The business model of a free daily obviously eschews circulation revenue in favour of a wide distribution predicated on the notion that people love free things. Content costs are also smaller because of spatial limitations.
What's more difficult is for the free dailies to calculate exactly how many copies are being read and how many are simply taken from hawkers and tucked away or discarded. Advertisers, similarly, find it difficult to understand those dailies' impact.
Roy Greenslade of the Guardian notes today how the bubble might be bursting, particularly in Europe. As goes the overall advertising market, the free daily might find itself more pinched than usual.