However bad things may seem, the news for newspapers is good
As another year looms, I cannot remember such despondency in what used to be called Fleet Street. It is not just that several newspaper groups are losing money: it was ever thus. There is talk of a general decline in newspapers. Some even suggest that the written word — as it appears in a bundle of newsprint delivered to your door or picked up at a newsagent — will not last more than ten or 20 years. We are told that the Internet will tempt more and more readers, and that the young do not have the same interest in newspapers as their parents and grandparents did. The sharpest decline in readership has been in London, where almost every title has suffered, and it is adduced as a warning of what will happen in the rest of the country. In the capital, people are more frantically busy, and more drawn to the Internet and other sources of news. Some 20 per cent of the population hail from foreign climes, and seem not to have acquired the newspaper-reading habits of native Britons.
Clearly not everything is rosy, but much of the sense of malaise seems to me misplaced. Not every title has suffered over the past 12 months. Both the Times and the Independent have gained some 10 per cent over this period as a result of going tabloid. I find the tabloid Times very unsatisfactory, and the Independent is far from perfect, but in this instance it does not really matter what I think. Both titles have attracted new readers, not all of them at the expense of other papers. I freely admit I was wrong to suggest earlier in the year that the Times had made a mistake in going tabloid. The paper has plunged further downmarket, and that to me is sad, but one can hardly criticise it from a commercial point of view. The success of the Times and the Independent underlines the truth of the old adage that the market rewards innovation. In the daily quality-newspaper sector little had happened — the debilitating price war aside — since the launch of the Independent in 1986.
If we look back not one year but ten, the picture is certainly not one of unrelieved gloom, though there have been casualties. (In the case of all circulation figures I am including so-called bulk sales. Methods of computing sales may have changed over ten years, but in broad terms we are comparing like with like.) The daily newspaper that has lost the highest proportion of its circulation is the Daily Mirror. A decade ago it was selling almost 2.5 million copies a day. In November 2004 (the last month for which figures are available) it sold 1.75 million copies. This means that it has mislaid getting on for a third of its sales. One could say that the paper’s working-class base is shrinking, and in support of this cite the fortunes of the Sun, whose circulation has declined from 4 million to 3.25 million over the same period, an almost equally calamitous drop. One might also add that neither title is, within its own terms, much good at the moment. I certainly wouldn’t assume that a brilliant red-top editor such as Kelvin MacKenzie in his prime could not turn either of them around. The management of the Daily Mirror plainly does not have the faintest idea of what to do with it, and, looking forward to 2005, it must be the most likely of all titles to be sold. Here the name of Richard Desmond, owner of the Express titles, is sometimes mentioned. He also owns the Daily Star, whose sales have increased by more than 15 per cent over the past decade to some 900,000.
Say what you like about Mr Desmond, he has slowed the sales decline of the Daily Express. Over the past ten years this is not quite as dramatic as some might think, with circulation falling from 1.3 million to about 900,000, though over the past quarter of a century the descent has been catastrophic. No one can be sure that the Express has a long-term future. It has long since swapped roles as the pre-eminent mid-market paper with the Daily Mail, whose sales stood at 1.8 million ten years ago, as against 2.4 million in November. The latter is more profitable than it has ever been. However, it is menaced by the downmarket Times and, to some extent, by the Daily Telegraph. I recently suggested that Rupert Murdoch’s strategy is to put his tanks on the Mail’s lawn in order to ensure that the Mail does not threaten the already diminished circulation of his other (and still very profitable) daily title, the Sun. If the Telegraph were to go tabloid, the Mail would feel some extra heat.
Will it? This may be the most interesting development of 2005. One school of thought believes the newspaper would be mad to aggravate its older readers, many of whom are known to dislike the tabloid form. The opposing school says that these readers would probably stick with a tabloid Telegraph, just as readers have stuck with a tabloid Times. They point to a sales decline which, though not earth-shattering (1.05 million to just over 900,000 in ten years), is worrying. If the Independent and the Times can turn themselves around by going tabloid, why can’t the Daily Telegraph? This will be a difficult argument for the newspaper’s new management to resist.
As for the rest of the so-called quality market, I have already considered the Independent and the Times. Despite its recent gains, the former, with a November circulation of 260,000, is still about 30,000 short of its sales figure of ten years ago. The Times is slightly ahead. The Guardian has suffered a little (down from a fraction over 400,000 a decade ago to 377,000 in November), having lost some readers to the tabloid Independent. From early 2006, when new presses will have been installed, it will adopt a Le Monde-sized format. Those who have seen dummies speak highly of them, and the paper’s future is surely secure, though its dependence on government classified advertising is a cause for concern in the longer term. A less sympathetic (and more cost-conscious) administration would spread this advertising around other titles, and push some on to the Internet. Among quality dailies, that leaves the Financial Times, which has suffered a calamitous decline in its UK sales, now standing at 80,000, while expanding its foreign circulation. Its combined sales have risen from some 280,000 ten years ago to 425,000 in November, but profits have been wiped out as financial advertising has slipped and the paper’s cost base has spiralled. Pearson may sooner or later sell the title, which, for all its commercial problems, must have a strong future.
All in all, though there have been winners and losers, and probably more of the latter than the former, this fleeting analysis hardly supports the proposition that newspapers are in inexorable decline. (Although I have restricted myself to dailies, I should mention the Sunday Times, which has slightly increased its sales over the past ten years.) Not all newspaper publishers need enter 2005 with a heavy heart. Overall sales may have declined, particularly at the bottom end, but there is still much fun to be had, and good money to be made, as well as new opportunities for those brave enough to seize them.
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