Friday January 30, 06:57 PM
Free daily Metro becomes first press victim of Spanish slowdown
By Gilbert Grellet
MADRID (AFP) - The Spanish edition of free newspaper Metro (Xetra: MEO.DE - news) on Friday ceased publishing, becoming the first victim of a sharp economic slowdown in Spain that is just starting to impact the nation's press due to plummeting advertising revenues.
Per Mikael Jensen, the head of Metro International (MTXBF.PK - news) , the Swedish media group which runs the paper, announced the move late on Thursday, saying it was due to falling revenues and the stiff competition it faced in Spain where there are three other highly popular free dailies.
"Even though Metro in Spain has been losing less money than its Spanish free competitors, the worsening Spanish economic downturn, which during the beginning of 2009 has resulted in a collapsing advertising market, has now resulted in unsustainable losses," he said in a statement.
He said Metro, which is published in 17 countries, would concentrate on more lucrative markets.
Metro was the fifth most read daily newspaper in Spain with more than 1.8 million daily readers.
The newspaper, which employed 80 people, was launched in 2001 and by 2004 had achieved profitability but had been posting losses in recent years.
Spain's three other free dailies -- 20 minutos, Que! and ADN -- have a daily circulation each of nearly one million copies meaning the country's four free dailies had a readership that was equivalent of that of the country's paid papers.
Analysts had long warned that this situation was unsustainable during a sharp economic contraction that has led to a 35 percent drop in advertising revenues.
Last month Pedro J. Ramirez, the director of El Mundo, Spain's second-most sold newspaper after El Pais, said Spain's daily newspapers were in "a state of shock" because of the economic slowdown and the drop in advertising revenues.
He said El Mundo's advertising revenues plunged 34 percent in November alone over the same year-ago period and predicted they would be down by around 20 percent for all of 2008 when compared to the previous year.
In a further sign of the stress that Spanish newspapers are under, Spain's largest media group Prisa (Madrid: PRS.MC - news) , which publishes El Pais, last week announced it would merge the staff of the newspaper's print edition with that of its online version to avoid job losses.
"In five years, print newspaper will certainly still exist. In ten years, probably, if things are well done. In 15 years, I am not sure they will still exist in the form that we know," Prisa's chief executive officer Juan Luis Cebrian said when he made the announcement.
Spain's once-buoyant economy, the fifth-largest in Europe, is facing its first recession in 15 years as a real estate boom comes to an end due to the international credit crunch, oversupply and rising interest rates.
Last week the government slashed its forecast for the economy to a decline of 1.6 percent this year from the growth of 1.0 percent previously forecast.
Faced with this gloomy outlook, groups representing journalists have appealed for government aid to help the struggling media sector, which could lose thousands of jobs in 2009.
Spain's state-run radio and TV company, RTVE, alone has cut over 2,000 jobs over the past three years.
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