Sunday, March 30, 2008

In the UK, free Publications bite down Hard

In the UK, free Publications bite down Hard
National papers have lost 14 percent of their circulation
By Heidi Dawley

For Britain's national newspapers, the recent years have been tough, in some ways tougher than for U.S. papers. It's not just the internet, though that's certainly hurt.

British papers have been besieged by free dailies in growing numbers, far more than U.S. papers.

It's cost dearly. In all, Britain's national paid-circulation newspapers have lost 1.9 million copies, nearly 14 percent of their circulation since 2000, according to a study from Ernst & Young.

Worst hit have been the downmarket titles. "We could say the increase in the number of free titles has hurt the populars more than other segments of the market," says Luca Mastrodonato, a media analyst at Ernst & Young in London and author of the study.

For the U.S., where free papers haven't gained nearly the foothold, it raises some intriguing questions. For one, how much have the paid titles been hurt so far? And will free dailies ever take off in the U.S. as they have elsewhere in the world?

While most U.S. markets have free publications, there are just a few with free dailies backed by big-money chains with growth ambitions, notably the Metro and Examiner chains. And their growth hasn't been anything near what's been seen in Europe.

But it's tough to draw comparisons, and for several reasons. One is that the Ernst & Young study looks only at national newspapers in the UK, of which there are many, not local dailies. In the U.S., there are only really three national dailies, The New York Times, USA Today and The Wall Street Journal, and they have fared far better.

Also, the U.S. doesn't have upmarket and downmarket papers, at least outside of major cities like New York. Metro dailies tend to be one-size-fits-all papers. And while their circulation losses have been considerable, they're below UK levels. All told, U.S. dailies have lost 8 percent of their daily circulation since 2001 and 11.4 percent of their Sunday circulation, according to the Project for Excellence in Journalism.

Still, Mastrodonato's study is interesting for what it says about the UK market. His figures show the Daily Mirror and the Sun have lost more than 17 percent of their circulation since 2000, whereas the quality titles like the Daily Telegraph and the Times have only lost 10 percent.

The loss has been particularly pronounced for the downmarket papers since 2003, when the free papers really began taking off in Britain. Since then downmarket papers have lost 14.5 percent of their circulation, compared to just 2.2 percent for the qualities.

In fact, the only paper to see its circulation increase in the last two years is the Financial Times, which is very high end.

A big factor behind the decline of the downmarket papers has been the defection of the young, which surveys show are increasingly turning to the internet for information. In fact, Ernst & Young reports that over half of Britain's 15-to-44-year-olds rely on the internet as their first source of news and information.

One huge reason is that it's free, and that also explains the attraction of the free papers over the paid-for downmarket papers.

"The risk is these people aren't going to get the paid-for habit in the future. So going forward the risk gets higher," says Mastrodonato.

All this paints a dark future for downmarket paid-circulation papers, in Mastrodonato's view.

He foresees a shakeout in which paid dailies will shrink in number and more free ones will arise.

He's more optimistic about quality dailies, which he believes will have an easier time of it. "We will be looking at print editions for some time to come," he says.
Heidi Dawley is a staff writer for Media Life.