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Free is still profitable

February 2nd, 2011 by · 4 Comments · opinion

Later today Rupert Murdoch is expected to unveil the first edition of The Daily, his new tablet only digital newspaper. I was planning to wait and see what it looked like and what was said about it before posting, but early this morning I came across an article in the Guardian about Metro, a free daily newspaper in the UK.

The contrast between Metro and The Daily caught my eye, and I thought it worth a post. From the Guardian:

Metro is far and away Britain’s most successful national newspaper. Over the past year, its distribution has increased along with its geographical spread. Its advertising volume and revenue has increased.

It made bumper profits in the 12 months up to October 2010 after enjoying years of money-making before that. Recession? What recession?

The article goes into some length explaining why Metro isn’t a “real” newspaper, but it’s not relevant to my point here so I’ll pass.

My point is that the argument that newspapers can’t survive on advertising alone is bunk. Right now several major newspapers are pushing to enact paywalls s they can charge their readers directly. The Times of London already have one; the NYTimes keep intending to launch theirs. But opposite those “real” newspapers is the Metro, a national daily that don’t charge their readers even the newsstand price.  They charge nothing, and yet they’re quite healthy.

The only conclusion I can draw from that the free business model works, and the reason it’s not working for the “real” press is that they’re encumbered with a blinkered mindset. They need to change and adapt, and they’re either unwilling or unable to do so.

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4 Comments so far ↓

  • Mike Cane

    NYC has two such freebies. They’re largely crap with a lot of wire service copy and “articles” that are short on detail and done in very short paragraph style (i.e., one sentence = one paragraph). They mainly exist to sell ads, and I guess they succeed at that. But as a model for a real newspaper that breaks stories and does in-depth journalism? No.

    • Mike Cane

      OTOH, I just remembered The Village Voice. It’s gone downhill since its heyday in the 1970s, but it went free and does do some very good reporting. But it’s a weekly.

  • Mrawhimskell klaar

    As a daily reader of the Metro, and one whose organisation has advertised on it countless times, I wholeheartedly agree.

    I’m also quite amazed that a newspaper with free distributorship is also at the cutting edge – having both an e-metro flash-powered digital edition as well as specific versions for the iPhone and iPad. While their content may not be up the perceived standard of the big guns, I however read them to catch up on ads and local/national deals.

  • Charles Jorgensen

    I was just thinking about this the other day. The way the internet is changing how we receive our news. With that thought in mind, I made a comparison between Blogs and Newspapers. They’re both use some sort of advertising for their model but one charges to read certain articles but the other one is totally free. If newspapers used only ad business model. The prices of placing ads on the site becomes more and more expensive thus gaining more profit.
    What would even more amazing if newspapers online adapted what blogs like engadget and gizmodo have been doing which is live blogging :0

    My thinking is that everything from mobile games, music, even movies eventually will have some sort of freebie nature to it but ads will consume them, even though there’s already proof of this existing i.e. Angry Birds on Android, Spotify, and Hulu. It will become part of every MEDIA outlet.

    Imagine works of art are only viewed if through an ad!

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