• by Joe Mandese  @mp_joemandese, October 26, 2005

One of the newspaper industry's newest and most intriguing strategies for stemming the erosion of readers--the distribution of free metropolitan dailies--apparently isn't having much, if any, impact. That's the conclusion of a comprehensive study of free daily launches in four major U.S. markets that is being presented at a major industry readership symposium today. The paper, a collaboration of James Collins and Kathleen Mahoney, the top researchers at newspaper audience researcher Scarborough Research and The New York Times, respectively, found that freebies introduced in New York, Chicago, Boston and Dallas, have had a negligible impact on overall newspaper circulation in those markets. And while they are attracting some hard-to-reach readers, including younger and minority, these are small gains that have had more to do with distribution strategies--such as giving papers away free in mass transit areas--than with the availability of alternative, free papers. The main effect has been that heavy newspaper readers simply read more, picking up the freebies in addition to their regular paid dailies.

"Free dailies do not cannibalize paid readership. To the contrary, readers read more," reads the white paper, being presented by its authors today at the Worldwide Readership Research Symposium in Prague. The paper, an advance copy of which was provided to MediaDailyNews, goes on to suggest that free dailies are simply a way to have more "touch points with existing readers and to increase brand mind share and loyalty among the existing base."

That's not the goal the newspaper industry has been touting since free dailies began catching on in the U.S. The papers were supposed to attract a new generation of newspaper readers to help stem the tide of erosion and the aging of the medium's readership base. While the free papers are attracting a younger audience, the research compiled by Scarborough and the New York Times concludes "it is not a young audience."

And while the free papers have had some impact in attracting minority audiences, that has been more a result of being distributed in mass transit areas, especially in New York, Chicago and Boston. The minority readership impact was less pronounced in Dallas, where there is a less-developed mass transit system. One byproduct of this strategy has been a boost in so-called "ridership" circulation, or reading that occurs when consumers are riding on trains, buses or other mass transit.

The overall impact of free dailies, meanwhile, remains relatively insignificant, with a total circulation of about 2 million; and with much of that readership coming from existing newspaper readers, the paper raises the question of whether the freebies have been worth the investment by their publishers, a combination of independents and existing major newspaper publishers in their metros.

The papers analyzed included Metro New York and am New York in New York City, the Chicago Sun Times' Red Streak in Chicago, Belo's Quick in Dallas, and BostonMetro in Boston. The New York Times Co. is an investor in BostonMetro. "This can help their total revenue by increasing loyalty and retention to the brand by providing a product that may be more convenient for current readers at certain times of the day. This strategy, along with a 24 hour website operation offers an 'always on' service for readers," concludes the white paper, noting, "However, proving an adequate return on investment on this might be challenging for many newspapers."

In a final point, the paper raises the question of whether freebies can "directly monetize" their free daily audience from advertisers. "Existing advertisers might resist incremental pricing to reach mostly the same readers in markets like New York, Chicago, or Dallas. For some papers, this argument may be a barrier for some advertisers. In non-competitive markets, such as Dallas, the free dailies offer message frequency for advertisers for which this is attractive."