London freesheet battle: 200 metres, 11 distribution points and 8 newspapers
By stephendavis on Sep 20, 2006
On my short walk of just 200 metres from the Sun office to Cannon Street station last night, I passed eleven newspaper distributors: 4 Standard Lite; 3 the London Paper; and 3 the Evening Standard. Some days of the week, there are also people standing outside the station handing out sample copies of the FT and Daily Telegraph, produced in the hope that people will be encouraged to buy the full paid-for version the next day.
On my inward journey during the morning rush hour, I can pick-up a copy of the Metro (exclusively distributed from bins inside the station) or take a copy of City AM from a distributor standing outside in the street. Occasionally, there are people handing out copies of Money Market, a monthly consumer finance title, printed on pink newsprint similar to the FT colour. Additionally, there are a couple of classified job listings magazines that are selectively handed out to anyone that looks like they maybe a legal secretary or office administrator.
This explosion in freesheets over the past twelve months is taking place at a time when newspaper readership overall is falling and much of the classified advertising is moving onto the Web.
Why have Associated Newspapers and News International (the UK publishing arm of News Corporation), the two most successful newspaper groups in the country decided to produce freesheets? Do they believe the future of newspapers is to be free? After all, news is mainly free on the Internet.
In the future, newspapers might only be able to charge a cover price for expert analysis, comment and opinion. Although readers recognise that online news doesn't always offer the breadth and depth of coverage that they would find in the printed version, for most its still 'good enough'. But in research, many readers surveyed say that they are "turned-off" by heavily opinionated newspaper reporting.
I suspect that both groups are mainly interested in the contract to be awarded by London's mayor for the evening distribution rights using the bins placed in London underground stations. These contain copies of Metro during the morning rush hour (a title part-owned by Associated). As a market, London can probably still support several free newspapers. Since so much of the UK's wealth is concentrated in and around the capital, the London commuter market is highly attractive to advertisers. The problem for Associated is that their attempts to fend off any new entrant is likely to be equally damaging to the Evening Standard. A couple of weeks ago, the cover price was raised to 50 pence perhaps to compensate for expected falling sales.
In Associated and News International, there are two highly competitive and successful companies with deep pockets, neither of whom will expect to withdraw voluntarily from the London market.