HOWZAT

It is certainly not a problem unique to Associated. All Britain’s leading newspaper groups are wrestling with the conundrum of how to protect their profit margins while investing in new ways of attracting the readers that advertisers want.

Trinity Mirror, owner of the Daily Mirror and some of Britain’s biggest regional papers, is conducting a review of its operations that could lead to some of the titles being sold.

But with its proud history, Associated is even more acutely aware of the need to preserve its portfolio. With an Office of Fair Trading ruling last year paving the way for a new afternoon paper to get key distribution rights, that task has become more difficult.

At DMGT’s half-year results in May, the headline news was of a continuing struggle at Associated, with operating profit down by £4.9m on revenues that had fallen £29m to £459m.

Only last week, DMGT splashed out £22m on Simply Switch, a website that allows consumers to compare energy and mobile-phone prices, the latest in a string of such acquisitions made by traditional British media groups.

But it is on their newspaper operations that the likes of Rothermere remain most focused — and the industry is rapidly being transformed.

“There is no doubt that these new titles could give a kick up the backside to newspaper groups and force them to experiment more,” said Dan Pimm, head of press at the media buyer Universal McCann, part of the global marketing-services group Interpublic.

They already have. Last year, Associated was spurred into action when it launched Standard Lite, a free, slimmed-down version of the paid-for title.

“Associated has been wondering what to do with the Standard for some time,” said one DMGT executive last week. “It is still a great product, but in the age of the internet and free newspapers, fewer people are prepared to pay for it.”

There may be even fewer now. Last week the Standard raised its cover price by 10p to 50p and many industry-watchers believe Associated must be concerned about the impact the new free papers will have on its flagship evening title.

Stefano Hatfield, editor of Thelondonpaper, said: “There is a clear opportunity to compete with the Evening Standard. It does not cater for the vast majority of young Londoners, which is what our paper will do. It is about a state of mind that has largely been ignored by the national press. London Lite is just a spoiler.”

The early signs are that London Lite is less different from its paid-for sister than might have been expected. Dummy copies of Thelondonpaper, meanwhile, mimic the interactivity that is familiar to viewers of television shows such as Pop Idol, with readers allowed to vote ‘More or Bore’ on columnists’ contributions.

Whether such gimmicks will be enough to secure leadership of this emerging sub-sector is impossible to say.

“There is a market for one of these papers to work, but whether there is room for all of them is much more debateable,” said Pimm.

The two new freesheets will have much in common — a print run of roughly 400,000, a stamping ground of central London, a sizeable marketing budget, and, most importantly, a style that will attempt to persuade young commuters that newspapers are about more than politics and long interviews.

There is no reason why both titles cannot be successful,” said Steve Auckland, managing director of Associated’s free-newspaper division. “We aim to be profitable in four years.”

Whether both new titles last that long, one thing seems certain: the pace of change across the media sector means Britain’s newspaper groups will continue to make headlines of their own for some time.