Independent Sold: Now Going Free? New Reporting Fund

The UK’s tenth-placed national newspaper The Independent has been sold to Russian billionaire Alexander Lebedev, as expected, for £1. Now what will he do with it… ?

Specifically, will Lebedev scrap The Indy’s cover price, as he did after buying the London Evening Standard? Analysts seem to like the idea…

“With a nascent economic recovery, advertising offers more upside potential than circulation, as has happened in previous recessions,” says Ernst & Young media analyst Luca Mastrodonato.

“The advertising market is already showing pockets of growth and maintaining a paid-for Independent would limit the potential for an advertising rebound at the title.

“It is likely that free distribution of The Independent will also increase brand visibility online and grow digital revenues.

“The Independent has the least to lose from shifting to a free model. Its circulation has significantly underperformed other national qualities, it has lost a quarter of circulation since 2005 with bulks already accounting for over 20 percent of circulation.

But: “A cut in cover price would only bring limited upside. In 2009, the title experienced the highest percentage decline in full-rate circulation despite keeping its cover price flat. Other broadsheets increased prices by nine percent on average. (Going free) would inevitably hurt the other quality titles .. National qualities have been warned.”

Thanks partly to the ad downturn, the outlook for freesheets had looked poor when Lebedev took the Standard free. In the tabloid market, DMGT and News International folded their free London Lite and The London Paper in the capital.

But Lebedev, trumpeting the Standard’s quality credentials, went full-steam, more than doubling the print run to 600,000. Now the Standard is hiking ad rates after a welcome response from advertisers, the paper’s managing director told paidContent:UK last month.

But Andrew Mullins reckoned the Standard can accomplish this due to the “quirk of our geography” in a city of affluent readers that advertisers love. He wasn’t speaking specifically about the Indy at the time, but his words suggest the Standard’s new stablemate shouldn’t follow down the free road: “When you have a paid-for title and you are nationally distributed, paid content is critical.