One year on, who's winning the London free paper war?

LONDON LITE

Steve Auckland, head of Associated’s free newspaper division, gets a bit miffed when you mention the word ‘spoiler’to him. Surely it isn’t a coincidence that this time last year, two rival free papers launched in London within a week of each other?

Doesn’t Associated’s title, London Lite, bear all the hallmarks of a move to shake off Murdoch’s advances?

Auckland is adamant: London Lite was part of a long-term plan. ‘We’ve said all along that this was ridiculous,’he says of the spoiler claims.

‘We had a game plan that we had set for four or five years. You can’t just launch a newspaper on that scale without a lot of intensive planning beforehand.”

Some 400,000 copies of London Lite hit the streets on 30 August 2006, narrowly beating News International rival thelondonpaper, which launched the following week.

In a very unscientific experiment the day after thelondonpaper’s launch, Press Gazette sent our work experience girl (code-name: ‘The Acceptor”) to pick up every free newspaper she was offered on her route home. At the end of her two-mile walk from Oxford Circus to King’s Cross, she had collected almost 50 papers – illustrating the extent to which the capital was flooded with freesheets.

Auckland admits that the presence of armies of distributors on every street corner was perhaps a little intimidating at first. ‘To begin with there were some problems – the paper was being thrust at people,’he says. ‘There was obviously a lot of rivalry.”

Associated has since toned down its street force, employing fewer people but with each distributor now handing out about 1,000 copies a night – up from 600.

And while the title’s circulation settled at 400,000 in the space of a few months, Auckland believes his rival struggled to do the same. ‘I think that showed their inexperience,’he says. ‘Maybe they launch?ed sooner than they wanted. It looked to be a bit of a hurried campaign.”

As the street teams became a familiar sight across the capital, the distribution battle moved indoors – to London’s mainline railway termini. In October, NI won a Network Rail contract to share distribution bins with free morning paper Metro, in what former Daily Mirror editor David Banks called a case of ‘who bins wins”.

Within months, thelondonpaper upped its print run to 500,000. But although the title gained a circulation lead, Auckland claims that not winning the rail contract was no big loss.

‘They’re still having to distribute by hand in the stations, months after the contract was signed,’he says. ‘It’s crazy: paying Network Rail, paying for merchandisers in the station and paying for them outside as well. In a tightly controlled area, to distribute by hand is just as effective as bins.”

But the effectiveness of hand-distribution came into question earlier this year, when both sides became engaged in a spat about alleged dumping. Associated published a video in April that appeared to show distributors of thelondonpaper throwing dozens of copies in bins.

NI retaliated, releasing photographs supposedly showing London Lite merchandisers engaging in similar practices.

‘We were annoyed that NI added 100,000 copies to thelondonpaper and overnight that translated into an extra 100,000 on the ABC figure,’says Auckland.

‘We knew it was having problems [distributing] 400,000. One of its merchandisers said they were told to get rid of their copies – it didn’t matter where. That’s why we commissioned an inspector to do some undercover work and get it videoed.”

Associated passed the video to ABC, which, Auckland claims, ‘had really been ignoring what was going on”. Since then, the auditor has set up a ‘complaints hotline’to which cases of newspaper dumping can be reported.

The only other independent measure of how well received the papers are – the National Readership Survey (NRS) – postponed bringing out figures for the two titles last month because it had insufficient data. The first set of NRS results is now expected in September.

Research by Associated last November suggested a large crossover between the two papers, with about 60 per cent of commuters picking up both. Auckland predicts that, as the titles settle down, they will diverge editorially and begin to attract separate groups of readers. ‘Over the years, the readers will polarise – but it takes a while to do that,’he says.

So does this mean that London Lite and thelondonpaper will be able to coexist happily in the crowded London market? Both Associated and News International have deep pockets – especially the latter.

‘Associated is like a corner shop compared with the Tesco of NI,’Auckland says. ‘If they want to play in this market, they’ll throw money at it.”

And NI will need to, if Metro is anything to go by: eight years after its launch, Associated’s free morning title has only just begun paying back its original investment.

‘The path to profit takes quite a long time,’says Auckland. ‘Revenue [at London Lite] has been better than we thought, but it has cost more than we thought.”

The financial implications have had repercussions elsewhere at Associated – most notably at the paid-for Evening Standard, which has suffered severe collateral damage in the past 12 months. The paper, which raised its price from 40p to 50p when the freesheets launched, sold 23.5 per cent fewer copies in July than it did in the same period last year. And of the 275,186 circulation, more than 80,000 were bulk give-aways.

Auckland says the Standard still has a place in London as a quality alternative for those who want a longer read.

‘We’re trying to make sure that it has a stable circulation; a stable advertising base,’he says. ‘We’re quite happy with bulk sales in the right areas. We’re reaching an audience – it doesn’t really matter how.”

THELONDONPAPER

‘Gloomy”, ‘monopolistic”, ‘grinding”, ‘Little England miserablism”. thelondonpaper editor Stefano Hatfield doesn’t mince words when asked what it was about the Evening Standard that prompted News International to bring a free evening paper to the London market.

The paper launched in a blaze of publicity almost a year ago to this day, and the marketing push continues, with outdoor ads and a recently announced partnership with London’s Capital Radio to sponsor busking sites throughout the Underground.

‘You only need get on a tube or train in the evening to see that thelondonpaper is being read,’says Hatfield, a former editor of Campaign and the launch editor of Metro USA. ‘The only real surprise was that even some of the expected critics were grudgingly nice about us – at least those not taking Associated’s dollar in some form or other.”

In an interview with Press Gazette shortly before thelondonpaper’s launch, Hatfield said that the title would not try to take on the Evening Standard at its own game, but that there was ‘a gaping hole editorially’for a younger, upbeat read in the afternoon without the ‘miserable old git journalists”.

‘Perhaps we underestimated the depth of antipathy and frustrated resentment of all walks of London life towards the grinding Little England miserablism of the monopolistic Standard,’he says. ‘No-one recognised London in the Standard’s gloomy editorial outlook.”

thelondonpaper moved away from regular columnists ‘sitting in their ivory towers dispensing wisdom to a grateful public’and opened up the comment pages to a broader cross-section of Londoners.

‘We were delighted by the speed of reader take-up and the extraordinary level of interaction almost from day one,’says Hatfield. ‘The talk and style pages have been very influential. Our inboxes are brimming with reader contributions.”

But have advertisers responded to the launch in the same way as readers? While actual ad prices vary, a rate-cardfull-page ad in thelondonpaper costs almost twice as much as one in London Lite, with £11,000 compared with the Lite’s rate-card price of £6,500.

Despite the clear difference in price, Hatfield maintains that advertisers are still eager to tap into the young, urban audience that his paper has set its sights on, and that revenue is ‘well ahead of forecast”.

It is perhaps telling that when talking about the effect thelondonpaper has had on his Associated evening rivals – the Evening Standard and London Lite – Hatfield doesn’t call the latter by its actual name. Instead, he refers to it as ‘the spoiler”.

‘The Standard’s paid-for sale continues to fall and Associated masks it by adding more bulk copies, which are now at an unprecedented level,’he says. ‘Is the Standard going free by stealth, or merging? That’s the year-2 story.”

Another story will centre on NI’s rumoured plans to bring thelondonpaper concept to other UK cities. As Press Gazette revealed last October, the publisher has registered internet domain names for at least 10 cities, including thebristolpaper, thebirminghampaper and theleedspaper.

THE AD-BUYER

Away from the streets and the distribution bins, the fight for advertisers’ hearts – and wallets – is being won by thelondonpaper, according to Mark Gallagher, a senior buyer at ad agency Manning Gottlieb.

‘It feels a bit more contemporary in style and layout. It has more of a magazine feel, while London Lite feels more tabloid-ey,’he says.

Although there is not a vast difference in the type of advertiser that chooses one paper over the other, Gallagher says thelondonpaper has attracted a more mature and upmarket audience thanks to its securing of the Network Rail distribution deal, which gives it access to people on their way back to the commuter belt.

Gallagher says the first few editions of London Lite looked rushed, but since then it has transformed into ‘a pretty credible product”.

‘When it started, it looked pretty shoddy,’he says. ‘It looked like it was written by 60-year-old journalists trying to look cool.”

For example, an article last year about Kate Middleton coming out of a nightclub at 3am remarked that, despite the late hour, Prince William’s then-girlfriend didn’t even look ‘blotto”.

‘Language like that – it’s like your dad dancing at a wedding,’says Gallagher.

He points out that for advertisers, Associated’s Metro is a proven success, with readers flicking through it on the way to work, arriving at their desks and actively responding to ads that have caught their eye.

But at the moment, he adds, the two evening titles cannot compete in advertising-editorial ratio. Metro enjoys a roughly 50-50 split, while London Lite and thelondonpaper are closer to 25 per cent advertising to 75 per cent editorial.

The logical next step, says Gallagher, would be for Associated to cross-sell its two free titles – a proposition that would be even more attractive when Metro increases its London circulation by 210,000 next month.

‘What Associated is trying to do is suck the money out of the market,’he says.

‘I wouldn’t be surprised if it started offering packages for Metro and London Lite. It will try to do what it can to squeeze out thelondonpaper.”

But Associated’s biggest worry is closer to home: how can it persuade people to keep digging in their pockets each day for a 50p copy of the Evening Standard?

Gallagher says the paper’s vendors aren’t doing enough to actively sell the benefits of buying the paper.

‘They have their patches – they’re all unionised. I think it’s a shame they can’t think of new ways of selling the paper, just by being a bit more proactive,’he says.

Despite the bleak ABC figures, Gallagher says reports of the Standard’s imminent demise are overstated. And as the two free papers chase a young, urbanite readership, long-distance commuters and older readers will still appreciate the Standard’s depth and familiar feel.

‘There are still 200,000 people who buy the Evening Standard and will not touch another newspaper,’he says. ‘The Standard is not really a London paper, it’s a stockbroker-belt paper. It’s for people who live in Hertfordshire, Surrey and Kent.”

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