KOREA: Free papers hit traditional press

Traditional dailies are being put in the red by free newspapers, having lost 26 percent of their readership

The Korea Herald
Thursday, July 8, 2004

By Serena Park

Grabbing a free newspaper from neat stacks strategically placed at Seoul's subway station entrances is now almost second nature for commuters, and it's taking a toll on the traditional newspaper industry and the livelihood of news-stand vendors.

Just over two years ago, in May 2002, the first free newspaper - Metro - appeared in Seoul's subway stations, and the genre has spread rapidly. A number of competitors such as Daily Focus, AM7 and Good-Morning Seoul are now readily available alongside Metro every weekday morning as commuters rush for their trains.

"I pick a free newspaper up every day on my way to work, mainly because it's free," said Lee Oh-kyung, a 53-year-old woman. "Although they lack serious feature stories, I can find most of the daily news stories in free newspapers. I've never purchased any dailies from the news-stand vendor since I began to read free giveaways, although I have the Chosun delivered to my home in case I need more details."

College student Yang Hong-seok, 22, said, "Most of my friends don't seem to buy any dailies anymore, because free newspapers are good enough not to get bored on a subway. I pick one up when it's available. If I have a craving for additional news, I check (online portal site) Naver."

Im Jae-kyung, a 40-year-old subway news-stand holder, could have been speaking just as much for traditional newspapers as for his trade, saying, "Who would pay for a newspaper when you can get a free one right next to you? Free newspapers are just killing us."

Since they cost nothing and are easy to handle because of their tabloid size, around two million copies of free newspapers are being snapped up each day in Seoul, making deep inroads into the sales and well-being of traditional newspapers. It's not unusual to see people clutching more than one of the free papers, flipping quickly through the pages and discarding copies on the luggage racks in the trains for someone else to pick up and read.

The free papers are an average 20-minute read, appealing to people who want a quick glance at what's going on or occupy their time on the subway. Their success stems from the fact they have few staff or overheads and generate revenue from advertising. Traditional newspapers usually maintain a large permanent staff of reporters, editors, advertising and printing departments, as well as regular circulation routes to retailers and households. The free papers avoid any permanent heavy expenses by making bulk deliveries to subway stations.

The impact on the traditional newspaper market is too significant to ignore. The general readership of traditional newspapers has decreased by 26 % in the capital since the advent of free newspapers, according to a survey conducted by Seoul YWCA's consumer environment department.

The leading Korean daily Chosun averaged 2.32 million copies daily in Oct-Dec 2003, down from 2.38 million in the same period a year earlier, according to latest figures available from the Audit Bureau of Circulation. JoongAng's circulation was 2.08 million (2.06 million) and Dong-a 2.07 million (2.09 million).

The leading free newspaper in Seoul is now Daily Focus, launched last year. The audit bureau showed its circulation averaging 662,000 copies daily during Oct.-Dec. 2003, followed by Metro (485,000). Figures for the same period in 2002 show Metro with a circulation of 400,100 while Daily Focus did not then exist. Metro in Korea is run as a joint venture with its media parent, Swiss-based Metro International, the world's largest promoter of free subway newspapers with 15 million copies daily worldwide from outlets in 26 cities in 16 countries and 14 different languages.

The editorial content of the free papers is restricted to basic information, eschewing in-depth comment and analysis. Most show hardly any difference in content, displaying a mix of brief local and international news stories using news agencies and lacking a traditional newspaper's unique characteristics such as its own distinctive news content, political commentary and color presentation.

The Korea Advertisers Association was unable to provide figures for advertising trends in free and traditional newspapers. But one staff member at the association, who wished to maintain anonymity, said, "It will be the smaller newspapers who will be struck the hardest by competition for advertising from free newspapers."

Industry experts say the traditional newspapers face their toughest period since the 1997-98 financial crisis. Almost all vernacular dailies, particularly the specialized sports publications, are threatened by the increasing encroachment of free newspapers and many are downsizing to reduce costs. Chosun, JoongAng and Dong-a are all planning to reduce or have reduced their pages, as have their smaller rivals.

The Seoul Economic Daily, a unit of the Hankook Ilbo group, started a free tabloid sports paper, Sports Hankook, on June 28. Subway news-stand vendors, protesting the new sports publication because it meant a loss of revenue, visited the main building of Hankook Ilbo to demand distribution of Sports Hankook, then finally on July 2 started boycotting every newspaper in the Hankook group, refusing to sell any of them.

The vendors also protested in front of the Segye Times after it started printing, under contract, a free cartoon newspaper Daily Zoom, whose majority shareholder is a pension organization, Military Mutual Aid Association.

"We work every day, without any days off, but the profit after rent for my newsstand is just 400,000 to 500,000 won monthly," said news-stand vendor Im. "It's devastating that now I can't even afford the rent anymore."

He and other newsstand holders are caught in a trap. "We are stuck with contracts with the Seoul Metropolitan Subway Corporation, which requires a cancellation fee of 2 to 3 million won if we quit," he said.

Seoul Metropolitan Subway Corporation and Seoul Metropolitan Rapid Transit Corporation have allowed people who are rated as first or second level handicapped and low-income to operate subway newsstands, and all of them will find it difficult to get another job if they have to give up their businesses.

Date Posted: 7/8/2004