The Financial Times even wrote “Freesheet no longer viable model for papers selling news” which was slightly off the mark, but I admit that “London cannot support four free dailies in a recession” doesn’t sound half as sexy.

FT’s Salamander Davoudi also wrote “News International’s decision to close its only freesheet” - which is not just off the mark but totally wrong (in Australia the publisher owns two free dailies, four editions in total).

What is happening in London, and in other countries like Sweden, Switzerland, Denmark, the Netherlands, Spain and Italy, is that more than two free dailies - in this case, two evening papers, one morning paper and one financial paper - competing in a crowded market (almost a dozen paid papers, including the part-free Evening Standard) in a recession will not lead to profits for all titles. Especially free evening papers, a model proved to be very difficult in other parts of world, will suffer. In all markets mentioned above, free dailies have closed down already.

Does this mean it’s the end of free daily newspapers? Not really.

It means that the combination of competition (two or more, but certainly four or five titles) and an economic recession could be lethal for free dailies - at least for the weaker ones. With one down, the remaining papers will profit from it.

Competition is worse for free than for paid papers because they are perfect substitutes for each other - which makes them an easy target for advertisers looking for discounts. A recession always hurts newspapers (paid and free) more than other media because they rely more on ads that are vulnerable (jobs, retail, cars, real estate, classified).

But with paid newspapers also losing circulation and with many of them losing money as well (where’s the FT article “Paid no longer viable model for papers selling news”?), there certainly is room for a free paper as the young urban non-paid audience is growing and still valuable for advertisers. Room for one at least and two perhaps, but not for three or four.