The Metro strategy

Carlos Salas, director of Metro Spain explained the Metro consolidation strategy employed by the company in the last year at the 1st World Congress of Free Press in Madrid. He used cases from The Czech Republic, Sweden and Denmark to illustrate his case.

In the Czech Republic Metro sold 60% to competitor Mafra, which in turn closed down their own free daily Metropolitni Expres. As a result Metro saw readership and revenues to up and expects to reach break-even in 2009. Synergies have been realized in the editorial departments – meaning paid papers and Metro share resources – and in distribution.

In Sweden Schibsted acquired a 35% stake in Metro Sweden. Schibsted shut down their Punkt SE free dailies and made an allience between Metro and paid paper Aftonbladet. Readership of Metro increased almost overnight in Sweden, while distribution costs went down. Because of the lower competition, net ad prices increased. The new combination offers ad packages to advertisers.

In Denmark Metro saw readership go down because of high competition, ad prices dropped as well. After the closure of Nyhedsavisen and the takeover of 24timer after 24time-owner JP/Politiken bought a share in Metro Denmark, also in Denmark the future looks more bright for Metro.

Salas predicted that in the new recession some players will pull out while consolidation will be visible in more countries. The recession, actually, is an opportunity to close the CPT gap with paid papers according to Metro.

Several publishers from all over Europe said that Metro was indeed talking with other publishers in order to discuss cooperation.

2 Responses to “The Metro strategy”

  1. Hannnns Says:

    That’s for sure a silly question, but what is the CPT gap?

  2. Piet Bakker Says:

    fair question, it is Cost per Thousend (indicating advertising rates) difference between paid and free dailies.