Nowe Państwo seeks investor to boost print run

By : Anna Kocińska

   This week’s launch of the Polish edition of Newsweek and the pending debut of other foreign-backed publications has not scared off smaller publishers from trying to eek out their share of advertising revenue.

   Warsaw-based weekly Nowe Państwo (NP), published by Srebrna, told the Business Journal last week that it is in talks with an investor about increasing the magazine’s print run from the current 15,000 to 60,000 copies, a move aimed at bringing in more advertisers.

   “Concrete talks should end within the next few weeks,” said Adam Lipiński, publisher and founder of NP. “For now, we have to reach a strong market position and to do that we’ll need no more than zł. 10 million ($2.39 million).” According to Lipiński, NP has been looking for an investor since the day the newspaper launched in 1996; it has lost money ever since. “I knew we’d have to find an investor within five years,” he said. “With our current print run of 15,000 we sell about 5,000 copies, but according to market research surveys we could sell as many as 30,000 copies. Then the ads would roll in.”

   A cash injection would also go toward improving paper quality, allowing for full-color advertisements. “With growing sales we should be able to find a strategic investor, but that’s the next step,” Lipiński said. “First we need to get rid of our label as a niche publication.”

   Lipiński’s optimism may not be enough to sway advertisers, however. This is mainly because NP, which is geared toward a conservative readership base, is perceived by media planners as being a political publication. “Clients (advertisers) don’t want to be linked with political groups, so if a newspaper is politically affiliated it negatively impacts their decisions,” said Dorota Kozerska, director of the press division at Warsaw-based media house OMD Poland.

   But not all politically biased newspapers are suffering from a lack of advertiser interest. Przeglšd, a weekly aimed at readers with leftist views, boosted its print run from 120,000 to 192,000 copies (75,000 in sales) after redesigning the product in June. “Being a leftist newspaper used to be a problem, but not anymore,” said Janusz Domański, the newspaper’s editor in chief. “It neither helps nor makes it easier for us.” Przeglšd lists among its advertisers U.K.-based pension fund Commercial Union and domestic software giant Polkomtel.

   For his part, Lipiński said NP is not backed by any political party; however, he did say the paper’s focus on politics has soured relations with advertisers. On the other hand, according to Arkadiusz Jastrzębski, investment director at venture capital fund Innova Capital, most ven caps don’t care about a newspaper’s political affiliation as long as a title shows potential. “Unless of course it’s a pornographic publication,” he said. “But if it’s addressed to a specific audience with a clear political profile, it only means that we are dealing with a niche publication.”

   Meanwhile, according to Jastrzębski, ven caps often invest money in niche media projects. “It might be an opportunity to sell (a niche media project) to a larger media group in the future.”

   OMD Poland’s Kozerska said niche publications are often used in advertising campaigns, which are aimed at a limited group of customers. “If we need a carefully selected group of potential buyers of a certain product, niche newspapers serve the purpose perfectly,” she said.

   Even so, the zł. 10 million Lipiński needs to develop NP may be too small an investment for most ven caps. “We don’t invest that kind of money anymore because the size of our fund has grown,” Jastrzębski said. Innova Capital is now raising EURO100 million for its third fund. “And most venture capital funds invest up to 10% of their assets, but it’s not necessarily a financial investor that could be interested in (Nowe Państwo),” Jastrzębski said. “It could be a foreign media group that wants to enter the Polish market this way. However, there might be smaller funds interested in investing $2 million, especially if they know it will be just the first tranche in a longer investing process.”