Media Forum: Will market back 10p Star?

Should advertisers approve of the Star's new price cut, Alasdair Reid asks.

In London, the Daily Star is "half the price of The Sun and twice as much fun!" Don't take our word for it: it must be true because it's on the front page of the Star. Above the big panel telling us the paper now costs just 10p. And that's not all. The Star is Britain's most successful newspaper - a fact conveyed to us recently via an informative TV ad.

You've got to hand it to Richard Desmond, the title's proprietor. He likes to stir things up (not least with his reported offer to move into TV with a bid to buy the broadcaster Five). Where the Star is concerned, he's been rather successful in recent times. Yes, it is in third place in the red-top rankings behind The Sun (which had an average circulation of 2,936,099 during May) and the Daily Mirror (1,238,145 million), but thanks to some judicious coverprice manoeuvres, the Star has been the only one of the three to show signs of growth.

True, its headline May ABC figure was 822,934, slightly down year on year, but in previous months it has been bucking the general trend and posting modest increases. This has been achieved on the back of a coverprice cut in certain parts of the country from 30p to 20p since November 2008 - and Desmond is said to believe he can continue to make ground on the Mirror.

And he means business, if last week's move is any indication - he's only gone and halved the paper's coverprice in London down to the aforementioned measly 10p, which equates, according to our all-important sweets currency converter, to the cost roughly of one sherbert tube or two strawberry laces.

This will surely provide a further boost to circulation - but it could also raise the spectre of an all-out price war. After all, though the Mirror has been standing firm on its 45p coverprice, The Sun has been trialling a discount from 30p down to 20p in parts of the country.

A price war would surely be a worry, especially when the newspaper medium is still in such a fragile state. Not really, John Ryan, the head of press at Manning Gottlieb OMD, argues. He says he's an advocate of anything that adds positive numbers to the print market - and the Star's promotions have tended to be successful in the past. He adds: "It could push it towards the psychologically important one million benchmark and make its red-top rivals look over their shoulders. The interesting thing will be whether it can retain any circulation it puts on. That's the thing that will be of most interest to advertisers."

Absolutely, Vanessa Clifford, the Mindshare managing partner, agrees. She maintains that any move designed to increase newspaper circulations has to be applauded - but, equally, this initiative does raise some interesting questions.

She states: "Where the Star is concerned, coverprice cuts are a tried-and-tested means of increasing circulation. It will be interesting to see if, having engaged new readers, the price is put back up again. Because we keep returning to the debate about whether newspapers should actually be more expensive. And there's also the debate about whether someone who pays 10p for their paper is more engaged than someone who pays 30p. My instinct is that they're not - but the question is there. And then you might ask if you're reducing it to 10p, why not just make it free?"

Alistair MacCallum, the M2M managing director, says the paper is continuing to win friends among certain types of advertiser. He says: "For a number of core categories such as entertainment and retail, it has clear strengths in reaching a younger male audience - and its lighthearted approach makes it an attractive advertising environment. So I think this move will be welcomed. The Star has a good track record in using price cuts to build circulation. I can see it attracting readers from newspaper titles and from weeklies such as Zoo and Nuts, as well as stimulating greater loyalty among existing readers."

And Pete Edwards, a founder of Edwards Groom Saunders, argues that even if the cuts attract only temporary circulation gains, that has to be a worthwhile exercise from an advertiser point of view.

He says: "A reader of a 10p newspaper has been stimulated enough to buy. And as long as the advertiser has an appropriate message, delivered in the right context, why shouldn't this be effective? There's an obvious argument that the title's editorial approach combined with its very attractive price might draw in a younger audience that currently doesn't read much in the way of national print or aren't readers at all. So we're talking about an audience potentially more receptive and responsive to print advertising - and that could be directed effectively to dailystar.co.uk as well."

YES - John Ryan, head of press, MG OMD

"We've been seeing papers experimenting with price elasticity in different ways at different times. After all, pricing is very much on the agenda now, with The Times introducing a pay-wall for online content. I can't see a problem."

MAYBE - Vanessa Clifford, managing partner, Mindshare

"You can't be negative about attempts to increase circulations. There are questions, though. From an advertising perspective, for instance, will the Star want to charge a higher rate if it has a higher circulation?"

YES - Alistair MacCallum, managing director, M2M

"I suspect that this move has been well thought-through. So I can't see this as being in any way bad for the newspaper industry. I can't see it sparking a price war."

YES - Pete Edwards, founder, Edwards Groom Saunders

"Any advertiser wants to reach actively engaged consumers of media. Does reducing the purchase price diminish the value of that consumer? I'd suggest not significantly. Metro and the London Evening Standard seem to attract advertising."

- Got a view? E-mail us at campaign@haymarket.com.

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