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11/23/2012 04:53 PM

The End of Financial Times Deutschland

Germany Hit by Wave of Newspaper Bankruptcies

For years, Germany had seemed largely immune to the print-media woes washing over the US. In recent weeks, though, the country's newspaper industry has been hit by a pair of high-profile bankrupcies. On Friday, the respected Financial Times Deutschland became the latest victim.

Germany's newspaper market is among the biggest in the world. With 333 titles to choose from, numerous robust local and regional papers among them, the country has long seemed a bastion of stability amid a struggling global print news market.

Those times, however, would seem to be over. On Friday, German publisher Gruner + Jahr announced that it was ceasing publication of the Financial Times Deutschland, the German offshoot of the influential British financial daily. The final issue of the salmon-colored broadsheet is to appear on December 7, after which some 320 employees will lose their jobs.

"This is not a good day for financial journalism in Germany," one FTD journalist told Reuters on Friday.

The announcement comes after days of speculation that the paper was in trouble, and it also follows several other recent blows to the country's highly diversified print-media landscape. Just last week, the Frankfurter Rundschau, one of Germany's 10 largest dailies, filed for bankruptcy after years of falling subscription numbers and a dwindling print advertising market.

In October, the German news agency DAPD declared bankruptcy just two years after it was founded via a fusion of the Associated Press' German language service and the German wire service DDP. Cuts are also forthcoming at the Berlin daily Berliner Zeitung, published by the same company as Frankfurter Rundschau.

Widely Respected

Still, the shutdown of the Financial Times Deutschland does not come as a surprise. Launched in 2000, the paper has never made a profit and has lost an estimated €250 million since then, according to estimates cited in the German media. Last year, the paper lost €10 million ($12.9 million).

During its 12 years in existence, however, the paper became one of Germany's most widely respected financial outlets. In 2008, British publisher Pearson, which publishes the FTD's namesake, sold its 50 percent share to Grüner + Jahr for a reported €15 to €20 million.

"The Financial Times Deutschland was one of the most ambitious journalistic projects of the last decade," said Julia Jäkel, head of Gruner + Jahr, in a statement released on Friday. "Daily newspapers are under pressure, particularly in the business sector. The FTD has made losses since its founding in 2000. Given that background, we see no way to continue publishing the paper."

Despite the continued dedication of Germans to printed newspapers, which makes Germany the liveliest print market in Europe, the sector has not been immune in recent years to the challenges that printed products are facing in the US and all over the world as an increasing number of readers switch to the Internet for their news. According to Nielsen Media Research, newspaper advertising revenue in Germany plunged by 6 percent in the first 10 months of the year relative to the same time period in 2011 -- marking the continuation of a long downward trend. Whereas newspapers owned 29 percent of Germany's advertising market in 2000, that number had fallen to 20 percent by 2011, according to the Federation of German Newspaper Publishers (BDZV).

The Ascendency of Online

When it comes to circulation, falling numbers have likewise become the norm. In the last decade, paid circulation of German dailies has fallen by a fifth, from 23.7 million copies in 2001 to 18.4 million in 2012, according to the BDZV -- a fall roughly equivalent to that seen in the US. Circulation of the Financial Times Deutschland, however, fell even faster. Between the third quarter of 2006 and the third quarter of this year, subscriptions dropped from 62,000 to 42,000. The total circulation during that period consistently hovered around the 100,000 mark, but an ever-greater share of papers were giveaways.

In recent years, of course, the losses experienced by print journalism have been more than reflected by gains seen online. Combined, print and online news outlets in Germany have never had a greater audience. And online advertising revenues have rocketed upward in recent years, climbing by 15.4 percent in 2011 alone.

However, it is still not enough to finance a print outlet. And that, ultimately, is one of the primary factors that did in the Financial Times Deutschland.

"Since our founding, we have reported on the creative-destructive power of the Internet more than perhaps any other outlet in Germany," wrote FTD editor in chief Steffen Klusmann on the paper's website Friday. "But we were unable to develop a web-based business model that was able to finance the kind of journalism we practice."

cgh -- with wire reports

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