Buying newspaper by the £

This is a rather astounding illustration of the state of the newspaper business. Earlier this week, Russian billionaire Alexander Lebedev purchased the Independent, a 24-year-old nationally circulated British newspaper, for £1 (about a buck-fifty). In exchange for that small change, he gets the daily and Sunday newspaper, plus all of its liabilities and obligations, plus another £9.25 million (the seller is paying Lebedev, that is).

According to the story in the Grauniad, the paper reached a maximum circulation of 400,000 in 1989. I remember the paper being a big deal when I was first in Britain in February 1989, an alternative amongst "quality" broadsheets to the Thatcherite Times and Telegraph and the far-left Labourite Grauniad. The paper's popularity mirrored an attempt to forge a center-left political party as an alternative to the Tories and Labour; the result evolved into the Liberal Democrats. About 8 years later, Tony Blair filled that political gap with New Labour, marginalizing the Liberal Democrats. It appears that the Independent has been similarly marginalized; its latest circulation numbers are below 200,000, about the same order of magnitude as the Oklahoman.

Last year, Lebedev purchased the Evening Standard (again for £1), and to fight falling circulation, he relaunched the nation's only major evening paper in October 2009 as a giveaway, doubling its circulation. It's an interesting strategy.

If the goal is to get your advertisers in front of as many eyes as possible, if advertising is your principal source of revenue, why not give the paper away? Granted, this strategy may not work in a sprawling American city where you have to pay an army of carriers to put your paper on every doorstep, but it makes sense for a newspaper that can be handed out on street corners as millions of people rush by on the way to the Tube station for the commute home.