Economies of (free) dailies

Free dailies were extensively covered on Philip Stone’s Follow the Media website today. I was interviewed by mr. Stone and gave a raw estimate on profitability of free dailies. In my view at least 70% must be losing money – most of all because they have been around for three years or less and don’t expect to make money in the first years.

Starting point for the Follow the Media analysis were the Metro International results, the closure of BostonNow and the recently reported substantial loses in the London afternoon market.

Yesterday Robert Picard wrote on his blog a more general analysis on the newspaper market, concentrating on the financial position and the lack of perspective of many publishers.

The closure in Boston has also another reason: the economic depression that is felt in some countries – in this case in the US and Iceland. On this subject, Robert Picard, my colleague Richard van der Wurff and myself recently published an article in the Journal of Media Economics on the relation between the state of the economy and advertising revenues for different media. Again: not very good news for print – in general more vulnerable for economic downturns.

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