Three Years On And That Manchester Free Downtown/Paid in the Suburbs Newspaper Looks Like It Is In Trouble And Its Long-Time Editor Quits

Philip M. Stone September 23, 2009 Follow on Twitter

Back in 2006 the Manchester (UK) Evening News broke new ground with a hybrid distribution system – give away copies free downtown but continue charging in the suburbs. There have been plenty of twists and turns since, the newest to cut back on free copies by 75% on Monday-Wednesday while keeping to its current 80,000 free issues on the top advertising days – Thursday and Friday. But is it working?

It has been a fascinating experiment for what one can learn about the public’s willingness to pay for something that they could get for free, but the bottom line seems to be that the experiment has not performed where it counts the most – the bottom line although management might make the argument that things would have been far worse if they hadn’t tried the experiment.

Regular ftm readers will recall we have kept tabs on the goings-on in Manchester since its 2006 inception – indeed we received several emails from American publishers saying they were studying the case carefully. But the experiment didn’t stop the Manchester Evening News from having to do what all the provincial UK newspapers have been doing – cutting costs dramatically and just this year it lost 39 editorial staff – 44% of the newsroom – and the weeklies within the group all closed their local offices and started working out of the Evening News’ offices.

Sadly editor Paul Horrocks, at the newspaper for near 35 years, has had enough and is quitting to start his own consultancy. Horrocks was one of the UK’s leading provincial newspaper editors -- editor in Manchester since 1997, he was president of the Society of Editors in 2007 and he served on the Press Complaints Commission from 2002 to 2006. “Leaving after such a long time is a wrench, but it is the right time for me and my family,” Horrocks explained.

Founded in 1868, in its heyday the Evening News’ had circulation of more than  500,000, but by the end of 2005, according to ABC figures, circulation was down to 134,000, that was 7.2% less than the year before. Something had to be done. “We had actually extrapolated our rate of decline and found that by 2025 we wouldn’t have anything left,” Horrocks then told the UK Press Gazette trade magazine (which is no longer in print but is online).

And so the hybrid circulation system was born. Downtown sales made up only 7,000 of the 134,000 circulation so, the thinking went, sacrifice those 7,000 sales and instead give away 50,000 copies downtown and assuming the paid-circulation in the suburbs held then total circulation would rise to 180,000, the largest of any provincial newspaper in the country, and advertisers would be overjoyed. 

But it didn’t turn out exactly as marketing envisaged. Manchester is the UK’s eighth largest metropolitan area with a population around 400,000 and it has around 250,000 commuters daily. It seemed once commuters figured out they could get for free downtown what they were paying for in the suburbs it was only natural what came next – free copy distribution increased and sold copies went way down.

Within a year the newspaper had achieved its total goal of 180,000 copies, but the proposed 50,000 free papers had become 92,000 free newspapers, while the 127,000 paid copies sank to just 88,000 copies.  It had crossed that line in the sand and was giving away more copies than it sold. At 40 pence per sold copy that’s a downturn in newsstand income of around £100,000 a week and that must have hurt. 

By three years into the experiment, with all sorts of tweaking, the total paid/unpaid circulation was at 153,724, so that’s 26,276 (15%) short of the target, but to get even there the newspaper was still giving away far more copies than planned originally -- in the last half of 2008 it was 81,092 -- and suburban sales tumbled to 71,933. In other words the planned ratio of 27% giveaways and 73% paid-fors got turned around and has ended up as  53% given away and 47% sold. So, the total distribution was still 20,000 more than when the experiment started, but 26,000 short of target.

That brought on more tweaking in April, cutting the 80,000 free copies to just 20,000 free copies Monday – Wednesday, while keeping to the 80,000 on Thursday and Friday when advertising is strongest. One problem in doing that is that the Audit Bureau of Circulation that had earlier agreed to include free and paid together had no system to account for some days of the week having far more free newspapers  than others, so the newspaper announced this week it was withdrawing from the ABC regional newspaper  sales survey.

Just how do you account for a newspaper that has free/paid circulation of around 165,000 copies on two days of the week and about 90,000 for the other three days? Average it all out?

And how has all of this affected the bottom line? Profits at the MEN Group which includes weekly newspapers and a local cable TV station fell 85% in the 12 months to March, and its parent company, Guardian Media General, said that its regional newspaper division which once was a huge money spinner had been losing money for the past six months.

Horrocks enthusiastically backed the project back in 2006. “Nobody can predict this is perfect, and, yes, there are some risks to this whole strategy. But the greater risk is you sit here wringing your hands worrying about the next set of figures. My answer to those who want to knock the strategy is ‘what’s the alternative?’”

The answer seems to that, yes, circulation did hit its 180,000 target, but the bottom line got nailed by doubling the planned number of free newspapers while losing some 30% of paid circulation. It’s doubtful any increase in advertising revenue because of higher circulation covered the loss of the paid newspaper revenue added to the cost of producing the free newspapers.

So will cutting back on the free newspapers on weak advertising days do the trick?  It’s an interesting tweak – and one can’t help but feel there is a right tweak somewhere – but when the Guardian Group says its provincials are operating at a loss and the editor of its top provincial quits that can’t bode too well for what is going on in Manchester.

See also in ftm Knowledge

UK Newspapers

The newspaper market in the UK is among the worlds most competitive. The publishers are colorful, editors daring, journalists talented and readers discerning. ftm follows the leaders, the readers, the freebies and the tabloids. 64 pages PDF (August 2009)
Order here