The New York Times
One London Paper to Rule Evening Commute
By ERIC PFANNER
In the latest of the great newspaper wars of London, two lions of Fleet Street, Rupert Murdoch and Jonathan Harmsworth (the fourth Viscount Rothermere), have been outflanked by a former Soviet K.G.B. officer, Aleksandr Lebedev.
London Lite, a free newspaper published by Mr. Harmsworth’s Daily Mail & General Trust, signaled its intention last week to shut down. That would leave the London afternoon newspaper market to Mr. Lebedev’s Evening Standard.
In January, Mr. Lebedev, a Russian tycoon, acquired a controlling stake in The Standard, a 182-year-old fixture of London commutes, from the Daily Mail & General Trust. The Standard put intense pressure on London Lite by becoming free three weeks ago, rather than charging 50 pence (80 cents) a copy. This vastly increased its distribution.
The Standard’s move followed the recent demise of another afternoon free paper, The London Paper, published by Mr. Murdoch’s News Corporation. For three years, London Lite and The London Paper fought a battle that ended up bleeding both, as well as The Standard.
Circulation of The Standard had fallen to 225,000 in July, from 443,000 nine years earlier, and many of those copies were discounted or given away.
Since the paper became free, Mr. Lebedev said, its popularity has soared.
Whether Mr. Lebedev’s coup translates into profits is another matter.
“At the personal level, I’m quite happy about what we have done,” he said in an interview. “Whether I will be unhappy someday with the financial results — let’s wait and see.”
The decision to shift to free distribution goes against the grain, at a time when other papers are raising prices to compensate for a plunge in advertising. Across Europe, dozens of free papers, with all their eggs in the advertising basket, have shut down.
Andrew Mullins, managing director of The Standard, said the move would result in lower distribution costs, balancing the effects of lost newsstand revenue. And while printing costs will rise as circulation increases, the paper hopes to recoup that and more by raising ad rates.
“We had to be brave and do something bold,” Mr. Mullins said. “It had become abundantly clear that the paid-for model could not generate the audiences we needed.”
The Standard has increased distribution to 600,000 papers a day, filling the gap left by The London Paper. The Daily Mail & General Trust, which has kept a 25 percent stake in The Standard, is still publishing London Lite for now. But it said it had begun consultations with its staff about the future of that paper, a formality before a shutdown.
While The Evening Standard will pick up many of the other two papers’ readers, advertisers are not guaranteed to follow, said Vanessa Clifford, head of press at the media-buying agency Mindshare in London. Many advertisers, she said, are more interested in reaching specific groups of readers than in reaching the largest possible circulation.
“I hope they aren’t skipping around saying, ‘Yippee, all that money is now going to come in to us,’ ” she said of The Standard. “That would be naïve.”
Mr. Lebedev said advertisers had been reassured by the paper’s insistence on maintaining journalistic quality — something that is not a hallmark of free publications.
“It’s good to see people getting newspaper literature, rather than litter, for free,” Mr. Lebedev said.
The Evening Standard is not Mr. Lebedev’s only media holding. With the former Soviet president Mikhail Gorbachev, he owns a majority stake in Novaya Gazeta of Moscow.
Mr. Lebedev installed a new editor, Geordie Greig, who was hired away from Tatler, a Condé Nast magazine. The decision to drop the cover charge, Mr. Mullins said, had been personally approved by Mr. Lebedev after a study in which a number of business scenarios were presented to him.
Now, Mr. Lebedev and his London-based son, Evgeny, are keeping a close eye on developments.
“There’s a phone call once a day from one of the Lebedevs,” Mr. Mullins said. “They bought an influential paper and want to make sure it stays an influential paper.”
There have been reports that Mr. Lebedev might move to acquire another paper, like The Independent.
“Most of the speculation has been inaccurate,” he said. “It’s not that I don’t want to, but there’s no substance in it now.”
Mr. Lebedev said that he felt an obligation to support the newspaper business at a time when many were struggling with the challenge of the Internet. Much of what he learned about business and finance on the way to assembling a multibillion-dollar fortune came from reading the papers, he said.
“It’s good that we have online, but there’s so much rubbish in it,” he said. “What could Dostoevsky communicate with Twitter?”