The Danish Free Newspaper Civil War Has Started With Four New Free Daily Household-Delivered Newspapers Launched Within A Week In Preparation For The One They All Fear Coming in September
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Philip M. Stone August 21, 2006

Denmark has become a messy, bloody, free newspaper battleground as four new free newspapers launch within a week in preparation for the arrival of the one they all fear next month that the Danish Post Office has agreed to deliver to households throughout the country before 7 am

With the exception of the free Metro that has now launched a PM edition, the new free newspapers are all launched by publishing houses that have successful paid-for newspapers. Their preemptive strike is against the planned launch next month of Nyhedsavisen, a free newspaper backed by Dagsbrun, the Icelandic telecommunications and media conglomerate, which has formed a joint venture with the Danish Post Office to deliver the newspaper to about 500.000 households by 7 am.

With special focus on the Copenhagen, Odense and Aarhus regions, the new venture says that in addition to delivering the newspaper Monday – Saturday by 7 am that it will also deliver unaddressed advertising.

The Danish newspaper media fear that Nyhedsavisen will be as successful as its Icelandic sister, Fréttablaðið, which quickly after its launch became Iceland’s biggest circulation newspaper, distriibuted to homes across the country daily, free of charge.

And so the battle to protect market share has begun. MetroXpress, which claims to already have the largest AM readership in Denmark, starts today a PM edition under the same title with an initial 100,000 distribution Monday – Thursday and 110,000 for Friday.

And in what could be the fastest record time to start a new free newspaper, Norwegian Orkla Media, now owned by David Montgomery’s Mecom Group, trotted out last week Dato which was given away at major intersections in Copenhagen and Aarhus and which plans door-to-door delivery. It is published by Berlingske Tidende, the jewel in Orkla’s crown. Its target circulation is 500,000, to be delivered to households before 7 a.m.

Interestingly, it was because of the Nyhedsavisen threat and what that paper might do to the finances at Berlingske Tidende that Montgomery came up short in his financing to buy Orkla as many investment banks shied away. Finally Orkla  had to offer Montgomery seller financing in order to complete the deal. Berlingske already has its own free newspaper, Urban, that it publishes in six editions with a circulation around 220,000.

Just as interesting is that before Montgomery came along Orkla actually hawked its media business to Dagsbrun earlier in the year, but without a bite. With Orkla obviously sensing that the Nordic area was becoming ultra-competitive, the Norwegians did whatever they had to do in order to ensure that Montgomery could financially do his deal.

No one is sitting still waiting for the Icelanders to attack. JP/Politiken, owner of the country’s two highest read paid-for newspapers in Denmark, Politiken and Jyllands-Posten – yes, that Jyllands-Posten, last week launched its own free newspaper, 24timer, distributed door-to-door in the country’s major towns.  Jyllands-Posten also started its own local free newspaper, Centrum Aften, in northern Jutland with a target 50,000 circulation.

Now, all of these players have deep pockets, so the question must be who is going to blink first? Henrik Jensen of Carat in Denmark, says that he expects at least one free newspaper to fold before the end of the year.

Advertisers can’t believe their luck, but it is a fair question to ask how long all of these newspapers can survive in what was a limited advertising market to begin with – Danish newspapers currently sell about 3.1 billion kroner (close to €500 million) of advertising each year and unless the free newspapers can enlarge that spend they are going to have to try and steal around half of it away from the paid-fors in order to survive. Advertising rates will surely will hit bottom. Package advertising deals will be plentiful.

Will the editorial content of the free papers concentrating on entertainment and stories to attract the young, not affect subscription circulation because readers will also want their dose of hard straight news? If not, how much circulation loss can the paid-fors take and still survive? Or, could it be as the publishers of Dato have said that much of their 500,000 circulation will come from people who currently don’t read a daily newspaper.

According to Piet Bakker, the acknowledged expert on the free newspaper industry at the University of Amsterdam’s School of Communications Research, advertising pricing will probably drop around 50% -- how can the paid-fors survive with that?

“”Distribution also seems to be a problem,” Bakker says on his web site. “Foreign labor from Poland is hired to secure door-to-door delivery. In the end it will mean that Denmark will have something like 2 million copies of free papers and 1.3 million of paid ones. In other words: 60% of the circulation is free.”

The other interesting question is what all of this is going to do to the cost structure at the paid-fors? Danish journalists are among the highest paid in the world, with benefits and vacations that are the global envy of others. Can that type of cost structure continue?

In the 1970s when this writer often made visits to Copenhagen one of the most striking sights when visiting Politken’s Pressefoto, the Copenhagen photo agency owned by Politiken, was that on the floor, near the editing desks were crates of Carlsberg and Tuborg beer, there for the taking, and there were empty bottles all over the place. On my first visit the editor in the slot saw my surprised look and said simply, “It’s in our journalist’s contract.” As I said, great benefits, although I don’t know if that one continued.

One question that does come to mind with all this door-to-door delivery of free newspapers is whether in addition to “junk mail” will households now be complaining about “junk newspapers?” Coming to the rescue is the Danish Consumer Council that has printed up mailbox stickers, “No free newspapers, please.”

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Danish Newspaper War -- Nyhedsavisen Doing Better - April 16, 2007

Nyhedsavisen, the Icelandic-backed free newspaper that got Danish newspaper publishers into such a tizzy that many started their own free newspapers, is finally beginning to see some good news after its very difficult launch last October, but questions remain whether financially it can make it.

Nyhedsavisen’s readership rose by 30% from January to February as some home delivery problems started to be resolved, whereas other Danish media – paid and free -- saw either flat results or very slight gains. But the question remains whether Nyhedsavisen has enough money in the bank to last through 2010 – the year it is scheduled to see its first profits.

It all depends on how much of the  newspaper’s 406 million Danish kroner (€55 million, $$75 million) start-up capital has been spent, and if that money goes sooner than the business plan called for, will the Icelandic Dagsbrun company be willing to invest more in the project?  The idea was to have the newspaper delivered via the Danish Post Office before 7 a.m. but that didn’t go as well as expected at the start and a lot of money had to be spent on alternative distribution methods.