Kasturi and Sons Ltd, the Chennai-based publisher of The Hindu, has decided to discontinue India’s first experiment in giving away a newspaper for free. The company said its tabloid, Ergo, will cease publication in print, but will continue to be available online.
With this, we probably won’t soon see more experiments in selling newspapers that are entirely supported by advertisements–a model that is popular and profitable in many European countries and elsewhere in the West.
Sometime in 2005, the Swiss freesheeter company, Metro AG, reportedly scoped New Delhi to launch a free tabloid here, when the Delhi metro started operations and was used by millions of commuters everyday. It was apparently as a reaction to this, that arch rivals Bennett, Coleman & Co. Ltd and HT Media Ltd set up a joint venture that published Metro Now, even though the paper was not free. Ironically, Metro Now also ceased publication as a daily and is now published as a weekly.
Many have pointed out that the model won’t work in India becase the paper has some value in the recycled paper market (raddi) and if the cover price of the paper is lower than its value in the recycled paper market, the newspapers will be diverted there in bulk rather than reach the intended audience. Ergo had a controlled distribution in the IT corridor of Chennai and tight distribution supervision to tackle this issue.
“The decision to discontinue the all-colour, minimum-16-page print edition of Ergo reflects the realities of the economic slowdown, with its adverse industry-wide impact on advertisement revenues. The decision to continue Ergo online reflects the view that digital journalism has a promising future in India,” The Hindu story about Ergo closing its print edition said. Ergo had a circulation of 55,000 copies, the story said.