First shots fired in London newspaper war

Rivals ready to act as Associated Newspapers nears launch date of free daily tabloid. Hilary Clarke reports

WORK has begun in earnest on London Metro, the new title of Associated Newspapers, publisher of the Daily Mail and the Evening Standard. Journalists started arriving at the paper's offices this week and advertisers have been treated to a series of glossy presentations. Marketed as "the print equivalent of a double espresso", Metro could spark a newspaper war in the capital.

With a print run of 350,000, London Metro will be free and aimed at commuters - most of whom, according to Associated Newspapers' research, are an advertiser's dream. More than half of the people who squeeze into the Tube every morning are between 20 and 34, most earn more than pounds 25,000 and over 60 per cent own, or are in the process of buying, their own home.

The paper will be distributed from 1,000 racks across the Underground. Advertising sources say Associated Newspapers is also negotiating to have the paper distributed on the bus network.

Associated Newspapers executives are expecting the title, which is to be launched on 9 March, to make a small loss this year and a small profit next. The question some industry commentators are asking, though, is why launch a newspaper just as the economy is going into a downturn and corporate advertising budgets are showing the first signs of cuts?

"You don't launch just as advertising is slowing down, unless you are being pressurised by competitors," said Lorna Tilbian, an analyst with WestLB Panmure. "It's a clever move and also a defensive one. It [London Metro] will steal some sales from the Evening Standard and they want to make sure what they lose will go to the Metro and not someone else."

The Evening Standard has a current monopoly in London but News International seems likely to launch its own free London daily title this year. While News International headquarters in Wapping is declining to comment, The Times - a News International newspaper - says that a new title is on the cards and a dummy is being put together.

Modern Times Group, the Swedish company that launched a free morning newspaper in Stockholm and now also owns titles in Prague and Budapest, is also declining to say whether it is planning to introduce its own London title.

A London newspaper war will echo what happened 10 years ago when Robert Maxwell launched the London Daily News and the late Lord Rothermere, the proprietor of the Evening Standard, revived the London Evening News as a spoiler - a newspaper it gave away free. News International also talked about launching a daily paper for London in 1986, though in fact the publicity was a decoy to divert attention from the company's move from Fleet Street to Wapping.

Associated Newspapers denies London Metro is intended to be a spoiler for any future competitor to the Evening Standard. "All the talk about defensive moves is nothing but myth-making," said Thomas Grahl, London Metro's editorial and development director. He said the move had been planned since early 1997 after a visit to Sweden by Lord Rothermere. Mr Grahl, a Swede, was headhunted from Stockholm's Metro where he was first editor and then managing director.

Mr Grahl also denies claims that Associated Newspapers will not distribute at main line stations because it does not want to lose Daily Mail morning sales. "If you look at where there is a concentrated flow of people in this country, nothing beats the Tube," said Mr Grahl. "You don't need to get more complicated than that."

As to whether it will be a success, only time will tell. Kim Chapman, the editor of London Metro, used to edit the Evening Post in Reading, where she is credited with turning an annual loss of pounds 1m into an annual profit of the same amount.

Twenty-two journalists have been hired and there will be as many advertising staff. The paper will also be able to draw on the resources of its sister titles. It is based at Surrey Quays in London's Docklands, where it will have one of Associated Newspapers' presses. A tabloid, it is designed to be read from cover to cover in about 20 minutes - an average Tube journey. It will be mainly news and listings.

"If you look at it on paper, it looks clever, but the real test is editorial quality. I don't think it will succeed if it looks like a local newspaper. But if it looks like it should have a cover price then I think it will work," said Paul Mukherjee, press and radio buying director of Mindshare.

Those most worried must be the free recruitment magazines such as Girl About Town and Midweek. Analysts say the paper will also bite into the daily newspaper market.

"Put it this way, if you can get a paper for free, would you buy one?" said one advertiser.

The weaker tabloid titles such as The Express are seen as other potential losers.