Murdoch shuts London Paper, quits freebie war

LONDON: The free-newspaper war in Britain's capital is over as Rupert Murdoch's News Corporation retires from the battlefield after announcing the closure of its title the London Paper.

In a rare and embarrassing admission of failure by the world's most famous media mogul, his son James Murdoch, News Corp's chairman and chief executive for Europe and Asia, declared the free-newspaper experiment, the subject of intense planning and major investment, had "fallen short of expectations".

The paper, which has a staff of 60, is part of the News Corp subsidiary News International, based in Wapping, east London, and made a pre-tax loss of £12.9 million ($31.45 million) in the year to June 2008.

The decision appeared to surprise executives at the rival Associated Newspapers, publishers of the free evening title London Lite as well as the nationally distributed free morning paper Metro. After a series of meetings yesterday afternoon, Associated would only say: "We are watching developments with interest."

Associated, also the publisher of the Daily Mail, is the former owner of the paid-for London Evening Standard and retains a 24 per cent share of that title, which has seen a sharp fall in sales in the wake of the freesheet war.

There is now a strong likelihood that London Lite, also a loss-making initiative, will close too, though the Standard, sold by Associated to the Russian media mogul Alexander Lebedev earlier this year, may benefit from the shake-up.

For the past three years, the sight of purple and mauve jacketed vendors thrusting free newspapers into the hands of office workers as they headed home from work has been a familiar feature in the British capital.

News International launched the London Paper in the autumn of 2006 after detailed market research. Geo-mapping was used to track the footfall of young London office workers, an attractive group to advertisers, and ensure that vendors could be positioned to maximise and properly target circulation.

News International this month announced a drastic fall in profits. Its UK papers suffered a 14 per cent drop in year-end advertising revenue, while profits across the global newspaper division fell from US$786m to US$466m.

- INDEPENDENT