After one year in business, BostonNOW, the daily free newspaper for commuters, shut down operations on Monday due to its primary investor, Iceland-based telecom and media holding company Baugur Group's financial difficulties, according to Russel Pergament, BostonNOW's CEO.

Freesheets are very successful in Europe, perhaps because of the massive usage of public transportation which offers attention time, but freesheets have been struggling in the U.S., especially in Boston and Philadelphia. BostonNOW, however, had increased its circulation, like the Financial Times, from 59,000 to a Certified Audited Circulation (CAC) audited daily circulation 119,000. Its newsroom had 52 full-time  and 100 part-time employees. The free-daily Metro Boston was BostonNOW's rival with 248,000 readers.

"The paper grew to 119,000-circulation daily is suddenly compelled to halt operations due to rapidly deteriorating economic conditions in Iceland where interest rates reached 15.5 percent Thursday, the krona, their currency, has declined over 20 percent against the dollar since January, and inflation is now at 8.7 percent," BostonNOW officials said.

"The death of a vibrant, flourishing newspaper because of economic turmoil thousands of miles away is beyond sad and is something we never anticipated and for which we were totally unprepared," said Pergament.

Source: Boston Business Journal through LA Times