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Free papers rule the roost across the Globe, not shining in India yet

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Free papers rule the roost across the Globe, not shining in India yet

Last year was a treat for free newspapers. Free Papers crossed sales of 25 million copies worldwide. And they made it to the World Association of Newspaper's definitive guide to the industry, World Press Trends. The 2006 Edition argued how "the consumption of free papers is helping to reach new newspaper readers all over the globe" even while many remain concerned at any comparison of free and paid titles.

As free papers steer newspaper sales across countries, those concerns are waning fast. Between 2000 and 2005, circulation of paid newspapers increased by just 2.8 per cent, but along with free papers, total sales grew by 4.5 per cent. Over 2004, the number of paid titles declined in 2005 by 0.3 per cent. But taken along with free dailies, total newspaper titles show a growth of 0.3 per cent.

Many argue that the rise and rise of free papers is merely a reflection of news consumption by readers on the Internet. However, Metro International SA - the Swedish company that has become the champion of free papers globally with sales of 8 million copies - began with a rather modest business premise in 1995. "If you can largely remove the cost of distributing a newspaper then why charge a cover price at all (Metro Annual Report 2005)?"

Read this in the context of the Indian consumer's strong paisa-vasool trait, and it's hard to imagine why free papers have still not taken off as well here.

Apart from Metro only one other global media company is active in free newspapers in Asia/Pacific. Rupert Murdoch's NewsCorp publishes the Herald Sun in Melbourne and started their free paper mX in 2001 (and a Sydney edition in 2005); a free daily local paper is also published by NewsCorp. The first Asian free paper, however, was published in Singapore in 2000 - this paper (Streats) has merged with it's only competitor Today in 2005. A Japanese free newspaper lasted only for a few months. In isreal the free daily closed down after a year.

Metro launched a Hong Kong edition in 2002 and granted a franchise to a Korean group of investors in the same year (World Football Championship in Korea/Japan). Recently Metro acquired a 5% stake in the Korean operation. Metro has a circulation of 835.000 in both countries together. In July and August 2005 two more free papers were launched in Hong Kong.

In 2004 six different Korean free newspapers were available in Seoul, total circulation being 2 million (Asia Media estimate July 2004). Among these are Metro, a daily broadsheet sports paper and a paper with a focus on cartoons and comics. Seoul newspapers reported a drop in circulation of 25% in 2004.

In the Philippines the leading national paper The Inquirer publishes a free tabloid version since 2001. The Malaysian free paper theSun is a former paid-for newspaper that was relaunched in 2002 as a free newspaper. It is published by Sun Media Corporation (subs. of Nexnews Berhad, which also publishes the financial weekly The Edge).

Even closer home in Dubai , a free newspaper 7 Days launched almost 4 and half years ago is doing well and has posed some threat to both Gulf News and Khaleej Times. Infact Gulf News has launched its weekly free newspaper called X Press.

India does not have a free newspaper in the true sense of it. The closest to a free newspaper is the Delhi based Neighbourhood flash which is not very successful. There are a lot of newspapers who when launched have used a penetrative pricing model akin to a free pricing model.

Take the Mumbai newspaper market. In 2005, two newspapers began enticing readers in the city with subscription offers that were as attractive as they went. You could subscribe to Daily News & Analysis (DNA) for as low as 27 paise a day! That's almost free but not truly free. That's if you said 'Yes' to its Rs 99-a-year scheme. Hindustan Times (HT) went one up. You could taste it for a mere 21 paise as part of HT's Rs 150-for-two-years offer. DNA and HT are not strictly free papers and are part of mainstream newspapers but there pricing is very close to being free.

Considering that a reader stands to earn more by selling his newspaper in raddi and that both these papers are delivered at your doorstep for this price - unlike how free papers operate abroad - they represent what may be called more-than-free papers. By that definition some more newspapers might fall into our definition of free papers.

Despite such attraction for the reader, sales are lukewarm. They haven't managed to grow the market as fast as free papers have demonstrated in, say, Spain or France. 20 Minutos, for instance, sells over 11 lakh copies in Spain (see chart below)

This may perhaps be an indicator of a market that's still nowhere near fuelling a boom in free papers any time soon. Having said that who knows the future. It would be interesting to watch how Free Papers do in India and whether they match the progress of mainline newspapers.

CHART: Top 20 free papers, by circulation


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