While News International has recovered some of the loss by launching a Sunday Sun and taking steps to restore its reputation, the closure dealt a blow to the rest of the Sunday market, accelerating the already existing downward trends in circulation and ad revenue.
The last issue of the News of the World was printed on 10 July 2011 after details of its journalists’ unethical practices left News International bosses with no choice but to close the Sunday tabloid after advertiser after advertiser boycotted the title.
On 26 February this year Rupert Murdoch’s company launched the first issue of the Sun on Sunday to plug the red top-shaped hole left in the Sunday newspaper market.
Douglas McCabe, media analyst at Enders Analysis, believes the Sun on Sunday was “quite elegantly” released into the Sunday market and believes News International effectively removed the contagion of the News of the World by closing it so quickly.
“It then made sense to launch a Sunday Sun as they had journalists with six-day working patterns, presses laying idle and the management ready. It cost next to nothing and is an extraordinarily well-known brand – it makes sense to readers and agencies,” he adds.
The Sunday edition of the Sun has about 85% of the News of the World’s May 2011 circulation, according to ABC figures, but the new title has lost 55,000 in circulation on average between April and May 2012.
Katie Vanneck-Smith, News International chief marketing officer, says: “Despite the difficult economic climate, industry-wide challenges and a year of unprecedented difficulties for News International, our titles have proved robustly popular with readers and advertisers alike.
“The Sun on Sunday became the market leader on the day of its launch and has strongly retained that position ever since.”
In the past year, News International has implemented several changes to make sure it is not engulfed with a similar scandal in the future. This has included the departure of key executives such as former CEO Rebekah Brooks, the commissioning of a Managing Standards Committee and the introduction of a staff training programme throughout the organisation.
The company has also launched new supplements and claims to have increased both its digital and print subscriptions, partly as a result of building a new digitally-focused marketing hub in September last year.
While News International appears to have weathered its and the market’s storm relatively well, others in the Sunday newspaper sector have found the conditions more challenging.
According to Mediatel and ABC figures for May 2012, the national Sunday newspaper market is “up” 31% year on year, but these do not include the News of the World’s circulation the previous year. Including that, the market is down 12% year on year, more than the daily market’s decline of 8.3%.
Enders’ McCabe says the closure of the News of the World dealt a “structural shock” to the Sunday newspaper market.
“That shock has an impact on audience and ultimately advertiser behaviour. It helped accelerate a general trend of decline. It gave people another reason not to go out to the newsagents and it was another reason for brands and agencies to explore other options [outside of press advertising],” he adds.
A former senior News International executive who asked not to be named says the Sunday red top newspaper market is still “overshadowed by the dark storm clouds overhead” of the Leveson Inquiry and ongoing criminal investigations.
He adds: “I wouldn’t be surprised if some iconic figures at the papers are prosecuted, brands may reappraise morally their relationships with these newspapers.”
Fear of litigation has also made the newspapers reconsider their more salacious stories, which in turn is having an affect on readership, the former News International executive says. In the past, big front page splashes could have attracted up to 500,000 extra readers, which would boost their monthly readership averages. Without such spikes, ad agencies and media buyers could start looking to renegotiate their yields.
Liam Mullins, head of press at media agency the7stars, says a legacy of the Leveson Inquiry – which was sparked by the News of the World scandal – has resulted in a “cleaner but much leaner” newspaper industry.
He adds: “Considering the big difference in consumer needs and behaviour on a Sunday we can expect to continue to see declining circulations in these editions driven by uninspiring headlines, lack of gossip and celebrity news and ultimately lack of advertiser revenue – meaning that this vicious circle will continue.”