The Rise Of The Free Press

News travels fast on the London Underground during the morning rush hour. On a typical day, only commuters taking to the capital’s subway trains before 9 a.m. can get hold of a copy of Metro, the free daily newspaper piled high in racks near the station entrance. Metro is a popular title, and copies are snapped up quickly. So getting a newspaper after 9 a.m. usually means paying for it — which a declining number of Britons seem prepared to do. Scanning his Metro while awaiting a train to work, Jonathan Cole, a 26-year-old stockbroker, sniffs at actually purchasing his morning read: “Not if there’s one for free.” While paid circulation among British national newspapers skidded 2.5% in the five months to March, distribution of Associated Newspapers’ Metro reached the 1 million mark last year, making it the fourth highest-circulation Monday-to-Friday paper in the U.K.

And it’s not just Britain. London-based publisher Metro International (no relation to Associated’s title) last week rolled out its own Metro in Porto, Portugal, the 56th edition since launching in Sweden 10 years ago. And 20 Minutes, set up by Norwegian media group Schibsted in 1999, is thumbed in 20 cities across France, Spain and Switzerland, racking up 5 million daily readers. The secret of the giveaways? They’re free and easy. For young, urban, time-poor commuters, “It’s the right product, at the right place and at the right time,” says Sverre Munck, executive vice president of Schibsted and ceo of 20 Min Holding, which controls 20 Minutes in France and Spain.

The rise in free papers is one more headache for traditional dailies, already smarting thanks to competition from online and television news providers (Dow Jones & Company, publisher of the Wall Street Journal, last week announced plans to shrink its title’s European and Asian editions to tabloid size in October). Daily newspaper circulation fell across much of Europe between 1999 and 2003, dropping 2.3% in France, 6.2% in the Netherlands and 8.1 % in Germany. As many paid-for titles fight for readers, free dailies — typically stuffed with enough short, sharp international and local news, business, sports and entertainment for a 20-minute 404 Not Found

nginx/1.14.0 (Ubuntu) commute — are booming, even as some media observers worry that the growth of free media erodes quality journalism.

The math favors the freebies. Take Spain, where only 122 people in 1,000 read a paid-for daily paper — compared to a European average of around 250 — according to Bertrand Pecquerie, director of the Paris-based World Editors Forum. Distributed in nine Spanish cities, 20 Minutos — the local title of Schibsted’s giveaway — is aimed at the vast majority of Spaniards who don’t pay for a daily paper. “If a reader sees something that really interests him and he wants to know more, then he can pay for a paper for more in-depth coverage,” insists José Antonio Martínez Soler, director general of 20 Minutos in Spain. The publication now ranks as one of the country’s most widely circulated papers.

At least for now, the Spanish market seems capable of supporting both giveaways and paid-for papers. But free sheets poaching readers from traditional titles “has contributed to a crisis” in France, insists Pecquerie. Metro International’s 10 editions, stacked alongside 20 Minutes’ coverage of seven French cities, mean “the menace is real for the paid-for newspapers.”

And don’t think they haven’t noticed. Rupert Murdoch, head of News Corporation, the parent company of U.K. publisher News International, admitted in February that Associated’s free Metro may have dented circulation of his top-selling Sun tabloid by as many as 40,000 copies per day. “The record of these free newspapers has been … to more seriously damage existing newspapers,” Murdoch said. In the U.S., at least one prestigious publisher felt it had to join the free movement; the New York Times Company in January bought a 49% stake in Metro International’s Boston operation for $16.5 million. Even Associated, in its push to peddle free papers, seems to be cannibalizing itself. Circulation of its own paid-for London title, the Evening Standard, fell 10.8% in the five months to March. Aiming to prop up circulation, Associated late last year launched Standard Lite, a free, slimmed-down, lunchtime version of the evening title. Sources close to the company say only one-third of Standard Lite’s readers are willing to buy the bulkier, paid-for evening version. And Britain’s Office of Fair Trading last month ended Associated’s exclusive rights to London Underground stations to distribute Metro, clearing the way for rivals to offer a free afternoon paper through the same channels. Whoever wins, “We think the Evening Standard would have to go free pretty quickly” afterward, warned Deutsche Bank analyst Mark Braley in a January research note, though Associated swats away the suggestion.

How do free papers make money? By aggregating enough eyeballs — generally young and urban — to lure advertisers. Many newspapers already rely more heavily on ad revenues than on circulation; ad sales represent almost two-thirds of total revenue among British titles, and 57% among those in Germany, according to the World Association of Newspapers (wan). But overall, advertisers are turning increasingly to other media. Newspapers’ share of worldwide advertising spending has dropped around 5% in the past 10 years. While it’s not clear to what extent free papers are squeezing paid-for titles’ revenue, “It’s definitely the case that free newspapers are generating significant ad revenues, some of which are unique to them,” says Jim Chisholm, strategy adviser to the wan.

Though newspapers’ share of the global ad spend is sliding, total ad revenues for newspapers are growing. According to Nielsen Media Research, advertising spending in Britain’s Metro climbed 9.2% in 2004, compared to 3.9% across the U.K.’s daily newspaper market. So what’s the attraction? With the ubiquity of freesheets in or around transport links, firms are able to combine ads in a commuter’s free paper with promotions elsewhere within a public transport network, says Richard Chataway of the Media Planning Group, a London media agency whose clients are regularly publicized inside Associated’s Metro. He says advertisers want the commuting audience, and, besides, “It’s a quality read.”

Not everyone agrees. While the Metro may print more serious news than some of Britain’s tabloid papers, “To aim at the mass market, freebies need to be [editorially] neutral,” says Jo Groebel, director general of the Dortmund-based European Institute for the Media. Stripped of ideological or political bias, Metro lacks personality, insists Peter Cole, a professor of journalism at the University of Sheffield: “People don’t refer to it as ‘my Metro.'” As a basic, quick news service, it’s only “like switching on the radio news on the hour,” Cole says.

Of course, the dumbing-down debate has been around as long as newspapers themselves. “Free papers reach a broad cross section of the population,” points out Ingela Wadbring, researcher at the University of Gothenburg’s Institute of Journalism and Mass Communication in Sweden. “They are read by young people, immigrants, the unemployed and people with low income. This is very positive.” And free news doesn’t necessarily mean second-hand news. Staffed with more than 400 journalists worldwide, Metro International fills an average 50% of its pages with news-agency content, down from 80% 10 years ago. At 20 Minutes, wires account for between 20% and 30%. “A year and a half ago, a politician wouldn’t give interviews to free newspapers,” says Pecquerie. “This is no longer the case.”

A robust media environment means that there should always be high-quality publications for those willing to pay for them, even if only on a small scale. But will traditional publishers survive long enough to find a way to compete with free papers? Read the message at the bottom of the London Metro‘s empty rack: you’ve got to be quick.