UK Nationals Continue Their Downward Spiral -- More Than 1.3 Million Copies For The Dailies And Sundays In A Year – But Not Everyone Agrees Web Pay Walls Are The Solution

Philip M. Stone February 17, 2010 Follow on Twitter

Circulation for the 11 UK national daily newspapers fell by 773,211 copies in the 12 months to January, a 7.1% drop while for the 11 Sunday newspapers circulation was down 650,709, a 6% fall. Some of that came from the end of bulk distribution for some titles, some a by-product of less promotion spend, and not everyone agrees with Murdoch that pay walls are the solution.

Among the dailies, Murdoch’s Times had the worst fall – down 17.69% from 617,483 to 508,250. A lot of that had to do with getting rid of bulks and less promotional spending but surely such a drop hits the newspaper’s advertising rate card (assuming such rate cards are still in existence). The Times always loses money and its sister Sunday Times always makes up the deficit  and a whole lot more, but the Sunday paper is also hurting with its circulation down  some 54,000 year on year, a 4.51% decline, and if profits remain between the two combined they are probably very small.

It’s those types of numbers that gave credence a couple of weeks back to rumors that perhaps the two titles were for sale. After initial Twitters and blogs there’s been nothing on that since -- can you see Murdoch the elder really letting go? But the rest of the family?

And then there are the numbers for Guardian Media Group (GMG) which really show why management is now so worried financially about protecting its national newspapers that last week in what looked like a fire sale it sold its 32 regional titles. The Observer, the world’s oldest Sunday newspaper – its first issue came out December 4, 1791 -- lost 17.3% of its circulation last year, the worst percentage of any Sunday national. It switched from broadsheet to Berliner size in January 2006 and circulation shot up 25% up for a January 2006 ABC of 550,000. But how the mighty do fall – this January that figure was down to 354,565 – that’s a huge 36% fall. All eyes will be on this coming Sunday when it once again relaunches. If it gets another 25% boost as people check it out the big question will be whether they will stick around? If not, this relaunch could be, perhaps, The Observer’s last chance, for above all else GMG’s priority is to protect The Guardian.

And over at The Guardian circulation dropped 15.76% last year, some 56,000 down on the year before, just keeping its head above the psychologically important 300,000 figure at 302,285. With TheTimes down its 17.69% and The Guardian down 15.76% it makes even more poignant the very public spat now going on between Rupert Murdoch and Guardian editor Alan Rusbridger over the right way forward to make money on the Web.

Murdoch has gotten religion in the past months and has banned the word “free” from his vocabulary – he even dumped the free thelondonpaper -- and he wants all of his newspapers to start charging for their digital news. Rusbridger, on the other hand, has very publicly said he believes Murdoch is wrong and when Murdoch was asked recently what he thought about Rusbridger’s very public Hugh Cudlipp lecture last month that really took Murdoch to task Murdoch said he hadn’t read it but he thinks Rusbridger “is full of BS”.

Rusbridger is basically wary of Murdoch’s motives in putting digital behind a pay wall – pay walls are something that the Guardian editor does not believe are good for democracy. "Murdoch, who has in his time flirted with free models and who has ruthlessly cut the price of his papers to below cost in order to win audiences or drive out competition... this same Rupert Murdoch is being very vocal in asserting that the reader must pay a proper sum for content - whether in print or digitally," he said.

Rusbridger appears to fear that once Murdoch has convinced everyone to give up the bulk of their advertising revenue and go behind pay walls then Murdoch would do the same thing on digital platforms that he has done in print – cut subscription prices well below cost in order to gain market share and probably destroy some media outlets in the process – remember when he reduced the price of The Times to just 10 pence? Fleet street never really recovered from that.

The Guardian’s web site is seeing traffic about double that of The Times – so The Guardian has more advertising revenue it needs to protect. The Guardian’s bean counters and the marketing/sales people are really going to have to get the formula right to ensure the most revenue – stay with the current advertising model, switch to a pay wall model, or something in between such as that recently announced by The New York Times.  

Not an easy decision but one thing is clear – the very fact Murdoch is trying to persuade everyone to go one way causes lots of fear and suspicion in the marketplace as to his marketing ploys later should he persuade competitors to do it his way initially.

The January figures also showed a significant dip in the global Financial Times (FT) numbers, falling now below 400,000 to 390,315.  North America continues to be its biggest market (it has made temporary arrangements for printing in Seattle during the Vancouver Olympic Games) but what catches the eye is the still very large number of bulk sales it has in the UK – some 42% of the total 115,447circulation. No wonder the FT is concentrating so much on its Web site which is having good success in growing its subscription revenue (there are complaints on the Internet, however,  that subscribers who had previously been paying £6.25 monthly are now getting renewal notices for about double that!)

Compare that UK & Ireland FT print circulation with the 88,038 circulation of the free City AM that is distributed mostly in London’s financial centers. The newspaper says it has plans for wider distribution at suburban train stations and it will be giving away copies to British Airways business class passengers flying from City Airport. So it seems if the editorial quality is adequate even the financial people can be persuaded with “free”.

And last, but certainly not least, the Evening Standard is having great success at giving away more than 600,000 copies daily in London, but no real word on what that is doing to the bottom line. The Standard had been charging 50 pence and selling less than 200,000 copies daily until Russian oligarch Alexander Lebedev bought it last year and turned it into a free newspaper while maintaining the editorial quality usually reserved for a paid-for.

Apparently there is more demand than the 600,000 (thelondonpaper and London Lite, both of which are now gone, had distributed around 1 million copies combined) but 600,000 seems to be the cost level that Lebedev finds acceptable for now. But in a real supply and demand scenario, the “shortage” is encouraging some suburban newsstands to start charging 50 pence a copy and apparently with some success.

What goes around comes around.

See also in ftm Knowledge

UK Newspapers

The newspaper market in the UK is among the worlds most competitive. The publishers are colorful, editors daring, journalists talented and readers discerning. ftm follows the leaders, the readers, the freebies and the tabloids. 83 pages PDF (October 2010)

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