Papers chase future revenue
The colossal rise in the cost of newsprint – over 50 per cent in the past six months – seems, at first sight, an unlikely premise for the decline of newspapers as we know them.
The only certain consequence, so far, has been a ceasefire in the price war. News International evidently decided there’s no more sport to be had. To embroider the Grand Old Duke of York theme, Murdoch has led them down to the bottom of the hill and led them up again. In volume terms, The Times has achieved a particularly satisfying result: both readership and circulation figures have risen by about 300,000. The Telegraph took a nasty knock, and The Independent looks more damaged than before. But what of the costs? By one authoritative reckoning The Times was losing 25m a year while priced at 20p. True, advertising revenue has been boosted. But media buyers’ objections to the supposed quality of new readers have managed to keep rate increases low. Circulation gains, now that the price has been hiked, look less steady.
For the rest of the field, with the exception of The Sun, it’s been an unmitigated bleeding match. Relief, however, is likely to be short-lived. The pressures which led to a price war have by no means dissipated. Readers, for example, will continue to fall off; newsprint will go up yet again.
All of which has been concentrating newspaper publishing minds on the New Digital Frontier. With a fever reminiscent of the Klondike, everyone has been creating on-line services. Certainly the prospects, if we don’t scratch too far below the surface, look good. Here is a potential way of slashing production and distribution costs; of effortlessly crossing national borders; and rehoning newspapers’ dying USP against broadcast – the immediacy of their news. Sadly, “Klondike” is a bit of a misnomer. There’s precious little gold in this particular rush. Most publishers – though they often deny it – are on the defensive, motivated more by fear than greed.
That doesn’t mean they’re wrong for trying. On-line delivery may be crude, highly restricted in its catchment and prone to crashing, but the situation is rapidly improving. Newspapers, however, face a certain long-term decline. That decline can be manipulated and delayed by skillful judgement. It may be more like that of the steam locomotive than the wooden-hulled warship. But it cannot be averted.
