“Freesheet no longer viable model” and other myths

How come, that the words of Rupert Murdoch, one of the most unreliable people in newspapers, is taken as a token of truth and a source of sheer wisdom by journalists?

Murdoch, who said the WSJ website would go all free after he bought it (which was duly reported) and reversing that policy later – and saying recently that all online news should be paid for. The guy is changing opinions faster than other people change underwear.

His latest move – thinking about closing London free daily thelondonpaper – has taken the media by surprise, and leading to headlines suggesting that the paper is already closed down (no, it’s not).

The Financial Times even wrote that “Freesheet no longer viable model for papers selling news” which was slightly off the mark, but I admit that “London cannot support four free dailies in a recession” doesn’t sound half as sexy.

FT’s Salamander Davoudi also wrote “News International’s decision to close its only freesheet” which is not just off the mark but totally wrong, in Australia the publisher owns two free dailies, four editions in total.

What is happening in London – and in other countries like Sweden, Switzerland, Denmark, the Netherlands, Spain and Italy – is that more than two free dailies, in this case two evening papers, one morning paper and one financial paper, competing in a crowded market (almost a dozen paid papers, including the part-free Evening Standard) in a recession, will not lead to profits for all titles. Specially free evening papers, a model proved to be very difficult in other parts of world, will suffer. In all markets mentioned above free dailies have closed down already.

Does this mean it’s the end of free daily newspapers? Not really.

It means that the combination of competition (two or more, but certainly four or five titles) and an economic recession could be lethal for free dailies – at least for the weaker ones. With one down, the remaining papers will profit from it.

Competition is worse for free than for paid papers because they are perfect substitutes for each other – which make them an easy target for advertisers looking for discounts. A recession always hurt newspapers (paid and free) more than other media because they rely more on ads that are vulnerable (jobs, retail, cars, real estate, classified).

But with paid newspapers also losing circulation and with many of them losing money as well (where’s the FT article “Paid no longer viable model for papers selling news”?) there certainly is room for a free paper as the young urban non-paid audience is growing and still valuable for advertisers. Room for one at least and two perhaps, but not for three or four.

4 Responses to ““Freesheet no longer viable model” and other myths”

  1. The link today: 25/08/09 « Journalism Technology Says:

    [...] “Freesheet no longer viable model” and other myths The row surrounding the closure of London’s freesheets gets some myth debunking [...]

  2. Tim Holmes Says:

    I take your point but why has Murdoch given up this particular fight?

  3. Piet Bakker Says:

    Hard to tell, it puzzles me too.

    I expected that with the sale of The Evening Standard, there were chances of pulling out of the market “with honor” by Associated. For some reasons they didn’t. Murdoch could have expected that as well and now it didn’t happen, he’s convinced he will not make money within a reasonable time span.

    Closing now also means that conversion to a morning paper (if News Int. would win the new tender for subway distribution) is less likely. Launching a new morning paper would be more expensive and converting the evening title.

  4. This week in the paid content debate | Sips from the Firehose Says:

    [...] The Newspaper Innovation blog writes at greater length about thelondonpaper, and whether this is really the death knell for the freesheet model http://www.newspaperinnovation.com/index.php/2009/08/24/freesheet-no-longer-viable-model-and-other-m... [...]