When The Sun was making severe loses and registering poor sales, consultants told owner Vincent Tan that he had two options - shut the newspaper down or make it a free tabloid.

Tan, who had by then burned RM200 million of his fortune in the ailing newspaper, was not about to call it quits.

It was the decision to go free that saved The Sun newspaper from going under, according to its group editor-in-chief Ho Kay Tat at the Malaysian Media Congress 2007 in Kuala Lumpur yesterday.

Ho told about 500 participants at the conference that The Sun was making losses that amounted up to RM200 million over a period of eight years.

He said since it adopted the free newspaper model, The Sun was able to substantially slash their RM25 million-a-year losses.

"By 2006, we made losses of only RM5 million. We hope to reduce this even further in the coming two years," he said.

In his speech to top advertising industry representatives, Ho said The Sun learned from other free tabloid-style dailies such as Metro International - the world's first free newspaper launched in 1995, which now publishes 70 editions in 19 countries.

"However, we wanted to be different from Metro, which offers just sports and leisure news. We decided to give our readers hard-hitting news and opinion pieces in addition sports and leisure," said Ho.

Ho added that The Sun had also been at the forefront of creative advertising, noting that the daily offered advertisers the flexibility of using its front and back pages - a first in this country.

The 48-year-old Universiti Sains Malaysia political science graduate also said that the success of The Sun was due to its ability to adapt as it won't be easy to beat its competitors.

"It is difficult to build a reputation as a paying newspaper. You can ask The Star how difficult it was for them in their first 10 years before building a strong readership."

Changed or be changed

According to him, The Sun - from its dismal readership of 50,000 in the mid-1990s - now boasts of circulation up to 235,000, with 77 per cent of its readers based in the Klang Valley.

He said that this year's audit could put its daily circulation as high as 265,000.

The daily's marketing strategies includes distribution in the commuter train stations, offices, apartments, cafes and offering delivery services to homes.

"My advice is that in order to survive, one must change or be changed," said Ho.

Before he concluded his 30-minute presentation, he offered his views on the future of the newspaper industry.

He said news targeting the masses would remain free online and only newspapers with solid readerships would make reduced losses in wake of the Internet revolution.

Meanwhile, news targeting niche groups would see online subscription as an acceptable model.

The Sun is currently the second-largest English daily and the only free newspaper in the country.

The Malaysian Media Congress (MMC) is an annual gathering of more than 500 media pundits, industry specialists and key media decision-makers in the fields of media, marketing, branding and advertising.

Other speakers at the event include Carat Malaysia managing director Roy Tan, B-Side digital futurist Brian Tiong, MindShare Singapore CEO Jeffrey Seah, Universal McCann Malaysia CEO Gaurav Bhasin and malaysiakini editor-in-chief Steven Gan.