Warsaw awash in free dailies as newcomers enter market

The glut of free newspapers available at tram stops and metro stations across Warsaw has reached a fever pitch, as four media companies are now giving away a combined 600,000 papers a day.

With the mid-October launches of Metro and AGB Metro, published by domestic media giant Agora and 4Media respectively, the dailies follow in last year's successful rollouts of Metropol, published by Sweden's Metro International (MI), and Dzień Dobry, a free weekly run by Marieberg Publications (MP). Traditional newspaper publishers like Agora are turning to free dailies to offset losses in advertising revenue after Metropol and Dzień Dobry started to erode their sales.

Agora's launch of Metro is the company's answer to a burgeoning sector niche that has proven strong for advertising sales. For its part, 4Media is new to the free-press market in Warsaw, but it already publishes free dailies in six cities nationally, totaling 245,000 copies (including Warsaw). The company is looking to launch more free dailies in each of Poland's 16 provinces by December.

Until Metropol began appearing at bus stops and metro stations last year, the market for Gazeta Wyborcza appeared unshakeable. After all, according to estimates by Agora Monitoring, the company's market research arm, Gazeta Wyborcza logged 80% of press ad sales in the capital last year. But as the free dailies picked up, that dominance began to fade. By last month, Metropol had cornered a robust 12.8% of the Warsaw newspaper advertising market compared to 10.6% the previous month, up from 3.5% in January.

"All that when ad budgets had generally diminished by 10%," said Rene Frey, chief executive officer of Metropol. "So, in fact, we increased by about 20% in September."

Moreover, Metropol's final September edition reached some 325,000 readers, making it the most widely read newspaper in Warsaw. By comparison, Gazeta Wyborcza's final September issue had 217,000 readers, according to the Polish Readership Monitor (PBC). "Our ad revenues are increasing and our people are much more motivated because Agora showed them they are doing a good job," Frey said. "They are easily making (our goal of) 35 meetings a week. We are increasing sales staff from 25 to 28." Frey said the company's target is to solidify the paper's position at 10% market share before moving into more ambitious territory. "We're looking ahead, not backward," he said. "We've set next year's goal at 20-25% (of the ad market in Warsaw)."

Dzień Dobry, meanwhile, has about 8% of the capital's market, up from 6% in February. Its year-end goal is 10%. As for 4Media, company spokeswoman Monika Sarnecka said AGB Metro's first issue had six pages or 40% of its newspaper devoted to advertising. Against this backdrop, Frey predicted that Gazeta Wyborcza would continue to lose out to free newspapers. Currently, Gazeta Wyborcza holds 70% of the market. "Experience in various markets shows that it's the big, fat traditional paid newspapers that lose, not the tabloid papers," Frey said. "For instance, in Zurich there is a tabloid and a traditional daily, Tages Anzeiger. Within a year Tages Anzeiger lost 10% of its paid circulation in an area where free dailies were distributed."

No doubt Agora understood this earlier in the year when it started distributing Metro as a supplement to Gazeta Wyborcza in southern Warsaw. But although Metro is now distributed throughout the capital, it is only published on Mondays and Fridays. Agnieszka Pietraszek of Agora's press office said this policy would probably not change. "(Monday and Friday) are the days of the week when readers need information the most," she said. "We see the best sales of newspapers on these days in Poland." Pietraszek also said Metro would help improve the readership of Gazeta Wyborcza. "This results from the experience gained by foreign markets where the launch of free newspapers resulted in an increase of press readership," Pietraszek said. "It simply reaches people who normally don't buy and read papers. In addition, Metro features stories and topics that are later expanded on in Gazeta Wyborcza, so it's also good promotion for GW." But according to Frey, Metro will eventually have to compete with its mother paper to become successful. "We are a newspaper that does not need to be concerned about cannibalism from its main paper," Frey said. "They can't feature good news because they may be afraid people will not buy Gazeta."

At the same time, Agora and 4Media are finding it difficult to distribute their newspapers. While Metro and AGB Metro are handed out on the streets of Warsaw, Dzień Dobry is placed in special racks in selected buildings, while Metropol has an exclusive 10-year contract with the city for distribution in metro stations. According to Teresa Kuźmińska, spokeswoman for Warsaw's metro service, 250,000 Poles commute by subway every day.

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Radio Kolor this month launched a campaign to promote its revamped programming and jack up the station's listenership and audience reach. "It promotes the second stage of changes we are implementing," said Kazimierz Piekarz, general director of the Warsaw-based station. "The competition is extremely strong, so what we see is a huge battle for listeners."

In April, research carried out by Radio Kolor concluded that listeners expect stations to be more professional. Consequently, last spring the station adopted a new logo, hired new hosts and came up with a music format based on hits from the 1980s to the present. While the alterations helped bump up the station's audience share to 10.9% in the second quarter from 6.9% in the January-March period, Piekarz said he is concerned that the station's daily reach, which affects audience-share ratings, has decreased. "It's because we are trying to take listeners away from other stations," he said. "If someone listens to two stations on the same day he will be taken into account in calculating ratings of the two stations, but the longer he listens to one of them the more he impacts its audience share. That's why we launched a new campaign and "Rozkoszny poranek" a new morning program, which should improve our daily reach."

Radio Kolor's daily reach did improve in the second quarter, though only by less than 1%. In the third quarter it dropped to 10.3% from 12.3% in the first quarter. Nevertheless, Radio Kolor has a stable position in Warsaw at 21% market share, Piekarz said. Even so, the forecast for the radio ad market is not promising. According to media brokers, the radio advertising market has sunk by 15-22% compared to last year. "I only hope that the media market learned its lesson this year and won't go back to the war of discounts (next year)," Piekarz said.

Anna Kocinska