'London Lite' is on a roll. So what price the 'Standard'?

With foreign freesheets surging ahead of paid-for titles, London's free dailies continue to fight it out, and the capital's venerable evening paper is caught in the crossfire. Tim Luckhurst reports

Surveying the global newspaper market, it is increasingly plausible to imagine free newspapers as the future of print. Recent figures compiled by Piet Bakker for the website newspaperinnova-tion.com show global circulation of free titles at more than 40 million daily copies. The European market accounts for 27 million of these – a rise of 22 million since 2000.

Spain sets the pace. There the daily 20 Minutos has surged past El Pais to become the country's largest general-circulation title. The French equivalent, 20 Minutes, is already the second most-read daily among opinion formers (just behind Le Monde). Its readership has risen by 12 per cent to 2.4 million in the year since September 2006.

Israel's free daily, Israel Today, has just raised its distribution from 250,000 to 350,000 daily copies. In Switzerland, distribution boxes appeared on streets last week as preparations were finalised for Wednesday's launch of the latest newcomer, .ch.

In London, National Readership Survey figures show that London Lite, the free sister title to Associated Newspapers' Evening Standard, had an average daily readership of 745,000 in the January-June period this year, while thelondonpaper, owned by News International, had 713,000. Not bad for two titles that only appeared last year. The word on the street is that the Standard may tread a path upmarket to provide some clear blue water between itself and its free rivals.

Confidence that the future lies in giving away journalism is strong. "Free papers are reversing the trend for decline in the paid-for sector," says Ian Clark, general manager of News International Free Newspapers.

As if to prove it, the former FHM editor-in-chief, Mark Soutar, will this week launch a free men's lifestyle weekly called ShortList. Meanwhile, former Daily Express editor Richard Addis is hoping to join the fray with an upmarket daily provisionally named The Day.

Sceptics accuse Messrs Soutar and Addis of naivety, pointing out that the British freesheet war is gruelling. London Lite and thelondonpaper are both loss making after 13 months of trench warfare on the capital's streets. They face each other across a no-man's land of discarded news- print from which analysts predict only one can emerge alive.

Mr Addis is blunt: "In London neither side can win. It is a bloody, long-term battle. Each product does its job well. On its own, either would be a good business. But they can't survive together."

He believes the long-term advantage is with Rupert Murdoch's News International. "The pain is equal for the two competing freesheets, but the damage spreads laterally. Associated's Standard is taking a big hit."

Mr Soutar says: "At the moment you have two papers fighting to the death for a very valuable patch. It is a war of attrition that is causing a great deal of wastage."

But Steve Auckland, managing director of Associated's free newspapers division, says the pain is worth bearing. "We are pleasantly surprised by the revenue we have gained. At Associated we develop products for the long term. We believe we can get London Lite into profit."

He claims News International is facing bigger losses but recognises why that may make commercial sense to his rival. "It has been open about saying that it is attacking the Standard. It thinks thelondonpaper can bring it down."

News International's Mr Clark denies it. "Our criterion for success is to have a profitable newspaper. It is not about killing the Standard. But if Associated had not launched London Lite, the Standard would be selling more. It has put us in a strong position. Anything we do is likely to have an impact on one of the Associated titles, whether it is the Standard, Metro or Lite."

Mr Auckland says that is nonsense. Associated sees London Lite as a tool to attract young, affluent commuters who have not acquired the habit of buying newspapers. He believes it will survive alongside Metro and the Standard. "There is nobody on the Associated board who thinks the Standard is in peril. This is a very long game."

Sources at the company say plans are in place to take the Standard further upmarket and distinguish it more clearly from its free siblings.

Mr Soutar fears this may reinforce the British paradigm that free must mean cheap. He sees it as the best way to reach the "can read, won't read" generation. "When you take a European-wide view, you can really see the value of free media. There is a big age factor: readers over 40 associate free with cheapness and poor quality; readers under 35 have been conditioned by the internet to understand you can get high quality without paying for it."

"Free titles abroad perform a much wider range of roles than they do in this country," agrees Mr Addis. "Here the existing big players appear to think they are for kids. I am convinced that they can play a more serious role."

He identifies niches such as business, sport and ultra-local news as ideal for dedicated free titles and cites as proof the success of the London financial title. "City AM is very good – interesting, brave and far-sighted. It will be there for a long time."

"Free newspapers and magazines need careful targeting," says Mr Soutar. "If you are the only title on the street, you can have a very broad appeal. In a contested market, you need a clearer idea of your audience."

ShortList is aimed at career-oriented men in their 20s and 30s who are alienated by existing lads' magazines. "There is no point being bland," he explains. "You have to identify an audience that can congregate around shared passions."

Mr Auckland at Associated acknowledges that such targeting appeals in principle to advertisers, upon whom free titles depend for profits. But he says it is hard to achieve. "City AM identified a tight niche among young City commuters, but now they are handing it to van drivers in order to hit their circulation target. That isn't targeting."

He believes in a simpler philosophy: getting London Lite's short news articles, sports reports and entertainment listings to the right distribution points at the right time. He insists it is the best way to reach the young, upwardly-mobile audience that advertisers crave.

News International's Mr Clark is equally upbeat. "People are picking up both thelondonpaper and London Lite. They are reading them at a time when our research shows they used to look out of windows or listen to MP3 players. There is room in the market for both."

Few European cities support more than one profitable free general newspaper. But optimism is boosted by evidence collected for the World Association of Newspapers in Colombia, Japan, the Philippines, Lebanon, Serbia, Spain, Sweden, the US and UK. In each market, free titles are credited with stimulating young people's curiosity about news.

This raises hopes that such people may finally be persuaded to sample and appreciate ones that you buy. But the theory is unproven. As Associated and News International insist their free titles are on track for profitability, the Standard looks increasingly vulnerable.

The same goes for many venerable titles where the traditional quality of journalism cannot be maintained without a cover price.

Tim Luckhurst is professor of journalism at the University of Kent