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Come Saturday Morning: Why Are Swedish Newspapers Thriving While US Ones Aren’t?

Towards the end of a March 17, 2012 speech at the Left Forum at New York City’s Pace University, Michael Moore made the interesting assertion that, unlike in the United States, Sweden’s newspapers were not only surviving, but thriving. The reason he gave for this was that Swedish newspapers depended more on circulation than advertising for their revenue.

I couldn’t help being intrigued by this, so I decided to do a little digging.

According to the Swedish Institute’s website, Sweden has the highest level of internet usage of any nation in the European Union. Yet per a 2009 document from the European Journalism Centre, all this internet usage hasn’t come close to killing off the traditional Swedish media:

The Swedish newspaper industry of the late 1990s was a generally profitable business. The net margin increased in the late 1990s after a period of decline due to a period of economic recession. In the early 21st century, it is still increasing — to about 10 percent in 2007 — mainly because of the expanding advertising market. The economic crisis of 2008 and ’09 probably means a strong decline because of the loss of advertising. Newspapers’ share of media advertising volume has gradually declined among paid-for newspapers—from 35 percent in 2000 to the 27 percent in 2008 — but it is high by international standards. The main competitors here are not so much other media but direct mail and, to some extent, the Internet. The expansion of the total advertising market during the same period meant that the newspaper industry kept its economic volume, even as its share of the volume decreased.

Local newspapers have applied different strategies to cope with this development. One important measure has been to develop their editorial content, especially by including more of what can be called instrumental contents such as consumer pages as well as more news on entertainment and music. Further, all papers have launched Internet versions, especially developing so called user-generated content. Another measure has been to change the size of the paper from broadsheet to tabloid. The format developed gradually in the local press, but in 2004 it became very visible. All main metropolitan papers changed to tabloid size. Finally, and most economically important, are mergers of local newspaper companies and the expansion of the main newspaper conglomerates by further newspaper purchases.

Interestingly, it seems that Google doesn’t — or at least didn’t at the time that was written in 2009 — seem to be siphoning off ad revenue from the newspapers or other media the way it has in the US, as overall internet advertising was still not heavy enough to sustain online-only enterprises:

There have been initiatives to develop online media with no counterpart in print or broadcasting. So far all have failed. One obvious reason has been the problem of attracting advertising to the Internet media. It also means that most papers still lose money on online services. However, the online service has been regarded as important as a complement to print or broadcasting and an investment in knowledge for the future.

Why have Swedish papers seemingly weathered Google better than American ones? Could the reason be that, unlike our Federal Trade Commission, the European authorities are much more inclined to rein in Google’s excesses?

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