For U.K. Papers, Arena is Shifting in Big Way

International Herald Tribune – 2/28/05

Eric Pfanner

 

 

Rivalry provokes fears of 'bust-up'

 

LONDON British newspapers, like their readers, used to know their place. There were broadsheets, which soberly covered the serious issues of the day. And then there were tabloids, which screamed about seamier stuff.

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But as in society at large, class distinctions among the dozen or so national newspapers seem to be dissolving. With circulation sliding, most of the serious papers long ago took to the celebrity-and-scandal fodder they had previously eschewed. More recently, two of the broadsheets switched to a tabloid shape. Meanwhile, free newspapers are scratching for a foothold, and the Internet is siphoning off readers across the range.

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After a three-year slump, advertising is recovering and the near-term financial outlook for the newspapers, some of which racked up severe losses over the past few years, is improving, analysts say. Over the longer term, however, the industry will have to deal with a continuing erosion of sales and a marketplace that looks increasingly crowded in the middle. And while competition is often good for journalism, some editors worry that the new rivalries, driven by business pressures, are causing newspapers to alienate more readers than they attract. At a recent conference, Alan Rusbridger, editor of The Guardian, talked of the possibility of a "real bust-up in the middle of the market."

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"If this is so, I think it will lead to winners and losers," he said. "There will be casualties, there will be victors, there will be, I think, a very fruitful and constructive debate about what journalism is there for."

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Some analysts say consolidation is inevitable in the long term, but for now all of Britain's national newspapers seem determined to stick it out. Still, that does not mean the changes are over.

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The Times and The Independent switched from broadsheet to tabloid size last year, and The Guardian plans its own shift, to something in between. The Guardian has not yet said when the change will happen, only that the required new presses will be in place by the end of next year.

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Other papers, too, are investing heavily in new printing capacity as they seek to sell more color advertising. Among them is The Times, which has been losing money as it invests heavily in an effort to catch up to The Daily Telegraph in circulation.

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"The audience for serious journalism is increasing, but serious journalism is seriously expensive," said Robert Thomson, editor of The Times, which is owned by News Corp.

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The Daily Telegraph and The Sunday Telegraph, under new ownership after Hollinger International sold them last year David and Frederick Barclay, are taking a different strategy from The Times. The papers announced plans last month to lay off 90 journalists, or 17 percent of their editorial staff, in part to help pay for new color presses.

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Telegraph Group, which declined to make an executive available for this article, is also offering advertisers a more prominent role. It reached a deal this month under which Vodafone, the mobile phone operator, will jointly create a section called Business Voice with Sunday Telegraph journalists.

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While The Times and The Telegraph are engaged in one long-running battle on the right, The Independent and The Guardian have been locked in a similar rivalry on the left.

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By shifting to the tabloid format, analysts say, The Times and The Independent are also pushing into the middle ground, long dominated by The Daily Mail, which competes with The Daily Express to lure readers with alarmist headlines about asylum seekers, germs and Germans.

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Meanwhile, at the lower end of the market - called the "red tops," for the traditional color of the tabloid masthead - things have been changing, too. The Mirror, whose top is now blue, has been losing circulation rapidly, hurt by a scandal last year over the publication of faked photographs of British soldiers "abusing" Iraqis. The Sun, a tabloid that is also owned by News Corp., remains Britain's biggest-selling paper.

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But New Corp.'s chairman, Rupert Murdoch, acknowledged recently that it was losing sales to a free publication, Metro. Murdoch estimated that Metro, published by the parent of The Daily Mail and distributed in the London Underground, was costing the Sun 30,000 to 40,000 daily sales.

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Metro also threatens to cannibalize sales of the Daily Mail's afternoon sister title, The Evening Standard. To fend off the challenge, The Standard has started a free lunchtime edition, and analysts say it may be only a matter of time before the paper goes entirely free; Associated Newspapers, which owns The Standard, The Mail and Metro, declined to comment.

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Meanwhile, Associated finds itself under fire on another front.

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London's mayor, Ken Livingstone, who has grappled with the company's papers for years - most recently with The Evening Standard, over what the paper calls an anti-Semitic verbal attack on a reporter - has vowed to tear up the company's exclusive deal with the Underground. This could allow another competitor, most likely Richard Desmond, who owns The Express and a red-top, The Star, to move in with a separate free afternoon paper.

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While free newspapers may appear to undermine the habit of paying for news, David Trunkfield, a consultant at Pricewaterhouse Coopers, said they could help the industry in the long term by bringing in young readers who might otherwise never pick up a paper. And in other ways, he added, the financial prospects are improving. British papers, which habitually engaged in ruinous price competition in the past, have largely avoided them lately.

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The Times and The Independent have bucked the circulation trend, attracting younger readers with their smaller, easier-to-read formats. The Financial Times, which stands above the fray with its mix of business, political and international news - but which had been losing readers and money - has pared its losses and gained new readers on the Internet.

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Compared with many other European countries, newspaper penetration rates remain high in Britain. And as audiences for other media, such as television, are fragmenting, the three million readers of a paper like The Sun look increasingly impressive. Indeed, British newspaper ad spending rose 4 percent last year, to £1.95 billion, or $3.72 billion.

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"Everyone is overly fixated on circulation right now," Trunkfield said. "In the long run, if circulation keeps going down, you don't have a business. But at least in the short term, the outlook for profits is pretty good."