MEDIA STUDIES

A word to those two heavyweights, Black and Murdoch — box on!

ANDREW NEIL

You now need a degree in applied mathematics and a PhD in Fleet Street Kremlinology to work out who is winning the circulation war between the Times and the Daily Telegraph. Only the stupidest of students, however, would rely on the papers' own page-one interpretations of the latest sales figures: classics of their kind even in an industry always at its most inven- tive when it comes to circulation. Goebbels would be proud of them.

`The Times is steadily closing the gap with the Daily Telegraph' was the Times's self- regarding interpretation of the latest inde- pendently audited sales figures. Last month it sold an average of 766,358 copies, up 47,000 (+6.1 per cent) on April 1997, help- fully adding that the Telegraph's average sales of 1,074,464 were down 59,000 (-5.2 per cent) on April 1997. Hence the narrow- ing gap.

But Saturday's Telegraph front page reported that the Telegraph's 'huge lead over the Times has widened still further dur- ing the past month'. Its 308,000 lead over the Times last month was an increase of 68,000 since January 'when the Times embarked on a frenzy of price-cutting'. The Telegraph concluded with its own generous spin: 'The Times's circulation has been tum- bling month by month all year.' The bizarre thing is that both papers are right. The trick comes in using the particular comparison that puts you in the best possible light.

The Times has chosen to highlight the annual difference (last month with April a year ago) because it shows it catching up on the old enemy. The Telegraph conveniently ignores this comparison and emphasises instead the fact that the Times has slipped from a peak of 842,341 in January, when its Saturday edition was enlarged, revamped and sold at cut-price with much expensive fanfare.

The good news for the Telegraph is that many of those who flocked to sample the souped-up Saturday Times at the start of the year have been slipping away from it; the bad news for the Telegraph is that, over a period which allows for reliable compar- isons, the Times is still catching up, albeit at a slower rate than before.

The most reliable long-term indicator of circulation trends is the six-month average: this allows for comparisons which iron out monthly fluctuations. Between November 1997 and last month the Telegraph sold an average of 1,080,159, down 4.11 per cent on the same six-month period a year before, as some of those who had taken advantage of cut-price subscriptions drifted away. On the same basis, the Times sold 797,468, up 3.26 per cent. For the six months to April 1997, the Telegraph sold 354,162 more copies than the Times; for the six months to April 1998, the gap had narrowed to 282,691.

The problem for the Times is that the huge boost it enjoyed from selling its Mon- day editions for 10p and the relaunch of its cut-price Saturday edition is wearing off. On recent trends, the gap between the two titles could start to widen again. That is what has been most recently worrying Wapping, and Rupert Murdoch has given his answer: he has cut the price of the Times again.

Whether this will be enough to continue the Times's forced march towards 1 million and Murdoch's dream of overtaking the Telegraph must be doubtful. The recent sales pattern of the Times suggests it needs periodic bouts of price-cutting and other gimmicks to sustain a circulation close to 800,000.

Perhaps Murdoch thinks it is time the Times was good enough to give him a self- sustaining rise in sales without resort to regular and expensive price-cutting. After all, the Telegraph remains a superior paper in terms of such staples as news, sport and business, where it has stayed at the quality end of the market while the Times has rushed with flair to the middle. The news and features agenda of the Times is now indistinguishable from the Daily Mail (which often carries more serious reports than its broadsheet rival); only the excellent op-ed and editorial pages of the Times remain really heavyweight. Maybe a mid- dle-market Times is what will attract Express Tory readers, about to be put off by its new left-wing editor.

More likely, Murdoch was put off a bolder price cut by all the complaints about preda- tory pricing. Yet there was no need for him to be so cautious: the liberal-left 'hoo-ha' (to use a popular phrase for much ado about nothing) about predatory pricing has been defeated, in Parliament and intellectually.

Predatory pricing is best defined as cut- ting prices with the intention of putting competitors out of business and, having done so, restoring prices to their original level or more. It is an evil practice which deserves to be stamped out by vigilant corn- petition authorities. The problem for Mur- doch's many enemies is that he is not guilty on any count.

The purpose of cutting the price of the Times was not to drive the Independent out of business. It was an act of desperation to realise Murdoch's long-held desire to replace the Telegraph as the biggest-selling broadsheet. Changing editors (four in under a decade) and hurling the paper first downmarket, then upmarket, then down- market again had left the Times flounder- ing far behind the Telegraph. Cutting the price was Murdoch's final throw. • The fact that the superior Guardian remained untouched by the price-cutting war shows that the decline of the Indepen- dent was of its own making. In any case, it was never in any danger of going out of business: even if Tony O'Reilly had not been prepared to take it over, there were several other putative proprietors with deep pockets waiting in the wings.

Those who have shouted loudest about predatory pricing have shown the sophisti- cation of 0-level economics failed. What has been happening is old-fashioned cross- subsidy: Murdoch has used the huge profits of the Sunday Times to cut the price of the Times, just as the Guardian group uses sub- sidy to keep the ailing Observer afloat, the Independent was kept alive by the profits of the Mirror group (and is now on the meagre O'Reilly life-support system) and the Sun- day Telegraph was launched and nurtured on the back of the Daily Telegraph. Except for the rather naive O'Reilly camp, Fleet Street has realised, belatedly, that when everybodY is at it, it is best to shut up about it.

Price-cutting has caused proprietors much pain and treasure, but that is how a competitive market works. Newspaper readers have been the beneficiaries to terms of more and cheaper papers. As the Times and Telegraph gear up for the next round in their heavyweight contest, no holds barred, we should raise a cheer for Rupert Murdoch and Conrad Black for the cut-price products they are providing. This battle will run and run — to all our bene- fits, even the Independent, if only it had the nous to realise that the rush to the middle- market has created a new niche at the top.

The author is editor-in-chief of the European and the Scotsman. This is the first of a series of guest Media studies during Stephen Glover's absence.