Ride, read, and rag the competition

More than a niche: Free dailies on subways worldwide pressure older papers.

Commuters around the world can thank their counterparts in Stockholm for the most-talked-about addition to the subway since the turnstile: a free daily paper.

People from Scandinavia to South America might still be staring out windows during their morning rides if the newspaper-loving Swedes hadn't embraced a new paper called Metro in 1995. Now, the commuter-paper concept has spread,helping develop a market of new and young readers in an industry that covets both.

"There are a lot of people reading the newspaper that didn't before Metro arrived," says Ingela Wadbring, an assistant professor of journalism at the University of Gothenburg, who has studied Metro's impact in Sweden.

Free daily papers number almost 40 worldwide, according to the International Newspaper Marketing Association. Most debuted in the last several years, and 18 are owned by Metro International, Metro's publisher. Its aggressive expansion brought it to the US last year when it launched Metro Philadelphia, with other major US cities reportedly targets.

While the impact on advertising and subscriptions at traditional papers is still being assessed, the trend has caught the attention of the world's newspapers -which have launched their own free dailies and challenged Metro's exclusive rights on transit systems.

"We view Metro as competition, pure and simple," says Pamela Browner-Crawley, spokeswoman for Philadelphia Newspapers Inc., publisher of The Philadelphia Inquirer and Daily News, a party in a lawsuit involving Metro.

In many cities, competitors are racing to get underground ahead of the stealthy Swedes. In London, Oslo, Zurich, Toronto, Montreal, and New York publishers have started their own free daily papers, sometimes competing directly with Metro.

To keep the upper hand, Metro International has become secretive about target cities, where it can set up shop practically overnight. Two new Metro editions were launched in the first week of this month alone, in Montreal and Barcelona -even while elsewhere other editions were being closed or merged.

"They're like stealth bombers now. They come in and you don't know they're coming," says Ed Trayes, director of the master of journalism program at Temple University in Philadelphia.

Metro's payload is light, mostly wire-service items that can be skimmed on a 20-minute ride.

"It's enough information -not too little, not too much," says Tomas Wrobel, a computer specialist at a downtown Stockholm bank, who is still reading his copy of Metro as he walks to work on a recent morning.

Some traditional papers compare Metro with fast-food journalism (much as they did USA Today). But Metro says it has no plans to change its format - which is an inexpensive-to-produce news summary supported entirely by advertisers.

"That's what we do. We summarize the world for people," says Sakari Pitkanen, editor in chief of Metro Stockholm. "We don't want to be one of the boys, we still want to be the new kid on the block, which no one really likes except for the readers."

Metro's management says it has to offer a quality product, or it can't stay in business. "We are and see ourselves primarily as a sales company, and it's nothing that we are ashamed about," says Jens Torpe, Metro's London-based chief operational officer. "Having said that, if you want to sell something to advertisers ... the only way you can do it is if you have good and high-quality [product], because otherwise you don't have any readers."

A Gallup survey commissioned by Metro last November shows that the paper has a readership of more than 6.6 million people worldwide, many of those women and young people. At the end of 2000, 41 percent of its daily readers were between 13 and 29, the company reports.

Associated Newspapers Ltd. in London says that its free daily is also attracting young audiences. The average age is 32, with 77 percent of all readers under 44.

Associated - which also owns British tabloids The Daily Mail and The Evening Standard - launched its version of Metro in 1999 (they even won the right to use the same name) and have taken to calling it "Britain's first off-line website," because of its look and feel, says Linda Grant, the paper's marketing director.

The British company is credited with forming a successful defense to Metro International, keeping it out of London and Britain altogether. Associated adopted the approach Metro aims for: starting in a major city and spreading out to other urban areas - a way to attract national advertising. Associated's strong position in eight cities across Britain caused Metro to close its only British edition in Newcastle because the competition was too stiff.

"We simply hadn't done our homework and didn't know about the market," says Mr. Torpe, who says they made the Newcastle deal early on.

Metro International has taken other measures to protect itself in crowded markets. Last week, it closed Everyday, the afternoon sibling to Metro in Stockholm, saying advertisers weren't forthcoming. The same day it announced plans to merge with Today, a rival free paper in Toronto, to help the papers recover from multimillion-dollar losses in a market crowded with three free daily and four other papers competing for advertisers.

The company is more savvy than it was when it rolled out its first edition six years ago, with the idea to forgo the 30 to 40 percent of revenue that usually comes from subscribers and offset the loss by choosing a less costly distribution system: public transport.

Metro turned a profit during its first year, as did Associated's free daily in London. But the quality of the stories and the variety of ads in Stockholm weren't that good in the beginning, commuters report. Now they say both are improving.

"If I can't get it in the morning, I miss it a little," says Monica Westling, a university administrator, who passes the paper on to a co-worker when she's finished with it.

In Philadelphia, Professor Trayes says Metro has been popular. "It's no substitute for the Inquirer, but it's good enough for quite a few people," he says.

Some analysts suggest it won't be in subscriptions so much as advertising that Metro will have an impact on traditional daily papers, especially in competitive markets. Some papers, like those in Philadelphia, report minimal or no change in subscriptions and advertising so far, but they are concerned about having a level playing field.

In a number of cities, traditional dailies have challenged Metro's exclusive distribution deals with transit systems -though they've rarely prevailed. In the US, Metro's contract with the Southeastern Pennsylvania Transportation System drew fire from US media heavyweights -including USA Today's parent company Gannett and The New York Times Co. - which charged that the arrangement violated the First Amendment.

Those companies, along with Philadelphia Newspapers, sued because the contract gives SEPTA the right to review content in the paper, and to exclude competing publications. SEPTA won the first round, but the case is in mediation. "Our biggest issue has been that they are really a newsletter of a government agency," says Ms. Browner-Crawley. "A real newspaper would never agree to control. There's a real conflict there."

"For instance, what happens if a transit strike occurs? Would the paper report it?" asks Kathy Park, a spokeswoman for The New York Times Co.

Absolutely, say editors and executives at Metro. They say the transit systems often get ad space in the paper, but don't interfere with editorial content -even when it's unfavorable. "In no city whatsoever do we have anybody from the local transport authority sitting in our editorial meetings or in any way impacting what we are writing about the subway," says Mr. Torpe.

Torpe says these debates miss the bigger point, which is the change free dailies can bring to the industry. "This is an opportunity for the print media ... [to] bring young people back to newspapers."

(c) Copyright 2001. The Christian Science Monitor

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