Free newspapers are proving to be a successful platform for advertisers, with local freebie am730 announcing it broke even last month after competing in an increasingly tough market for almost two years. This may not be good news for the traditional dailies with industry watchers warning the ad dollar is increasingly shifting to the freebies. Still, things are getting competitive at the free end of town. Am730, founded by property agent boss Shih Wing-ching, will celebrate its second anniversary on July 30 and the news that the paper is in the black for the first time should be a good birthday gift for both Mr Shih and his team. Am730 is in a relatively weak market position compared with its direct competitors - Headline Daily and Metro Daily. Headline can rely on parent Sing Tao News Corp for content, while Metro has dominated the market since 2002 with exclusive distribution rights in MTR stations. 'Many advertisers previously chose Headline and Metro, but ignored am730,' a media agent told Media Eye. 'But the newspaper has successfully established its brand with quality columns and news reporting.' According to media research firm admanGo, advertising revenue for free dailies now accounts for more than 10 per cent of the total newspaper market. Am730 achieved a 54 per cent growth in revenue in the first six months of the year, to HK$413 million. Headline Daily increased its sales 109 per cent to HK$455 million, while Metro Daily saw its ad dollars rise 11 per cent to HK$392 million. This compares with the sluggish performance of traditional Chinese-language broadsheets. Oriental Daily News, Hong Kong's number one daily by circulation, experienced an 11 per cent drop in ad revenue to HK$1.7 billion, while Next Media flagship Apple Daily recorded an 8.2 per cent decline to HK$1.1 billion. Am730 was launched in July 2005 with an initial capital of HK$50 million. The newspaper faced a tough start with Sing Tao launching Headline Daily two weeks earlier, with an initial print run of 600,000. The rise of the free dailies also embroiled paid newspapers in a price war. Oriental Press' The Sun cut its cover price by half to HK$3 in an attempt to force the free dailies out of the market. However, two years on the freebies are still around. Headline Daily goes to Macau While am730 celebrates its breakeven, Headline Daily is planning to expand outside Hong Kong. The Sing Tao title started to distribute in Macau last month, media agent Carat said. The newspaper will distribute around 10,000 copies in Macau's central business district during the morning rush hour. Hong Kong Economic Journal, the city's oldest Chinese-language business newspaper, celebrated its 34th anniversary on Tuesday last week with a bumper edition. It has been experiencing a fruitful year after receiving new funds. The new sales team, composed mainly of former Apple Daily sales executives, has boosted advertising, recording a 122 per cent growth in revenue to HK$132 million in the first six months of the year. Mainland has 1,935 newspapers There are more newspapers for people to read in the mainland although most of them are in government hands, according to figures from the China Newspapers Development Report 2007. The report said 1,935 papers were published regularly at the end of 2006, an increase of nine from June 2005. Newspapers published by provincial government bodies accounted for 41.9 per cent, or 811 titles, while central government organisations published 220 titles. Guangdong has the biggest market, with more than 101 titles.
