Shoptalk: Latest 'Free' Advice

By: Mark Fitzgerald For a supposedly "mature" industry whose businesses are always celebrating centennials and sesquicentennials, American newspapers increasingly flit about like anxious teenagers ? checking each other out for the latest fashion do's and don'ts.

Once upon a time, the industry needed a couple of decades to coax a critical mass of newspapers from letterpress printing to offset, or from black-and-white reproduction to color. That started changing in the 1990s. One day a bunch of Canadian papers began trimming their page widths, and the next day nearly every paper in America had converted to the 50-inch web width. Since then, daily newspapers have embraced every fashion that walks down the runway, from faux-alternatives to Spanish-language papers.

And now, newspapers are swooning with excitement and trepidation at the twin phenomena storming across the Atlantic like some publishing version of the '60s "British invasion" of mop-top bands: the tabloid format, and the free general-interest daily.

Think of the tabloid as The Beatles. A little different-looking maybe, but well-mannered, something the kids really like and that doesn't overly annoy their parents. From the Daily Telegraph in London to the G?tesborgs-Posten in Sweden, even the most conservative European papers are shedding their dowdy broadsheet format and becoming "compacts." Few American dailies have taken that plunge yet, but the industry is busily spinning out new tabs for young adults, Latinos, and other niches.

Free dailies, on the other hand, are the Rolling Stones. They're disrespectful of their elders. They attract the wrong kind of crowd. They give off a dangerous vibe somehow. They even unsettle Rupert Murdoch, who is used to being the one unsettling everyone else in the media. (He airs a TV game show that challenges an abandoned child to ID her father. He publishes an English tabloid with dodgily sourced gossip on the front page and bared breasts on the third.) Yet, as Jennifer Saba's cover story in this issue notes, even Murdoch admits to watching "apprehensively" as free-paper publisher Metro International roils the newspaper market with its 45 commuter dailies on four continents.

The feeling is the same throughout Europe; newspapers trip over each other to convert to compacts, but are far more wary of going to free distribution. It's likely to work out that way here, too.

Consider the opinions of Mario Garcia, one of the industry's most fearless futurists. The designer preaches constantly that tabloids will one day ? and that day will come sooner rather than later ? be the standard format for American newspapers. But he won't go out on a similar limb about free distribution.

"I don't think that the future belongs to free newspapers. Not at all," he says by e-mail. "But I think that the future will find more of the cheap-in-price, breezy, colorful, compact, easy-to-read newspapers finding a niche market in large metropolitan areas." Readers, he notes, want substance with sparkle. "And they will feel better if they pay a little for it," he adds.

Free papers, Garcia argues, appeal mostly to people who aren't buying a newspaper anyway. "However, more and more, we find that these readers like a newspaper if it is presented to them? especially free, and specifically in a commuting environment," he says. Like any other kind of product sampling, reading enough free papers may convert the freeloader into a buyer.

As director of the Readership Institute at Northwestern University's Media Management Center, John Lavine oversees the biggest readership research project ever attempted by the newspaper industry. Even with all that data, he says it's hard to generalize about free distribution's future among traditional dailies.

But looking out on a 3- to 10-year horizon, Lavine does not dismiss the prospect out of hand. Consider, he says, metro dailies afflicted with subscriber churn rates that can run as high as 150%. "With really high churn rates, it is a losing situation to get new paid customers to replace those who drop out," he says by e-mail. "When it costs a paper $1.40 to get a new paid customer and they only take in $1 in circulation revenue, it is a lot easier to think about free delivery than when a newspaper makes money on circulation."

Dailies might also choose to be free in boxes and stacks around town but charge for the convenience of home delivery, he suggests.

"Before a newspaper can even think about free or paid, however," Lavine adds, "its leadership needs to do some serious analysis" about its position in the marketplace, its competition and, especially, about its customers. "Isn't price in some sense a deflection from this central issue ? which is making a newspaper that is so compelling that people will want to regularly use it, and will pay for it?" he asks. "That should be the heart of the discussion."

When American newspapers are giving readers that kind of newspaper, Lavine says, the whole question of free or paid will be a lot easier to decide.