Analysis: Is this the Decade of the Free Newspaper in Latin America? – Part 1

In 2003, Portada noted that the market for low-cost newspapers in Mexico, which is mainly linked to mass distribution via public transport, was booming.
Whereas some of the publications cited have significantly increased their newsstand price (from 3 pesos to 12 pesos for Reforma, and from 7 to 10 pesos for Milenio), and thus changed market, it is misleading to think that the good prospects forecasted for low-cost newspapers several years ago were misguided. Rather, the trend has grown stronger, as demonstrated by the rapid development of this market since 2006, when Metro (Publimetro) joined El M, an offshoot of Universal, in the free newspapers market. While our article pointed out that Swedish company Metro Internacional had already made a foray into Argentina and Chile, with mixed results, today we can see that the high penetration and growing audience of low-cost dailies has been capitalized upon by an expanding market.

Expansion in the region

Since that first foray into Mexico in 2006, with an initial circulation of 130,000 copies, Publimetro (the publication’s name in Mexico) expanded its circulation from Mexico City to Monterrey in 2009, with a launch of 60,000 copies. And although the paper had to discontinue its publication in Argentina less than three years after launching there, due to the December 2001 crisis in that country, it has now also added Brazil (circulation 180,000) Ecuador (120,000) and Guatemala to its circulation figures.

The newspaper launched its Brazilian edition in May 2007 through the Bandeirantes Group, and currently publishes in the cities of São Paulo, Santos, Campinas and recently Rio de Janeiro.

In fact, Metro Internacional launched an expansion project last year in Brazil. Metro launched another edition in Rio de Janeiro, Brazil’s second largest city, with a population of approximately 11 million. According to WARC, newspaper ad spending has increased by 9% so far this year, compared to last year.

With a circulation of 100,000 in Rio de Janeiro, Metro’s goal is to reach 330,000 copies in the country by the end of the year, which would make it Brazil’s largest Monday-to-Friday circulation newspaper.

In Chile, where the paper has a daily circulation of 137,000, its main competitor is La Hora, which since 2000 has had an average circulation of 108,000 in several Chilean cities, having switched to its current format after garnering poor results as a paid afternoon edition. On the other hand, new players have recently joined the free newspaper market in Mexico. Among the most important of these are Mas por mas, launched in November 2008 with a circulation of 150,000. Mas por mas has been distributed in the city’s subway system since 2000, where it currently has a circulation of 100,000.

Recently, Metro Internacional announced an agreement with Grupo de Emisoras Unidas GEU to launch a newspaper in Guatemala City. Metro’s new paper will be called Publinews and is the first to be published by the group in Central America.

Paul Mazzei, EVP of Publimetro, says that "the development of the free newspaper industry in Latin America, and that of Mexico as a major player, has generally been positive," and adds that "the free newspaper market definitely is poised to grow more than paid newspapers this year, which have dominated the industry until now, but have encountered great difficulty in reinventing themselves." In addition to expanding its business to other Mexican cities, Publimetro also launched product segmentation efforts which yielded a 60% increase in advertising spending year-on-year, well above the 4% increase in print media advertising nationwide. The outlook is optimistic, to the point that Metro has diversified its product to include the launch in mid-2010 of Publisport, Mexico City’s first free sports biweekly.

With its growing share of the overall market (3% in Mexico and upwards of 19% in Chile, taking into account the consolidated investment in print media), Mazzei believes that the industry is still in a nascent stage and there is still much room for growth. His goal is to grow the company’s market share to 5% and continue expanding its segments and products.

In the second and third installment of "Is this the Decade of the Free Newspaper in Latin America?" (Premium content), Portada examines the circulation increase of free newspapers in Latin America and hears feedback from media buying agencies in the region.

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