Hong Kong will see its sixth free newspaper later this month. Shirley Zhao asks if the city-wide circulation war has gone too far...

Everyone who works in Hong Kong knows the frustration of the early morning rush hour. On any given day, swarms of people will gush out of the MTR stations and rush through underground tunnels and overcrowded exits. But a peculiar thing is now happening. Many are holding free newspapers they have either grabbed from stands or had thrust in their hands by armies of uniformed distributors who, shouting the names of these publications, block the path of oncoming commuters in order to palm off their products. This new morning ritual has become so commonplace over the past three months that many Hongkongers now think it a normal procedure in their everyday bustle to work.

But the truth is far less ordinary, because Hong Kong’s newspaper industry is in the midst of a bitter and bloody circulation war.This battle between newspapers has escalated dramatically of late, with Hong Kong Economic Times Ltd (HKET) launching its free Sky Daily on July 27 and Next Media Ltd planning to launch its free Sharp Daily on September 17. Both corporations already have their own paid newspapers – the Hong Kong Economic Times and Apple Daily respectively – the latter being one of the city’s top three sellers. These newcomers will bring the total of free city-wide distributed dailies up to six – the other four being Metro Daily, AM730 and Headline Daily in Chinese, and The Standard in English.

According to statistics from the Hong Kong Audit Bureau of Circulations, the total circulation of the current five free dailies is more than two million a day. With Next Media aiming the circulation of Sharp Daily at a staggering one million, there could soon be more than three million free newspapers distributed every day. To put this into context, that is almost the same as the city’s total workforce, as well as being 40 percent of the entire population of Hong Kong – easily the highest among the world’s major cities.

The battle is now on and the gloves are most definitely off. The immediate pressure will be on the older free dailies, since people are unlikely to take all six papers every day and advertisers will have more publications to choose from. Unsettled by Next Media’s imminent plans, the highest circulated free newspaper Headline Daily ran a double-page ad declaring it had four times the circulation of Apple Daily as well as the lion’s share of Apple’s advertisement market.

Shih Wing-ching, the founder of AM730, has also written in his column articles that the newcomers may find it hard to survive due to the over-saturated market, seemingly reaffirming his own paper’s strength and position.

Alan Lo Kok-lun, chief editor of AM730, appears to be confident with his paper. “The competition will certainly be intense,” he tells Time Out, “but each paper has its own market. Our paper is more intellectual, aiming at young readers and providing long column articles and in-depth analysis. It’s not the brand but the style that attracts readers.”

This frontal attack of free dailies has also been threatening the paid newspapers – and subsequently the independent newsstands on the streets – since 2002, when the city’s first free daily, Metro Daily, was published by Metro International. At present, free newspapers take more than 30 percent of the city’s total ad spending budget. According to media monitoring firm admanGo, 60 percent of ad spending budget from the cosmetics and skincare industry (one of the top advertising sectors that helped beef up the total ad spending to a record HK$3.13 billion last year) went to free newspapers during the first seven months of this year.

In 2005, cosmetics and skincare were almost wholly dominated by paid newspapers.

“Before the launch of Sky Post, the market obviously still had room for more free newspaper players,” says Professor Clement YK So, a Hong Kong newspaper specialist at the Chinese University of Hong Kong. “That would be at the expense of the paid ones: some will suffer and may even close down. The concept of being free is so powerful to the general public, and the market just responds to them.”
HKET and Next Media responded to the market by participating in the lucrative freebie game, despite the possibility that their free papers could take away a certain share of advertising revenues and readership from their paid titles.

“It’s better to beat yourself than do nothing and let others beat you,” says Next Media’s executive director Ip Yut-kin. He added, however, that the readership of free newspapers is different from paid newspapers, so Sharp Daily will not ‘necessarily have much impact’ on Apple Daily.
Tang Yup-ming, the vice-chairman of the Hong Kong Newspaper Hawker Association, shares a similar view to Ip’s. “Paid newspapers provide richer and more professional information and in-depth articles that free papers don’t have, due to their limited pages,” Tang says, “and newspaper buyers want those. If they haven’t stopped buying newspapers before, two more free papers won’t change them.”
However, individual newsstand owners are not as optimistic.

Ms Chen, owner of a newsstand in Quarry Bay, fears the freebies will further deteriorate her business. “I’ve already lost 30 percent of my business thanks to the free newspapers,” she says. “Look at the MTR stations. They are distributed here, they are
distributed there, and we are under siege. It’s a pain to see even more are coming.”

At least some newspaper buyers are sticking to their habits. “The articles in free newspapers are rather short and superficial,” says Kwok Lai-man, a financial consultant. “I read them, but they’re not enough for me. I buy newspapers.”

Meanwhile, Wong Yut-cheong, an IT technician who buys Apple Daily every day, is considering whether to change. “They are from the same company, so they surely will share news information,” he says, “But I guess I will wait until Sharp Daily comes out and see. If Apple’s news can be found in Sharp Daily, why should I keep buying Apple?”

The biggest problem for paid newspapers, according to Tang, is that many young people don’t have a habit of reading newspapers. “How many students do you see reading newspapers? They may grab a free paper and flick through the news, but they wouldn’t buy any even if there weren’t free ones.”

According to So, getting non-readers to read is a benefit for the free newspapers. “Overall, the flow of news information will be increased,” says So. But he worries that more papers will become ‘digests’ with less in-depth journalism and analysis. “People’s news information will be more like TV news: quick, short and descriptive.”

Worst of all, the flared-up newspaper battle and bitter cut-throat competition to attract more advertisers could severely compromise Hong Kong’s reputation as the journalistic mecca of Southeast Asia, turning the news industry into a money-driven circus filled with exaggeration, cronyism and celebrity schlock.

“I hate to say this but the very popular Apple Daily and Oriental Daily are already like tabloids,” says Samantha Ng, a Hong Kong journalism student. “I don’t read them any more and I won’t expect much if they plan to publish free newspapers.”