Before you read a newspaper

i heard a relative bought 10 copies of the same newspaper one day, bringing down a dozen of trees, and never read a single news headline of those papers. You might have recently noticed, in any usual morning without any exciting breaking news happening in town, people tightly queue up in front of newsstands. They grasp the bulking papers and cut up pieces with scissors they have brought, and in the next minute, they throw the papers into trashes.

What they really go for are shopping coupons. The face value of those coupons far exceeds the price of the newspaper. For instance, one day, Sun Daily which is sold for HK$4 gave out coupons worth HK$20. You earn HK$16 for each copy purchased. If you bought 10 copies, you would sweep a profit of HK$160. That's why people are so desperate to buy newspapers that they go down the street at six o'clock in the morning.

On the surface, the phenomenon contrasts with the economic wisdom that "there isn't such a thing as free lunch".

Some newspapers, such as Metro and am730, are free of charge. Moreover, those attached with valuable coupons, such as Sun Daily, are actually cheaper than free. What went wrong?

Meanwhile, the free newspapers have generated a new kind of jobs-- the front-end newspaper collectors. i am not talking about those workers responsible for distributing free newspapers in the street. It is the reverse. There are some people asking you to pass the newspapers to them, if you have already finished reading them. One day, i was wondering why a middle-aged woman stood in the middle of the pedestrian and said good morning to everyone passing by. Later, i figured out that she is collecting finished newspapers. There used to be newspaper collectors only who collect large bulks of newspapers left in the recycle bins. But this new type of jobs is different in the way that the workers actively remind, or pursue to a certain degree, people to give away their papers.

These workers are not wearing uniforms. They are not hired by the newspaper publishers. They are not offering value-added services to help you conveniently unload your unwanted stuffs. They want your papers because the papers can be sold for money.

Papers are costly. Readers of free newspapers get papers free of charge. Even for paid newspapers, the wholesale price of newspaper cannot fully cover the cost of paper materials used, let alone the heavy overhead of the editorial departments. What a favorable deal for readers, as a consumer?

You get it all wrong if you believe what you are doing every morning is what it appears to be. You buy a breakfast and have it. Fine, you are a consumer of a meal. By handing the coins to the newsstands, you are not buying newspapers. You and all the other newspaper readers are not consumers at all.

The supply chain appears to be: raw information -> reporting -> editing -> printing -> wholesale -> retailing. No, the supply chain is actually the reverse of what it appears to be. You are the supplier -- the supplier of attention, eye-balls; the supplier of brain-space, memories, perceptions. Newspaper publishers actually work as the collectors, the aggregators of attentions and all the stuff. Their business is to sell these "goods" to advertisers including property developers, supermarkets, warrant issuers, watch companies, apparel retailers, etc.

In fact, attention is valuable goods for advertisers, and it sells. This is the real part of the whole business. Forget about the few coins you hand out. Property developers budget millions of dollars in marketing campaigns, including placing ads in the front pages of newspapers. They are buying your attention.

People are most alert in the morning, best time for advertisers to get their notices. For instance, you hear a song from the radio early in the morning, and the melody will echoe in mind for the whole day. Every morning you grasp your favorite newspaper, you sell your valuable attention to it.

Advertising is the vital income source for newspaper publishing businesses. For profitable publishers, the adversiting revenue more than covers the paper costs and the salary expenses for reporters and editors. That's why some publishers do not care giving out newspapers for free, and some others publish them "cheaper than free".

Well, the next question is: "If my attention is so valuable, why do i still have to pay for some newspapers? The cash flow ought to be the other way around. The newspaper publishers should pay me for reading the newspapers, instead."

The easy answer it: "You pay for the contents, the breaking news, the investigative feature stories, the tips for jockey racing, soccer games and stock punting, as well as your favorite columns and the editorial."

i pay my respect to journalists who produce great contents. Good articles are invaluable. Sometimes, i come across wonderful articles which help me understand what is happening around me and guide my thoughts. How do you value this kind of articles? A pint of beer is sold for HK$40 in pubs. A good article should be worth as much as a happy hour with a buddy. Therefore, i am willing to buy a newspaper which carries a good article for HK$40.

But the reality is there is not any newspaper publisher making sustainable profits without advertising income. Even those newspapers with the best quality cannot depend solely on selling contents.

Therefore, you do not pay for the content. Back to the question why i have to pay for newspapers if i am indeed the supplier, i imagine a newspaper publisher would say: "Thank you for your $6, dear reader. Well, the advertising fees have taken care of our production expenses for the contents. The $6 you paid is for us to identify you as one of the serious suppliers of attention."

To boost advertising income, a publisher must boost the circulation of its newspaper. The easy way to boost circulation is to reduce the newsstand price. But that won't serve the advertising the best because it won't help them access to the best quality of attention. In an extreme scenario, if a publisher attached a HK$100 banknote to each copy of its newspaper, it must be able to sell as many newspapers as it wishes. Everyone, including me, will run to the nearest newsstand by dawn and sweep away as many copies as they can.

Yes, the circulation must be spectacular. But will the advertisers be happy to see that? No, they will not because they won't get more attention to their ads than before. Most probably, they would get less because, by the time the serious readers walk down to the newsstands, the $100-giving newspaper would have already been sold out.

Therefore, by handing out $6, you are acquiring a certification -- ISL 9000 required as an approved supplier of attention. While ISO 9000 is an industry standard for quality control, ISL 9000, which, out of my imagination, stands for "I Shall Look", would be a qualitystandard for the "attention" industry.

Still, there are unanswered questions: "Why don't free newspapers require ISL 9000?" "How does contents play their roles in this attention industry?" i will continue next time.

May 16, 2006
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