashion, of business, of the stock exchange and, moreover, with almost
double the number of commuters using the underground than in Rome. But
the local public transportation company, ATM (Azienda Trasporti
Municipalizzata), decided to call a contest to decide who would publish
the first free tabloid to be distributed in the underground. ATM
specified that the contract must be for a long haul of three years and
with a minimum yearly licence (which would add up to the sum of one
billion lire). On top of that they wanted a percentage of advertising
The stakes were high but the bidders still lined up: Metro
International; RCS Editori (the publisher of Corriere della Sera);
Ediemme (the publishing group of regional dailies owned by Alberto
Donati); and a partnership of Schibsted (the publisher of the free
tabloid 20 Minutes in Koln and Zurich), SEE (the publishing house behind
the Milanese daily newspaper, Il Giornale) and Mondadori Pubblicita, the
advertising arm of publisher Mondandori. The three-way partnership
emerged triumphant on 26 October.
Meanwhile, rather than sit still while the bidding process carried on,
Metro International had decided to sidestep the competition. On 30
October, Metro Milano was being handed out outside the entrances of the
Then the launch of the partnership's Milanese 20 Minuti was delayed.
Italian law forbids that the majority of a publishing company is held by
a non-EU partner and 20 Minutes Holdings, the majority stockholder of
Newspaper Milano, the publishing company of the partnership's 20 Minuti,
is based in Switzerland.
Finally, in February ATM decided to invalidate the bid and consider
another partner for the venture. In the new round of talks were RCS
Editori (who came second in the initial bid), Alberto Donati and Metro
RCS Editori won this second round and published City in Milan in
September in a partnership with Il Giornale. Now City Italia, a joint
venture between RCS and Alberto Donati, plans to be in nine cities by
Turin is the latest city to be given the freesheet treatment. Existing
paper Torino Sera has been handed out free in the past two months and
Leggo Torino has joined the fray.
Leggo Torino comes from the stable of another publisher with national
ambitions for city freesheets - Gruppo Caltagirone, owned by the
southern real estate entrepreneur Francesco Gaetano Caltagirone. The
Leggo titles include a freesheet in Rome which launched in March 2000,
and one in Milan which came out two months later.