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!

Philip M. Stone February 23, 2006

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.

January numbers were up for everyone, no matter what their particular marketing strategy, but then again they were all coming off a dismal December – the month is traditionally slow as people actually start their Christmas holidays. That really leaves unanswered how much of January’s increase is to the new strategies and marketing giveaways and how much is because people are back from holidays and reading the newspaper again.

The industry in January was still into the thick of giving away DVDs, but also it expanded the gifts to include CDs ranging from Mozart to learning French, new specialist magazines, and even a Dictionary of National Celebrity.

The strategy at Richard Desmond’s Daily Star and Daily Express was to cut the cover prices while at the same time investing in a massive television branding exercise. The cover price cuts alone are said to be costing Desmond some £500,000 a week, but company officials say they are very happy with the results thus far and intend to keep the price cuts in place for some time to come.

Desmond reduced the price of the Daily Express by 10p and the Daily Star by 5p so both sell for 30 pence. The January results showed the Star gaining 5.2% to 820,070 daily copies, and the Express up by 6.1% to 849,001. But while those numbers look good they still pale in comparison to a year ago – The Star is down 4.82% and the Express is down by 10.56% although in the latter’s case it no longer counts some 61,000 discounted bulk copies.

The Express’ main competition is the Daily Mail that chose not to match the price cut after the first day, but it did finance an expensive millionaire competition that resulted in a 3.29% increase to 2.389 million.

At the Sun, the UK’s highest circulation daily, no sooner does owner Rupert Murdoch damn DVD giveaways as a waste that only increases circulation for a day or two, than the newspaper participates in a huge DVD giveaway that helped move circulation 6.4% to 3.319 million, but that is still down 1.87% over a year ago.

But the move this week by Trinity-Mirror in raising the price of the Daily Mirror by 3p to 38 pence bears careful watching. It means it is 3p more expensive than The Sun, and yet only 2p less expensive than the Mail. Could that be No Man’s Land?

Trinity Mirror upped the price because the group has seen a real softness in its advertising revenues. For its three nationals – the Daily Mirror, Sunday Mirror, and The People – advertising was down 16% from July to November. The group has been savage in its cost-cutting via editorial redundancies throughout its national and regional newspapers and is looking to save some £15 million in 2006. In January, before any price increase, the Mirror saw an increase of just 2.9% to 1.728 million copies – well short of the Sun’s spectacular month – and still down 1.18% over a year ago..

On January 8 the Observer relaunched in Berliner size and the ABCs show a whopping 26% increase – more than 100,000 copies, to 542,000 copies and that is 21% more than a year ago.. That compares with Sunday Times, remaining a broadsheet, that saw sales up 3.32% to 1.357 million, still by far the Sunday “quality” leader, but down 1.37% on the year.

The Observer, in the same stable as The Guardian, seemed to do better with its Berliner launch by holding onto new readers than did the Guardian, although in January the Guardian, even with a 10p cover price increase, still saw circulation up 3.74% to 394,913, about 56,000 higher than before the format change, but down from the 400,000 plus said to have bought the newspaper in the first week or two after the relaunch. In all it is now selling 18,000 copies more than it did a year ago, up 4.8%.

The Independent, the first of the UK quality newspapers to turn compact, had also increased its price to 70p and saw a 3.27% increase over January. Its editor, Simon Kelner, says that in order for the Independent to really be able to invest in the type of journalism he wants the cover price needs to be £1, but that’s not going to happen for a very long time.

The Independent on Sunday, that turned compact last October, saw a 10.21% in crease to 241,414 – much more respectable than the 202,000 of six months ago, and 17% ahead of a year ago.

And the task facing new Financial Times editor Lionel Barber, who has been busy making multiple staffing changes over the past two months, came clear in the ABCs that show the FT’s circulation in England, Wales, and Northern Ireland is now a dismal 86,347. The newspaper is said to have broken even in 2005 – the first time it has not made a loss since 2002 – but it faces a hard time getting back the corporate reader who now finds the business pages of UK national newspapers have improved to the point that the FT is not necessary reading any more.

But for all the marketing strategies, the tabloid News of the World, the largest circulation newspaper with 3,789,176 copies in January did it the old-fashioned way – breaking good news scoops.

Its stories by an investigative reporter who posed as a multi-millionaire Arab and who got England football coach Sven –Goran Erikkson to say a lot of things he shouldn’t have, were splashed over two Sundays, and the newspaper also broke a story about a Liberal Democrat politician doing sexual things he shouldn’t. That saw circulation up nearly 8% on the month, but still down nearly 1 % on the year.

The true problem for the UK press is that it still has not recovered from the days when Princess Di was daily front-page fodder. The public lapped all of that up, they couldn’t get enough of it, and the newspapers just have not found anyone else to replace her.

Rather a living princess than Mozart.

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