Frettabladid cuts costs and sacks editor

frettabladid2009Two weeks ago I mailed Icelandic free daily Frettabladid editor Jon Kaldal for an update on the Icelandic free newspaper situation, which he promptly provided. The country is interesting because it was (and still is) the country with the highest market share of free newspapers (83% in 2006). It is also one of the countries most affected by the economic crisis. As a result, free newspapers suffered as well.

Second free daily 24 Stundir (launched as Bladid in 2005 and owned by paid paper Morgunbladid) closed in 2008 while the leading free daily Frettabladid (home delivered, 7-days-a-week paper at that time) was to be sold to Morgunbladid. As the competition authorities did not approve of the sale, 365Media kept publishing Frettabladid (see previous post).

But Fréttabladid was affected as well by the crisis. It reduced page count somewhat – although is it often still between 48 (Mon.-Wed.) and 96 (Sat.) pages – still an impressive number for a free daily. The Sunday edition was dropped in January 2009.

As I mailed Jon to check some facts and the quotes he said that he just lost his job at the paper – which came as a surprise apparently, as he explained earlier how Frettabladid fought the crisis. So below is an interview with an ex-editor-in-chief.

Kaldal first explained how the crisis affected Fréttabladid and how the paper reacted:

“One large effect from the recession is that the print advertising market has consolidated around Fréttabladid. The marketing people cannot splash their cash as wildly as in the boom years, so now the focus is on the paper where they get value for money.”

“We cut down free home-delivery and circulation. When it was highest it was 107,000, but we are now down to approximately 87,000. Included are a few thousand copies sold in the countryside, but we still deliver to homes in the capital area, and Akureyri, the largest town in Northern Iceland. Last year we also changed from free delivery in several towns, to drop-distribution (stores, gas-stations, neighborhood-boxes).”

Asking money for the delivery of a free paper is unusual, although also other titles have experimented with the model. But as home delivery in a sparsely populated country like Iceland can be very expensive, Fréttabladid introduced this model:

“Last autumn, we decided to offer the paper for distribution cost (around 18 Eurocents per copy) to retailers in the countryside. They can choose between selling the paper or give it to their customers (the availability generates traffic). This effort is mainly aimed at the more isolated towns in the countryside. It looks like this experiment is going better than we hoped. Readership per copy is rising outside the capital area. In certain areas the number of readers per copy has risen from 3,7 to 8,7. Which is by far the highest we have registered. People now have access to Fréttabladid pretty much all over Iceland.”

Although circulation is lower than before, readership is hardly affected, it went down slightly in from April 2008 to August 2009, after that it increased again. The gap between Fréttabladid and paid competitor Morgunbladid, however, is growing.

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The average daily readership (age 12-80) of Fréttabladid is 63%, while Morgunbladid reaches 32%. In the Reyjavik area, Fréttabladid reaches 76% of the population against 34% for Morgunbladid. In the age group 18-49, Fréttabladid reaches 74% of the population in the Reyjavik area against 24% for Morgunbladid. (data from Capacent)

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