Swedish newspaper eyes best financial result this century

Many newspapers around the world are struggling or closing down due to coronavirus but Sweden’s most prestigious daily is on course for its best financial performance this century, thanks to a rise in digital subscriptions since the start of the pandemic.

Dagens Nyheter is on course to increase operating profit by about 50 per cent to about SKr180 million (€17.1m) this year, its best result since the 1990s, despite initial worries that Covid-19 would mean a crisis, editor Peter Wolodarski told the Financial Times.

Profits could have been even higher as the liberal title is one of the few Swedish newspapers not to accept government aid, which could have added as much as SKr70m to its results.

“Financially, we’re heading for one of our best years, maybe the best year, since the 1990s. If somebody had told me that at the start of the pandemic, I would not have believed it,” he said.

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“This has to do with digitalisation. If you’re well positioned in this environment then what the pandemic has done is accelerated existing trends.”

Dagens Nyheter’s success stands in stark contrast to the travails of most other newspapers around the world with Covid-19 having led to lower print sales and a collapse in the advertising market, causing job losses at traditional titles and digital upstarts alike. Even the New York Times, which has enjoyed a boom in digital subscriptions since March, has experienced a dent in profitability.

Dagens Nyheter — the Swedish equivalent of The Times or France’s Le Monde — has been the most prominent domestic sceptic of Sweden’s lighter-touch approach to managing coronavirus, questioning early on whether the country should have imposed more restrictions.

Mr Wolodarski made the decision to open up its website to non-subscribers for free at various times throughout the crisis in exchange for their email address.

About 25 to 30 per cent of the 200,000 people who tried it out converted to a subscription, lifting digital revenues by almost half from a year earlier even as advertising revenues fell by 20 to 30 per cent.

Overall, digital subscriptions have increased by a fifth so far this year to 208,000 while print subscriptions have fallen by 6 per cent to 144,000.

“If you are a general newspaper one challenge is to reach a lot of people. If the hurdles are too high, if the paywall is too strong, you will keep a lot of people out. So we have had a lot of free trials,” Mr Wolodarski said.

“In a crisis, there is a mission to be available to as many people as available. To get people on board, you let them try.”

The title has trimmed some costs but the increase in digital subscribers will lead to an increase in the number of journalists Dagens Nyheter employs. It is planning to hire 10 new full-time reporters as it moves away from a Stockholm-focused strategy to more of a national one.

The newspaper has about 215 journalists, up more than 10 per cent in the past two years after it opened a bureau in Sweden’s second city of Gothenburg.

During the 1990s four-fifths of its revenues came from advertising, but now about SKr1 billion of its SKr1.3 billion revenues come from subscriptions. Its operating profit margin is expected to be about 13 per cent this year.

Mr Wolodarski credited a meeting five years ago with venture capitalist Michael Moritz, who told him, “I can hear you’re busy dying”, for sparking a turnround at the group, which included making it easier for people to buy subscriptions using digital payments.

Sir Michael suggested he work closely with Klarna, the Swedish “buy-now, pay-later” start-up that is now Europe’s most valuable private fintech. Mr Wolodarski said Klarna’s frictionless payment solution had been “instrumental in our big growth”, with pure digital subscriptions now contributing SKr200m in revenues. – Copyright The Financial Times Limited 2020