Finance company PPF has sold its PPF Media division and shut down its local media project in the Czech Republic, called Naše Adresa ("Our Address"), which created a network of local weeklies across the country.
PPF invested at least Kc200 million (€8.05 million) in Naše Adresa, but the pilot project "did not meet the parameters of return on investment," the group's spokesman told the Czech News Agency (CTK) today. PPF sold its PPF Media company to investor Richard Benysek, CTK reported Friday.
"The pilot project, during which the PPF Media websites operated hyperlocal news and published [print weeklies] in seven regions of the ČR, has not complied with the parameters of commercial return on the PPF targets," PPF stated in a report dated Aug. 27, aktuálnĕ.cz reported.
However, the reason the project was shuttered is being debated.
"It's nonsense. How could it earn something while [in its] preparatory [stage]? How can it earn with a few isolated district weeklies? That was the purpose of the pilot project," a journalist who was part of building the project told aktuálnĕ.cz.
PPF's reason for selling PPF Media is that it wants to take on larger investments, worth at least Kc2.5 million (€100 million). Benysek bought PPF Media because he wants to continue growing the group's portfolio of activities, his PR representative told CTK.
In May 2009, PPF launched Naše Adresa, which then consisted of seven local weeklies and 23 websites in three regions of the Czech Republic, covering about 4 percent of the country's households. A year later, it reported printing more than 30,000 copies of the 24-to 32-page tabloids at its offset printing plant in Brno. In the future, Naše Adresa planned to grow to 230 local weeklies with a circulation of 500,000 and 700 hyperlocal websites, covering 14 regions and 75 districts of the country.
Naše Adresa is unique in that it took 18 percent of its profits from sales at its dozens of coffee shops across the Czech Republic. The coffee shops' goal is to become a hub for local discussion, and to serve as a place for citizens to meet to discuss important issues. PPF also launched Futuroom, a hub newsroom in Prague, where the weeklies are produced and edited. The Futuroom headquarters are designed to earn money, while the news cafés are designed to cover costs.
"The most profitable part is the café. There are no doors. Anyone can go talk with reporters. We know that the thinking of the editorial team is very close to that of their readers," PPF Media CEO Roman Gallo was quoted recently as saying in SFN's latest report, "Million Dollar Strategies for Newspaper Companies."
It is unclear when the closure will take place, and if the Futuroom will also be closed.