London Evening Standard to go free

Owner Alexander Lebedev to more than double Evening Standard's distribution when it drops 50p pricing later this month

Russian oligarch Alexander Lebedev is to make the London Evening Standard a free newspaper later this month, after more than 180 years as a paid-for title.

The 50p newspaper, which is 75.1% owned by Lebedev and 24.9% owned by Associated newspapers, will go free from 12 October.

Lebedev's decision immediately throws the spotlight on Associated Newspapers' London Lite, set up as a rival to News International's the London Paper, which closed in September. Many expect that London Lite will now close.

The distribution of the Standard will increase from about 250,000 to 600,000 copies a day.

"I am confident that more than doubling the London Evening Standard's circulation and maintaining its quality journalism is what London deserves," said Lebedev. "The Standard has been producing exceptional journalism since 1827 and that is not going to change under my ownership. The London Evening Standard is the first leading quality newspaper to go free and I am sure others will follow."

The Evening Standard managing director, Andrew Mullins, admitted that "sustaining a paid-for afternoon newspaper had its challenges even before the freesheets [London Paper and London Lite] were launched in 2006".

"There are so many competing distractions to potential readers, particularly with new technologies," he said. "Being a quality newspaper with large scale and reach should transform our commercial fortunes. Our London reach will be at multiples of the quality national titles and our London classified business will once again have significant scale."

The Standard has denied that there will be any immediate redundancies, although it will lose millions of pounds of revenue annually from the decision to drop the 50p cover price.

Some of the staff are in shock, but others are understood to be "up for it".

Lebedev talked to his minority partner Associated about the decision. The Standard, which is housed in Associated's Derry Street headquarters, has a contract with the Daily Mail owner to supply copy to London Lite. That contract is still in place but "may not last forever", according to one source.

"It is early days since the closure of the London Paper and the launch of this new initiative from the Evening Standard. We will continue to assess the situation regarding London Lite," said the managing director of Associated Newspapers' free newspaper division, Steve Auckland.

"It is business as usual and we are pleased with the progress we are making."

Lebedev's paper makes in excess of £15m in revenue a year from its paid-for circulation, a sum that is split with vendors.

The Standard will now examine how costs can be reduced at the title, but has ruled out any initial redundancies.

"You have got to find ways to take costs out of the business when the model moves to free, of course," said one industry source.

It is understood that the business will save millions of pounds annually by streamlining its distribution and delivery system.

By boosting the circulation to 600,000 – described as potentially a "starting point" that could be increased at a later date – the Standard intends to get "back in the game" of classified and display advertising.

"Classifieds is a numbers game, it is about response and boosting circulation and going free means the paper will be back in the game," said the source. In terms of display advertising the argument runs that high quality papers obtain a higher rate for ads and that by going free, with greatly increased circulation, the revenue opportunity for the Evening Standard is greatly enhanced.

"The Evening Standard is more likely to be first on the [media buying] schedule when it wasn't really before, particularly given the audience profile – young, upmarket, London," said the source. "It could take it from an also-ran to a leader."

The Standard recorded an average net circulation an issue of 235,977 in August, according to figures from the Audit Bureau of Circulations. Within this 50.7% of copies were circulated free and 49.24%, or 116,192 copies, paid for.

Of the paid-for copies 107,680 were at "basic cover price" and 8,512 were sold "below cover price".

The free distribution was made of 75,645 copies, or 32%, bulks and 44,140, or 18.7%, free distribution.

Lebedev's move marks a reversal in the a new mixed pricing and distribution strategy that the Standard had been implementing since he took control of the title in February.

The strategy included offering the 50p paper for 10p after 9pm at mainline London train stations and at selected events, such as Lord's cricket ground, and free in certain areas such as Canary Wharf shopping centre after 8.30pm.

In July, the Evening Standard withdrew from the monthly national newspaper audit, repositioning itself as a regional newspaper for the purposes of reporting its circulation.

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Mark Sweney

The GuardianTramp

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