World War Free

It's the 'News,' the 'Post,' and Some Swedish Guys in the First Skirmish of a Global Journalism Battle

"It's ego over purse," says one person who rubs elbows with the likes of Murdoch and Zuckerman. And that thrill of owning a New York City newspaper goes for both of them, the observer says.

If anyone has to blink, however, it would be Zuckerman. If Mort were to try another move, like a renewed search for new readers in Queens and Brooklyn, the high-level observer says, Murdoch could always slash the price of the Post in those boroughs as well. Another onlooker, a former Manhattan newspaper executive who wants to see the Daily News Express succeed, has a concise prediction: "It's doomed."

That exec recalled the last time the News tried to enter the afternoon market. It was during the 1980s, when the paper launched Daily News Tonight. "It cost $20 million and lasted 12 months," the exec said, giving a rough tally of the damage. "And afterward, the Daily News lost 250,000 in circulation."

Goodstein said there's little comparison between that ill-fated venture—which occurred in the days when no daily newspaper publisher would have dared issue a free paper—and this one.

"The problem then was selling enough papers," he said. Not a problem if you're giving them away. "It's a different business today," he added. "We've done the numbers."

Asked whether the News' announcement simply woke the sleeping giant Murdoch, Goodstein insisted, "It wasn't a case of waking a sleeping giant. We didn't do it to go after the Post. We did it to fill what was a desperate void in the afternoon."

But who's being desperate here? Veteran industry analyst John Morton said of the Daily News Express, "I'm not terribly optimistic. The potential gains are not very big. They tried it in the '80s and it was a calamity. If Murdoch's strategy [of slashing the price] is as successful in New York as it was in London, it could be a big problem for the Daily News."

No, said Goodstein, "the analysts don't understand. Tonight was the same paper as the Daily News, only with a different front page [and] a different wrapper around it." The Express, he said, will be 40 to 48 pages, aimed specifically at the Internet generation, with 3000 to 4000 words per story, "more like USA Today."

And an awful lot like what people can get online. Goodstein said CBS MarketWatch would provide 90 percent of the content of the Express's business coverage.

The aim, he said, is to reach new readers, people who don't now rely on newspapers. "The Daily News is the main product," he said. "It's like the Daily News in the morning is the novel, and the Daily News Express is the short story. It's for the younger reader—it's more like a Web site viewer, with short bites. Yes, we want to lure people to the Daily News."

Sounding like a typical Internet corporate dweeb, Goodstein said, "What we feel is that all of this helps promote our brand."

But analysts like Morton know the paper's history of losing circulation.

"The Daily News' lifeblood was the five boroughs," he said. "But the middle class started fleeing to the suburbs."

Going to the suburbs to recapture them is out of the question. To the east is Newsday, a profitable paper just swallowed up by the Tribune Co. multimedia conglomerate. To the north is Gannett, the nation's McPaper chain. To the west are scads of Jersey papers.

And on the far western horizon, almost as scary as Murdoch, are the Vikings.

Rupert Murdoch has his trusted lieutenant, Peter Chernin. And Jan Stenbeck has his: a fellow named Pelle Tornberg. The Swedes have already landed in Philadelphia with a free newspaper called Metro, distributed in Philly's subways. They're doing the same thing in Toronto. The cookie-cutter Metro freebie is spreading around the world. What kind of paper is it? For depth, Metro makes USA Today seem like The Wall Street Journal. And the head of the Swedes' newspaper operations in North America is Jan Sjowall, who was once the king of infomercial production in Europe.

Groan, but don't laugh. Stenbeck, educated at Harvard and at Morgan Stanley, has already conquered Stockholm, Budapest, and Amsterdam, forever shaking up the newspaper markets in those cities. His Modern Times Group, which, in just the past year, also has moved into Rome and Santiago, Chile, has targeted 60 other cities around the globe.

And these Swedes can be just as pushy as anyone else. The Swedish press claims that one of their countrymen invented New York's skyscraper elevators, another one had the Bronx named after him (that "fact" is in dispute), and yet another Swedish immigrant turned out to be Donald Trump's grandfather.

Stenbeck himself, now 57, is not just off the boat. He lives on Sutton Place and on a farm in Locust Valley, Long Island.

He's enough of a New Yorker that the Swedish press calls him an expatriate. And he's enough of a rich New Yorker that the housekeeper who answered his phone on Long Island last week said he was unavailable because he was in either Sweden or Luxembourg, where he owns a castle.

Les Goodstein knows who these freebie-newspaper Swedes are. So do the other biggies. The New York Times and Gannett both went to court in Philly to fight the distribution of Metro by that city's transit authority. The Americans lost.

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