01-01-04 | Printable Version

Free, Free, Free, Dailies!

In a year with a relatively modest amount of newspaper merger-and-acquisition activity, new free-distribution papers have sprouted up all over the country. The combined new daily free distribution in 2003, or soon to be launched in 2004, was greater than the total combined daily circulation of daily newspapers sold in 2003.

Dirks, Van Essen & Murray estimates that 10 new free-distribution dailies have begun publishing this year, or will begin early next year, accounting for nearly 1 million in new daily circulation. The total number of free-distribution daily newspapers in the U.S. is now nearing 30, with total daily distribution of around 1.5 million. In addition to the new dailies, there were approximately 30 new free weekly newspapers launched with a combined distribution of approximately 500,000.

These papers have been started both by conventional newspaper companies and entrepreneurs and are aimed at different markets. Some, such as Red Streak and Red Eye in Chicago, are aimed at the young professional community working downtown. Others, such as the Metro publications in Boston, Philadelphia and soon-to-be in New York, are targeted to commuters. Meanwhile, the Journal Newspapers in suburban Washington, D.C. are home-delivered to the highest-income households in the market.

The general purpose of all these newspapers, however, is to reach people being missed by the established dailies and other media in the market.

Free-distribution newspapers are, of course, not a new concept. The free weekly newspaper business model grew in popularity after World War II, when suburban weeklies popped up to serve returning military personnel and others opting to live in suburbia instead of in the city. At that time publishers found it was often more profitable to give a free newspaper to new residents settling into these relatively new communities, rather than to try to persuade them to pay for a newspaper.

It was during this era that the late Dean Lesher took this concept to the next level by founding a free daily newspaper in Walnut Creek, California, an exurban community east of San Francisco. He started other free dailies in adjacent markets. These free tabloid dailies were converted to paid broadsheet newspapers in the 1970s, and eventually they were consolidated as the Contra Costa Times with four zones. After Lesher's death in 1995, the newspaper was sold to Knight Ridder for $360 million.

Even so, until the last two years, the preferred market for free daily newspapers seemed to be confined primarily to ski and college towns in Colorado. The notion was that tourists and students were more likely to pick up a free paper than pay for one.

The oldest free daily still being published as a free product is the Colorado Daily in Boulder, Colorado, which dates back to 1972 as a for-profit publishing venture. The Colorado Daily had been the University of Colorado's student newspaper. After its editorial positions became more than the regents at the University of Colorado could handle, it was booted off campus and expanded its circulation to the entire Boulder community as a means of survival.

Seeing the success of the former student paper, others followed suit. The Aspen Daily News was started in 1978, and a number of other Colorado free dailies were started or converted from paid products. Today, Colorado still claims more free dailies than any other state -- 10.

Because free dailies are relatively unknown in the U.S. and Canada, traditional advertisers will need to get comfortable that the papers are being read and, more importantly, that their advertising is effective, in order for them to survive as stand-alone publications.

Although relatively new and few in the United States, the free daily is much more common in Europe. London-based Metro International -- the company that started free commuter-oriented dailies in Boston, Philadelphia and soon in New York -- publishes in 18 cities around the world and has publicly said it intends to launch in several other U.S. cities. The Washington Post has launched its own commuter paper -- Post Express -- distributed at subway stations in its market.

These commuter papers tend to be "quick reads," with a digest of national, international and local news intended to be read while traveling to work. Free dailies targeted at young professionals in Chicago, Dallas, Riverside and elsewhere are written with more of an "attitude,"usually by a younger staff.

Trib PM, started by Richard M. Scaife's Tribune-Review Publishing Co. in May 2003, is described by company executives as the Pittsburgh Tribune-Review's "alter ego." Started as a free paper initially, hawkers now charge a quarter, and circulation is 6,500 to 7,000 daily.

In three California communities -- Palo Alto, San Mateo and Santa Monica -- free dailies have replaced paid dailies that have abandoned the markets. These papers resemble more traditional general-interest dailies in their approach to news.

The trend has sparked old-fashioned newspaper wars in some cities. In Dallas, Belo recently launched its free daily, Quick, within days of Jeremy Halbreich's announcement that he was going to publish a free daily in Dallas called a.m. Journal Express. Both dailies thus far have carried a fair amount of advertising from major advertisers in the Dallas market.

And there already have been a few obituaries. Mort Zuckerman started Daily News Express in New York City in 2001 as a defensive measure, but closed it after a little more than a year of publishing. Last year a free daily in Berkeley, California was closed after a short stint.

The free weeklies that have popped up all tend to be aimed at reaching the MTV crowd. Gannett in particular has been active, launching five such weeklies in Boise, Idaho; Lansing, Michigan; Cincinnati, Ohio; Indianapolis, Indiana; and Louisville, Kentucky.

These publications, with names like Noise, Rage, Velocity and Intake, are referred to as youth publications internally, although to the outsider they appear just a chromosome short of what most would consider an alternative publication. Gannett recently announced it would soon publish similar publications in Rochester, New York; Wilmington, Delaware; Greenville, South Carolina; and Pensacola, Florida as well.

Not all new free-distribution non-dailies are aimed at youth. Three years ago, Dr. Robert Pamplin, Jr. launched the Portland Tribune, a free general-interest twice-weekly in Portland, Oregon, with distribution of 160,000. Portland is considered by many to have one of the more dominant daily newspapers, as well as one of the premiere alternative weeklies.

This trend of new free newspapers will likely continue, perhaps similar to the way daily newspaper companies launched shoppers and TMC products in the 1970s and 1980s in their own markets as defensive measures.

Will the strategy add to the value of the enterprise? At this stage very few stand-alone free dailies have sold. The free weekly newspaper has proven to be a valuable and sustainable business model. There is no reason why the same will not be true with the free daily.