Contrary to popular belief, Pelle Tornberg did not invent the free daily commuter newspaper. In fact the genial Swede actually recommended against producing such a title when he was president of Kinnevik Media in the early 1990s.
Tornberg loved the concept pitched to him by two men from Sweden’s top-selling morning paper, but he figured Kinnevik had its hands full with radio and TV. His entrepreneurial boss, Swedish media and telecom mogul Jan Stenbeck, thought otherwise. ”The chairman said ‘sorry, you’re completely wrong, let’s do it’. And here I am still suffering,” Tornberg jokes.
Despite his hesitation, the former broadcast journalist is now closely identified with the freesheet revolution, having driven the phenomenal growth of commuter papers around the world as the head of Metro International. Starting with just one free newspaper in Stockholm in 1995, Metro International now publishes 59 editions of Metro in 83 cities.
Under Tornberg, Metro has successfully adapted its freesheet formula to suit different cultures. Its continued growth in readership and advertising revenues has raised questions about the future of paid-for titles and unnerved media players. Boasting more than 15-million readers around the world, Metro is the most-read newspaper outside of Japan.
Its titles have a combined circulation of 5,1-million in Europe, dwarfing the 3,7-million copies Germany’s Bild sells, and the 3,2-million sold by the British Sun. Targeting the young urban professionals so sought-after by advertisers, Metro has seen its revenues soar from $9,6-million in 1995 to $302-million last year.
Tornberg attributes Metro’s success to its strict editorial formula, and its ”scientific” approach to distribution. The standardised editorial style and design of the papers ensures that Metro provides advertisers with a consistent product. ”We have a lot of control mechanisms. It is absolutely important to stay neutral, to have the same editorial line in all countries.”
As it does not charge a cover price, Tornberg argues Metro has no need to hype stories. ”If you give away something for free, you can actually do a very decent paper. We don’t need to put bikini girls, crime, on our front page to sell papers.” But he acknowledges the model has limitations. ”If you have a strong editorial line, you could change things, which is one of the duties of a newspaper I think. Metro [is] not here to mobilise readers.”
Tornberg once described Metro as the Big Mac of newspapers. But that was before a French columnist told him McDonald’s was hated in many countries.
Now he prefers the term ”glocal”. ”Metro has the same editorial line, layout, template [around the world], but every Metro is perceived as being a local newspaper,” he says. The company modifies its distribution system to best reach commuters in each market. Fewer than 30% of Metro copies are distributed on public transport: the papers can be found in any ”high commuter traffic zone”, including shopping malls, offices, universities, libraries and coffee bars. It is a huge operation: seven million copies are printed each night at 53 plants and then delivered by 500 trucks to 3 200 hand distributors and 22 000 racks.
Metro’s international expansion has not been without its teething problems. In the Czech Republic it was forced to employ guards to give out the paper in train stations, after it discovered old women were pilfering 100 copies at a time to take back to their villages and sell. ”We created a lot of entrepreneurs,” Tornberg says.
Meanwhile, stiff opposition to the freesheet in France forced Metro to print its French editions in Luxembourg, then drive them over the border.
Like the Internet, the Metro freesheet model has fuelled the notion that news is free, much to the horror of paid-for titles, which are losing readers and advertisers. ”Journalists are probably the most conservative people in the world,” Tornberg says. ”They love to write about change, but they hate change happening to them.”
But he agrees that newspapers are facing a ”scary” future. He blames the plight of the paid-for press on the ”semi-monopoly situations” they have enjoyed for too long. ”They’ve been fat cats, they haven’t done a good job.”
Tornberg still expects 95% of paid-for newspapers to survive, albeit in a niche capacity. ”If you apply the pay-TV and free-TV [model] to the newspaper industry, then the paid-for newspapers probably have to accept living with smaller circulation and probably increasing their prices, increasing the exclusivity.”
Right now he is concerned that the distinction between free and paid-for newspapers is becoming increasingly blurred. At a time when paid-for titles are cutting editorial staff to improve profitability, Metro International is hiring more in-house reporters and reducing its reliance on wire copy.
”It’s a dangerous situation now we’re starting to fight with the same weapons.” But Tornberg is amazed Metro has not encountered more opposition from the paid-for papers. The New York Times is actually one of the biggest advertisers in its local Metro edition. And in cities such as Stockholm the arrival of the freesheet has increased readership of newspapers overall.
The freesheet has conquered most of continental Europe, most recently arriving in Russia and Portugal, but so far Germany has eluded it. Competition is much tougher there, and the Germans have proved more disciplined than their neighbours at banding together to keep Metro out of the market.
Metro remains determined to crack Germany, and it has also been negotiating to enter China. ”We [Europe] are the past, they are the future,” says Tornberg. Metro is keen to expand into other cities in Russia and the United States, and South America.
Metro expects to turn a profit in each market it enters within three years, and Metro International is likely to make its first profit as a group this quarter. In markets where it has been established for more than three years, the paper typically enjoys 22% revenue growth and 10% profit growth. — Â