Free newspapers are nothing new - in fact, they have been around since the 1940s, mostly as protest sheets. In the past 10 years, however, something has changed quite significantly.
The current wave of free newspapers seems to have started in Stockholm, Sweden in the mid-1990s, with the Metro brand. Metro newspapers are now available in nearly 20 countries (interestingly, the Metro available in the UK isn't affiliated with Metro International, but rather with the Daily Mail), and scores of other newspapers have popped up all over the world. London, for example, has no fewer than three free-sheets covering it - thelondonpaper, London Lite and Metro.
So, how can they afford it?
The newspaper media has long been in a strange evil cycle: People investing in newspapers are either not interested in news but in money, or (more sinister) interested in using news outlets as ways of influencing public opinion and building other brands. This means that money to the people actually reporting (such as reporters, researchers, and journalists) gets cut, and we're seeing a very real trend towards capable wordsmiths and curious would-be-investigative reporters shying away from the profession because in many cases the starting wages are so ridiculous.
The economy of creating a newspaper is pretty simple: You invest in people, in knowledge, and in research. You get journalists who comb through all the local papers in the hunt for a story. You have journalists who are out, talking to people, in search of the next scoop. You have people covering the courts, and digging through public documents. You've got people with a hunch who go and hunt out news where they thing someone has been wronged.
Of course, creating a good, strong newspaper which is at the cutting edge of the world news costs money. A lot of it.
Free newspapers have a huge advantage over paid-for newspapers: They can guarantee to blanket-cover a large part of the population. In large cities like London, the majority of the working public travel in to work by public transportation for purely logistical reasons, so if you were to hand out a newspaper to every person who travels on the London Underground, you've got a pretty good market share.
And - lo and behold - they do: According to the Audited Bureau of Circulation (ABC), the body which accounts for the number of copies of a publication gets distributed - and read - by the public, the London freesheets are doing very well indeed. The London Lite is audited at more than 400,000 copies per day, thelondonpaper hands out just over half a million copies, and Metro distributes nearly three quarters of a million newspapers every day in London (and nearly 1.4 million across the UK). Compare that to 350K copies of The Guardian, 620K copies of The Times and about 2M copies of the Daily Mail every day.
With a huge market penetration comes a lot of advertising revenue, but if you pick up a copy of any of the free-sheets and compare it with any of the other newspapers mentioned above, you realise that despite huge circulations and significant revenues, the production values are nothing like more 'serious' newspapers. Hell, even when compared to non-serious newspapers such as The Sun, the actual news value of the free sheets is nearly nil.
By using a skeleton crew of an editor, a crew of sub-editors and a hand-full of journalists while relying heavily on wire services such as the Press Association and Reuters, combined with a strong element of crowd-sourcing ('send us your pictures' 'What do you think about X'), the free-sheets are able to produce papers for very little money indeed.
The economics involved, then, are simply 'low spend' with 'high circulation'. Advertisers can talk to a large number of commuters for cheap (the rate card for free sheets is typically a fraction of that of the more established papers), the commuters can stay on top of the latest developments in the news world without paying money, and the newspaper publishers pocket the difference.
Everyone wins - right?
Well, not really - the big worry is that as the mass market starts to feel that they can get 'the news' from the free sheets, they don't have to buy the other newspapers anymore. Which in a sense is true - between the free newspapers and the internet, it's possible to stay on top of a lot of the news in a way that fits into a busy schedule - the time spent on the underground is just downtime anyway, right?
The problem is that there are some sinister forces at work. Not many people know that the Metro is owned by the Daily Mail - but most people have a strong opinion about that particular publication: the consensus is that the Daily Mail is a right-leaning, hate- and fear-mongering newspaper with a very strong agenda indeed. The Metro, interestingly, seems to have inherited some of the value system from the 'Mail, but is a lot more subtle about it, which might be a much more effective way of shaping the public opinion about a matters in a more subtle way.
Quite apart from the brainwashing which is slowly becoming evident in the free dailies, more people getting their (possibly flawed) world view from free newspapers means that there's fewer people buying the paid-for newspapers. The effect of this is that the downward spiral continues; in order to remain profitable, the other newspapers have to save money somewhere, and that somewhere often means having fewer staff journalists, fewer sub-editors, fewer investigations, etc. The other danger is that less money means that newspapers are less willing to take chances - taking a chance means taking a risk on a court battle, which some times is worth the investment, but might be expensive. The free-sheets, in contrast, are risk-averse to the point of being bland, which means no law-suits, but also no pushing the boundaries.
It's quite easy to imagine a media landscape where major, established newspapers start folding because they are losing their casual buyers, which means they can't continue demanding the advertising rates they have been, which means they can't afford the number of investigative reports they have done in the past, which means that the harder core of buyers - the ones who used to buy the paper because of its deep-digging features - will stop buying or subscribing - etc.
The news media has long been described as the guardians of democracy, which is the true reason why it seems dangerous to have a series of free newspapers erode away the basis of some of the strongest bastions of Old Media.
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