German Papers Face Free Sheet Assault

Will Germans soon be picking up a free newspaper at the train station on the way to work? It certainly sounded that way when Metro boss Pelle Törnberg let slip in an interview in mid-February that "we want to enter the German market at some point."

The remarks unleashed a wave of rumors about the company's intentions, which have been fuelled by the group's refusal to discuss their plans. According to one rumor, the Swedish company has signed a letter of intent with the German group Axel Springer with a view to cooperating on the venture. Others say Metro it is about to link up with the giant Westallgemeine Zeitung (WAZ) publishing house in the Ruhr area, Germany's industrial heartland.

Metro's thinking is not hard to fathom. "If you don't have a presence in Germany, then you don't have a presence in Europe," said Anja Pasquay, the spokeswoman for the German federation of newspaper producers (BDZV). "With more than 22 daily newspapers, it is the fifth-biggest press market in the world and the biggest in Europe in terms of circulation," Pasquay said. "It is obvious in that context that a group like Metro looks at what is happening and asks what it can do here."

German papers battling falling readership

Germany's numerous regional papers are seeing young readers desert in droves, although some are defecting to national papers that are beginning to follow the example of Britain and produce daily editions in a condensed tabloid format, such as Die Welt Kompakt (photo), the little sister of the Berlin-based broadsheet.

The readership crisis follows a familiar pattern repeated around Europe -- between 80 and 85 percent of people aged 40 to 69 regularly read a daily newspaper in Germany, but that percentage falls to 72 percent for people aged 30 to 39 and drops to 63 percent among 20 to 29-year-olds.

Even if its plans are little more than rumors, Metro has got the German press world scared.

The sector saw advertising revenue fall by a third between 2000 and 2004. And the arrival of a brash young rival in a market that has seen a modest recovery in advertising would not be welcome even in good times.

"The competition between newspapers for a share of advertising revenue has become tougher and you have to wonder if there is enough money to go round if a new competitor enters the market," Pasquay said.

Former free paper chased out of town

The only previous attempt to launch a free newspaper in Germany failed after coming under intense pressure from the bigger press groups.

In December 1999, the Norwegian group Schibsted, which already publishes the successful 20 Minutes free paper in France, launched a daily in the western city of Cologne, handing out 150,000 copies at train stations and other distribution points. But within two years, 20 Minuten Köln -- as it was known in Germany -- had disappeared from the city's streets.

The local publisher DuMont Schauberg, which has a near monopoly over the press in the city on the Rhine, and Axel Springer did everything in their power to prevent the new upstart from laying down roots. Their first move was to prevent Schibsted from using any of the local presses and then they launched two rival free papers -- which they promptly shut down as soon as 20 Minutes had been chased out of town.

The established groups also turned to the courts, but were sent packing after a ruling in 2003 that the free press had the right to operate in Germany.

German publishers too powerful

The success of Metro's free papers in other western European countries has forced established press groups in many countries into a rapid rethink -- in Britain, it is rumored that the paid-for London Evening Standard is considering going free to compete.

But one media analyst told the AFP news agency that the prospects of a free paper succeeding in Germany remained slim. "A daily free sheet has no chance in Germany," said the analyst, who asked not to be named. "The power of the German publishers is just too strong and Metro will not survive."