ARE FREE DAILIES POINTING THE WAY TO A WEALTHY FUTURE?

Advertisers and readers seem to like something publishers don't

It would have been ludicrous to ask this question even a few months ago, but is the growth of daily newspapers tied to free distribution?

In addition to the worldwide success of the Metro concept, as detailed by Senior Correspondent Julius Duscha here recently (see NewsInc., Aug. 28, 2000), a spate of free dailies have started up across the United States recently. Inside, Senior Editor Pete Wetmore talks with the publishers behind three of these titles.

In an era of declining daily newspaper circulation and readership – which is counterpointed by increasing weekly newspaper circulation and readership – it is at once interesting and disturbing that dailies which forego circulation revenues are having success.

Excluding the Metro papers – which have their own unique formulae, with commuters in transit as their primary readers – the strengths of these free dailies seem to lie in their strong focus on local news, local opinions and local advertising – a microcosm that even a traditional hometown daily seems to have difficulty achieving.

These papers are, in fact, microdailies.

The pressures on executives at paid dailies are enormous, not the least of which is the competition for readers' time with TV, the World-Wide Web, magazines, direct mail, national dailies. Space – newshole – in a paid-circulation daily is apportioned with almost scientific precision. Each day, sports, business, features and entertainment make large demands on the amount of space they desire. World news, national news and political news are all fighting for space.

At the bottom of the totem pole, it would seem, is local news.

News executives have had to give over a tremendous amount of space in the last few months to Olympics coverage, political news and now baseball playoffs. How does a local fire or an after-school activity compete?

In a microdaily, they don't have to: There is no world, national, sports, business or entertainment news (or damn little). There is only local news, buttressed by local opinions (in the form of letters to the editor) and local advertising.

Ah, yes, advertising. The free strategy allows the microdaily's publisher to come up-to-speed on circulation numbers quickly, which can then attract local retailers. The bargain-basement ad rates that microdailies seem to offer probably doesn't scare anyone away, either.

Nonetheless, their costs are low – some rent time on printing presses, many limit editorial to "six or seven" people and some of the microdailies don't even seem to have a full-time ad sales force. Yet at least one of the publishers claims that his business is doing roughly $1 million a year.

The scary part for traditional newspapers is that the presence of a paid daily in a market doesn't seem to influence the success of a microdaily – they seem to work in cities both with and without paid competition.

But if that's the case, then is there even a reason for a traditional publisher to be concerned about microdailies?

Here is where I have two opinions, each of them influenced by the two hats I wear: