It’s already started in Europe. It's about to arrive in the U.S. It's what's fast becoming a global war between traditional paid newspapers and the hordes of free dailies sprouting up in cities worldwide.
It's an ugly fight, and it threatens to transform American newspaper publishing when it arrives.
Imagine a typical newspaper market in America, with one or two paid dailies and perhaps a subway freebie. Now imagine a handful of free papers joining the scramble to win readers and advertisers.
That's already happening in Copenhagen, where three free papers launched last year alone, bringing the total to five, and it's hitting the paid dailies hard. Circulations are sliding, and ad rates are sinking as more papers chase a finite number of advertisers with enticing just-try-us ad rates.
London is seeing a similar trend with its own flush of free dailies. One problem--and hardly the only--is the increase in litter. With so many free papers targeting commuters, local councils are facing mounting costs in keeping streets free of throw-aways.
Next stop, Boston.
In a matter of months, yet another free paper, to be called Boston Now, is set to launch, probably in late summer, just in time for back-to-school shopping. Boston Now is being funded by Dagsbrun Media, an Icelandic company that operates that country's largest media company.
"We are putting it all together at the moment," publisher Russel Pergament tells Media Life.
Six years ago, Pergament founded the freebie Metro Boston, then moved to New York to launch amNewYork, a freebie owned by Newsday parent Tribune Co.
Pergament is not saying much about Boston Now, other than it will emphasize local news, but he makes it clear that Dagsbrun has ambitions well beyond that city. Says Pergament: "It’s very much our intention to do more free sheets in the U.S., eight or 10 more."
And why is Dagsbrun coming to the U.S.? "The same reason as everyone else. It’s the most exciting, biggest media market in the world," he says. "And it is open to new ideas."
Typically, free sheets have favored the larger U.S. markets with extensive public transit systems, such New York, Philadelphia, Chicago and Washington, D.C., and the new free sheets will certain enter those markets. But they'll also likely reach into smaller markets.
The equation for the free sheets is rather straightforward: Give the papers away to win over readers and charge advertisers rates that are much lower than those of the big dailies. That's been the model of the Examiner chain, which now has papers in San Francisco, Washington and Baltimore and its eye on a number of other markets.
In the smaller markets the new freebies will face less competition for readers and likely a more inviting advertising climate, where the existing dailies tend to charge premium rates.
Those battles for readers and advertisers promise to be bloody. Newspapers have a tradition of waging long, hugely expensive battles to win markets, more than a decade and a reported $100 million in the case of New York Newsday. They go in with deep pockets.
In the meantime, existing dailies can be expected to launch their own free sheets, if only to discourage entrance by the likes of the Examiner chain and foreign players like Dagsbrun.
If they already have free sheets, they'll be looking at increasing circulation. In Boston, Metro plans to increase its distribution from 165,000 to 200,000 daily. That paper is now owned by London-based Metro International and The Boston Globe's parent, The New York Times Co.
And just last week, the Tampa Bay Times, a free daily published by the St. Petersburg Times, increased its distribution above 356,000 copies a week. That makes it the fastest-growing newspaper in the top 20 U.S. markets, according to Andrew Corty, vice president of the Times.
The St. Pete paper started the free paper, called TBT, after watching what was happening in other cities. "We thought we had the opportunity to do the same thing even though we have no mass transit system, where many of the successful free dailies are being handed out," Corty says.
TBT was launched as a weekly in September 2004 with a distribution of 75,000 in the Tampa Bay area and then went daily in March 2006 after showing it had found a desirable audience of younger, educated, affluent readers, says Corty. Distribution now runs 95,000 copies on Fridays and 66,000 other weekdays. Pickup averages 85 to 90 percent each day, he says.
"It has grown a lot because it has attitude. It’s edgy and it has a local sensibility," Corty says. "TBT is not a rehash of the Associated Press. I think a lot of success is that it is so local and it is connecting it to its readers. And people like free. Who doesn’t?"
Says Corty: "If someone wanted to come into Tampa Bay (to start a new free daily), they would need a lot of newsroom to compete."
Free dailies have already popped up in Canada. "During this month there are six free dailies being launched in just two Canadian cities-- Calgary and Edmonton-- where there are already two conventional paid dailies published in both markets,” says Len Kubas of Kubas Consultants, a Toronto-based newspaper consulting firm.
"By the end of this month, free dailies will represent approximately 25 percent of Canadian newspaper circulation, where there are both multiple conventional papers and multiple free dailies in each of Canada's six largest markets."
Kubas sees the free trend transforming markets, leading to increased segmentation. "It is tough for multiple free newspapers to exist in the same market without there being substantial segmentation (morning versus evening) or general audience versus specific, i.e., business audience."
But they will surely come. "The prognosis is that there will be more free dailies in America-- whether through the Examiner (delivered to homes) model, or through the street/hawker/pick-up model (Quick - Dallas, Red Eye - Chicago, Express - Washington), or via hybrid distribution in smaller markets. The trend to free is inevitable."
What's less clear is who will survive and who not when the shakeout comes.
