The Standard's gamble

Yesterday's decision by the London Evening Standard to give itself away for free illustrates

The hard choices facing newspaper owners are illustrated by Alexander Lebedev's decision to forgo £14m in circulation revenue in the hope of recouping the money from increased advertising rates

according to Salamander Davoudi and Ben Fenton writing in the FT this morning.

The paper currently sells for 50p and shifts around 250,000 copies.Its management believe that free distribution will increase that figure to around 600,000.

The question of course for the paper now is whether the revenue it will lose from its cover price will be adequately replaced by the increased advertising from its greater catchment area

As Ian Burrel writes in the Independent this morning

The Standard's move to a free model will be watched with interest from across the regional and national press, where circulations are in widespread decline but advertising revenues are also in recession. Sources at the Standard say advertising income has improved in recent weeks to levels above those of last year.

The demise of the free paper may be premature

Last week's announcement of the closure of the London Free sheet the Lite brought the gloom and doomongers to the fore over the future of the concept.

Maybe though the obituaries shouldn't be dusted down just yet.

What is happening in London, and in other countries like Sweden, Switzerland, Denmark, the Netherlands, Spain and Italy, is that more than two free dailies - in this case, two evening papers, one morning paper and one financial paper - competing in a crowded market (almost a dozen paid papers, including the part-free Evening Standard) in a recession will not lead to profits for all titles. Especially free evening papers, a model proved to be very difficult in other parts of world, will suffer. In all markets mentioned above, free dailies have closed down already.

writes Dr. Piet Bakker over at Paid Content.

Quite simply he adds

there certainly is room for a free paper as the young urban non-paid audience is growing and still valuable for advertisers. Room for one at least and two perhaps, but not for three or four.

Another shift in the Murdoch stable?

So does the decision by the Murdoch empire to close the London paper mark a radical shift in Rupert Murdoch's attitude to free news?

Last night his son James announced that the experiment in shoving free papers in the faces of London commuters had "fallen short of expectations.

The project which employs over 60 people lost £12.9m in the year to June 2008.

According to Patrick Smith writing at Paid Content

Murdoch’s decision to axe that paper today shows just how much the axis of publishing has shifted: just as proprietors are growing weary of readers enjoying their online news for free, there is not nearly the same confidence in the free print model there was three years ago and publishers are reverting to ways of maximising user revenue in all media instead of giving it away for nothing.

No doubt the other London freebies,Lite and the Metro will be watching developments and maybe up here in Manchester the MEN's free experiment will also be coming under scrutiny

Express and Star experiments with part free

It look like Wolverhampton's Express and Star is going to test the part paid newspaper model according to the report by Hold the Front page this morning.

From next month, the Stafford edition of the Express and Star is to be delivered free to homes and business in the mid-Staffordshire area on Wednesdays only, while remaining paid-for the other five days.

Morals of competition in newspapers

Chris Anderson looks at a free newspaper model that didn't quite work over at his Long Tail blog

He tells the story of

“Nyhedsavisen”, a new Danish daily newspaper hit the streets. The newspaper would feature an editorial mix prioritizing both prize-winning critical journalism and stories close to the everyday life of ordinary Danes.
The pricing of Nyhedsavisen was simple: it was free. And, as something entirely new: it was going to be delivered to the homes of all Danes – at no cost. Not only the newspaper itself was free, delivery was free as well. It was in effect “double-free”.

which was launched in October 2006.

The paper targeted three revenue streams in Denmark,the traditional one funded by advertisng revenue,the second being distribution of printed advertisement catalogues and brochures alongside the distribution of the paper itself.

The third was to act as a news wire to other Danish news outlets.

What happened is that the competition decided to fight back and the market was flooded with free newspapers,forcing the price of advertising down.

This free newspaper war went on for over two years and caused the entire industry to bleed. On top generally declining circulation for all (paid) printed newspapers the cost of producing and distribution additional free newspapers added significant losses to the financial results.

Chris Blackhurst at Uclan

Uclan was given a treat last night as City Editor of the London Evening Standard Chris Blackhurst gave a talk to assembled students and lecturers.

It probably couldn't have come at a more opportune time with last week's news of the paper's takeover by an ex Russian KGB officer.

Blackhurst had two themes to his talk.Firstly defending the media against charges that it didn't predict the recession.He described the notion that the media has talked us into recession as "absolutely rubbish ."

It was all the fault of the PR industry," the press went along with the great economic success story but never asked what if "he maintains.

As for as to whether the press are making the situation worse,Blackhurst believes that not to be the case.The press' job is to report what is going on and capture the mood of the nation.

He did though have a few bad words for politicians whom he says have now taken over from journalists as being one of the less trusted professions.

As for the future prospects for the media industry it is he says "in no worse state than any other industries." citing the comparison with retailers who also have no idea how their industry will look in the next 10 years.

Newspapers ,he believes will always have a place.They have many advantages over the net including the ease of use but will have to learn to coexist in the new environment.Whilst the internet has given us a multitude of information,the best writing on their is still written by journalists.

As for the economic model it is no doubt broken."The classified ads market is finished but there are many products that are still suited to the newspaper model." he says

And one day it may be that all papers become free.There is nothing wrong with that but the model needs to change."Free newspapers should not be dismissed,there is a gap in the market for a free quality journalism paper ."

Why my £50 is safe

Just back in Manchester after a long weekend with a group of friends in the village of Litton in the Derbyshire Dales.

I will put some pictures up later.

However scanning my RSS feeds quickly before setting off for Preston,I see that Dave Lee is convinced that the bet that I had with him back in the summer that one of the UK nationals will go free may come to fruition

Dave believes that the merging of the back room operations between the Mail and the Independent announced on Friday

now that the Indy is moving to Northcliffe House — and sharing the same subs that put together the Mail, as well as being only two doors up from the aforementioned Metro — I reckon there’ll be a free print edition very soon. This time next year.

I'm not sure whether the move will lead to a free Indy.I would have thought that this is purely a cost saving exercise designed for both publishing houses to halve their high fixed costs.The Indy will surely want to keep its brand distinct.Producing a free copy will diminish the power of its brand

Metro struggles with its online content

Is it not rather ironic that Metro International announces that it will not breakeven in 2008 and its third quarter results show losses 69% bigger.

And it's all down to its online operations.

Paid content reports that

So strong in print, Metro International seems unable to find a coherent online money-making proposition and so far this year has lost a total €3.97 million (£3.08 million) from its seven websites in Sweden, the Netherlands, Denmark, Hungary, Chile, France and Spain. We now can’t rule out site closures: Metro says it’s “actively engaged in a strategic review of its websites to ensure that the product continues to deliver growth

It's web traffic has seen rises but it is unbale to,in its own words

to exploit the sales opportunities for online at a lower cost”.

As Roy Greenslade points out though,

Karen Wall, assistant managing director of Metro in the UK, focussed on good old print, arguing that the free newspaper model was growing

£50 hopefully not down the drain.

I have taken up Dave Lee's bet that one of the major national papers will go free within the next three years.

I am assuming that Dave hasn't got any inside information in all this,but I cannot see the major nationals going down the free route

Does the free newspaper model stand up today.

Do read Philip Stone's article in Follow the media this morning.

Philip examines the business model of the free newspaper Metro and questions whether the revenue streams stack up in the current economic climate?

As economies around the world suffer from high oil prices, the credit squeeze, and in the case of newspapers higher newsprint costs, the logical question is whether free newspapers can really make money in an environment where the advertising ranks are thinning out and ad rates, already pretty much rock-bottom, have to sink lower to attract the free paper advertiser? Can consolidation that creates bigger advertising package incentive deals with paid-for newspapers save the day?

Reflecting that it is 13 years since the Metro first launched in Stockholm,Stone says today that

According to Dr. Piet Bakker, perhaps the foremost expert on global free newspapers, most publishers probably planned at launch that their free newspapers would be profitable in three years, but they now seem resigned that it will take far longer, perhaps five years or more. Can they stand for that kind of long-term expense? He believes that some 75 free newspapers have already closed.

Rumours of a free Indy

So the Independent is considering becoming a freebie.That is at least according to Media Guardian which reports that

The Independent is considering a free edition in a bid to boost circulation and shore up ad revenues, experts in the media industry have claimed.
The model could be based on the successful Manchester Evening News strategy, which involves free distribution within central Manchester and normal paid-for newsstand sales in the outlying areas of the city.

However this is all heresay with none of the Indy management available for comment.

Good idea,well with it being the lowest selling of the qualities and shedding readers at a fast rate a possibilty perhaps.

However will this damage the market for the other qualities and just how many would they have to give away to fill the gap from cover price with advertising.Would this purely be a London move with the provinces still having to pay for example,or perhaps they will experiment with a day a week?

A story that is likely to run perhaps??

Update Indy Editor Simon Kelner refutes the claims made in Guardian media

The rise of the free paper

Bad news for those who despair of newspapers littering our streets and transport system but the newspaper innovation blog looks at the rise of the freebie across the world.


There are now free papers in 50 countries,they are read by 72m people daily and on any one day there are 38 million copies published.

The metro paper was first introduced in the public transport system in Sweden in 1995,it came to the UK in 2000 and is now printed in most European countries