12 JUNE 2004, Page 32

Murdoch may be the new - Northcliffe, but he

has backed a loser with the tabloid Times

There is a tendency in media circles to think that Rupert Murdoch is a genius who rarely makes mistakes. It was Murdoch who in 1986 masterminded the removal of his printing operations to Wapping, smashing the unions and slashing his cost base as a consequence, and allowing more timid publishers to follow suit. It was Murdoch who in 1993 reduced the cover price of the Times, causing panic at the Daily Telegraph and consternation at the Independent, and encouraging both papers to follow the Times downmarket as its circulation soared. Murdoch, so the received wisdom goes, may be a brash dumber-down, but he is a brilliant media businessman, the nearest thing the modern age has produced to Northcliffe.

Well, perhaps he is. But in allowing the Times to go tabloid he may have made, if not a fatal mistake, a decision which has taken the paper into a kind of cul-de-sac. Of course, sitting in his office in America, and planning his next step towards world domination, he probably was barely aware of developments in Britain, and merely reacted to the advice of his underlings. 'Boss,' they may have said, 'the Independent has gone tabloid. We had better do the same.' I don't imagine that the decision was motivated by a feeling that the Independent constituted much of threat to the Times. Murdoch's thoughts must have been more on his more formidable competitor, the Daily Telegraph, and the Likelihood that it would produce its own tabloid edition. He was in the position of a mafia boss who hears that a small-time crook has moved into a new part of the city, and feels that he should get in on the action before his real rival muscles in.

More than six months on, it does not seem such a smart move. Whereas the Independent has gained in circulation, and is now available only in tabloid form. the Times produces both a tabloid and a broadsheet edition. The tabloid has certainly gone down well with some commuters in the south-east who no longer have to wrestle with a paper of tentlike proportions on the early-morning train from Basingstoke. But the overall effect on circulation has been negligible, and sales have barely increased year on year. Arguably they might have fallen if the Times had not produced its tabloid edition: the paper had been losing circulation slowly since it increased its cover price closer to that of its rivals, which it had previously savagely undercut. This, however, is not much of a consola

tion if you consider the amount of money that the tabloid experiment is costing.

First there are the marketing costs — perhaps £10 million — and then there are the salaries of the extra journalists who have been taken on, as well as increased distribution costs and higher wastage as the result of more unsold copies. The Times in any case haemorrhages quite serious money. In the year to June 2003, it and the Sunday Times together lost £28.6 million. The Sunday Times is handsomely profitable even in an advertising recession which shows few signs of lifting, so the Times must be losing bucketloads of money, though there are those who argue that these figures are creatively engineered for arcane accounting reasons. Of course, News International and its parent, News Corp, have vast resources, so there is no need to panic. But the costs of producing the tabloid are more painful when they are added to already substantial losses.

No one would mind if there were some prospect that these costs could be reduced, but there seems not to be. If the Times were to follow the Independent and produce only a tabloid edition, it would save a lot of money. Its problem is that a large minority of its readers — mostly older ones who associate the tabloid form with popular journalism — do not want to switch to the tabloid edition. The danger of forcing one on them is that they might defect to the Daily Telegraph. On the other hand, there is no question of abandoning the tabloid edition, since some readers, having been introduced to it, plainly like it, and might switch to the Independent if it were withdrawn. So it seems the Times is stuck with producing two editions for as long as one can see. Its management seems to recognise this. At the very moment that it is extending the tabloid edition to cover the whole country, it is exhorting those of its readers who want the broadsheet version to put in a special request at their newsagents so as to be sure to receive it. Meanwhile the management at the Daily Telegraph which only a couple of months ago was gazing longingly at copies of a prototype dummy which it yearned to unleash on a grateful public — is relieved that it was not tempted to join the craze, Perhaps it would have done so had the paper not been on the auction block. The reasoning seems to be that it would not have been very clever to have produced a tabloid edition if the new owner of the paper is to be DMGT, with whose Daily Mail it would be in direct competition. As I write, it is not clear whether DMGT or the Barclay brothers will acquire the Daily Telegraph. But it is clear, I think, that in one sense the Daily Telegraph has benefited from all the uncertainty of recent months. It has been saved from going down the same path as the Times.

It is perfectly true that the tabloid edition of the Times is not very distinguished, being even more dumbed-down than its broadsheet parent, and we must hope that it will benefit from the relaunch which is planned for it. But I doubt that even a more alluring tabloid Times would tempt those readers who are wedded to the broadsheet version. The person I feel most sorry for in all this is Robert Thomson, the paper's somewhat beleaguered editor. He let it be known when he was appointed nearly two and half years ago that he hoped to take the newspaper upmarket. As it is, he finds himself presiding over an increasingly downmarket tabloid. How distracting all this must be. But it is a distraction that will go on. As he peers into the future, he must see two Timeses and perhaps two increasingly distinct readerships, as well as a great deal of money continuing to flow out of the door.

10 ince 1 May, when photographs of American troops torturing Iraqis first emerged, the words 'America' and 'torture' have appeared with the following frequency in the British press. As you might expect, the Guardian leads the field, with 39 examples of the words 'America' and 'torture' being used in the same piece. The Independent comes second — again as you might expect — with 26 examples, closely followed by the Times (25), the Daily Mad (24) and the Daily Telegraph (21). The Daily Mirror is a little more of a laggard than one might have supposed, with 15 examples, while the Sun predictably brings up the rear with just seven.