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December 2008
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Metro International closes Spanish operation

Bligh me, Metro International has just announced that it's closing down its Spanish operation with immediate effect!

Actually, to be precise, the announcement ticked into my mail account three hours ago, but I only happended to check it now. Is there something I have missed? I must admit that I've been spending this month writing by the seaside and haven't followed the news as closely as I use to, but I didn't see that one coming.

Only, oh... I forget, probably when Metro presented their last quarterly results, Per Mikael Jensen, the company's CEO hinted strongly that a merger was on its way in Spain when I interviewed him, certainly they've been successful creating such partnerships in several of the other markets they operate in, but seems they've been unable to negotiate one in Spain. Next week's results should be interesting.

According to the press release:
Metro International S.A. ("Metro International"), the world's largest international newspaper, announces that it is discontinuing the activities of its fully owned operation in Spain, Metro News S.L. ("Metro Spain"), which publishes the free daily newspaper Metro in seven Spanish cities. Thursday 29th January 2008 was the last day of publication for Metro. Prior to the closure of our Spanish operations, Metro was the fifth most read daily newspaper in Spain with more than 1.8 million daily readers

Per Mikael Jensen, CEO and President of Metro International said: "Despite dedicated efforts from our Spanish management team and staff, it is with deep regret that we have taken the difficult decision to close down our operations in Spain. Even though Metro in Spain has been losing less money than its Spanish free competitors, the worsening Spanish economic down turn, which during the beginning of 2009 has resulted in a collapsing advertising market, has now resulted in unsustainable losses.

"The stiff competition coupled with a forecasted continued weakening advertising market for Spain, makes the closure of our operations the only rational decision at this time. A continued investment in Spain cannot be justified at this point and we are therefore focusing our resources on growth areas where we can create long term shareholder value."


The David Montgomery Appreciation society

Mecom shareholders launch fan club for David Montgomery on Facebook.

Fed up with all the negative media coverage of former Mirror boss David Montgomery's struggling pan-European media group, Adam Billiald, a small shareholder in Mecom, has set up nothing less than The David Montgomery Appreciation Society (thanks to Christoph for alerting me to the fan club on Twitter).

At the time of writing, some eight hours after the group launched, it has 40 members.

In an email, Billiald explained to me that he was tired of the markets and press slating Montgomery and wanted to show that the Mecom-boss has support, a point he claimed was proved by the first few comments on the group's Facebook wall.

"I am sure he can get them through this mess and wipe the debts. We are all also (small) shareholders... but we are all supporting him, as did the major ones..." he said. Billiald, who works for Yell Group when he's not dabbling in shares, is an active contributor to this Mecom Group Share Chat Forum where the news of the new group was met with much praise.

Reacting to the news on the chat board, another regular contributor, petertee, whom I'm guessing is the same person as the Facebook profile Peter Robert Tee, wrote: "Hope we get many more members - search Facebook under Mecom - David Montgomery Appreciation to join - its free and you can add comments, news, whatever - anything relating to Mecom under DM leadership. He is like our modern day Buzz Lightyear, and he will lead MEC to infinity and beyond!"

In a Facebook message, Billiald told me he hoped Montgomery himself would be in touch at some point.

For the record: I have followed the discussion on the chat forum on and off since some time around Christmas, and Billiald emailed me his thoughts on Mecom's forthcoming disposals last week in response to this post.Several of the people who contribute to the forum follow the company very closely, so closely that Christoph has been kind enough to set up a Yahoo Pipe which provides an RSS-feed for the news articles they share with each other as we all know, at least those of us who've followed the company for a long time, that UK media coverage of the group tend to be patchy and limited.

Old grievances die hard

"Life is too short to be a minority shareholder in a company controlled by Erik Must. I don't have the health for it," said Norwegian media proprietor and investor Trygve Hegnar after selling his 30,2 per cent stake in Gyldendal Publishing House to his arch rival Erik Must on Monday.

Hegnar, who's held shares in the publishing giant for six years, has unsucessfully fought to gain a seat on board of the company for some time. He attributed the animosity between himself and Must to an incident some 30 years back when he, as a young journalist, wrote a less than flattering novel about the finance industry where one of the characters bore close resemblance to Must.

Sounds like a classic case of how old grievances die hard. However, Must refused to comment on Hegnar's claims. (links in Norwegian)


On the Icelandic government's collapse

Today Iceland's coalition government collapsed under the strain of an escalating economic crisis, finally some would say (thanks to @lauraoliver for alerting me to this story)

I was in Reykjavik to do story in December, on media of course, and it was a surreal experience. The sense of doom and gloom was not helped by Iceland's barren "moon landscape", nor by these weird sculptures along the road from Keflavik airport to Reykjavik (this photo was taken from behind a dirty bus window, click on the pictures to see them in full size):

SculpturesAlongTheRoad

"Welcome to the sinking Iceland," wrote Andri Snær Magnason, the author of «Dreamland: Self-help for a frightened nation»," when I contacted him by email (photo below snapped from the airplane when taking off.)

Reykjavik 056

"I'm not so sure Bjørgólfur Guðmundsson, or anyone else in Landsbanki were criminal: they could drive in 250 km/hrs and they did," said DV's editor-in-chief Reynir Traustasson, with reference to the Icesave scandal. But if Traustasson did not think the bank directors and others criminal, a large portion of the population certainly do, with signs comparing prime minister, Geir Haarde, and the head of the central bank, David Oddson, to bin Laden and worse flourishing at the weekly demonstrations.


ReykjavikProtest4

ReykjavikProtest3

I truly felt like a stranger in a strange world while I was on Iceland, and if we think we're having a bad time here due to the struggling economy it's nothing compared to the situation there. However, I was told one upside for journalists, who're facing massive job cuts, is the fact that the financial woes of the island has attracted so much interest from international press that some journalists have been able to compensate for loosing their Icelandic jobs by working as stringers for international agencies such as Reuters and AP (by the way, these photos are all my own haphazard shots, but I worked with a great photographer, Haraldur Jónasson - highly recommened: very professional, flexible, knowledgeable and fun to work with - while there)

Bonus link (added 27/1-09 8pm CET): Is this the most hated man in Iceland? (via Andrisig on Twitter)


How the web is changing newsreading habits

I should perhaps have entitled this post "How the web is changing newsreading habits, chapter xxx", but I've quite forgotten which chapter we're on. In any case, here's an interesting snapshot from Fred Wilson:

The Gotham Gal has been religious about reading the NY Times in paper and doing the crossword as 'dessert' as long as I've known her (28 yrs now)... So this past year, during the presidential election, when she went online 5x per day to see what was going on, you'd think shed have gone to the nytimes.com.

But she didn't. She went to Huffpo. And that habit has not changed since early November. She reads the paper in the morning as always and then checks in with her trusted blogs and web news services throughout the day and evening, like the trader who reads the WSJ in paper form on the train in and then hangs out on his/her Bloomberg all day long. I've asked her to post on all the online news sources she checks every day and she just did that. Here it is. ....

...it teaches me some important things. First, the mainstream newspaper reader is just making this transition to intraday news consumption now. Second, they will not blindly follow their offline brand loyalty when they go online. And most importantly, publishing news online is fundamentally different from publishing news offlin
e. Do check out the full post here.

Summing up the Scandinavian media year 2008

No, this is not one of those summaries xxx weeks after the events: if anything, I put together the usual summary of the region's key media events a bit too early in 2008 (my deadline was mid-October).

Then I got a bit too busy, forgot to be on the lookout for when it went oline, and ended up stumbling across it by chance recently. Surprisingly, the summary still holds up pretty well, the only events that took a slightly different turn from when I wrote it were Baugur pulling out of the proposed merger of Frettbladid and Posthusid Arvakri, the publisher of Morgunbladid, and bailing out the media arm of 365media, which owns Frettabladid.

Of course, Iceland is not strictly a part of Scandinavia, although foreigners often think so, but this story was so intertwined with developements in Danish media last year that it was decided to put it all under the same headline.

The focus of the summary is largely on structural changes, like mergers and acquisitions and new laws affecting the region's media industry, but there's also a bit on online development in there.


Frettabladid back in the hands of Baugur-led consortium

Icelandic freesheet merger called off as the country's media battle debt inflation.

Now, this is not news to those of you who read Journalisten.no, but I got a bit too busy at the end of last year and ran out of time to do a follow up on this story  for my blog, so here goes:  Jón Asgeir Jóhannesson, the controversial chairman of Icelandic investment group Baugur, recently raised 6,4bn Icelandic Kroner (ISEK), to buy out the media arm of 365media, the company behind Frettabladid.

Fjar[1]

In October, news broke that the door-to-door freesheet, which is Iceland's most read newspaper, was to merge with Posthusid Arvakri, the company responsible for Iceland's biggest paid-for paper Morgunbladid. This deal was later abandoned due to the latter part's reluctance to take on the added risk of the increased debts of the merged group, said Ari Edwald, CEO of 365media.

Iceland is currently battling a banking crisis and monetary crisis of extraordinary proportions. The three main banks, accounting for about 85 per cent of the banking system collapsed in less than one week and the krona fell like a stone. 60 til 80 per cent of all companies in Iceland are said to be technically broke, and leveraged companies have seen their debts inflated.

"We got more than a billion ISEK more in debts only in October. We had to find a way to refinance our business quickly because we had 1,5bn ISEK in down payments due 5 November," said Edwald.

He explained that Jóhannesson paid 1,5bn ISEK in cash, the reminder of the price was debts he agreed to take over, but emphasised that Jóhannesson is not the sole owner of the new company. "The operation was led by him and he is still the majority owner, but we are working to get other investors on board," he said.

Baugur's role as a dominant media investor on Iceland has been controversial, but Svánborg Sigmarsdottir, a senior reporter with Frettabladid, said most of the freesheet's journalists were just relieved when Jóhannesson put the urgently needed money on the table.

On Mecom's board room revolt, the German deal and new disposals

Didn't I just say there were no boring days with this company? Two days after that comment six of the company's directors resign after a failed coup to oust Mecom-boss David Montgomery.

It's good to see Rob back in the comment section copying me in on the news, he's copied me in on some really interesting links in the past, but on this account I must admit I just failed to address the drama due to lack of time. Now, my colleague Martin provides some really interesting background on the boardroom mutiny attempt and how it came about here (in Norwegian).

According to the sources Martin talked to, the failure to sell Edda Media, Mecom's Norwegian division this summer, before the price offers were reduced, was one of several concerns which led up to the the boardroom revolt.

Now I'll be the first to admit there are internal dynamics at play here that I'm not qualified to opine on, but as one who's followed the company closely I do think selling Mecom's German arm rather than the Norwegian one is a good move.

If I were to put on my business developer/analyst hat I'd say it's the best bet on the future Mecom could make: due in part to the macroeconomic outlook for Germany vs. Norway, but also because how far ahead the Norwegian newspapers are in terms of online develoment - a fact that Montgomery himself was keen to point out to me.

As the most profitable division in Mecom Edda Media might have fetched a better price if sold last summer - to take one of the courtiers: A-pressen reduced it's offer with roughly one billion NOK since then - but we can only speculate if that was due to the worsening financial outlook, completing the due diligence tests or both.

However, the Norwegian business generates a good cashflow and is much better poised to deal with the downturn and to be a player in the future media landscape than the German which would have needed a lot of investment in order to embrace all the advantages online (and there is no getting around doing that if newspapers want to stay competitive the current market).    

Also, the fact that Mecom failed to make more of its German business - e.g. by making Netzeitung its online operation and taking advantage of the expertise of this site, the first standalone news site in the country, as Olav Anders has pointed out on several occasions - suggests to me that Mecom's German management was not up to the job.

Mind you, this conclusion is also supported by some of Joseph Depenbrock's statements - such as this one about not needing the trust of his employees  (see esp. this link) - and my many talks with employee and union reps. These will always have their own agenda, but it was kind of telling when an employee representative sugggested to me that Depenbrock might have achieved better results if he'd emphasised the benefits of a more effective organisation and of new online possibilities rather than cost-cuts and negative aspects.  

As for what disposal Mecom should make next, more disposals are needed to reduce the debt level, I'm wondering if the company's stake in Rzeczpospolita is not more trouble than it is worth. The Polish state has been discontent with how the British media group has run the ship, especially with not turning over a better profit (oh, the ironies here) and Truls Velgaard, Mecom's Polish CEO threatened with legal action based on this conflict - though local union reps have told me they think this is a political conflict and that they were happy with Velgaard as a boss.

So it will be interesting to see what happens when the Polish state announces what it wants to do with its stake in the company that owns Rzeczpospolita later this week. Several parties have announced their interest. Mecom has also been in talks to divest some of its Dutch operations, and then there's of course Polaris Media's bid for Edda Media's papers in Western Norway, worth roughly 600m NOK, to keep an eye on.

If you're following this story, I'd love to hear what you think about recent developments and the road ahead (however, I'm in London 'til Wednesday morning, and if I'm slow to reply it's because my internet access will be limited while here).  


Hudson River crash reveals Twitter in league of its own for breaking news

For my part, the story of the plane that crashed into Hudson River started with this message on Twitter:

@BreakingNewsOn is checking on reports that a plane has crashed in the Bronx, New York. More to come.

More messages from @BreakingNewsOn, several others chip in, incl @davewiner and @HAX. I go upstairs, turn on the TV (about 15min after the story broke now): NOTHING. Web: nothing on the frontpage of Nettavisen.no, NRK or BBC; - NRK headline story is former prime minister Kåre Willoch: "Eg angrar ikkje" (Je ne regrette rien), a storm in a teacup if you ask me - but CNN has the goods. Good, very moving web-TV.

I go downstairs again and find a cacaphony of people informing each other on Twitter; sharing tidbits of what's happening and who's twittering, who's goot footage and snapshots, including these amazing pictures. At this point NRK.no has the plane crash story, but still not as top story - Willoch still rules the evening (FAIL).

And no, I'm not trying to break any news with this post, for that it is much too late: both for this particular news story and when it comes to Twitter's record for being the first place to look for breaking news stories - this is just a snapshot of how I got the news, recorded as much for myself as anyone else. 

A few comments from the Twittersphere :

@kevglobal Still "don't get" Twitter? Enter "Hudson" or "Airways" into https://search.twitter.com/ right now. Brace for bad news; plane crash

@webbmedia Twitteverse, Twitpic, excellent job! I'm amazed at how much information I learned so quickly...While waiting AT AN AIRPORT!

Update 16/1, 11:24 CET: just remembered that I removed the Twitter widget from this blog recently due to a security bug, but you'll find me twittering here: @KristineLowe


Business angel goes bust

Skype-investor Morten Lund's bankruptcy, following the demise of Nyhedsavisen, is hardly news to the Scandinavians among you, but Techcrunch has an interesting, very sympathetic write-up of the story.

The comments below the story are also worth reading: they make for sharp contrast to the animosity he's often met with in Danish newspaper columns and comment sections, and it was intriguing to see the video of his Le Web presentation which I hadn't heard/seen before.

I've blogged about the Danish freesheet war from beginning to end, including Lund's takeover of Nyhedsavisen, on this blog - it's yet another colourful, and at times unbelievable, tale from the Northern media frontrier that is Scandinavia, a tale deeply intertwined with Mecom's colourful newspaper adventure. For a short summary of the Nyhedsavisen story scroll down to the Icelandic newspaper saga here.

It must be said that the Icelandic part of this story has changed a bit since the latter article was written though (October 08) - in short, the Icelandic freesheet merger was cancelled, and Baugur bailed out the media division of 365media.is. I'll try to get back with more on that soon.  


Top Mecom executive resigns after German deal

Just as Mecom finally put up the official statement about its German disposal yesterday, news broke that the man in charge of finding a new ownership solution for its Norwegian division, Edda Media, had resigned.

There are no boring days with this company: as someone who's followed Mecom from its early days I can tell you it's been a colourful tale from day one, a fact I guess Europe's media hacks should be grateful for - though they've often failed to take advantage of it.

No sooner was the German deal done and dusted, when it was announced Jan Moberg, who was relieved of his administrative duties as CEO of Edda Media "in order to focus on new ownership solutions" for Edda in October 2008, was to step down. Union representatives blamed friction between Moberg and Truls Velgaard, the CEO of Mecom Poland, who was brought in to take over running Edda, and said the former had been a good manager who would be sorely missed. Media site Kampanje claimed there had been disagreement between Mecom-boss David Montgomery and Moberg about selling parts of Edda Media, but Moberg declined to comment.

Montgomery&MobergCartoon
Jan Moberg (left) and David Montgomery (photo copyrighted to, and courtesy of, Martin H. Jensen, edits by me. I believe it was snapped after this most intriguing debate)

The British media company's Norwegian division has attracted indicative bids from rival newspaper companies A-pressen and Berner Gruppen, as well as one for its news operations in Western Norway from Polaris Media, but employee representatives have said they think the German deal makes it less likely the local newspaper group, the best performing among the Mecom divisions, will be sold.

MontgomeryReadingDT
Montgomery pictured here reading Edda newspaper Drammens Tidende (DT), where both Moberg and yours truly have served as editorial columnists - both before Mecom acquired it, but not at the same time (copyrights: same as above photo).

Moberg does not have a new job lined up, but the media executive has a parallel career as a playwright. He is best known to Norwegian children as the author of "The Christmas Scoundrel" (not to be confused with Scrooge, though both do their best to put a damper on the festive season), and if working for Mecom has been as colourful as the saga of its rapid expansion, and now contraction, has appeared to the outsider, perhaps we can look forward to a few inspired new plays in the years to come?

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DuMont Schauberg to the rescue of German Mecom employees

"Mecom is poised to sell its German newspapers for €165 million (£148 million)... If the talks conclude as anticipated, an announcement could come as soon as today, reports The Times."

Well, yes, that would be the announcement everyone who's following the company closely has been waiting for all day. Update on the negotiations delaying the deal here (10 Jan, in German), on the final price here (12 Jan). Updates added 13 Jan 09:00 CET.

In the meantime, why not indulge in a bit of background for amusement: we can of course only speculate at this stage whether or not it is exactly the white knight Berliner Zeitung employees had in mind when they advertised for a new publisher to save them from Mecom last summer, but at least M. DuMont Schauberg (MDS), Germany's fourth largest newspaper publisher, the country's third largest if the deal goes through, is of the right nationality.

BerlinerZeitungAd

The strong synergies between MDS' Frankfurter Rundschau and Berliner Zeitung, the most prestigious of the assests MDS will acquire when it takes over Mecom's German division, might result in job losses and make the deal taste somewhat bitter-sweet to some of those being acquired, but under current circumstances, I think it's a good deal for all parties (I'll return with more on why, apart from the obvious benefits, later).

As the deal currently stands, no redundancies are on the table, but further down the road it might be an attractive opportunity for MDS to "consolidate" its operations into bigger, more cost-effective units.

A price tag of 165m Euro for Hamburger Morgenpost and Berliner Verlag would have come close to equalling what Mecom paid for the latter company three years ago, 152 Euro is even less. Still, in the current bear market, where it's hard to raise money and several market insiders were starting to wonder if Mecom's suitors had not decided to pull out and wait for David Montgomery's investment vehicle to go bankrupt so they could pick up the pieces for a bargain, it's not too bad and, with a few more new disposals, it should help buy Mecom the time it needs to get its house in order.  

In an ironic twist, the current editor-in-chief of Frankfurter Rundschau is Uwe Vorkötter, who two years ago left the job as editor-in-chief of Berliner Zeitung in protest over Montgomery's and Mecom's cost saving measueres. According to a colleague on the scene, German newspapers, including Taz, speculate that Vorkötter will get a key role in the merged company.

Meanwhile, employee representatives in Mecom's Norway division, Edda Media, have said they're disappointed by the recent turn of events, as it makes it less likely that the British media group will sell it's Norwegian arm any time soon, and it is rumoured Mecom journalists in Germany are holding their breaths in case it should be decided in the last minute that Hamburger Morgenpost won't be part of the deal.


So it's goodbye to the last newspaper company in Fleet Street

Metro International has just announced it's planning to relocate key operations from Fleet Street to Stockholm by the end of this year, implicitly blaming the move on the financial downturn.

"During Metro's growth period particularly in Europe we have benefited from being located in a media capital such as London. As our business has entered into a more mature state our needs have changed and we have therefore concluded that some of our London functions would profit from being closer to both an operating unit as well as our financial market," Metro's CEO Per Mikael Jensen said in a press release.

I interviewed Jensen at Metro's London offices only February last year, at which point he was talking of employing more journalists in London to build a central content agency, producing content for all of Metro's papers there. How quickly things change.... 

Metro's move from Mayfair to Fleet Street in 2007 was met with appraising nods that print was moving back to  "the spiritual home of British Press". 85 Fleet Street was previously occupied by Reuters, the last major news organisation to move away from the “street of ink” in 2005.  

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London, as seen from 85 Fleet Street:
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Fighting institutional inertia

David Cohn has an interesting post which rhymes with my post on why change in the newsroom is so hard. Among other things, he says:

"The fate of newspapers isn't the fault of any individual editor, reporter, publisher, etc. They are all acting within the confines of institutions. Newspapers are industrial age institutions with inertia that could pummel an elephant. To use an analogy: They operate like the military. It might not be so strict that reporters have to salute their superiors - but there is a chain of command, an expected means of behavior and decisions must go through the proper channels. As a result - newspapers turn like battleships and even implementing one line of code can take upwards of six months."

This also gels with what I wrote on media and disruptive technology and especially the part about The Entrenched Player's Dillema (a post in which I was really just playing around with ideas, but found it a very useful thought experiment which I will return to from a different angle soon).

Another of my favourite explanations of why the media industry sometimes is slow to catch on is this one, which I've taken from Paal Leveraas (unfortunately I don't have a direct link to the post I found it it):

"We stand in the stream of events, while busy chasing deadlines the world changes and we are too busy to notice the change."


Anniversaries: Berlingske celebrates with tunnel vision, Dagbladet with old news

Mecom-owned Berlingske Tidende, Denmark's oldest newspaper still in existence, celebrated its 260-year anniversary Saturday, and marked the event by creating this time tunnel.

A rather nifty application, if perhaps a bit, well... complicated? I found it a bit dizzyig at first, which is what made me think of tunnel vision, it reminded me of a recent talk with a Norwegian Mecom editor who said Danes had a way of thinking so complicated when it came to web media (many thanks to Helle Kruuse for alerting me to this on Twitter: I could easily have missed it as I tend to read Berlingske, like most news sites, only via my newsreader).

Meanwhile, in Norway Dagbladet is celebrating its 140-year anniversary by printing old news every day for an entire month. Critics of the tabloid - which often is derided for having downgraded its news department - will no doubt ask what's new in that respect.


Here's to 2009....

A tad late, I know, but 2008 was a trying year for me - I met some great people, was partly given/partly created some brilliant opportunities, had a few adventures, but was also presented with what at times seemed like unnecessary and unsurmountable challenges - so I needed a bit of a break before summing up the year past and welcoming the new one.

What pulled me through the rough patches was, to a large extent, this blog, or rather the funny, irreverent, insightful, thought-provoking comments and links it spurred - in other words: you guys and gals - and all the great friends I'm blessed with. Now, when I suggested in this post that social media can be of great help in turbulent times Adriana, who kicked me into the blogosphere in the first place by setting up this blog for me as a gift in 2005, pointed out that what I really was saying was that people were of great comfort at such times, not social media.

I still think social media makes a huge difference, though perhaps it would have been more precise to say the ambient intimacy social media offers/facilitates is what makes the difference, to use a term coined by Lisa Reichelt (in short, ambient intimacy is about being able to keep in touch with people with a level of regularity and intimacy that you wouldn't usually have access to, because time and space conspire to make it impossible).

Anyway, I wish you all much joy and success in the year ahead of us. This is what coming from 2008 to 2009 looks like to me right now. The first photo is from a lovely winter day in the forest at Tranby (more here):

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This shot is from Corntin Bay, Stavern, today:

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And like Duke, pictured below, I'll definently be scouting for new opportunities in 2009, albeit of a slightly different nature than him (I've also got a few interesting projects up my sleeve which I'll return to shortly):

DukeScoutingForOpportunities