Less Than A Year Ago Rupert Murdoch said British Newspapers Had To Stop Giving Away DVDs, And Newspaper Cover Prices Were Too High. Today, The DVDs are Still Being Given Away And His Sunday Times is Britain’s first £2 Newspaper.

Murdoch also said at the same time he thought newspaper cover prices were too high but he wouldn’t engage in any more price wars. What his company did instead is increase cover prices with the Times 5p higher, more on Saturdays, and the Sunday Times now reaching that magic £2 charge.

The giveaway craze has reached such a crescendo that one man claims on the BBC web site that when he bought a CD the shop gave him as a free bonus a newspaper. Have we really come full circle?

The authoritative Screen Digest reported recently that the DVD giveaways by UK newspapers continues unabated, with 54 million DVDs given away in the first quarter of 2006, exactly the same number that were sold through stores during the same period.

ftm background

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The UKs Manchester Evening News has tried just about everything to stop the rot – widening its distribution area but that increased the cost per copy, starting a successful Lite edition but still the classifieds flowed to the Internet, reorganizing editorial to cut some 20% of its editorial staff to reduce costs, but it wasn’t enough. So now it is pushing the envelope where none other has dared to tread – it is giving away downtown what it sells elsewhere.

Three Different Approaches By UK Nationals to Stem Steep Circulation Losses: Daily Star, Daily Express -- Lower the Newsstand Price And Up the Brand Advertising; Daily Mirror, Guardian and the Independent -- Raise the Cover Price; Observer -- Go Compact. And All Seem to Work!
The year-on-year circulation numbers for the UK nationals show circulation down although all had a good 2006 start in January. But how to stem the overall losses? Two pricing ideas are now in play – raise the cover price and lower the cover price. The third option is to resize, and the January ABCs seem to indicate that everything can work.

“When Will They Learn” – ftm in July Decrying the British Newspaper Marketing Practice of Giving Away DVDs. “ They’ve Got to Learn. That’s Got to Stop” – Rupert Murdoch, November, 2005
The very British newspaper marketing practice of giving away DVDs to boost circulation has now been damned by the publisher who probably is responsible for giving away more DVDs than any other. To Rupert Murdoch it just doesn’t make sense any more.

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Last year 77 titles, totaling 130 million DVDs, were given away by leading newspapers, depriving retailers of a potential £500m, according to Screen Digest.

And as Murdoch said last November, “The fact is the sales go up for a day, and are right back to where they were the following day…People grab (the newspaper), tear the DVD off and throw away the newspaper. They’ve got to learn. That’s got to stop!”

So why hasn’t it? The UK is blessed with 11 daily and Sunday national newspapers, each one fighting for what seems to be a declining print advertising market. Circulation is down for many, and publishers know that at least on the day they give something away their numbers go up perhaps by as much as 15% and that keeps the advertisers happy. And as long as someone continues to do it the rest are afraid to stop. But as Murdoch says there seems to be very little readership loyalty won by those promotions.

The Independent newspaper has found a growing loyalty by a different, and far less expensive giveaway – wall charts. It has produced wall charts about British birds, British trees, the solar system, the weather system, the human body and the dynamic earth. And the reverse of the last five posters can be used to assemble a full-size human skeleton. The newspaper is said to be well pleased with the results, including loyalty of new readers.

According to Screen Digest about 20% of all cover mount DVDs are thrown away immediately. What annoys the retail DVD industry is that 26% of those who received a free cover mount DVD said they would have actually bought an original copy of that title had it been on sale at a reasonable price.

And the research has shown that with so many DVDs now being given away that the consumer’s perception of the value of a DVD has diminished, as prices in the stores attest.

It’s thought that newspapers are able to make very good DVD production deals and when all is said and done each individual DVD costs the newspaper less than 20 pence. But that still means The Times with a circulation of around 675,000 is going to pay around £135,000 for each DVD promotion. At The Sunday Times, with a circulation in excess of 1.3 million the cost is probably around £250,000. No wonder Murdoch has such strong feelings.

And there are signs from UK bloggers that the newspapers are biting the DVD hand that feeds them. People are complaining about the five minutes of advertising one has to go through on the newspaper-given DVD (and it can’t be skipped) in order to get to the real feature). As someone once said, there really is no such thing as a free lunch.

Newspapers look at giveaways as a way to boost circulation, but there are some places in the world where newspapers are seen as very viable delivery vehicles for other products. Like condoms. The Hindustan Times reports that condoms, wrapped in strawberry-colored wrappers are being attached to the daily-delivered newspaper on an experimental basis in one Indian region.

Civic authorities are starting the experiment in Nizamabad in the Telangana region where three out of 100 people have been tested HIV positive.

A health official said, “We thought that delivering the condoms with newspapers would be the surest way of reaching people. We are talking to newspaper distributors and hawkers to pitch in for this social cause.”

The idea is to distribute around 10,000 condoms daily. Initial feedback says women find it embarrassing but most men thought it was a great idea.

As far as the British are concerned, the Screen Digest survey results would suggest that for some, the condom might be the more popular giveaway.