The sudden decision by Evening Standard Ltd, chaired by Alexander Lebedev, has implications for the London media market but on the bigger stage also fuels the debate over free versus paid-for content.
The first response of Marc Sands, marketing director of The Guardian, is to say: “It’s a remarkable decision bearing in mind free sheets around the world are closing down. I cannot imagine what has possessed them to do such a thing.”
With publishers wrestling with how to introduce paid-for content onto the internet it does seem a retrograde decision for the London Evening Standard to ditch its cover price revenues.
But as one newspaper managing executive points out, the title has probably run out of options. It has been relaunched a number of times in the past few years and it appears the latest overhaul by Lebedev, accompanied by a sizeable, and unusual, marketing campaign and a flexible pricing model, has not delivered the hoped-for circulation or revenues.
Gabrielle Rosetti, media manager at Arena BLM, says: “The Standard needed to do something big – from a buyer’s perspective rates were being driven down and as 40% of their circulation was already bulks it makes sense.”
Liam Mullins, head of press at the7stars, says: “This is an attempt to drive their circulation and bolster their yield. How buyers will react to the concept of it being free as opposed to actively purchased however may mean it’s difficult to encourage buyers to pay more.”
The latest twist means that eventually the capital may revert to one afternoon title instead of the three available up until last month, when News International axed thelondonpaper. The move by the London Evening Standard may accelerate Associated Newspapers’s thoughts regarding its free title London Lite.
Given that many saw the launch of London Lite as a defensive measure to help protect the revenues of the paid-for Evening Standard when it was owned by Associated, there’s speculation that the title may have a limited future.
What does seem clear is that Associated Newspapers, despite having a 25% share in London Evening Standard Ltd, was rocked by the news that the Standard was dropping its 50 pence cover price.
Associated Newspapers may have thought it had a breathing space with the recent closure of thelondonpaper but now it faces having to make some swift and tough decisions about a title not expected to go into profit until 2011.
However, there are factors in London Lite’s favour, not least that its commercial and marketing team have been immersed in the free newspaper world for three years and can draw on the experience of the grand-daddy of the free newpapers, Associated Newspaper’s sister morning title Metro.
There’s also a sneaking suspicion that the London Evening Standard team may not be so enamoured about being part of a free offering. Especially as the whole positioning of the paper since the Lebedev acquisition has been towards a quality, upmarket offering. This is not a position a free title can hold without serious investment, although editor Geordie Greig is pledging that “The Evening Standard will remain the same newspaper with the same award-winning journalism”.
Rosetti adds: ” It will be interesting to see how the editorial changes – the free market is younger and people are used to thelondonpaper and Lite content. It also remains to be seen how they manage their cost base- an extra 400-450k copies is huge in terms of cost, as paper costs are up 22% YOY. And then there are distribution considerations.”
There’s always the possibility that Lebedev is not concerned about making a profit but driven more by the political clout that the newspaper might wield. However, Sands points out that the Standard is not mass market – it’s not The Sun – and even 600,000 copies (the mooted new distribution figure) is small beer.
He also adds that opinion formers and leaders of business are not very likely to be influenced by a free newspaper.
The manoeuvrings in the capital take place against the backdrop of the recession and declining advertising spend forecast for newspapers – Carat has just revised its projections to state that newspapers will see a 16.7% fall in ad revenues this year.
Lebedev may be more confident about the speed of the economic recovery than some but even if he is proven right there is no guarantee that ad revenues are going to return to printed products. If he does have deep pockets with which to invest, maybe the funds should be flowing more in the direction of digital projects if he wants to keep the Standard brand flying into the next decade.