Suddenly, all is not going well for Swedish free newspaper publisher Metro International, whose worldwide rise and rise had hitherto appeared unstoppable.
In the course of a single week, the world’s fastest growing newspaper company has axed its Zurich edition, postponed the imminent launch of its Paris newspaper, and suspended publication of its Argentinian daily in Buenos Aires.
Trouble started to brew for Metro in Zurich last year with the advent of Norwegian rival Schibsted which launched its own free newspaper 20 minutes and proclaimed plans to replicate the operation in every other European city in which Metro operates.
Admits Metro ceo Pelle Tornberg: “We do not believe that [the Zurich] operation would ever achieve an acceptable level of profitability in our target time frame … shareholders’ funds are better focused on other markets where we are growing strongly, gaining market share and moving towards profitability.”
Meantime, the launch of Metro in Paris with a print run of 300,000, originally scheduled for this week [WAMN: 11-Feb-02], has been postponed purportedly because of demnds by brawny communist trade union CGT that Metro be “printed and distributed in keeping with accepted practice.”
Translated into plain French, this means handing over part or all of the distribution to CGT-controlled company NMPP, which distributes other newspapers in the French capital. To rub salt into an open wound, the conveniently-timed delay has opened wide the door to Schibsted's 20 Minutes which launched unopposed in Paris on Thursday.
And as if to prove that troubles travel in threes, Metro has been forced to suspend publication of its daily edition in Buenos Aires until Argentina’s stricken economy shows signs of recovery. “We are reviewing the situation and hope that it improves,” says a London-based Metro spokesperson. “We continue to believe in the potential of the Buenos Aires market.”
The while, Metro’s woes have created a nervous tic among some members of the global financial community, who have expressed their concern over the rate of the group's cash burn – not least because Metro is totally reliant on advertising revenue at a time when global adspend is in severe decline. The group has twice raised cash by issuing new shares during the last eighteen months.
Data sourced from: AdAge Global; additional content by WARC staff