With 1.65 Million Free Newspapers Available Daily In London And Perhaps More To Come, It’s Not Only The Evening Standard That Could Be At Risk

Philip M. Stone September 7, 2006

With CityAM, the one-year-old free financial daily seeing circulation rise to near 100,000, Metro distributing some 550,000 copies at Underground (subway) and rail stations, and the PM free newspaper war with some 1,400 distributors each fighting for their territory to hand out 400,000 each of the thelondonpaper and London Lite the question becomes whether it is really necessary to buy a newspaper in London any more?

That’s not the question the 10 national newspapers want to hear, nor the London Evening Standard – until last week the UK capital’s only PM newspaper. But it is a question being asked more and more, and the newspapers themselves are full of quotes from Londoners including “professional” people such as lawyers and the like, saying frankly that with so many free newspapers around perhaps they’ll give up paying for a newspaper for a while.

Paid-for circulation of the UK national newspapers is already in decline. According to the August Audit Bureau of Circulation (ABC) numbers, circulation has fallen to 12 million daily since January – a drop of 3.5%.

No one pretends that the free newspapers have the news depth of the paid-fors, but what media barons will learn in the months up to Christmas is whether the news content of those free newspapers is “good enough” to satisfy a large number of readers who could dessert paid-fors. City AM claims that half if its readership does not read a daily “quality” newspaper or the Evening Standard.

The Evening Standard, run by the same Associated Newspapers that also publishes the new London Lite, is banking on the free newspapers and the paid-fors absolutely having different types of readership. In fact, so sure are they of that they raised the price of the Evening Standard 25% -- 10 pence more so it now sells for 50 pence – because it believes it has a core readership that wants to read the longer, in depth stories that the free newspapers shun.

Associated announced on Monday, the first day that the two new free newspapers, its London Lite and News International’s thelondon paper, competed with one another, that the circulation of the Evening Standard was unaffected by either the price increase or the free PM newspaper war.

But one day will not tell the story. As readers get used to the free newspapers they will decide over time whether those papers are “good enough” for their needs, or they really do want a dose of the straight news and analysis found in the Standard and are willing to pay for the privilege.

For the Standard it really is a war for survival. Its circulation has nosedived over the years even though it was the only PM game in town and in the August ABCs it was barely above 300,000, of which 100,000 is in the core London area and the other 200,000 is out in the suburbs. It’s that 100,000 in the city center that is at the most risk from the new competition.

Associated may be very clever in placing the Standard a rung or two on the ladder above the others and making a point that you “get what you pay for”. It has added “London’s Quality Newspaper” to its masthead to drive home the point. But much will depend on just how well the new free PM papers satisfy the news needs of their readers, and whether it is just the young that they attract or whether they attract the older crowd that is the Standard’s forte.

With the free competition starting out on Monday, both promoting the fact of how they want to give a London relevance to their readers and that there would be just a smattering of foreign news, it was somewhat surprising therefore that both chose to lead on an event from the opposite side of the world – the death of Australian naturalist Steve Irwin, famous from his documentary films, especially those involving his entanglements with crocodiles.

No question he was quite a character, but one would have thought for the first day of competition each would have been out there with some sort of exclusive that would actually directly have affected the lives of Londoners. After all thelondonpaper editor Steve Hadley had said before launch, “This paper is written for those who want to celibrate London.”

Financial analysts are watching from their bleacher suites as the gladiators fight to what undoubtedly will be the death of one of the new publications, not really believing the kind of money that they are seeing being spent on the war between London Lite and thelondonpaper.  Let’s face it, newspapers are not exactly the medium of choice for advertisers these days, and in the UK in particular the advertising market is very soft, and yet that is the battlefield for the aged 18-34 commuter going home at night. Both newspapers have also introduced matching Internet sites.

Another reason why this battle is so fascinating -- it is generally accepted that the newspaper managements at both Associated Newspapers and News International are about as good as they get. These are true professionals embarking on a campaign that they know will see plenty of red, both have very deep pockets, and neither one is used to “blinking “ first.

Rupert Murdoch is said to have put up £20 million (€30 million) to launch the 48-page thelondonpaper. The word from the advertising houses is that they give it the edge in appearance for its bright, modern, colorful, less-cluttered look (Murdoch is said to have been personally involved in approving the style, having bounced back several previous dummies he did not like) but everyone agrees it will be the readers that make the final decision on success – not the advertising houses.

Associated Newspapers’ ultimate goal is to protect the Evening Standard, and it only launched London Lite when Murdoch’s plans for his free newspaper became known. The Standard is said to be losing £5 million - £10 million a year even with all of its cost-cutting, and with two free PM newspapers now around it is going to have a hard time sustaining its current high advertising rates and/or the advertisers themselves who may opt for the less expensive option of the free papers.

Some analysts believe the Standard’s advertising revenue could drop in the next 12 months by some £15 million. For instance the Standard has a good business from telecommunication companies, but both free newspapers have drawn those same advertisers.

One problem for the free newspapers are that they are after that 18-34 aged reader and it is questionable if there are enough of them commuting in the late afternoon/early evening  to go around. There are said to be some 5 million daily commuters in and out of London each workday, but are there 800,000 in that aged group?  Will they continue to grab both newspapers because there is something different and of interest in each, or will they settle on just one. On such answers rests a couple of fortunes.

About three million Londoners use the Underground service in and out of London and yet the vendor boxes used by the AM Metro, also published by Associated Newspapers, are left empty in the afternoon. Those same boxes will be used for distribution of an free PM, with a contract awarded by the end of the year and also a contract for distribution at London’s main train stations.

If News International or Associated win those contracts then they can cut back on distribution costs – 700 distributors each a day for three hours cannot be cheap – or perhaps a third player enters the arena – Express Newspapers or Guardian Newspapers?

If that happens, then the blood really spills.

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