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Jon Bernstein: Free is just another cover price

August 27th, 2009 | 10 Comments | Posted by in Comment, Newspapers

Apocryphal perhaps, but the story has it that Rupert Murdoch always wanted to charge for thelondonpaper.

When News International’s big boss was shown a dummy copy prior to the September 2006 launch, he apparently declared that the paper would easily justify a 10p cover price.

James Seddon, a member of thelondonpaper launch team, who recounts the tale on this blog, concludes:

“If he didn’t get ‘free’ then, it’s no surprise he dropped the paper when times were tough.”

Given Murdoch’s current fixation with finding a way to generate revenue online, it would be tempting not only to conflate thelondonpaper decision with a general trend towards paid-for content, but also to assume the paper’s demise sounds the death knell for freesheets.

So let’s be clear about a few things:

  • thelondonpaper didn’t fail because it was free
  • it didn’t lose £12.9 million in a year because it was free
  • a 10p cover charge would not have saved it
  • its free-to-view website isn’t closing because it’s a threat to Rupert Murdoch’s paid-for plans.

Oh, and:

  • the freesheet isn’t dead

All newspapers, and the bulk of broadcast media around the world, adopt an ad-funded business model.

In some cases advertising subsidises the cost of production and the consumer pays a competitive price.

In other cases advertising covers those costs completely and the consumer gets to read, watch or listen gratis.

In both cases the advertiser is paying for the eyeballs and the reader, viewer or listener gets content for a fraction (or none) of the real running costs of the media business.

Rather than two distinct models, there’s a continuous line that runs from commercial radio, trade publications and freesheets to subscription satellite channels, consumer magazines and national newspapers.

Whether the content is free or has a nominal price attached is something of a moot point.

As web strategist Jeff Sonderman argued earlier this summer “newspaper folk haven’t actually charged for content since the 1830s.”

It was during that decade that subscribers stopped bearing the full cost of putting the paper together. Typically, says Sonderman, newspaper prices fell from six cents to one cent.

At a stroke, access to newspapers was no longer limited to those who could afford the luxury. He notes:

“For about 180 years, the retail price of a newspaper has never reflected the total cost of assembling and producing it. Any paper that tried to charge such a price (6x more) would lose circulation and be undercut by correctly priced competing papers.”

Murdoch’s 10p cover charge wouldn’t have saved thelondonpaper. It certainly wouldn’t have paid for production costs and circulation would not have justified a 500,000 print run.

So, thelondonpaper isn’t closing because the model was flawed, but because News International either couldn’t make it work in the current economic climate or was unwilling to give a paper, still in its infancy, the time it needed to become commercially viable.

Or, as David Prosser neatly put it in last Friday’s Independent:

“The surprise with thelondonpaper is that it has survived this long, especially as the title was launched for no real commercial reason other than to get up the noses of Daily Mail & General Trust, owner of Metro and London Lite.”

This is not the end of the freesheet even if it feels that way right now.

Certainly, London Lite could fold. After all, it too was launched for tactical reasons – a spoiler in a spiralling tit-for-tat between DMGT and News International.

Having effectively achieved those ends, its owners may conclude there’s little point in London Lite overstaying its welcome and queering the pitch for its stablemates.

But if London Lite does go, commuters beware – you’ll still be playing dodge the Metro/City AM/Shortcuts/Sport vendor for some time yet.

After all, free is just another cover price.

Jon Bernstein is former multimedia editor of Channel 4 News. This is part of a series of regular columns for Journalism.co.uk. You can read his personal blog at this link.

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Thelondonpaper – what everyone’s saying

August 24th, 2009 | 1 Comment | Posted by in Editors' pick, Job losses, Jobs, Newspapers

A quick round-up of the weekend and Monday morning comment on the fate of the londonpaper:

“thelondonpaper is closing – with a pre-tax loss of £12.9m last financial year on £14.1m turnover. Maybe if they’d sorted out their SEO strategy, they’d have got more website visitors and sold more adverts?”

“Let’s assume, then, that when James Murdoch says he’s concentrating on his ‘core’ responsibilities henceforth, he means no more fishing in Metro ponds. That phase is gone. News International has retired hurt. But what does this mean for London itself, apart from much less waste paper?”

“Free newspapers funded by advertising are a volatile business model in any downturn, let alone a recession. While freesheets are unlikely to disappear altogether, in closing the London Paper the Murdochs have underlined their belief that charging for news is the way forward.”

  • Stephen Glover (the Independent, 24/08/09): ‘A vicious press war with no real victors
  • “[T]he supposedly invincible media mogul has raised the white flag. He is closing thelondonpaper. In my view, of course, he should never have launched it in the first place. It was an expensive distraction that contributed little or nothing to good journalism.”

“News International’s decision to close its only freesheet highlights the newspaper industry’s move towards charging for content in print and online and away from the focus on ‘free’, which gave us the London Lite, Metro, thelondonpaper and City AM, the morning business paper.”

and from last week:

“[The decision] shows just how much the axis of publishing has shifted: just as proprietors are growing weary of readers enjoying their online news for free, there is not nearly the same confidence in the free print model there was three years ago and publishers are reverting to ways of maximising user revenue in all media instead of giving it away for nothing. And, more fundamentally for News International, London’s free newspaper war was just costing too much.”

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thelondonpaper’s closure – tell the rivals or readers first?

August 21st, 2009 | 2 Comments | Posted by in Newspapers

Journalism.co.uk couldn’t help but part with 50p on the way back from London last night after seeing the Evening Standard seller’s newspaper boards at Victoria Station loudly declaring the death of newspaper rival thelondonpaper.

The front page was also dedicated to the story: “Free London paper to close”, “Murdoch axes loss-making title”, “Staff shocked at sudden decision”.

(This must be the new ‘positive’ direction for the paper Geordie Greig mentioned when he took over as editor in February)

Still the ES, as far as the print edition yesterday went, refrained from commenting further on the demise of a rival. And it must have been tempting given thelondonpaper’s full-page advert last January, which taunted the ES over its sale for ‘the price of a chocolate bar’.

As a collector’s edition – the last will be issued on September 18 – Journalism.co.uk also picked up yesterday’s thelondonpaper. No mention of the closure in print (perhaps news was released after it had gone to print – anyone who sees today’s edition is welcome to correct me) and it seems to be business as usual on the website. Journalism.co.uk towers received the release from News International around lunchtime yesterday, which begs the question: is it right to let your rivals and the rest of the industry know before your readers (and, indeed, staff – see yesterday’s NMA report about new launches for thelondonpaper website and the recent job ads for online staff)?

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Journalism Daily: thelondonpaper to close, tax and video for freelancers and video mag ads

August 20th, 2009 | No Comments | Posted by in Journalism Daily

A daily round-up of all the content published on the Journalism.co.uk site. You can also sign up to our e-newsletter and subscribe to the feed for the Journalism Daily here.

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MediaWeek: Londonpaper quits NRS, after survey showed it had fewer readers than its rival

November 18th, 2008 | No Comments | Posted by in Editors' pick

National Readership Survey data released last week showed thelondonpaper is behind its rival London Lite in reader numbers, despite the fact that thelondonpaper distributes more copies. Now, the Londonpaper is ready to leave the NRS. MediaWeek reports that Ian Clark, managing director of thelondonpaper, has lobbied the NRS to change its methodology.

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NMA: thelondonpaper plans to relaunch website

August 20th, 2008 | No Comments | Posted by in Editors' pick

The revamped site featuring more user-generated content will be rolled out early next year.

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The people behind the papers – London’s freesheet vendors

July 16th, 2008 | No Comments | Posted by in Newspapers

Ever wondered what kind of person could survive standing for hours on end trying to communicate with hurrying commuters? Current filmmaker Joe Oppenheimer speaks to the street vendors of London’s freesheets:

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