Free newspapers costing an arm and a leg

Despite a rapid rise that has seen it become one of the country's most widely read newspapers in little more than a year, free daily newspaper Nyhedsavisen announced yesterday that budget constraints had forced it to fire half of its news staff and narrow its focus to the country's two largest cities.

At the same time, the newspaper's editor-in-chief, David Trads, announced his resignation from the newspaper.

The news comes less than two weeks after the Icelandic group that started Nyhedsavisen sold their controlling interest to Danish venture capitalist and internet tycoon Morten Lund.

Media watchers say the firings are the first sign that Lund and the new management will attempt to take Nyhedsavisen in a different direction than the original plan of delivering a free newspaper, filled with quality news content, to every home in the country.

Instead, the newspaper says it will place more emphasis on the crowded market for free newspapers handed out to commuters during the morning rush.

Nyhedsavisen also announced on Wednesday that it has entered into a partnership with Freeway, a company that operates a number of widely used internet community sites.

Since its launch on 6 October 2006, Nyhedsavisen is believed to have lost in the neighbourhood of DKK 600 million (EUR 81 million). During that time another free newspaper, run by a subsidiary of British media mogul David Montgomery, has stopped publication.

Yesterday's news confirmed experts' warnings that the country's media market is too small to bear four free dailies.

'What we are seeing here is a logical consequence of the long war of attrition that the papers have been waging,' media analyst Søren Schultz Jørgensen told financial daily Børsen.

It is estimated that what has become known as the 'Freesheet Wars' has cost the five publishing houses a total of DKK 1 billion since the summer of 2006. According to Schultz, the war would likely peter out.

'They didn't have any experience with this sort of thing and that has had them fighting in the dark. I can't imagine that any of the major publishers will be pumping money into the papers much longer.'