The publication of Fréttablaðið has ceased Magnússon

The publication of Fréttablaðið will cease and the circulation of Hringbraut will stop. This was stated on Fréttablaðið’s website.

It has the following statement that the board of directors of the publishing company Torg ehf. has published.

“The reasons for the operation of Fréttablaðið did not work are many. Partly because of bad luck and partly because of an unstoppable trend of rapid decline of paper media, both worldwide and in this country. Digital media is gradually taking over. Furthermore, the business environment of private run media in Iceland is unacceptable. There is nothing to do except confronting these facts. Every employee hired by Torg was paid today.

The pandemic led to a loss

The pandemic that plagued Icelanders and the world throughout the years 2020 to 2022 was very bad for Fréttablaðið’s operations and led to a loss. Advertising was severely reduced when whole industries and powerful companies folded or even closed down. The pandemic brought in support for private media, which was thankfully effective but not enough for the major media. The government has consequently supported the activities of the media financially but this contribution has decreased and has not been able to keep pace with price developments. The aim of this support was to strengthen the national press and support and strengthen the language.

The administrators of Fréttablaðið had hoped that this was a temporary problem that needed to be sorted out and re-established until normal conditions were restored. However, the pandemic proved to be much longer than we thought, and when it ended in early March 2022, a war in Ukraine had broken out, disrupting the worldwide peace process and leading to increased costs related to higher oil prices and hence higher cost in getting materials.

Could not sustain free circulation

At the same time it became increasingly clear that the newspaper’s free circulation into households was too costly and could not be sustained indefinitely. Therefore, the attempt was made to distribute the newspaper to crowded places, such as supermarkets, petrol service stations, and shopping malls, where large numbers of people were passing through. This distribution has been a success, but the market seems to have been unable to believe this arrangement. Therefore, it became impossible to continue. The transmission of the Hringbraut TV network will also cease.ítas

We, on the other hand, have every confidence in the operation of and related media, the web-based media, but the operation of these media will continue with full force as well as the soon-to-be launched information service called Iceland Magazine.

The issue of RÚV on the market

Fréttablaðið has been a free newspaper for nearly 22 years and has been the most read paper in the country all along. It is big news now that the the newspaper disappears from the Icelandic media market. Many have, in fact, predicted for years that the operation would not be successful because of the development of mass media, as the mass media are taking over the internet and as a result of the aggressive business environment in which private media faces in Iceland. For years and indeed for decades, politicians and political parties have promised to bring the media market to a fair and reasonable level by withdrawing the Icelandic National Broadcasting Service, RÚV, from the advertising market as is the case in neighbouring countries, and is seen as the normal state of things. However, all such promises have been delivered and there is no sign of change. The Icelandic National Broadcasting Service receives six billion ISK of the country’s tax money every year, and it is also forced to pull in advertising budgets in competition with the private media.

The foreign social media conglomorates

In addition, a growing share of advertising income now goes to foreign social networks and streaming services without them collecting VAT on their activities or passing on taxes and fees to the government as is required of their competitors. This distorts the competitive position significantly without the governments having seen fit to intervene.

Of course, the outcome presented here is very sad. But the management of Fréttablaðið has certainly looked for every way to find a satisfactory basis for its future operations, but to no avail. The board of directors of the company regrets this closure and thanks the many employees who have worked day and night to trust the foundations of the business recently and wish them well.”


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