News International plans to shut free London paper

August 20, 2009 by Roland Jackson

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Copies of thelondonpaper are distributed in London in 2006 on the day of the free paper's launch. News International, the UK newspaper arm of Rupert Murdoch's media giant News Corporation, has said it planned to shut down thelondonpaper, its loss-making freesheet for London commuters.

News International, the British newspaper arm of Rupert Murdoch's media giant News Corporation, said Thursday it planned to shut thelondonpaper, the group's loss-making freesheet for London commuters.

The move marks the latest bid by News Corp. to move away from free news content, after Chairman Rupert Murdoch warned earlier this month that the firm would start charging readers of its online newspapers in the coming year.

"News International today announced that it proposes to close thelondonpaper, its free evening newspaper," the group announced in a statement, adding it was consulting with 60 workers.

The freesheet, which has a daily circulation of about 500,000 copies, suffered pre-tax annual losses of 12.9 million pounds (14.9 million euros, 21.3 million dollars).

"The strategy at News International over the past 18 months has been to streamline our operations and focus investment on our core titles," said James Murdoch, Chairman and Chief Executive of News Corporation in Europe and Asia.

"The team at thelondonpaper has made great strides in a short space of time with innovative design and a fresh approach but the performance of the business in a difficult free evening newspaper sector has fallen short of expectations.

"We have taken a tough decision that reflects our priorities as a business," he added.

News Corp. had revealed earlier this month that it suffered an annual net loss of 2.0 billion pounds (2.4 billion euros, 3.4 billion dollars) for the 12 months to the end of June.

Rupert Murdoch had also warned that the past year had been "the most difficult in recent history" as the group weathered the worst global recession in decades.

International ratings agency Fitch forecast Thursday that there would be more newspaper closures to come, as the British media industry buckles under the weight of recession and dwindling advertising revenues.

"The closure of thelondonpaper... is a sign of the extreme steps ad-funded media companies are having to take to protect their margins in the current environment, and is unlikely to be the last high-profile title closure announced before the current recession plays out," Fitch said.

"The current extraordinary market conditions are forcing parts of the UK newspaper industry to take steps they would never previously have entertained -- including taking a cold, hard look at the viability of all their titles."

Thursday's announcement meanwhile marked the end of London's free evening newspaper war which erupted three years ago.

News International, which also publishes The Sun, The Times, and News of the World, had launched thelondonpaper in September 2006.

But rival firm Associated Newspapers -- publisher of morning freesheet Metro and London's paid-for Evening Standard newspaper -- retaliated with the launch of its own free evening paper, London Lite.

"It's a sad situation... but it is, as everyone knows, a very competitive market place and nowhere more so than in London," said Steve Auckland, managing director of rival paper London Lite.

Associated's parent group, Daily Mail and General Trust, has since sold the loss-making Evening Standard to former Russian KGB agent Alexander Lebedev.

London mayor Boris Johnson meanwhile lamented the looming closure.

"Thelondonpaper has become a part of many people's daily lives over the last three years and I congratulate the team for the great creative contribution they have made to life in the capital," Johnson said.

(c) 2009 AFP