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Are Free Dailies the Future?
Free daily newspapers can trace their roots back to the 1940s when Walnut Creek, California, publisher Dean Lesher started the Contra Costa Times. Today, almost every European country and many major U.S. markets offer a free daily paper.
While readership of paid dailies has continued its downward spiral in the first quarter of 2007, new free dailies are popping up all across the country. The new commuter papers have been launched by both established publishers, such as The Tribune and the Washington Post Co., and new upstarts.
Traditionally, free papers have established themselves in larger U.S. markets with extensive public transit systems, such New York, Philadelphia, Chicago and Washington, DC. However, the new free papers are wending their way into smaller markets, too.
The business model for free papers is fairly simple: Give the papers away to bump circulation figures and sell advertising at rates lower than those of the big dailies. That's been the model of the Examiner chain, which now has papers in San Francisco, Washington, and Baltimore (and has its sights set on a number of other markets).
"What I think is interesting about this economic model is its concession that newspapers are really about the advertising stream anyway," says Thomas Kunkel, dean of the Philip Merrill College of Journalism at the University of Maryland.
The little-known secret of most papers, he says, is that income generated by selling the paper barely covers the costs of attracting and keeping readers. "So what the freebies are saying is 'Heck, let's stop the charade.'"
As more people, especially younger ones, get their news free from the Internet, they are less inclined to equate free news with "cheap" or "insufficient," said Kunkel. "The audience cares not a whit whether they're paying for it or not," he says. "They read it if it's good and don't if it's not."
Free dailies are making aggressive inroads into the Canadian market. "During this month, there are six free dailies being launched in just two Canadian cities—Calgary and Edmonton —where there are already two conventional paid dailies published in both markets," says Len Kubas of Kubas Consultants, a Toronto-based newspaper consulting firm.
free dailies here to stay? The prognosis is that there will be more free dailies
in the U.S.—whether delivered directly to homes in targeted areas (the Examiner
model), through the street pick-up model (Quick in Dallas, Red Eye
in Chicago, Express in Washington), or via hybrid distribution in smaller
Phiadelphia Inquirer Debuts Column Sponsorship
At the end of April, the Philadelphia Inquirer debuted a new column in its business section called PhillyInc. It features short, punchy news items about companies with local connections.
This wouldn't cause even a ripple in the newspaper world except that the column is sponsored by Citizens Bank who is paying for the column space. Citizens Bank's ads, and even logo, are prominently displayed.
The paper maintains that the column is in no way an advertorial. Some of the revenue generated by the column will even partially pay for an editor who will coordinate and oversee the content, according to the Inquirer.
"There's been a lot of concern (from staff) over the appearance of sponsorship and what it means," said Tony Gnoffo, the paper's assistant managing editor for business. "I tell them what my bosses tell me. We're totally in control of this thing."
To date, no major U.S. daily has tried this channel for creating new ad revenue. But Gnoffo says if the Inquirer's experiment succeeds, more newspapers will likely follow.
The idea that independently gathered news is being coupled with ad-sponsored space concerns some newspaper industry observers.
"They should never blur the line between what is and what is not for sale in a newspaper," said newspaper analyst John Morton.
But even Morton's own former business partner sees it differently.
"It's just another form of advertising," said Miles Groves, a media economist based in Washington, DC. "You may have to educate readers on what it means if they notice at all. A lot of publications use page sponsorships. It just hasn't been the case in newspapers."
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Record Visitors to Newspaper Websites in First Quarter
According to custom analysis by Nielsen//NetRatings for the Newspaper Association of America, more than 59 million people (37.6 percent of all active Internet users) visited newspaper websites during the first quarter of 2007, a record number that represents a 5.3 percent increase over the same period a year ago.
These website visitors generated nearly three billion page views per month throughout the quarter, compared to just under 2.7 billion during the same period last year. According to data from Scarborough Research, newspaper websites have helped drive a 13.7 percent increase in total newspaper audience for 25- to 34-year-olds and a 9.2 percent increase for 18- to 24-year-olds.
"These record-setting numbers underscore...the importance of newspaper websites to the growing newspaper footprint," said NAA President and CEO, John F. Sturm. "In addition, the sites attract a younger, more affluent audience coveted by advertisers while providing a valuable service to readers seeking immediate information from a trusted local source."
Users continue to increase the amount of time they spend on newspaper websites, with the average visitor spending more than 45 minutes per month during the quarter, an 11.5 percent increase over this time last year.
In addition to quarterly averages that surpassed previous highs, two monthly figures broke new ground of their own. In January, visitors generated an astounding 3.1 billion page views, rising above the previous record high in that category. In March, more than 59.5 million people (or more than one in three active Internet users) visited newspaper websites, the largest unique audience for any month since the association began tracking these numbers in 2004.
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