Modern Times Group and Metro

Overview

This page considers the Modern Times Group and its spinoff the Metro newspaper chain.

It covers -

  • introduction
  • the group
  • Metro
  • studies

Introduction

Modern Times Group (MTG) traces its origins to the Kinnevik investment conglomerate, a counterpart of the extended Wallenberg interests.

Kinnevik was established in 1936 as an investment company, subsequently expanding into abrasives and steel manufacture, milling machines, forestry, pulp & paper and telecommunications. It currently centres on operating companies such as farming company MSLA and cartonboard and paper producer Korsnäs AB, along with major stakes in groups such as MTG.

Rationalisation of Kinnevik over the past two decades saw establishment of seven publicly listed companies and that embrace the fixed line and mobile telecommunications, free-to-air and pay-television and radio broadcasting, content production, publishing, paper & packaging, financial services, technology and services.

MTG has operations in over 30 countries, with principal broadcasting businesses in Scandinavia, the Baltic States, Hungary and Russia in competition with groups such as Sanoma WSOY and Bonnier. MTG is the largest free-to-air and pay-tv operator in the Nordic and Baltic regions and the largest commercial radio operator in Northern Europe.

MTG also operates seven radio networks in five countries. It is active in home shopping and e-commerce.

MTG formerly included the Metro newspaper chain.

The group

Modern Times Group, MTG AB currently has four business areas:

  • Viasat Broadcasting (free-to-air, pay-TV broadcasting and teletext operations in 16 countries)
  • Radio (seven national networks or local stations in six countries)
  • TV-Shop (home shopping and logistics)
  • Modern Studios (content production and distribution)

Metro

The Luxembourg-based Metro chain has free papers in the Americas, Asia and Europe. It does not currently have an Australian presence, although colonisation is recurrently mooted.

MTG's Metro operations were spun off to shareholders in 2000. At that time there were editions in Stockholm, Gothenburg, Malmö, Helsinki, Prague, Budapest, the Netherlands, Newcastle, Zurich, Santiago de Chile and Philadelphia.

The Metro group now publishes 40 free daily Metro editions in 61 major cities in 16 countries in 15 languages across Europe, North & South America and East Asia. The group claims that Metro's advertising sales have grown at a compound annual rate of 47% since the launch of the first edition in 1995.

It faces competition from independents, from established papers such as the New York Daily News, Chicago Tribune , London Daily Mail and Melbourne Age (which have pre-emptively launched free commuter papers), and from Schibsted (with editions of its 20 Minutes free daily in Bern, Basle, Zurich, Madrid, Barcelona and Paris).

The Metro editions are distributed in "high-traffic commuter zones or in public transport networks from a combination of self-service racks and by hand distributors on weekdays". Distribution points are typically located either at public transport nodes, office buildings, retail outlets and in other high-density population areas such as college campuses. Weekend editions are published in Stockholm and Holland on Saturdays.

The group claims that

"All Metro editions carry headline local, national and international news in a standardized and accessible format and design, which enables commuters to read the newspaper during a typical journey time of less than twenty minutes. Metro's editorial content is also free from bias and focuses on giving readers the news they need at the time they read, rather than comment or views."

In practice the news coverage is thin. One Metro executive in 2004 commented that

"We're more demographically targeted than your typical newspaper. Our target is readers 18-34. We're the NIE [Newspaper in Education] for 20-year-olds. We removed all the obstacles to reading a newspaper."

Media analyst John Morton, asked what's the editorial quality of free newspapers, commented

"I would say, sparse and sparser. The Metro is the sparser one. You know, a major story there would be three paragraphs long. A lot of it is picked up from wire services, they do very little original reporting."

Jack Shafer more tartly commented that

"to paraphrase Frank Zappa, these dumbed-down publications are journalism by people who can't write for people who won't read. But obsessing over the free dailies' editorial deficiencies misses the point that they're an advertising solution to the problem of declining circulation, having more to do with business than journalism."

"As the adage goes, a newspaper is an advertisement with a news story on its back side. No matter how good the newspaper, if it doesn't attract advertisers—which account for 80 percent of a big daily's revenue—it won't survive."

The corporate site is here.

City AM's largest single investor is Blue Bull, the investment vehicle of Boudewijn Poelmann, chair of the Dutch lotteryand one of the six co-founders of Dutch publisher Independent Media. Independent Media was founded in 1992 and published the Moscow Times and Russian language versions of glossy magazines such as Cosmopolitan until early 2005.

Studies

There have been no major English-language studies of the Modern Times, Kinnevik and Metro groups. Insights about free commuter papers are provided in Piet Bakker's Free Daily Newspapers - Business Models & Strategies (PDF) and his excellent Free Newspaper research site.

For MTG and Kinnevik's involvement in broadcasting see in particular Lena Ewertsson's 2001 dissertation The Triumph of Technology Over Politics? Reconstructing Television Systems: The Example of Sweden (PDF).