Free News and Readers Preferences Correlation

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Abstract

This paper answers the questions about implication of free news on print media with an effort of considering readers’ preferences, which are also a cause for emergence of free newspapers. The Effect of electronic media and availability of online news on print media and to what extent that will be a cause for the emergence of free newspapers finds place in review and analysis in the research.

The different types of free newspapers and their effect on mainstream newspapers and the complementary nature of the free newspapers will be examined to differentiate the readers’ preferences about mainstream newspapers and free news.

The aspects other than online availability of news and the free newspapers acting as prompters or marketing agents for online franchisees are reviewed and analyzed to decide the nature and extent of effect on mainstream newspapers.

As a whole the readers’ preferences are considered along with the effect of free newspapers on mainstream media and the division between readers of mainstream newspapers and free newspapers and the people who read both of them.

Introduction

The aim of the paper is to find out the impact of free news and readers preferences for the newspapers which offer it. To have enough understanding about the topic and to know about the readers preferences, the following research questions will be answered in the dissertation.

Relation to previous research

The relation to previous research finds place in the paper through answering the following questions and the literature review that reviews the opinions and results of the previous researches on the topic and the related topics.

To define and identify implication of free news in Print Media.
Why the newspapers that offer free news are focusing on certain sections of readers?
Do the free newspapers offer competition to traditional or mainstream newspapers or just go together with them?
If they are doing so, how it happens?
f. If they don’t the reason.
Is there any link between readers’ preference for free newspapers and more updated news?

Closed End Questions

Do you prefer free Newspaper?
1. Yes
2. No
Is the content of free newspapers is holistic or they differ from mainstream newspapers?
1. Yes
2. No
Is your main intention to read free newspaper is to know the news?
1. Yes
2. No
If Yes for the above question, do you find the news in free newspapers and its presentation as well as analysis is at par with mainstream newspapers?
1. Yes
2. No
If No for the question number three, what makes you read the free newspaper?
1. Marketing b. Life style stories c. to pass time in travelling
2. to know about new products you are interested in e. none of the above

Literature Review

The literature review of the dissertation explains what free news is and cites the situations that prompted the emergence of free newspapers. The availability of news for free due to changes in technology can be known as ‘free news’ as the readers may find the news online for free while browsing.

This resulted in a situation that prompted some companies in print media to offer free newspapers, which is termed as biggest threat to companies in print media in terms of profit and revenues.

Eventually the firms in newspaper industry found many threats and risks involved in managing a company and to release a newspaper. However, the response of these companies to readers’ preferences results in a threat or an opportunity for their business to stay sustained.¹

Availability of News on Internet

Publishing is the activity that has been severely affected by the advent of internet. The newspaper publishing has been still more affected due to the significant changes implied by digital media in the sector of news publishing. Regarding this aspect, the analysis of key factors that affect the preferences of readers in reading digital newspapers is necessary.

Thus while focusing on preferences of readers and the existence of free newspapers as well as their emergence; it is fair to focus on usability of digital newspapers and the choice of digital dailies by readers. To explain these affects the following text can help in understanding the relevance of newspaper sector on Internet.

“The advantages of the new digital media in terms of both supply and demand have brought a revolution in modern Journalism.

The use of these new systems is characterized by the speed in which news reach the reader, the low cost of distributing information, the possibility to update news constantly, and the opportunity to establish more direct contact and interact with users, who have come to play an important role in the design of journalistic offer.”(Flavian C., Gurrea R, 1).

As per the above quote, Flavian C., Gurrea R., mention the enormous advantages of the new digital media that have boosted the service of offering news in both qualitative and quantitative terms. The authors opine that this resulted in proliferation of increasingly, specialized electronic journals and resulted in a new communication media.

In this regard, Flavian C., Gurrea R (2008, p. 1) cite Nielson (2003) about news sites and digital newspapers, which are widely demanded by internet users worldwide. Going an extra mile in this regard, the authors cite Kaye and Johnson (2004), who affirmed that the main aim of accessing internet by users is to read breaking news and to search the most updated information.

Advertisement Revenue

Just before reviewing the emergence and sustenance of free newspapers, it is necessary to mention the threats to advertisement revenues faced by newspapers.

Regarding advertisement revenues, the newspapers get them from a diversified customers ranging from the people giving small personal advertisements selling consumer goods to the advertisers who give advertisements about luxury products, which are sold on a wider market when compared to the people giving small advertisements.

Both types of revenues are important in sustaining the profitability of newspapers and losing any of them is a major jolt to the profitability. The threat to the advertisement revenues is not only from online news portals but also from websites like e-Bay, which sell diversified products online and deliver them at the doorstep of the customers.

These types of websites and online marketing agencies normally tie up with big companies as well as small sellers and sell their products online. This not only relieves the seller from showroom expenditure but also the small advertiser to be free from giving costly advertisements in newspapers.

This type of marketing of products resulted in drop in advertisement revenues and the report of Trinity Mirror in 2006 that its advertisement revenue has been dropped by 10 percent. Hence, there should be an alternative to cope up with the damage done by websites and electronic media.

The advent of internet also challenged the monopoly of print media and the newspapers should fight with news portals as well as online marketing websites to stay in the gray and to enhance their advertising revenues.²

Coming to the point of emergence and sustenance of free newspapers, the analyses and interpretations of policies of governments by newspapers come to the fore as they can influence the readers. The influence of the content on the people matters here. The influence is due to interaction of media with its audience.

The influence is also due to flow of information offered by a Newspaper to its readers and the way it is being presented. Regarding the influence of print media on people, Andrew King & John Plunkett (2005) state as follows:

“The French Revolutions of 1789, 1830 and 1848 were all perceived as caused by unchecked floods of print through the social body: flow of media into the lower classes was considered a major problem.”(King & Plunkett 35)

In the contemporary period the necessity to penetrate (flow of media) into lowers classes or the target classes resulted in emergence of free newspapers.³

In the age of proliferation of free news on internet, the newspapers have no other way except to offer free news in print to counter the competition from news portals or other forms of online news. In this regard New York Times wrote about a newspaper in Hong Kong ‘The Standard’, which is a 58 year old English language daily that joined the ranks of free newspaper.

In 2007, when this paper has been offered for free in Hong Kong, initially the distributors gave a print run of 1,20,000 copies by tripling its last paid circulation run to outperform its major competitor ‘The South China Morning Post’. As it is for free, the first day public snapped all the copies within one or two hours and the publishers’ response is that it is better than they expected.

Only the attempt of the management to outperform its nearest competitor has been mentioned here, but the act of changing a print media newspaper into free newspaper is to compete with the Internet news portals and to retain their readers who are shifting from print to online media. Hence, the readers’ preference for online news and media can be termed as one of the causes that prompted some print media organizations to turn free.

In this point of view, it can be termed that the internet and online news are drivers of emergence of free newspapers as internet eroded the readership as well as advertising revenue of newspapers in markets worldwide. The companies like ‘The Standard’ responded faster than their peers who succumbed or suddenly fallen victim to web.

Though there are free newspapers before that, the case of ‘The Standard’ is the one that decided to shift from paid to free distribution of its publications. In this context, ‘The Standard’ relied on target readers of Hong Kong stock exchange as the 90 percent of its advertising revenue is from it.

As the exchange started offering companies the less expensive alternative of posting notices on Internet, the print media like the management of ‘The Standard’ started to oblige the same less expensive alternatives for the companies even in print and in an attempt to get advertisements they tried to increase circulation by offering the newspaper for free.

So, it can be termed that the compulsion of managements of print media to scramble for alternative ad revenue resulted in ‘free news’ even in print. The emergence of free newspaper is due to the logic that the free newspaper can have more circulation than the paid ones.

To consolidate the ad revenue as well as the readership, the free newspapers are acting according to readers’ preferences by targeting certain section of readers like ‘The Standard’ targeting the investors of Hong Kong Stock Exchange.⁴

In a similar manner, different free newspapers have to act according to readers’ preferences. The increase of popularity for online news after 2000 is evident from the article named ‘Newspaper Circulation up! (For Free Papers)’ published in mediacrit.com.

The article also mentions about the decline of circulation as well as revenue for print version associated with the slow and constant growth of online editions and indirectly underlines the readers’ preference for online news. This type of changes in growth regarding publication of news resulted in creation of a segment in newspaper industry, which has to offer free news to increase circulation.

The free newspapers are sold by hawkers on carts at all busy public places and in some cases are delivered to target customers in some neighborhoods and this is an attempt from the managements of print media to act according to the preferences of readers.

This resulted in emergence of free magazines also in countries like US, which are published weekly once but the context of free newspapers is different as the free magazines do not have a corresponding website as one of the readers’ preferences as mentioned earlier is to resort to online sources for news. The article cites Piet Bakker, a communications professor at the University of Amsterdam.

He is an expert on the free newspaper industry and explains the sustenance of free newspapers by increasing circulation as well as advertisement revenues. Bakker mentions that the 36 million copies of free dailies are being circulated in 49 countries. These countries include Korea, Chile, Austria and Botswana. Even in Europe, the circulation of free newspapers has grown five times in period 2000-05.

The combined circulation of 125 free dailies in Europe is around 26.5 million. This indicates that though there is growth in free newspaper segment, the market is highly competitive as there is more number of newspapers in a particular area. These free newspapers are compact when compared to their paid versions and come as tabloids to meet the preferences of readers.

The reason is that they offer these tabloids to the commuters who are mostly employees and workers and offer news mostly read by them as well as the articles about the issues and things they want. As they are targeted on commuters they can be read by the time the readers while they are in journey.

In the age of growth of online and digital news, the free newspapers are often used by mainstream newspapers to advertise themselves and to become popular among the readers. That means the paid newspapers are using the free versions as secondary sources and in the time being, the online news websites are also using the free newspapers as the ones to increase their popularity.⁵

Proposed Methods/Methodology

The methodology in this paper involves initially the survey results of some readers of free newspapers and mainstream newspapers. The analysis and discussion followed after the presentation of survey results will discuss and analyze the answers of readers in some academic researches and will be presented as a content that has answers for the questions taken as research questions for this dissertation.

The next part of the methodology is to fortify the analysis and discussion chapters with analysis of useful and important literature regarding free news and the consequences as well as causes for its emergence. At this stage the selected sources will be different forms of news, readers’ preferences, academic research papers or any type of news article or paper that is useful in analyzing the content that is useful for academic purposes.

Analysis

The most affected sector due to the developments in technology is Journalism as the ways and means of presentation of news has been changed with the advent of technology.

The proliferation of electronic newspapers resulted in availability of free news for readers and this resulted in pressure on print media that offers newspapers in print as their advertisement revenues have come down due to the availability of cheaper space in electronic news portals.

Hence, the motivations of the readers to read newspapers need to be observed by free newspapers to know the preferences of readers and to make them visitors of their corresponding websites. This results in a competition between news portals (digital news) and newspapers (print media).⁶

Digital versus Traditional Newspapers

The growing interest in the analysis of duality of channels that present latest news to readers or visitors results in competition between digital and traditional newspapers. This makes the study of free news as the one that makes readers to read the press despite availability of free news online.

When readers read free newspapers, the influence of motivations that make them to read them or the situations that result in reading them by the readers come to the fore. While studying these influences, press identified the following motivations;

To search for specific information
to get updated news
for leisure reasons
as a habit (Carlos Flavian., Raquel Gurrea, p.1)

are the reasons to read the newspapers either free or paid. Consequently, the analysis of duality of media that is available in the form of newspapers should be made from supply-side perspective as the advantages of internet as a medium boosted the supply of news in digital form. To overcome or withstand the competition, it is necessary for print media to find an alternative to make the newspapers attract the readers.

This can be made by using different distribution channels that reach readers in different forms and ways. One such example is to offer free newspapers to commuters going to offices. In addition to this, the free newspapers find many other distribution channels that find enough readers.⁷

Effect of Free Newspapers

Before discussing and analyzing the readers’ preferences and their links with the trends of free newspapers, it is important to know whether they are able to compete with the traditional ones or denting their revenues. This aspect might sound irrelevant to discussion and analysis of readers preferences, but the success and failure of any newspaper either it is free or paid depends on readers’ preferences.

If the free newspapers are cannibalizing the traditional ones, they are according to the readers’ preferences and are consolidating the readership. If they are not they must be targeting some sections of readers to sustain and to get profits through advertisement revenues and thus act as complements to main stream newspapers. In this regard according to Dr. Kathleen P. Mahoney., Dr James H. Collins (2005),

“the free tabloid newspapers have become serious media players in less than 10 years by having 2 million circulation in US. And now, traditional paid newspapers facing an already difficult marketplace are asking: is free dailies competition or opportunity?

This paper will provide some guidance to newspaper companies either considering introducing a free offering or being confronted by one, by examining whether the free dailies are competitive or complementary to the traditional paid newspaper.” (Mahoney. K. P. et al., p.1)

However, the observation of Mahoney K.P. etal., did not find any cannibalization of paid dailies by free dailies as both are following different strategies for their business. The intention of free tabloids is to capture non –readers and thus their strategies may not affect the paid newspapers’ business much. This is due to the fact that the free tabloids’ strategies rest on the expectation that the readers buy the franchisee’s paid products.

Though the free tabloids are not denting much into the readers’ base of traditional newspapers, they are capturing the non readers, who are elusive to the traditional newspapers till now. The effect of free tabloids on traditional newspapers lies on the extent of period the former hold the young readers. Normally, the readers of free tabloids do not stick to a newspaper for long time unlike the traditional ones.

Hence, the traditional newspapers have to consolidate their readership, whereas the free newspapers have to search for new readers on continuous basis. Moreover, a section of young people, who read free tabloids for a particular period of time may not leave their traditional newspaper if they are part of the latter’s readers’ base.

Eventually, the free newspapers may make the task of traditional newspapers difficult but cannot completely cannibalize them as the strategies as well as readers are different and even common readers also do not desert one for the other. Hence, it can be termed as the presence of free newspapers is making it difficult for traditional ones to sustain, but cannot make them irrelevant in the present scenario.⁸

Long term Perspective of Free Newspapers

After analyzing the effect of readers’ preferences on strategies of business now it is time to analyze the needs of long term developments for free newspapers. In this regard, Piet Bakker (2002) mentions the strategies that are applicable in the long run that consider readers’ preferences. The important concern the author put forth is that the reaction of the reader to the free daily, which is not a novelty but just an established product.

As the academic research on free newspapers is not widely available, the publications like reports by newspapers, organizations, business publications and press releases as well as the researches of free newspapers to frame strategies need to be used here to have an idea of scenario that is a result of the strategies of free newspapers that frame strategies according to the preferences of the readers they are targeting.

The important aspect, which is bone of contention, is about the circulation claimed by free newspapers as the audit for circulation followed for paid ones is different from that of the free newspapers. Eventually, the publishers of free newspapers claim their circulation and the reliability of that claim depends on certain sections that the publishers of free newspapers want to target.

In this context, the effect of free newspapers is supplementary or complement for the traditional newspapers as the strategy of them to approach is different from that of free ones.

Hence, the existence or emergence of free newspapers and their sustenance in long-term is independent of the adverse situation faced by traditional newspapers as that is a result of availability of content or news more on online than in the print and the access to online content being easy. In this regard Piet Bakker (2002) states that

“So far, 80 free daily newspapers have been introduced in 26 countries. The majority have been launched in the last three years. In some markets like Stockholm, Cologne, Buenos Aires, The Netherlands, Zurich, Basle, Bern, Toronto, Newcastle more than one free newspaper was published..”( Bakker, 181).

In support to the above facts Piet Bakker quotes the facts claimed by the free newspapers and finds that daily 20 to 25 million people all over the globe are reading free newspapers and another aspect of these newspapers is that they published in Metropolitan areas and the editions come out only on weekdays.

This further brings forth the preferences of readers in metro areas as well as the growth of newspapers in Metro in the presence of free newspapers as well as the advent of internet.⁹

Growth of Metro Newspaper

The emergence of free news also results from the fact that there is little scope of growth for metro newspapers as the advent of internet has decreased the profits of newspapers particularly in metro areas the people in these areas have more internet accessibility than their peers of rural areas.

The availability of entertainment as well as advertisement alternatives are denting the profits of print media by decreasing their advertisement revenue either by decreasing the number of advertisements or the tariff for them.

In addition to that the increase in prices of newsprint and decrease in readers interest as well as profitability prompted some newspaper managements to offer newspapers free to make their niche in the digital news channels as the free newspapers attract readers to the corresponding news portals and that results in increase of hit rate, which in turn increase the prospects of getting advertisements for online editions.

In spite of managing all the just mentioned aspects, the publishing of a newspaper needs greater levels of managerial discipline when compared to the publishing the same online. This is due to the fact that the printing operations need the assembly of first rate products with right advertising inserts with narrow production windows.¹⁰

Free Newspapers as complementary to Mainstream ones

In this situation of assembling first rate products with right inserting of advertising slots with lean production management techniques are necessary, but the traditional newspapers can use the free newspapers concept to increase the popularity for their online versions. In doing so, they can minimize the loss of advertisement revenue in print edition due to the advent of internet.

Hence, free news or free newspapers not only pose a threat to the traditional newspapers revenues, but also can be used as the ones that boost the revenues for their online editions. This strategy makes creating an online edition a compulsion for all traditional newspapers in print.

As the free newspapers target some sections of readers, the print editions can launch complementary free newspapers to target the sections of readers on which the free newspapers, which are not complementary for any print editions are targeting. Thus the traditional newspapers can use the welfare enhancing by new good complements to existing goods principle put forth by Michal Masika (2010, p. 2).

When the new goods, which are substitutes and are in the form of complementary newspapers for traditional newspapers are capable of replace the competitive free newspapers, the traditional newspapers can minimize the damaging effects of free newspapers their advertisement revenues.

This principle indirectly suggests to traditional or mainstream newspapers to offer the services for their readers, which are being offered by free newspapers through their online editions.

To do that, the mainstream newspapers not only should develop the appearance of website and presentation of news on that, they have to offer products online or should post advertisements of online marketing agencies for cheaper prices when compared to advertisement tariff in print edition.

Though this strategy may not increase the advertisement revenues considerably, they damage can be controlled and in long-term, the traditional newspapers can bring down the free newspapers to the standard of pamphlets for franchisee websites, thus drawing a clear line between their readers and the readers of free newspapers.¹¹

Reflections

It was found that the emergence of free newspapers initially is due to availability of online news as well as advent of internet. In the next stage, the free newspapers are used to as promoters for news portals or marketing web sites for certain products.

Hence, the free newspapers can be differentiated into two types; the first being the ones that target a section of readers to promote their products and the other type, which act as promoters to the online news portals that are independent or belong to a mainstream newspaper.

The potential and empirical obstacles found while doing research for this paper is that it is difficult to estimate the number of online news portals that are affecting the print media. As the news portals popularity is determined by hit rate and has no physical evidence, I found that the estimation of damage to mainstream newspapers is difficult in terms of circulation as circulation and hit rate cannot be compared.

Another potential aspect is that the differentiation of free newspapers, which are completely based on news and the ones that act as franchisees for online marketing sites. There is third type of free newspapers also, which act as publicity things for online news portals.

The fourth type of free newspapers are that come out weekly once or twice as a complementary from the publisher of a mains stream newspaper to withstand the competition of free news and to have publicity for the mainstream newspaper as well.

Regarding conceptual and theoretical problems, it is difficult to draw a line between mainstream newspapers and free newspapers. In other words paid newspapers and some free newspapers are difficult to differentiate except for the price. The theoretical problem that exists in the case of free newspaper is to authenticate the circulation claims.

In the context of paid newspapers, there is a system of auditing and related organizations to declare the circulation of each newspaper.

However, in case of free newspapers, as the publishers offer money to the people or shops who put their newspaper in stands, the more money the publisher can spend, the more claims for circulation may exist. Hence, I found that this aspect makes it difficult to calculate circulation of free newspapers.

From ethical point of view, commenting or criticizing on ethical standards of free newspaper do not have any theoretical or moral base. This is due to the fact that the free newspapers are not hiding any business activity they are doing and everything they are resorting to is legal and though it cannot be termed as moral, but can’t be called as immoral.

These points impact a study of a researcher to differentiate between complete newspapers and the papers that work as franchisees for online marketing sites. Moreover, as the free newspapers, which are used as tools for the marketing agencies also offer news and the absence of a system in print media to marginalize those type free newspapers from mainstream free newspapers will make the work of a researcher a difficult thing.

Conclusion

The conclusion in the dissertation will be in a way that reveals the importance of readers’ preferences in the emergence and trends of free newspapers.

After differentiating the free newspapers from the traditional and mainstream ones, the way the latter frame strategies to rein in the free newspapers to consolidate their advertisement revenue will find place. At the end how the free newspapers can also act complementary for traditional newspapers even in the presence of individual free newspapers in the market will be pointed out.

Works Cited

Andrew King & John Plunkett. Victorian Print Media: A Reader. New York. Oxford University Press. 2005.

Carlos Flavian., Raquel Gurrea, “Digital Versus Traditional Newspapers; Influences on Perceived Substitutability”. International Journal of Market Research, Vol. 51. Issue 5. 2009. P.1-3.

Carlos Flavian., Raquel Gurrea. “Perceived Substitutability between Digital and Physical Channels: The case of Newspapes”. Online Information Review. Vol. 31, no.6. 2007. P. 1-3.

Carlos Flavian., Raquel Gurrea, “Reading Newspapers on the Internet: The Influence of Websites’ attributes”. Internet Research. Vol. 18, no. 1. 2008. P. 26-45.

Donald Greenlees. “Hong Kong Newspaper takes gamble on free distribution”. Nytimes.com. published on 10^th September 2007. Web.

Flavian, C & Gurrea, R 2006, ‘The choice of digital newspapers: influence of reader goals and user experience’, Internet Research, vol. 16, no. 3, pp. 231-247.

Christensen. “API discovers “good enough” is better then best”. Strategic Direction. Vol. 24. Issue 9. 2008. Pp. 19-21.

Piet Bakker. “Free Daily Newspapers-Business Models and Strategies”. The International Journal on Media Management. Vol. 4, no. 3. (2002), p.180-187.

John Sterling. “Strategy Development for the Real World”. Strategy & Leadership. Vol. 30, issue 1, 2002, p.10-12.

Kathleen P. Mahoney., Dr James H. Collins. “Consumer Newspaper Choice in Markets with Free Print Options: Are Free Daily Newspapers Competition or Opportunity for Traditional Paid Products?”. Session &-The Symposium of Publishing. 2005.

Michal Masika. “Free Commuter Newspapers and the Market for paid –for Daily Newspapers”. University of Munich. 2010

Footnotes

¹ Flavian, C & Gurrea, R 2006, ‘The choice of digital newspapers: influence of reader goals and user experience’, Internet Research, vol. 16, no. 3, pp. 231-247.

² Christensen. “API discovers “good enough” is better then best”. Strategic Direction. Vol. 24. Issue 9. 2008. Pp. 19-21.

³Andrew King & John Plunkett. Victorian Print Media: A Reader. New York. Oxford University Press. 2005.

⁴ Donald Greenlees. “Hong Kong Newspaper takes gamble on free distribution”. Nytimes.com. published on 10^th September 2007.

⁵ NA. “Newspaper Circulation Up! (For Free Papers)”. Mediacrit.com. NA. 9^th June 2007. Web.

⁶ Carlos Flavian., Raquel Gurrea. “Perceived Substitutability between Digital and Physical Channels: The case of Newspapers”. Online Information Review. Vol. 31, no.6. 2007. P. 1-3.

⁷ Carlos Flavian., Raquel Gurrea, “Digital Versus Traditional Newspapers; Influences on Perceived Substitutability”. International Journal of Market Research, Vol. 51. Issue 5. 2009. P.1-3.

⁸ Dr. Kathleen P. Mahoney., Dr James H. Collins. “Consumer Newspaper Choice in Markets with Free Print Options: Are Free Daily Newspapers Competition or Opportunity for Traditional Paid Products?”. Session &-The Symposium of Publishing. 2005.

⁹ Piet Bakker. “Free Daily Newspapers-Business Models and Strategies”. The International Journal on Media Management. Vol. 4, no. 3. (2002), p.180-187.

¹⁰ John Sterling. “Strategy Development for the Real World”. Strategy & Leadership. Vol. 30, issue 1, 2002, p.10-12.

¹¹ Michal Masika. “Free Commuter Newspapers and the Market for paid –for Daily Newspapers”. University of Munich. 2010.

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