Can papers turn London's demand into real profits?

I was on a panel debating the future of media on Press TV's Forum show last week, filmed before an audience of 70 young people from London.

Steve Barrett is editor of Media Week
Steve Barrett is editor of Media Week

When questioned whether they had read a newspaper that day, about 95% raised their hands. But when I asked how many paid for their paper, only four hands stayed in the air.

And therein lay the conundrum at the heart of the success and failure of thelondonpaper, which News International last week announced will close in September.

The product was popular with London commuters and young people, tapping into a latent demand for upbeat, bite-sized, brightly presented content that didn't tax the brain cells too heavily after a busy day at work or college. Associated's more budget-conscious London Lite spoiler product also attracted a following.

But these new consumers weren't paying for the expensively produced and distributed paper. And a News Corporation no longer prepared to give away content online was unwilling to stomach further losses to add to the near-£40m already sunk into thelondonpaper (£16.48m in year one, £12.96m in year two and a reported £9.1m this year).

The jury is still out on whether a gentlemen's agreement was struck between NI and Associated to mutually shut their loss-making free papers, although this outcome is still the most likely scenario.

There is undoubted demand for free papers, but there will presumably be less competition for the Transport for London newspaper distribution contract, which is held by Associated's Metro, but expires next March and is up for tender.

Richard Desmond's Express Newspapers has thrown its hat into the ring again and claims to be reviving plans for a freesheet with a mystery Eastern European investor. But we've been down this road before and the suspicion remains it is a mischievous ruse designed purely to make life difficult for Associated.

And if News International is still in the running, could it be planning something extraordinary with its loss-making Times, such as distributing a Times Lite from Tube dump bins? Stranger things have happened, but it doesn't quite fit the new age of austerity at Wapping that ultimately spelt the end for the ill-fated thelondonpaper.

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