Media Forum: Are freesheets doomed?

Will a Standard revival hit London's evening freesheets?

Lord Rothermere was surely offering a hostage to fortune last week when he reaffirmed his love for ink, pulped trees, astringent opinions and much mischief. Having waved a cursory goodbye to the Evening Standard, a controlling interest having been offloaded on to Alexander Lebedev for the price of a pint of Wetherspoon's beer, the Daily Mail & General Trust chairman felt moved to caution against any further lurid speculation.

"I'd like to take this opportunity," he said, "to reiterate that DMGT remains fully committed to journalism and newspaper ownership."

This sounds suspiciously like the vote of confidence that football managers receive when their teams sink to the bottom of the league. More detailed reassurances were offered by Martin Morgan, the DMGT chief executive, who said the group remains absolutely committed to its London Lite freesheet.

He pointed, for instance, to recent management changes: the fact that Karen Wall, previously the assistant managing director of Associated's free newspaper division (under boss Steve Auckland), has been made the chief operating officer of London Lite, with a brief to develop the brand. And Grant Woodthorpe, the ad director on Metro, has been given an expanded role incorporating London Lite.

But sceptics will still take some convincing. London Lite, after all, was originally launched to protect the Standard's revenues and has been locked since day one in a war of attrition with News International's evening freesheet, thelondonpaper. Back in November, the two titles seemed to acknowledge their mutual plight when they entered exploratory talks. The arrival of a new Standard proprietor with billions to burn cannot be seen by either title as good news. Can either now hope to be profitable?

One or either, possibly, Dominic Williams, the press director of Carat, says. But certainly not both. He adds: "There's room for two freesheets - Metro and City AM - in the morning because they cater for entirely different audiences. That's just not the case in the evening market, where in most advertisers' eyes, the two titles have exactly the same readership profile. It's no secret that they both lose up to £20 million a year. People talk about the notion that both News International and DMGT have deep pockets, but deep pockets are never bottomless. So I can see big changes ahead."

Nick Vyas, the group press director at ZenithOptimedia, argues it's difficult to see how either London Lite or thelondonpaper can hope to turn a profit in the short to medium term - despite consumer appetite for their products. He says: "Associated and NI have recently integrated their evening freesheets into their wider operations, which will help with efficiencies, but it's still an expensive game to be playing over a prolonged period."

And Alison Brolls, the head of marketing planning, global marketing services at Nokia, tends to agree. She says: "Up until now, the London freesheets have been able to make some sort of claim to address changes in readership habits and demographics, and deliver the hard-to-reach, younger metropolitan audience. That was something the paid-for Standard was falling short on. Lebedev's arrival could change all that if the early signs are really to be believed."

Alan Brydon, the head of press at MPG and formerly an ad director of the Standard, says that new ownership (and a new editor) could be immensely good news for the Standard. "When there's a big story and the editorial mix is right, we know the Standard can sell 400,000. If new ownership frees up the paper to be better, who knows what it might achieve," he ponders.

What's more, he argues, there's still a significant amount of residual good feeling towards the title, not least in the ad industry. He concludes: "People want it to do well - and all other things being equal, if you've got a choice, an advertiser will want to be in a quality paid-for. So the Standard doesn't need to do an awful lot better to put a big hole in both of the frees."

MAYBE - Dominic Williams, press director, Carat

"There's room for one title, perhaps, but not two. Even if the market were buoyant, I don't believe there would be enough growth for both to attract sufficient revenue."

YES - Nick Vyas, group press director, ZenithOptimedia

"Factors have conspired to turn an ambitious freesheet model into a house of cards. Income from their only source of revenue - advertising - is plummeting at precisely the same time the cost of paper is soaring, compounded by worsening exchange rates."

YES - Alison Brolls, head of marketing planning, global marketing services, Nokia

"It's not just about ownership of the Standard. In the current economic climate, freesheets across the globe are folding, and many are still years away from becoming profitable."

YES - Alan Brydon, head of press, MPG

"Anything that is good news for the Standard is bad news for the frees. I think they'll both still be around - Associated and NI have their reasons for keeping them going. Both will continue to lose money and a rejuvenated Standard could mean those losses increase substantially."

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