Analysis: Is This the Decade of the Free Newspaper in Latin America? Part 2 (Premium Content)

Free Newspapers’ Increased Circulation in Latin America

In the previous installment of "Is This the Decade of the Free Newspaper in Latin America?," we highlighted the factors behind the expansion of the region’s free newspaper market— namely, the high profit margins generated as a result of low publishing costs and increased ad spending (in all media overall, but especially free newspapers, where players such as Publimetro Mexico posted 60% year-on-year growth, compared with a 4% increase in overall media ad buys).

With figures like these – such as Peru’s Trome, whose circulation (407,000) now beats Spain’s El Pais (400,000) – the outlook is good for the free newspaper business in all Latin America, especially because publishing and distribution costs are much lower than in Europe or the United States. Another contributing factor is that free newspapers in Europe and the U.S. are mostly targeted to the lower-middle class, whereas in Latin America they also target higher socioeconomic classes.

In Argentina, La Razon newspaper was a paid pub until 1999 (then under the ownership of the Spadone family), when it decided to transform itself into a free daily and be distributed on public transport throughout the city of Buenos Aires. In less than a year, its circulation rose from 7,000 to 230,000, which turned La Razon into the second highest-circulation newspaper after Clarin. Its advertising also grew exponentially, ranking third after Clarin and La Nacion. Today, circulation for La Razon’s morning edition is 90,000 copies.

This clearly marked a milestone in the history of newspapers in Buenos Aires, so much so that the Clarin Group acquired a majority stake in La Razon less than two years after its relaunch as a free paper.

Other free newspapers followed in La Razon’s footsteps, albeit with less success, such as Diario de Bolsillo and the Argentine edition of Metro Internacional, which lasted only two years in that country. In 2002, both publications shut down as a result of Argentina’s economic crisis.

El Argentino, another free pub, was launched in 2008. It belongs to businessman Sergio Szpolski, who also owns the daily Tiempo Argentino, along with Veintitres magazine, and news channel CN23. El Argentino‘s current circulation stands at 150,000.

In Ecuador, Metro Hoy was launched as the country’s first free newspaper in 2002, with a circulation of 100,000. In 2009, it was acquired by the Metro Internacional group, which began distributing the paper in Quito and Guayaquil, in both public transportation as well as shops. Fernando Paz y Miño, General Manager of METRO in Quito, says the paper’s content is designed so that "its sections can be read quickly and give readers an overview of what is happening in the country and the world, in topics as diverse as sports, entertainment, city news, and all the international news that are a part of daily life."

These growth trends in the free newspaper business in Latin America are reflected in a recent study done by consulting firm Price Waterhouse Coopers (PwC), which predicts a rise in circulation for printed newspapers in Latin America over the next five years. The results of the study are striking, given that editors in the rest of the world are finding just the opposite trend to be happening. In the next 5 years, PwC estimates that free newspapers in the region will post an annual growth of 5.7%.

For Brazil, the 'continent' country of the region, an annual increase of 2.2% is predicted, and in the case of Argentina, 1.4%. However, the study predicts the free paper market will fall by -0.8% and -0.2%, respectively, in Colombia and Venezuela. The predicted decrease, however, can also be attributed to market stability in those countries.

According to PwC’s Media & Entertainment Outlook 2010-2014 study, advertising revenue and sales in Latin American print media are expected to increase, from $5.9 billion in 2009 to $7.5 billion in 2014. In Argentina alone, ad sales are predicted to rise at a pace of 12% annually.

These improved figures will be especially boosted by readers 45 and older, whose readership is expected to increase by 16.4% over the next five years, from 107 million in 2009 to 124 million in 2014.

Today, free newspapers are a part of everyday life throughout the mayor cities of Latin America. After entering the market here more than ten years ago, they have settled into the paid newspaper spectrum as the most superficial in terms of news coverage, with less content and more pictures. The characterizations are not accidental. Free newspapers channel several media buying options for agencies trying to reach middle-class and lower middle-class workers.

In the third installment of "Is this the Decade of the Free Newspaper in Latin America?" (Premium content), Portada gets feedback from media buying agencies in the region regarding newspapers and their updating to digital versions, as well as what role free print media plays in the Latin American media landscape.

Part 1 "Is this the Decade of the Free Newspaper in Latin America?"


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Editorial Staff @portada_online

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