Media: All About ... Newspaper cover-price wars

By Alasdair Reid, campaignlive.co.uk, Friday, 09 September 2005 12:00AM

Are the quality dailies calling time on cover-price wars?

It has been a bitter struggle but, at last, it is really and truly over. Finally. Or so we must hope - there have been false dawns before, let us not forget.

On Monday, The Times raised its cover price by 5p to 60p, bringing it into line with The Guardian and The Daily Telegraph (The Independent sells at the cheeky premium of 65p) for the first time since 1993.

A lot has happened in the 12 years (almost to the day) since The Times began the price war it hoped would bring its broadsheet rivals to their knees. For a start, broadsheets have become endangered species - with the exception of The Daily Telegraph, they have reinvented themselves in smaller formats.

But we have witnessed even more fundamental changes. In 1993, for instance, there was no internet news to speak of and free newspapers were the flimsy local rags that arrived now and then through your letterbox.

In that relatively simple world, Rupert Murdoch had a brutally simple vision of the newspaper market. There would, he proclaimed, be only one long-term survivor in the quality market - and for The Times to be that survivor, it would have to see off the market leader, then as now, The Daily Telegraph.

1. The war began on 30 August 1993, with a cover-price cut on The Times from 45p to 30p, and the results were almost immediate as its circulation rose from slightly more than 350,000 to around 430,000 in the first couple of weeks.

2. The Telegraph held its nerve for almost a year but it too became drawn into the fight in July 1994, when it cut its price from 48p to 30p.

3. Then things really got silly - and by the summer of 1996, both The Times and The Telegraph were available for 10p on a Monday, while the Saturday edition of The Times was selling for a surreal (given all those supplements) 20p.

4. The circulation of The Times hit a high-water mark of 850,000 in October 1996 and although The Telegraph's sale dropped further and further below the psychologically important one million mark, it retained its market leadership, not just because it was prepared to fight toe-to-toe on cover-price cuts, but also because of its attractive subscription offers.

5. The Guardian's ultra-loyal readership was not really affected by this, so the paper that suffered the greatest collateral damage was The Independent. In 1993, it was almost neck-and-neck with The Times, but the price war saw its sale fall to less than 150,000 in December 2002.

6. This war triggered a series of investigations by the Office of Fair Trading into allegations that The Times' strategy amounted to predatory pricing. The OFT rejected this in a ruling delayed until May 1999 - no rival had actually been put out of business - but warned that News International must seek its approval for further cuts.

7. The OFT's ruling effectively signalled the beginning of the end of the price war and many believed the market was moving back to parity pricing in September 2003, when The Times raised its price to 50p (it had been at 40p since June 2001) on weekdays and 90p on Saturdays.

8. In the year to June 2004, Times Newspapers lost £40.1 million. In the year to June 2003, it lost £28.6 million. Headline circulations in the July Audit Bureau of Circulations figures show The Times on 698,043, with The Telegraph on 912,319.

9. Telegraph sources claim that the paper was a resounding winner in the war - The Times spent its massive war chest but achieved none of its strategic goals and The Telegraph has retained market leadership. Meanwhile, they argue The Times has diminished its brand values.

10. Times sources reply by pointing to the fact that in the November 2004 ABCs, The Times finally overtook The Telegraph in terms of fully paid-for sales: The Times on 504,568, The Telegraph on 500,214.

11. The Times' price hike comes as it prepares to relaunch T2 as Times2, with an increased pagination and a new focus on its female readers. It will feature themed sections on different days - for instance, Style, Health and Sound - and is running a major ad campaign to back the launch.

WHAT IT MEANS FOR ...

THE TIMES

- This is a confirmation of a change in direction (or emphasis) at The Times. Price wars have been expensive and the outcome has arguably been, at best, inconclusive - especially in terms of the original, rather simplistic, goals.

- New conditions prevail and, in general, newspapers face the future with even less confidence than they did in 1993. Times Newspapers has perhaps learned to be less monolithic in its thinking.

- For instance, recent editorial changes indicate a desire to make The Times attractive to Daily Mail readers rather than current purchasers of The Daily Telegraph.

RIVAL PUBLISHERS

- These are interesting times for quality newspapers, not least because The Times' price rise more or less coincides with The Guardian's relaunch in the Berliner format.

- Increased cover-price revenues across the whole market will allow for more realistic levels of investment in product development.

ADVERTISERS

- Advertisers want the best of both worlds - a high-circulating newspaper that has a market positioning as a premium product and is priced accordingly. They had begun to be worried about the status of a discounted Times in an era of free commuter newspapers such as Metro.

- Most will be pleased The Times is recommitting itself to producing a newspaper people genuinely want to engage with, rather than a bargain buy.

This article was first published on campaignlive.co.uk

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