Is Turning a Paid-For Metropolitan PM Into One That Gives Itself Away Downtown But Charges In The Suburbs One Way Forward?

Philip M. Stone July 31, 2007

One of the biggest questions newspapers are trying to resolve is how to get the eyeball “numbers” up and that in turn comes down to redefining exactly what comprises the “numbers”. In the US the National Newspaper Association says the way to combat steadily falling print circulation figures is to combine them with Internet readership, the idea being to impress advertisers that multimedia newspaper eyeballs are continually on the increase. But in the UK the ABC says it has no such plans to combine print and digital numbers.

So, if a UK newspaper is to rely solely upon its print circulation to impress the advertisers what can be done to get those print readership numbers up?  The Manchester Evening News (MEN) back in May, 2006, started a daring experiment – it would give 50,000 copies away daily downtown, and yet remain a paid-for in the suburbs. The UK ABC does not include the free copies in the official circulation numbers so a drop in the paid-fors could have a negative impact on the official numbers, but since advertisers spend far more money on a newspaper spend than they do on, say, an Internet spend, then why not a strategy of actually increasing the print numbers even if the additional copies are not officially recognized?

Has the Evening News been able to maintain and even increase eyeballs looking at print? Yes is the short answer, but there are “ands” and “buts”, the most significant being that readership numbers are up but the newspaper is now giving away more copies  than it is selling.

A year ago the newspaper had a paid circulation of 134,000 but it was very much a suburban newspaper with only about 7,000 sales downtown. So, the thinking went, why not sacrifice those 7,000 sales and instead give away 50,000 copies downtown, but still be a paid-for where its circulation was by far the strongest – in the suburbs. All going well, according to the business plan, copies distributed in total would increase to around 180,000.

And indeed a year later the newspaper is distributing close to 181,000 newspapers daily, but the percentages did not work out as envisaged. The  original 50,000  copies a day given away downtown quickly grew to 60,000 and continued on the way up and in June the Audit Bureau of Circulations certified that the MEN was giving away 92,867 copies downtown, and the newspaper says its paid-fors are now down to 88,000 copies – a drop of some 40,000 since the experiment began. It has crossed that line in the sand and is now giving away more copies than it sells.

That means, of course, that circulation revenues are certainly off, but overall has this produced a better revenue performance for the newspaper via higher advertising rates for increased readership?  The newspaper doesn’t actually address that head-on, but Mark Dodson, chief executive of GMG Regional Media that owns the newspaper, said in a statement, “We are pleased our circulation is continuing to increase in what remains challenging times for the industry. The increasing circulation figure and strengthened readership profile are great news for our advertisers. By listening to our advertisers and readers, we have been brave enough to change the way we provide news in the Greater Manchester area.”

So the newspaper, in about a year, increased its overall distribution by some 47,000, but at the same time its paid circulation has dropped by about 39,000. And to judge whether that’s good or bad it’s important to note what was happening before the experiment began.

Founded in 1868, The Evening News in its heyday had a circulation of more than 500,000. Today Manchester is the UK’s eighth largest metropolitan area with a population of some 400,000 and about 250,000 daily commuters.  And Manchester, like cities throughout the UK, has seen its newspaper circulation in continual decline for some years now. Editor Paul Horrocks said before the experiment, “We had actually extrapolated our rate of decline and found that by 2025 we wouldn’t have anything left.”

Dodson, the chief executive, said before the experiment, “Evening newspapers have been in full circulation decline for over 40 years. The cyclical downturn in this economy, coupled with a structural shift in advertising income has brought the circulation future of the newspapers into sharp focus. After a period of reflection we have decided to take a more radical approach to the problem. We want to take control of our future and believe a part free, part paid MEN is the future for this great newspaper.”

Horrocks, who is also President of the Society of Editors, said he understood the risks in going forward. “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?’”

If the Evening News was allowed by the ABC to combine the paid-for and free copies together, it would mean the newspaper has the largest UK regional circulation.

The GFKNOP research organization reported in March that the number of people who read each issue of the paper increased by a fifth from 362,213 in October 2006 to 428,931 in February, 2007. The question only the accountants can answer is whether that increased readership has attracted more advertisers, is the newspaper able to charge more for its advertising, and if so does all that additional advertising revenue more than make up for the circulation revenue losses at 35 pence a newspaper – around £80,000 weekly ($160,000, €116,000)?

The trend in Manchester each reporting period has been for the free copies to go up and the paid-fors to go down (although the paid-for only went down some 6,000 since December so that might be stabilizing), so if at the end of the day it’s a 60% free newspaper and 40% paid-for, and the advertisers are impressed with the higher readership and therefore are paying more, then maybe this could be a winning combination.

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