Targeting a Captive Audience   

Mass transit passengers receive free copies of Philadelphia’s new daily.

Suppose you are a commuter stuck on a train or bus for an hour or so twice a day, with nothing to do but wait for the trip to end. In effect, you are part of a perfect captive audience for a daily newspaper, especially a free one.

Such a captive audience and a free tabloid daily are at the heart of a court dispute in Philadelphia: Philadelphia Newspapers, the New York Times Co. and Gannett Satellite Information Network found themselves in the unseemly position of trying to block distribution of the new paper, Metro. The battle raises questions about government backing of a newspaper and, not incidentally, the specter of a new kind of competitor for newspapers in cities with large transit systems.

The Southeastern Pennsylvania Transit Authority for safety reasons has long banned public leafleting and the sale of newspapers on subways, rail-station platforms and in other areas commuters have paid to enter. What's different about the new daily is that it is published by the transit authority, in collaboration with a Swedish firm, Modern Times Group. The authority and Modern Times will share advertising revenue.

The transit authority views the new daily as nothing more than an elaborate newsletter that it can distribute wher-ever it wants.

The three complaining newspaper companies asserted in a court hearing in late January that the new paper has an unfair competitive advantage and should be banned from distributing in areas in which their own newspapers are banned.

Although lawyers for the three companies denied they were trying to halt publication of the new paper, according to local press accounts, that did seem to be reflected in another argument they put forth: Pennsylvania law makes it illegal for the transit authority to publish and distribute a daily newspaper.

Now, there are enough legal issues in all this to keep lawyers fat and happy for months, and presumably some legal mind more acute than mine will eventually sort it all out. The U.S. District Court judge who presided over hearings refused to grant the restraining order sought by the three newspapers, saying "immediate and irreparable harm" had not been proved. An appeal is expected.

I suspect, though, that one way or another Philadelphia will continue to have a free daily newspaper oriented to the city's half million transit commuters. It will be one more enterprise trying to take a bite out of local print advertising revenue. How big a bite is uncertain.

At the risk of sounding elitist, the majority of mass-transit users are not part of the broad middle class that traditional newspapers target for advertisers. Initial editions of Metro were full of one- and two-paragraph stories, some local and some culled from wire services. The tabloid is more of an elaborate headline service than a newspaper, at least so far. It also carries a page devoted to transit authority information and public messages.

Yet in this era of waning circulation, traditional newspapers are loath to give up any readers. It is likely that newspaper publishers in other mass-transit cities will view the developments in Philadelphia with interest and perhaps alarm. Modern Times Group already has successfully launched free transit dailies in six European cities and one in Santiago, Chile, and has said it has plans for other U.S. cities.

Philadelphia's free daily is a new breed of newspaper, one not seen before in the United States. True, for a long time we have had free weekly newspapers around most big cities, and in recent years a few small free dailies have popped up: in Palo Alto, California; in Berlin, New Hampshire; and in Telluride and Aspen, Colorado (Aspen has two--see "Mountain Shoot-out," April 1998). And I may have missed some.

But Philadelphia's Metro is the first to target mass-transit riders and the first, to my knowledge, to be published in collaboration with a public agency. If it succeeds, the focus on a captive readership and the absence of an elaborate and expensive distribution system are likely to be the main reasons.

The strategy in Philadelphia calls to mind the founding of the Toronto Sun in 1971 by former executives of the just-failed Toronto Telegram. The Sun's founders, starting off on a shoestring, told me then that they did not have the resources to create an elaborate home-delivery system. So they concentrated initially on mass-transit riders, which brought immediate circulation success that established the Sun as a newspaper attractive to advertisers.

The Sun, of course, was a paid daily. We'll have to wait and see whether the same strategy will work with a free paper.