Here’s A Lesson From The UK’s Sunday Times – Raise Your Cover Price To A New Industry High And Even The Most Loyal Readers Will Depart -- A 20p Increase in September Has So Far Cost It More Than 100,000 In Circulation

Philip M. Stone January 15, 2007

Sticker shock can apply to a newspaper’s cover price as the UK’s Sunday Times has learned. The term got its start in the US when buyers looking at a new car’s price sticker in the auto showroom were shocked to see figures far higher than expected. Well, the Sunday Times raised its price in September to £2 ($3.90, €3), the highest in the UK, and the sticker shock has so far cost it more than 100,000 circulation.

One might think that lesson would not be lost on those UK editors and publishers who believe they are selling their products at too low a price. So, what does Trinity-Mirror’s Sunday Mirror tabloid that lost a whopping 12.59% of its circulation last year do? You guessed it, its price went up this month by 5p making it more expensive than its principal rival, the News Of The World (NOW) which is the UK’s leading circulation newspaper that has  more than double the Sunday Mirror’s readership.

The News of the World is owned by Rupert Murdoch’s News International (NI) that also publishes the Sunday Times. Having gotten burned with its Sunday Times price increase will NI dare to increase the price of the News of the World so it at least matches the Daily Mirror’s, or will it have learned its lesson and welcome instead the chance to increase NOW’s circulation via a lower price?  The NOW itself lost 3.66% of its circulation in 2006.

The Sunday Mirror told its readers its increase was to cover “increased production costs” but then exclaims “What a bargain it is.” The public, used by now to free news on the Internet, has shown the quality Sunday Times there are price limits even to a quality act, and now the Sunday Mirror is going to discern whether down-market the same principle applies.

The Sunday Times debacle frankly caught most by surprise, none more than the marketing people at NI.  The newspaper had been riding a wave of success all year until September’s fateful decision. Executives raised the price from £1.60 to £1.80 in February and there was nary a complaint. So why not try a good thing again just six months later with another 20p increase and become the first £2 UK newspaper?

But this time the reaction was swift. October’s circulation sank 2.32% and for the first time in seven years sank below 1.3 million. November was pretty steady, so the thinking was that maybe the worst had passed, but then came the shock December numbers with a 5.87% drop over November – down to 1,212,886, barely above the 1.2 million mark. Those falls took a positive year and turned it into one with an overall 7.64% drop.

News International is in the midst of a £600 million ($1.17 billion, €900 million) investment in new printing presses that will enable all of its UK nationals to print color on every page. So if there was money being left on the circulation table to help pay for that investment then NI wanted that money scooped up, fast. Now it has found it has gone to that particular well one time too often, and too soon.

The Sunday Times can still boast, however, that it is very far ahead of its quality competition. The combined circulation of the Sunday Telegraph, The Observer and the Independent on Sunday comes to 1,278,315, just 65,429 above the circulation of the Sunday Times alone.

Apart from four publications, the word “down” repeats itself time and time again in the final 2006 audited numbers for the UK nationals. The exceptions were the Daily Mail that put on all of 34 copies year on year to 2,311,057, the Daily Telegraph, up 0.23% to 899,493 but still below that psychological 900,000 bar – it wasn’t that long ago its circulation was well north of 1 million -- The Mail on Sunday, up 1.17% to 2,241,752 million, and The Observer that has seen success since its switch to Berliner size, up 1.27% to 435,852.

The figures prove the hard task ahead for Trinity-Mirror that decided in its year-end business review that it would hold onto its national newspapers while getting rid of a slew of its regional newspapers. For the year, the Daily Mirror lost 8.22%, down to 1,540,817, the Sunday Mirror lost 12.59% and The People was the sickest of all, losing 13.47% and down to 766,842.

But whereas Trinity-Mirror is raising the cover price for the Sunday Mirror it is taking an opposite approach in Scotland where its Daily Record has been under siege from a cut-rate (10p) Scottish edition of Murdoch’s Sun. While the Record’s AM edition sells for 35p it also produces a 15p afternoon edition for Glasgow and Edinburgh.

But following in the footsteps of the Manchester Evening News that now gives away the newspaper downtown but still sells it in the suburbs, the Record is turning its PM Glasgow and Edinburgh editions into free newspapers and is adding two more cities -- Dundee and Aberdeen. Each edition will be localized but also contain Daily Record stories.

Back in London, The PM Evening Standard continues to suffer from the new free London Lite and thelondonpaper newspapers that now distribute between them 811,000 copies just three months after launch. The Standard raised its price 20% to 50p to counter the free newspapers, but the result is not encouraging – it lost 18.1% of its circulation in 2006, down to 263,095, although Standard executives put out a positive spin that they believe they have actually done well by limiting the loss to just that.

And another marketing lesson has been learned from that newspaper war. When Murdoch’s thelondonpaper won the £1 million license  ($1.95 million, €1.5 million) in September to give away its newspapers exclusively in bins at London’s main railway stations the thought was that it would jump way ahead of its rival London Lite, published by Associated Newspapers. That would make it imperative, the thinking went, that London Lite won the exclusive license to give away newspapers in bins at  underground (subway) stations.

And the November audit seemed to bear that out with thelondonpaper jumping some 35,000 copies daily ahead. But in December Transport for London that runs the underground system shocked everyone by rejecting the bids it had received because, it said, they weren’t high enough to make a decent profit after sanitation issues (costs of removing discarded newspapers from trains and the tracks) were taken into account, and it decided not to award the contract.

One would think, therefore, that the December audit would show the gap increasing between the two, but then one would be wrong. The December audit showed thelondonpaper losing 3.43% of its distribution from the previous month and there are now just 10,000 copies separating the two.

So it appears hawkers, although they may cost more, “sell” a paper better than a bin. Which brings to mind that when this writer lived in London a few years back he observed each night at a busy intersection during the evening rush hours a couple of hawkers making brisk sales selling the Evening Standard, walking down the traffic lanes when the lights had turned red. A bit dangerous, maybe, but it was obvious they had their timeframes down to a science.

Maybe it’s time for the Standard to stop relying so much on vendors sitting or standing quietly at their little tables outside Underground stations waiting for people to approach them, and instead they get a bit more proactive.

When was the last time a Londoner heard, “Standard, Get Your Standard here!!!”?

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