Metro's chief operating officer resigns

A month after Danish TV executive Per Mikael Jensen took over as chief executive of Metro International, his second in command has resigned, the free daily newspaper company announced today. Chief Operating Officer Chris Spalding, whose resignation is effective Dec. 31, ran Metro after Pelle Törnberg stepped down as CEO earlier this year.

Only a few months ago, Spalding sounded optimistic about the future of Metro. He was quoted in a press release about the move of Metro's headquarters to London's Fleet Street as saying, "We are excited by the idea of moving such a modern publisher as Metro into the historical heartland of the newspaper industry. In a way this move sees newspapers coming full circle: Metro broke the mould of daily newspaper publishing and now we are back where that mould was originally cast."

At the same time Spalding's exit was announced, Metro said it is sweetening the compensation plan of its top executives by granting them shares of the company's stock. The stock is being issued two months after the company announced an $18 million loss in the third quarter, double the amount in the same quarter last year.

The free daily story must be told!

EDITORIAL
Free dailies are incredibly popular among readers. Ask any publisher of a free daily and they'll tell you that they can't print enough of them. People like free news. And those who favor free dailies fall into the coveted 18-34 demo. In other words, free dailies are the perfect fit for regional and national advertisers who are blowing their money on internet and TV.

To most of you, I'm preaching to the choir. But this is a message that needs to get out to ad buyers.

Those ad buyers might say, "I can reach those people on the internet." Really? In the typical circulation area of a free daily, an advertiser would have to buy ads on hundreds of websites to reach as many eyeballs as the free paper. And as more sites are launched online, this fractionalization only works to the advantage of free newspapers. When it comes to reaching readers in a particular geographic area, nobody can beat us.

But we need somebody to tell that story. In London, Viscount Rothermere's Associated Newspapers is launching a trade campaign called "Metro Creates" to showcase that free daily's advertising services to agencies, according to the advertising trade website Brand Republic. The campaign aims to draw attention to Metro Londonr's advertising opportunities, including glossy wraps, tactical ads, front-page stickers, 3-D ads and silver ink ads.

Brand Republic says:

Metro is distributing 230 Metro branded Dualit toasters to senior agency figures, which will be accompanied by two toast-shaped hardback books titled "Fresh Out" and "Fresh In." The books will detail the paper's advertising opportunities and feature its most recent paper and online creative ads, highlighting various brands that have advertised within Metro.

Metro will send the books, packaged in branded sandwich bags, to a further 2,000 creative and media agency contacts, Brand Republic reports. The recipients will have the chance to win one of 20 additional Dualit toasters.

Metro launched the campaign after meeting with a number of creative agencies.

Are free dailies in the U.S. meeting with agencies and talking about things like this? Madison Avenue needs to know our story -- agencies (and their cilents) deserve to know how much more effective free dailies are than paid papers in the same areas.

Your feedback to this editorial is welcomed and encouraged. E-mail me at free-daily@hotmail.com.

New Czech free daily will focus on business

The Associated Press is reporting that a publisher in the Czech Republic is planning to launch a business oriented free daily later this month. Mlada Fronta AS, a privately owned Czech publisher, says its new paper, titled E15, will have an initial press run of 50,000 per day, Monday-Friday. AP says some analysts contend that E15 might add pressure on the tight print market by targeting business sections of the general news dailies as well as Hospodarske Noviny, the only Czech business daily newspaper.

Filipino free daily celebrates 7th anniversary

The Manila-based Inquirer Libre, an offshoot of the Phillippine's most widely circulated paid broadsheet, is celebrating its seventh anniversary. Libre has a circulation of 110,000 with no returns, according to its auditing firm, and a pass-on rate of four persons per copy. Hawkers hand copies of Libre to train and ferry commuters on weekday mornings.

In this anniversary story, Libre reports that it has beaten three competitors that were also distributed to commuters free of charge. "They include the Metro News given away on a weekly basis in MRT stations, Pasa ‘Yo which started in 2005 and lasted just over a year, and Standard Express which folded recently, also after a run of more than a year."

Nashville daily evolving from print to online

A free daily in Nashviille, The City Paper, has purchased a system from Olive Software of Santa Clara, Calif., that allows online readers to easily page through the paper, seeing pages as they would be displayed in print. The software allows readers to click on ads and reach advertisers websites, according to a press release from Olive Systems. Wehaa Design LLC is vendor of similar software. Both companies sell systems that will take the PDFs that a newspaper already makes and coverts them into pages that are easily turned, enlarged/reduced and searched.

In the press release, Albie Del Favero, publisher of The City Paper, says: “We are a free daily in the mold of European commuter dailies, but since Nashvillians don’t typically commute via train or the bus, we distribute the paper in office buildings rather than commuter stations. Because of this, our readers are more likely to read The City Paper at their desks in the morning. And what we found was that increasingly more of them were actually reading the paper online. Because of this online readership growth and the expense of printing and delivering the paper each and every day, we are slowly evolving the paper from a print product to a primarily digital product.

“There are lots of places to go to get national news, but there are very few places to get in-depth local news,” said Del Favero. “That’s why we remain focused on providing local, and not national or international news.

Canadian chain shows impressive growth

Perhaps one of the most exciting stories about the growth of free dailies is unfolding in Canada. The percentage of Canadians reading newspapers has been steady in recent years because those who have abandoned paid papers are now picking up free dailies.

Three free-daily chains have spread out across the broad expanse of Canada, publishing in most markets. They are:

• Metro Canada, a joint venture of Metro International and TorStar Corp., publisher of the Toronto Star

• CanWest (headed by Leonard Asper) which publishes RushHour

• Quebecor Media, publisher of the 24 hours or 24 heures papers. And, yes, the "h" is lowercase.

Quebecor Media (Toronto Stock Exchange symbols QBR.A and QBR.B) is a huge diversified company with broadcasting, cable, telephone, wireless and phone book businesses. So the results of its smaller free daily division are often overlooked. But five days ago Quebecor Media reported its third-quarter results and they showed that revenue at the company's 24 hours/heures papers saw a 69.1 percent jump in revenues compared to the same quarter last year (See page 23 of the company's Management Discussion and Analysis for the third quarter). Dollar figures weren't given.

The third quarter must have been the best quarter for the 24 hours/heures chain because for the first nine months of the year, revenues of the free dailies grew by 58.0 percent compared to the same period last year.

One reason for the revenue jump is that Quebecor Media in the past year has added Ottawa, Gatineau, Calgary and Edmonton to its network of free daiiles that started with Montreal, Toronto and Vancouver. Again while not providing dollar figures, the company reported an 87.2 percent reduction in operating losses at its free dailies in Montreal, Toronto and Vancouver compared to the same quarter a year earlier. In other words, Quebecor Media's free dailies are still losing money, but not as much as before.

CanWest MediaWorks did not report any information about its RushHour chain in the documents it provided to shareholders.

As for Metro Canada, its 50 percent shareholder, TorStar Corp. (Toronto Stock Exchange symbol TS.B), didn't provide much information in its most recent quarterly report. But it did say, "Newspapers and Digital revenue grew $6.1 million to $253.5 million with growth at Metroland Media Group, Metro and the Digital properties." Since its 50 percent share of Metro Canada was lumped in with other assets, it is impossible to know how its five free dailies (Toronto, Ottawa, Vancouver, Edmonton and Calgary) performed. The same type of information was given for net income.

But later in the report, TorStar Corp. provides a clue: "Higher revenues at Metro and the Digital properties offset lower advertising revenue at the Toronto Star both in the quarter and year to date. ... Advertising revenue was down 7.1 percent at the Toronto Star in the third quarter ... Metro continued to have strong revenue growth through the third quarter in both the Toronto market as well as the expansion markets." Under the heading "Outlook," TorStar Corporation's managers said, "{T]he revenue outlook is mixed with advertising trends continuing to be challenging for the Toronto Star but stronger for Metro, Sing Tao and the digital properties."

A couple of observations:

• It's unclear whether any of Canada's free dailies are making money, but with revenue increasing, many will in the next few years.

• In the United States, free dailies are owned by a wide variety of owners with a lot of independents in the fray. In Canada, the free daily industry is dominated by three chains, which have expanded into every major market.

Report: Paid paper stole free Boston papers

Boston Magazine reports that delivery drivers for the Boston Herald are stealing copies of that city's two free dailies, BostonNow and Metro Boston. Reporter M. Elizabeth Roman said she witnessed thefts at four locations. "As the presence of free daily and weekly papers here increases, hardball tactics like this seem inevitable," Roman writes. "Readership studies show that free papers do a better job than their pay peers of attracting new readers. For the Herald, which relies on single-copy sales for 77 percent of its weekday circulation, that makes the freebies serious competition." The illustration is by Marcos Chin from Boston Magazine.

Metro moving to London's Fleet Street

In one of his first moves as CEO, Per Mikael Jensen (right) is moving Metro International's headquarters to London's Fleet Street, the spiritual home of the British press. Some 70 employees will relocate there including the chain's global editorial, finance, marketing, research, online and global ad sales departments. According to PressGazette.co.uk, the new offices at 85 Fleet Street were previously occupied by Reuters, which was the last major news organization to leave the "street of ink" in 2005.

“We are excited by the idea of moving such a modern publisher as Metro into the historical heartland of the newspaper industry," chief operating officer Chris Spalding is quoted by PressGazette as saying. "“In a way this move sees newspapers coming full circle: Metro broke the mould of daily newspaper publishing and now we are back where that mould was originally cast."

An interesting question about comics

Here's a question I got from a reader:

Hey, I just want to say that I think your blog is informative. After discovering the free daily trend about 2 years ago, I've been following it on and off since. So, I thought I ask you. What are the chances of syndicating material to these free papers? Alt-weeklies have some syndicated features, like the "This Modern World" comic strip. Would it be possible to have comics running exclusively in these free papers?

My response:

Thank you for the kind words.

I am not an expert on syndication. You might consider going to freedailyassociation.com and posing that question. The members of that site include editors and publishers of free dailies. They would be in the best position to know.

My opinion, for what little it is worth, is that free dailies are very independent and often quite different from one another. While one might be longing for a certain comic strip, another would not be interested in any comics. It's hard to generalize.

I am sure the major syndicates (United Media, Universal, Creators, King Features) have tried to sell comics and features to all of them. About a year ago the Washington Examiner cut the number of comics they run in half (See item). Some of the newer "commuter" free dailies, such as BostonNOW, don't have any comics. Many of the "community" dailies, like the Palo Alto Daily News or Vail Daily, run the A-list of syndicated comics.

On the other hand, I know of cases where free dailies have been unable to buy the most popular comics because the major paid papers in their markets have obtained exclusiviity contracts with the syndicates. So you might have some success offering a product to free dailies that is unavailable to paid dailies.

As you probably know, the economics of syndication do not favor comic-strip artists. A paper of about 10,000 circulation typically pays less than $60 a month for a strip that runs six times a week. Most of the money a paper pays goes into the syndicate's pocket, not the artist. Even if you were to sign up every free daily in North America (55 to 60 papers), you would still need a day job.

But the number of free dailies is increasing every month, so I am optimistic that will change.

That's just my opinion. Ask the group.

Clyde Davis