A defensive move to protect advertising revenues – that’s what many say is the motivation behind the launch of Associated Newspapers’ morning newspaper, London Metro. Unlike its sister title, the Evening Standard, Metro is free and will be distributed through the London Underground system.
Reports that News International is considering a free London afternoon newspaper to rival the Evening Standard are said to have prompted the launch. News International refuses to comment on this speculation, but Ian Pay, chairman of Associated’s new products division which launches London Metro on March 9, admits: “There may be an element of truth in this.”
Inspiration for the new title came from Swedish media company Modern Times Group (MTG), which publishes a free news-sheet called Metro in Gthenburg. “We saw the operation in Europe and we thought it was right for London,” says Pay.
MTG has rolled out the title in Budapest and Prague and also plans to launch it in Holland. It is understood the company approached London Transport to distribute a version in the capital. However, Associated got there first, signing a ten-year deal with the London Underground.
Associated’s stitched tabloid London Metro has a pagination of 32 pages, an initial print run of 350,000 and is to be printed in full colour newsprint. It will be available at all 261 Underground stations every week day between 6am and 10.30am.
The launch will be supported by a 1.5m poster and TV advertising campaign created by Mustoe Merriman Herring Levy.
Metro will carry national, international, and business news as well as sports coverage, entertainment and TV listings. Brevity is crucial to the design of the title as it is aimed at the Underground’s 785,000 commuters, whose average journey is just 20 minutes.
Of those early morning commuters, Associated claims that 77 per cent of them are ABC1 and more than half of them are aged between 20 and 34.
Mike Smallwood, former chief executive of Western International Media, says: “The acid test is the quality of the journalism. If it is informative then there’s every prospect of it being successful.”
If the quality is not there, Smallwood believes that will prove the launch is defensive.
Associated is practised in the art of the spoiler. The group briefly resurrected The Evening News to see off Robert Maxwell’s attack on the Evening Standard with the launch of his London Daily News in 1987.
Lorna Tilbian, a Panmure Gordon media analyst, also thinks that the London Metro is a defensive move. “The Evening Standard has had six years of growing advertising revenues, and now it wants to launch a new title before the turn of that cycle. It would be a bigger risk to let others come in and take away ad revenue from the Evening Standard,” she says.
Associated claims that the title has start-up costs of substantially less than 5m, and that no profit is expected until its end-of-year results in September 2000.
It remains to be seen how national newspapers will react to the newcomer. Observers claim tactical price cuts in the London region may be an option.
However, Charlie Bennett, head of advertising sales at London Metro, says: “Our experience of Stockholm and Europe is that people pick up the Metro in addition to their paid-for newspaper. We don’t think there will be an impact on the [Associated-owned] Daily Mail or any other newspaper.”
In Stockholm paid-for newspapers are mainly distributed through home delivery, whereas in London large numbers of consumers buy newspapers on their way into work.
One buyer says: “People who regularly buy a daily newspaper are unlikely to stop for the sake of an edited freebie. They want in-depth analysis, features and comment.”
Associated claims up to 50 per cent of commuters travelling in the morning do not read newspapers, and it is these it wants to attract.
Ian Clark, media director at Booth Lockett Makin, believes this factor will help London Metro increase overall penetration of newspaper readership in London.
Associated claims there is little threat to the Evening Standard’s circulation as the two papers hit the streets at different times of the day.
The lack of competition between the two titles is reflected in their advertising rates. Bennett says: “The ratecard is not formulated in any way to be competitive with the Evening Standard.”
The price of a week’s worth of full page black-and-white ads is 11,000 per page on the Evening Standard. It will cost 7,000 in the London Metro.
And Clark adds: “I would expect Associated to give greater discounts on the London Metro ratecard than it would on the Standard.” He estimates that the London Metro will have a pick-up rate of under 250,000 per issue, compared with the Evening Standard’s average net circulation of 450,089 for the past six months.
If the London Metro is to succeed, it must carry out a delicate balancing act. It must contribute to overall group profits without encroaching on the territory of its sister titles through decreases in circulation or advertising revenue.