TOP EUROPEAN NEWSPAPERS: The web way ahead - Will the economic downturn undermine the role websites have made for themselves in the newspaper world?

It's been a tough time for the online versions of Europe's leading

newspapers. The bursting of the dotcom bubble and the travails of the

technology and telecoms sector have been compounded by the general

advertising slowdown. The widespread commercial uncertainty in the

aftermath of the 11 September terrorist strikes on the US have also hit

hard.



Whereas in the late 90s it seemed as if all the major media groups were

convinced that their online ventures would break even fairly quickly,

now there is plenty of doubt. A lot of newspapers are losing money on

their online activities, but most are unwilling to abandon the net for

fear that they will lose out when the economy becomes more buoyant

again.



Europe's newspapers also fear that pulling out of the web may also

damage the perceptions of their core print products.



Caught between a rock and a hard place, most are trying to cut

costs.



Moreover, they are hoping inspiration will strike that will help them

find new ways to make money from sites, given entrenched consumer

resistance to paying a subscription fee for news content.



"Dutch daily newspaper publishers are at present mostly holding back on

the investments in online ventures," Jan Willem Gast of the Dutch

publishers' association, NDP, says. "With the exception of special

information from financial daily Het Financieele Dagblad, activities are

losing money. Specialties like car-sites and real-estate sites from

Telegraaf and Wegener are slowly increasing their audience."



There is consistency to the pan-European picture. "As you can

understand, no newspaper is investing heavily in its internet site at

the moment," Kristiina Markkula, the Finnish Newspapers Association

research and development manager, says.



In the past, Finland's leading newspaper, the Sanoma Corp-owned

Helsingin Sanomat, put substantial investment into its website,

alongside the country's top financial newspaper Kauppalehti.



In Germany, all of the big newspaper brands, including Frankfurter

Allgemeine Zeitung, Die Welt, Bild and Berliner Zeitung, have developed

well-regarded websites that have been successful in attracting

significant audiences and building loyalty. In France, Le Monde is

widely accepted to have created the best-regarded web offering.



Yet everywhere the story is the same. Even if they are successful both

critically and in terms of traffic, it is difficult to make these sites

profitable.



"No-one is making money out of the internet in Germany," Joerg

Laskowski, the managing director of the German Newspaper Publishers

Society, BDZV, says. "The big papers view their websites as a service

for their readers and increasingly they are trying to give them areas of

specialist content such as car-buying information."



Aftonbladet, the market leader in Sweden, launched its website back in

1994. It is one of the few European newspaper websites to have made a

profit in each of the past three years. However, as a consequence of the

advertising slump, it will be returning to the red again this year.

Aftonbladet.se receives about one million visits a day.



"The downfall in advertising has led us to start discussing a new

business model for the future," Kalle Jungkvist, the Aftonbladet new-

media editor-in-chief, says. "We don't think that in the future it will

be enough just to have ads."



Jungkvist and his colleagues are exploring the viability of charging a

subscription fee for access to some or all of the site's content. A

decision is likely to be made by next spring, but Jungkvist says the

chances of success are higher in Sweden than would be the case in

markets such as the UK and Germany, because the choice of authoritative,

local language news sites in Sweden is more limited than in bigger

European markets. Aftonbladet also derives some income from e-commerce

ventures, but at this stage this is nowhere near sufficient to cover the

site's operating costs.



In Spain, one of the best-loved newspaper websites is Marca.com, the

online version of the sports newspaper Marca, the Recoletos-owned title

that has the biggest readership of any newspaper in Spain at 2.3

million.



In June this year, Marca.com had 76.5 million audited page impressions

and 5.1 million unique users, which are impressive figures given the

comparatively low internet usage rate in Spain.



"Clearly, advertising revenues are down this year but there is

considerable confidence that Marca.com has most, if not all, of the

right business models," Tom Burns Maraoun, the Recoletos communications

director, says.



"The feeling is that the losses have gone as far as they can go and that

the website is poised to gather in solid harvests from all that it has

sown. A key point is that since its launch in November 1996 Marca.com

has never represented an enormous investment and certainly not a

disproportionate one in the context of Recoletos' overall business."



Recoletos views Marca as a brand for a range of media platforms. In the

first half of 2000, a round-the-clock sports radio channel, Radio Marca,

was established and is currently broadcasting on FM in Madrid and in

Barcelona in partnership with Onda Cero, Spain's second-biggest radio

network that is owned by Telefonica Media.



The objective is to broadcast in all Spain's main cities within the next

12 months. Longer term, there are plans to start up a sports TV channel

under the Marca brand.



Specifically online, however, revenue raising ventures include: cars

website Marca Motor, run in association with RACE, Spain's main

automobile association, which in addition to blanket coverage on cars

also sells them - 19 were sold between June and August.



In September, Marca signed an e-commerce venture with El Corte Ingles,

Spain's dominant department store chain. Marca will sell sports

equipment and, in particular, top football star shirts. Other e-commerce

partnerships with distributors are also in the pipeline, as well as

link-ups with internet service providers and wireless content

opportunities.



Among the European newspapers to have received acclaim for their online

offering are The Irish Times, with Ireland.com and the Financial Times

with its FT.com site. In a recent interview, Andrew Gowers, the newly-

appointed editor of the Financial Times, clarified his commitment to

maintaining a strong presence on the web. While the quality of the FT's

sites - along with many other newspapers' sites - appears to be

improving, it remains to be seen in the current climate whether revenue

streams will be following suit.



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