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.
