The Czech Republic’s foreign battlefield

The Czech media is a simple game: a few companies chase readers and, at the end, the Germans win. That distortion of former England football star Gary Lineker’s summing up of his sport is a pretty good rough guide to the traditional Czech printed media, if Swiss media giant Ringer and the Swedish Metro International free newspaper empire are thrown in as players as well.

The German-Swiss domination of the paid-for daily market has been a constant for much of the last decade. The business daily Hospodárské Noviny, owned by Handelsblatt (the German publisher of the business daily of the same name) occupies the high ground, followed by the twin dailies, Dnes and Lidové Noviny, from the Mafra stable, owned by Rheinisch-Bergische Druckerei und Verlagsgesellschaft’s, and a series of regional dailies published by 80% German-owned VLP.

The bottom end of the market is dominated by Ringier’s celebrity star-struck daily Blesk.

What is new about the Czech media scene in the last year is the way the foreign-owned giants have surged into Prague’s free newspaper market, taking on the long-time sole occupant of the market niche, Metro, which chose the Czech capital for its first foreign venture outside Sweden in 1997.

Mafra rushed out its free daily, Metropolitní Expres, to hit the streets of central Europe’s richest city last April, within months of Ringier launching its 24 Hodin.

With Metro having distribution in Prague’s well-developed underground network wrapped up, the two newcomers were forced to resort to paying students and the elderly to hand out their offerings at tram stops, metro entrances and other public places. Metro hit back by expanding outside the capital to 40 Czech towns and cities with local editions and employing its own distribution army to hand out copies to drivers snagged in the Prague’s ever-increasing traffic jams.

A fresh round of Prague’s free newspaper war could soon be sparked when Metro loses its underground exclusivity, with all three major free dailies expected to be allowed to distribute soon.

While around 750,000 papers continue to be given away daily, owners are tight-lipped about the profitability, or otherwise, of their new ventures, which local media analysts denounce as a lemming leap into the dark which lacks any economic sense.

Indeed, the most tangible result of the free-paper boom seems to have been to undercut the country’s hitherto healthy paid-for daily sales. Paid-for dailies witnessed a 1.78% drop in sales last year, after enjoying a 1.24% circulation increase in the five years until the end of 2006.

That era could start looking like a print golden age encapsulated by the daily Dnes’s success in 2005 in single-handedly unseating then Social Democrat prime minister Stanislav Gross following a campaign over the way he financed his luxury Prague flat. Gross can, in fact, take a lot of credit for digging his own grave through his botched explanations.

Newspapers’ share of the overall advertising cake fell by 2.5% to 6.270 billion crowns (€220 million), or just over a third of the overall market in 2006. Despite growing advertisement spending, that figure is set to fall 4.3% this year according to predictions from the Arbo media agency.

Worse news might be on the horizon for the established newspaper giants. Internet advertising, long constrained by the slow roll-out of high speed connections, has taken off helped by the three main phone companies vying to offer cheaper services. While all the main up-market dailies offer non-print versions, they are well behind in visitor numbers with one of the country’s most successful internet portals, Czech-owned Centrum, launching its own high quality online newspaper, Aktuálne Cz, after taking a series of bosses and top reporters from Hospodárské Noviny. The news site has won around 140,000 visits daily.

With the internet market boasting an advertising revenue rise of almost a third last year, with similar growth expected again this year, the free paper chase appears even more questionable and the simple game might not be so simple after all.

• Kenneth Johnstone is a freelance writer based in Prague.

The Czech media is a simple game: a few companies chase readers and, at the end, the Germans win. That distortion of former England football star Gary Lineker’s summing up of his sport is a pretty good rough guide to the traditional Czech printed media, if Swiss media giant Ringer and the Swedish Metro International free newspaper empire are thrown in as players as well.

• Primary Source