The UK’s quality newspaper market is abuzz with activity as the major players try to halt a gradual circulation decline and reverse falls in advertising revenues.
The Independent and The Times have launched tabloid formats. The future ownership of The Daily Telegraph hangs in the balance. And now a British version of highbrow French newspaper Le Monde is being planned.
The proposed upmarket daily, provisionally called The World, is the brainchild of Stephen Glover, co-founder of The Independent. However, observers suggest that in the current economic climate Glover’s move is bold but potentially foolhardy.
The total average circulation in the quality newspaper market declined year on year by 4.56 per cent to 2.67 million for August 2003 to January 2004. And advertising revenues for quality newspapers have been savaged by the bleak economy. For the final quarter of 2003, the revenue for all national newspapers dropped by 3.8 per cent to &£428m (Advertising Association).
However, Glover seems optimistic about his venture. He has already assembled a team that includes EMAP chairman Adam Broadbent as the chairman and former Daily Telegraph enterprise director and managing director of PR Newswire, Vicky Unwin as the managing director. He has also managed to recruit the cerebral and well-respected journalist and author Francis Wheen.
An outline agreement for a distribution deal with Associated Newspapers has apparently been reached and negotiations with two print sites opened. Now it’s a question of Glover raising &£15m from the City to launch the product – which is where Broadbent’s connections and influence will play a part. The target circulation for launch has been pegged at 100,000.
One City analyst says: “Glover and his team are certainly setting themselves a massive challenge in trying to start a newspaper at a time when sales of most newspapers are declining.
“I don’t know who will be willing to back this launch in the current climate. And with advertising revenue still hard to come by, the sums don’t seem to add up with a circulation of only 100,000.”
He also questions whether &£15m alone could help launch the newspaper and points to the &£40m invested in The Business over the past six years, despite which the paper has yet to break even. The move also comes at a time when rivals are aggressively pushing their tabloid formats to boost sales. The Independent is enjoying a fillip from its “compact” tabloid version, now available nationally Monday to Saturday, and has seen a circulation rise for the past four months. The Times also has a weekday compact edition and there is speculation that all sections of The Sunday Times, except the news pages, will soon be published in tabloid formats.
The Guardian has publicly ruled out a compact edition for now, but insiders suggest that it could be working on a Le Monde-sized (between broadsheet and tabloid) format, while the Telegraph has drawn up its own dummy tabloid design.
These rivals, all of which are struggling to sustain their own advertising revenues, are obviously sceptical about a new entrant to the market. One industry insider says: “It is not circulation but advertising revenue that makes money for newspapers and there has been a savage advertising recession. A weighty broadsheet will need top-end advertisers, such as the ones used by the Financial Times (FT), and that market is very tough to crack.”
The FT, which seems the closest publication to Glover’s model, is expected to post significant advertising losses when owner Pearson announces its financial results this week.
If Glover’s project gets the required investment, it will be the first new national quality weekday newspaper to hit the UK shelves since 1986, when The Independent was launched. Ill-fated broadsheet Sunday Correspondent, launched in September 1989, turned tabloid shortly before its demise in 1990.
Glover, alongside founding editor Andreas Whittam Smith and Matthew Symonds, succeeded in raising &£18m of City money to launch The Independent. But newspaper experts insist that this is no time to launch a new title and say that if there had been a gap in the market, publishers with deep pockets would have launched a similar product already.
MindShare managing partner Paul Thomas says: “Publishing newspapers is a vanity business and so Glover could possibly attract someone with money to burn. But I don’t see that happening in an over-supplied market. The City money is looking at the Telegraph, so why risk trying to back something that does not even exist?”
However there are others who welcome an addition to the market that could provide more choice for advertisers. Vizeum press director Alex Randall believes there is potential for a highbrow title to change the market and says: “Anything new in the market means good news for advertisers. But because there has been a lot of innovation in the market recently, Glover might face an uphill task in attracting investors.”
Rumours suggest that Glover is finding it extremely tough to find patrons to back his launch, which with its modest 100,000 circulation is being dubbed as a “pamphlet”, not a newspaper. Whittam Smith declines to comment on the venture saying: “I do not want to add to Glover’s difficulties in raising funds for a new newspaper.”
The pedigree of Glover and his team is not doubted by the industry but, because he is not part of a media empire that could sustain any losses incurred by the newspaper, his venture is being described as “unworldly”.
As a columnist for The Spectator, Glover has often derided the “dumbing down” of the broadsheets and his launch is not expected to attract readers interested in populist stories about TV celebrities and scandal. While experts such as Randall argue that the agenda of the traditional serious newspapers has drifted more into the middle ground, others wonder whether an audience for a highbrow centre-right publication exists at all.
Thomas says: “The problem is that there is such a supply of information available to readers, and not just in print, that only a limited amount can be absorbed. I really can’t see an opening in the market, especially when governments themselves are no longer left or right, more middle-of-the-road.”
There is a consensus that the real threat to Glover’s newspaper is the high level of activity and innovation already in the market. The product would need to be significantly better or different to succeed. For the moment, the industry is waiting to see whether it manages to get off the ground.