Free newspapers feel the pinch as advertising slump takes hold (Guardian)

Roy Greenslade
Are we beginning to witness the bursting of the free newspaper bubble? There is increasing evidence pointing to that likelihood. Profits are proving hard, if not impossible, to find. Closures are becoming common (the latest examples are Nyhedsavisen in Denmark and two titles in Scotland). Distribution growth has tailed off.
The world's largest publisher of freesheets, the Swedish-owned Metro International (MI), is beset by problems. It is clearly involved in a substantial retrenchment in various countries, having reported a loss of £1.5m in the second quarter this year. It is also rethinking its strategy in the United States. Clearly, the advertising downturn in America and Europe has hit the company.
MI's president and chief executive, Per Mikael Jensen, has admitted to the vulnerability of his company's giveaway papers in the US, Britain and Europe while pointing to better advertising conditions in South America, Asia and Russia.
Even so, MI continues to boast of its claim to be themost read print media by affluent Europeans, those famed young metropolitans who, prior to recession, advertisers were eager to reach.
But are the metropolitans eager to read freesheets. A couple of charts, which can be viewed courtesy of the Newspaper Innovation blog here, show that this year marks "an all-time low in circulation growth for free dailies worldwide."
The figures show that growth in the first eight months of 2008 has been 5%, the lowest in free newspaper history. An accompanying graph shows why that figure is so significant.
There is no indication thus far that the British-based Metro titles, run by Associated Newspapers, are suffering as badly as those published by MI. But managing director Steve Auckland concedes that Metro UK will not be entirely immune to the ad dramas facing the publishers of Britain's regional paid-for papers, such as Trinity Mirror and Johnston Press. An 18% growth in ad volumes is expected to level out next year.
Meanwhile, it's obvious that one threat to frees is the move by traditional paid-for titles to become distribution hybrids, selling some copies at the same time as giving some away (as the Manchester Evening News is doing with notable success). So, in that sense at least, the free phenomenon is going through a readjustment.
But frees are an interim stage between paid-for newsprint newspapers and online "papers". They will probably survive longer than paid-fors. Their main effect, however, is to convince the emerging news-reading audience that news is, or should be, freely available. Again, that leads inevitably to an online future.
http://blogs.guardian.co.uk:80/greenslade/2008/09/free_newspapers_feel_the_pinch.html






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