Switzerland’s Ringier Shuts Down Its Financial Free Newspaper CASH As The Advertising Downturn Coupled With Lack Of Subscription Revenue Continues To Hobble Free Newspapers

Philip M. Stone March 19, 2009

Even in financially strong Switzerland where the franc rose to such levels a week ago that the Swiss National Bank stepped into the markets to buy foreign currencies -- basically trying to devalue the franc a bit -- the plight of newspapers is little different from elsewhere. Ad revenue is way down, some big media groups are merging, and even Ringier, biggest of all Swiss publishers, is closing down its free financial news tabloid.

Ringier has announced that CASH will last appear in print Friday with 23 jobs lost although the company is keeping another 16 staff to continue putting out the online edition.  Indeed the German language cash.ch is the country’s biggest financial news site, drawing  330,000 unique visitors in February making 2.5 million visits -- in Switzerland with its three different language groups  that’s doing pretty good. Also its mobile service had 271,021 visits and its cash TV reached an average of 166,000 viewers. Videos on the web site were viewed 141,971 times in February and Ringier says that over the past two years CASH achieved annual revenue growth of 30 percent.

Ringier made clear that the problem with the printed CASH was not a declining readership --  circulation last year grew from 75,000 to 112,000 – but rather it was the sharp fall in advertising revenue in recent months and the company quite frankly said it didn’t see any light at the end of the tunnel within the foreseeable future. It had always intended for CASH to go all digital in 2012, so this is a speeding up of the business plan because print advertising revenues are down so much.

And there’s the rub. For in a declining advertising market newspaper publishers cherish their subscription and newsstand revenue – indeed they even try and hike the prices – but for free newspapers that is not an option.

The smart money used to say that given that situation only those free newspapers belonging to big media companies that had varied revenue streams could survive, with the rest of the company basically supporting the free newspaper during the lean times. But Ringier seems to be shooting an arrow right through that theory, for it is Switzerland’s largest publisher, it is making a ton of money in E. Europe, too, but obviously the boardroom is taking the line that if a free print product cannot stand on its own two feet, -- advertising was down generally in Switzerland some 9% in January with little likelihood of any recovery soon -- then it’s time for Plan B, ditch print early and become all digital. 

And that should put a shiver in the spine for those employees who do work for free newspapers that are part of large groups – maybe those papers aren’t so secure in these recessionary times?

Ringier has not been having the best of times with its newspapers -- paid and free. It publishes the country’s largest circulation German-language racy tabloid Blick but it has been creamed in the readership stakes by the 20 Minutes free newspaper (20 Minutes readership, 1.299 million; Blick readership, 650,000 according to Wemf, a media research company). So after some four years as a tabloid Blick is expected in October to revert back to broadsheet to give the public a choice – a racy broadsheet that you pay for versus a tabloid, not near as racy, that you get for free.

After CASH’s departure there will still be four free newspapers in German speaking Switzerland – that covers about 60% of the country – but the betting seems to be that this year two of the weaker ones will disappear so the free battle will be between 20 Minutes and Blick’s PM freebie, Blick am Abend, and just where the paid-for Blick broadsheet will fit in is anyone’s guess.

The Swiss are avid newspaper readers with some 91.6% reading newspapers regularly, according to Wemf, although free newspapers have considerably helped that cause with some 30% of the population over 14 reading a freebie. The country has around 44 newspapers per one million inhabitants, compared to Germany that has 23 newspapers per 1 million, and Britain with 21 per 1 million and at the other end of the scale France and Italy that have just two newspapers per 1 million inhabitants. 

But in a sign of just how tough things are becoming the Swiss media world woke up to a shock announcement March 3 that Tamedia, the second-largest German language publisher – it publishes 20 Minutes that is giving Ringier such fits -- is buying the Swiss business of Edipresse, the leading media group in French-speaking Switzerland and the country’s third largest publisher – assuming, of course, the competition authorities agree.

The French speaking part of the country covers around 30% of the population and Tamedia and Edipresse have been locked in a free newspaper battle – Tamedia publishing a French language 20 Minutes with a readership of 471,000 and Edipresse with its Le Matin Bleu with a readership of 524,000.

The deal is being done in stages and won’t be completed until 2013, but one of the first things expected to happen as soon as the necessary competition approvals are received is for one of the free newspapers to be merged into the other – the betting being that Le Matin Bleu will disappear from the landscape.

That will be a shame since both are an enjoyable brief read – 20 Minutes is so named because the thinking went you could finish reading it in about 20 minutes which goes to show how newspapers can be misnamed – it should be called 5 Minutes. Personally this writer prefers the Le Matin Bleu because it prints a near full page color news graphic every day and 20 Minutes doesn’t (this writer launched the Reuters News Graphics Service back in the early 1990s and is still partial to large color news graphics.)

Readership loyalty really can depend on such little differences.