LONDON: When Metro International, a publisher of free newspapers, moved into France in 2002, established competitors cried foul, and some of their workers took to the streets. Four years later, Metro and other freesheets are fixtures of the French cityscape, accounting for one in five papers read in France, and publishers of paid-for dailies are considering free editions of their own.
The about-face in France reflects a broader shift across Europe, as upstart freebies continue their rapid growth and publishers of existing papers, casting about for any way to retain readers, increasingly turn to giveaways.
Last week, News Corp., which publishes The Sun and The Times of London, confirmed plans to start a free newspaper in Britain next month. In France, the august dailies Le Monde and Le Figaro are said to be working on free newspaper projects. And in Germany, where entrenched publishers have resisted the trend, Verlagsgruppe Georg von Holtzbrinck, publisher of the financial daily Handelsblatt, plans to start a free business paper as soon as Monday, according to German media reports.
"Almost all over Europe, you see circulation going down for paid newspapers," said Piet Bakker, associate professor of communications at the University of Amsterdam. "At the same time, the economy is improving, helping the advertising market. Free newspapers are seen as the best way to take advantage of this."
Free newspapers have made inroads elsewhere, but their gains have been greatest in Europe, where their tabloid shapes and short stories make them handy for commuters on public transportation.
Europeans read about 19 million of the roughly 28 million free newspapers distributed daily around the world, according to the World Association of Newspapers. The European total has doubled over the past three years, according to the group, which is based in Paris, and freesheets now account for more than half of all papers circulated in Spain and more than 30 percent in Portugal, Denmark and Switzerland.
While established publishers have been dabbling with free papers for some time, the new round of startups marks a new stage in the development of the market, said Aura Iordan, business analyst at the newspaper association. Established newspaper publishers had been starting freesheets primarily for defensive reasons, in an effort to fend off the threat to their business from the likes of Metro, but now, she said, they see free dailies as a possible source of profit.
Metro, which has grown from a single paper in Stockholm into a sprawling publisher of 69 editions in 93 cities, turned profitable on an operating basis this year, after years of heavy investment in expansion. The company has moved into 21 countries, including the United States, where The New York Times Co., owner of the International Herald Tribune, has invested in one of the Metro editions, in Boston.
With its broad presence in the urban centers of Europe, Metro can offer advertisers "pan-regional" packages, which are providing the fastest sales growth, said Wilf Maunoir, head of research at Metro International, which is based London. Overall sales grew 16 percent in the first half of this year, at constant exchange rates, and that kind of growth has made other publishers take notice.
News International, the newspaper division of News Corp., said last week that it planned to start a free afternoon paper, thelondonpaper, on Sept. 18, with a print run of 400,000 copies. It will be distributed in central London by 700 old-style hawkers, following a model pursued by a free London business daily called City AM.
Thelondonpaper will go head-to-head with The Evening Standard, a paid-for afternoon paper that recently started supplementing its falling circulation with an early-afternoon free version. The owner of The Standard, Associated Newspapers, also publishes a free morning paper called Metro, which is unrelated to the Metro International publications but is distributed in the London Underground.
The Underground is expected soon to award a new contract for an afternoon freesheet to be distributed in the subway system. Deals like these help the free papers reach young, urban audiences that advertisers find most desirable, at a low cost.
But the cost of distribution will rise as more free papers crowd into the market, Bakker said. A number of deals with European public transport systems are set to expire soon, and when they come up for renewal, transit operators are likely to try to squeeze more money out of the papers, he said.
As freesheets increasingly face competition from other handouts, some are experimenting with new distribution methods. Dagsbrun, an Icelandic publisher, has announced plans to start dropping a free paper on doorsteps in Denmark, after creating a joint-venture delivery operation with the Danish postal service.
In the United States, Clarity Media Group, controlled by the billionaire Philip Anschutz, has already begun home delivery of free papers under the Examiner name in the Baltimore, Washington and San Francisco areas. The papers are delivered to homes throughout desirable neighborhoods, but analysts say one drawback for advertisers is that it is hard to determine whether they end up in recipients' briefcases or go straight to the catbox.
As free papers continue to spring up, some markets are showing signs of saturation. In Spain, where four freesheets compete on a national basis, analysts say at least one is likely to fail, as hundreds of thousands of copies - out of a total of more than four million - go unread.
In order to survive, free papers have to keep their editorial costs extremely low. Iordan said less than 10 percent of their spending typically went toward journalism, for example, compared with 20 percent to 40 percent for conventional newspapers.
But publishers of free papers say the editorial mix, heavily weighted toward entertainment and other light fare, with plenty of photos and graphics, appealed to young readers, and to people who otherwise would not pick up a newspaper at all.
"You have to give the readers what they want," said José Martínez Soler, chief executive and founder of 20 Minutos, the first big freesheet in Spain, which is now owned by Schibsted, an publisher based in Oslo that competes with Metro International in many markets.
In France, a new freesheet recently begun by the industrialist Vincent Bolloré, called Direct Soir, has taken an even lighter approach, focusing on entertainment and nightlife, for instance. The paper hopes to achieve a circulation of one million by 2009, a spokesman said, although it is not expected to be profitable for six or seven years.
Separately, Bolloré is said to be in talks with Le Monde on possibly starting a morning freesheet in Paris, perhaps linked to a network of free papers published in other French cities, with names like Marseillesplus and Lilleplus. Le Monde is reportedly vying with Le Figaro, which has also drawn up plans for a freesheet, in cooperation with the broadcaster M6, that could be linked to the Plus group.
While France has become fertile ground for freesheets, paid-for German newspapers have managed to resist the incursion. An attempt by Schibsted to bring 20 Minutes to Cologne in 2001 failed when Axel Springer, owner of the Bild tabloid, and another German publisher, DuMont Schauberg, rushed their own free papers into print and won the ensuing war of attrition.
Now one of Germany's own publishers, Holtzbrinck, may be set to test the market for freesheets. According to news reports in Germany, the company plans to distribute 70,000 copies of a free business tabloid in financial districts, starting Monday. The company did not return calls requesting details.
Edda Fels, a spokeswoman for Axel Springer, said the company was keeping an eye on Holtzbrinck. If any publisher moves directly to undercut Bild, which sells nearly four million copies, she said, Springer would respond as it did in Cologne, bringing out a rival freesheet "within days."
"We are convinced that good journalism should be paid for," she said.
