Evening Standard “will be in profit” soon

The Evening Standard is thought to be close to making profit, nine months after Alexander Lebedev made it free.

The Russian tycoon bought the loss-making title for £1 from Daily Mail & General Trust in January 2009, when it had a circulation of around 237,000 and losses as high as £20 million.

Less than a year later, Lebedev announced plans to distribute more than 600,000 copies of the then re-launched Standard across London for free – a move that saved the paper around 50% in distribution costs.

Despite initial doubts over his business model, Lebedev and his new team have managed to turn the ailing paper around.  The Standard has increased its readership to more than 1.3 million, according to NRS figures for October 2009 to March 2010, and in turn has boosted advertising revenue.

As a result, “the lines of costs going out and cash going in have closed rapidly for 12 weeks now”, reports Peter Preston in the Guardian.  It costs Lebedev around £1.1 million to produce the Standard a week, and Preston says that on current form, the title can bring in the same amount (£1.1 million) in advertising revenue.

The industry is waiting to see whether Lebedev and his team at the Standard – Andrew Mullins, Geordie Greig and Justin Byam Shaw – will try a similar strategy with his recently acquired Independent titles, which he bought for £1 from INM in March.

According to the latest ABC report, for May 2010, the Independent‘s total circulation has fallen to below 195,000 copies after a 4.8% year on year decline.  The Independent on Sunday is also down, around 2% year on year, taking its total to an even lower 164,000 copies.

However, Preston doesn’t think a free-model will work for the Independent: “This is a national paper, not a WC1 special five days a week. Its latest upmarket design courts an influence that doesn’t go with giving away copies for nothing.”  He says the future of the struggling Indy titles is a “different sort of challenge”.

The Standard‘s model cannot be easily imitated, according to Preston, who also notes that these are “print results in a world where digital barely impacts”.

“The unmistakable irony is unmissable already,” he continues. “As paywalls go up around news online because advertising can’t produce either the volume or yield to sustain it, here’s poor, derided old legacy print taking down its wall – and beginning to smile again.”