To UK National Publishers It Seems To Be A No-Brainer – Circulation Is Down So It’s Time To Raise the Newsstand Price

In what was really a significant first move, Rupert Murdoch’s Times that has been priced 5 pence lower than its other “quality” rivals took the plunge and raised its price to equal the 70 pence ($1.40, €1) of its competitors. But rather than be content that the Times was now up to their level, rival publishers took that as a cue they should raise their prices even higher, too.

So the Guardian raised its daily and Saturday editions by 10 pence (20 cents, 15 centimes), with the daily now at 80 pence and the Saturday paper at £1.50 ($3, €2.40). The Telegraph maintained its 70 pence daily price but increased Saturdays to £1.50, a 10 pence increase.

Recent price increases elsewhere have had mixed effects. In June the Financial Times increased its newsstand price by 30%, from £1 to £1.30 and the Saturday paper went up 50 pence to £1.80 and there was no loss in sales, although it should be noted that close to 40% of its UK sales are bulk sales at discounted prices. Even so, those price increases are bringing in additional weekly circulation revenue in excess of £150,000 ($300,000, €220,000) – nothing to sneeze at.

But last September Murdoch’s circulation-leading Sunday quality, The Sunday Times, raised its cover price from £1.80 to a UK historical high for a newspaper of £2. Disaster! Within a couple of months circulation was down by more than 100,000, and this year’s August ABC shows the newspaper down 12.14% on the 12 months with circulation still down more than 100,000. The good news seems to be the rot has stabilized and indeed August showed a slight improvement over July.

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Here’s A Lesson From The UK’s Sunday Times – Raise Your Cover Price To A New Industry High And Even The Most Loyal Readers Will Depart -- A 20p Increase in September Has So Far Cost It More Than 100,000 In Circulation
Sticker shock can apply to a newspaper’s cover price as the UK’s Sunday Times has learned. The term got its start in the US when buyers looking at a new car’s price sticker in the auto showroom were shocked to see figures far higher than expected. Well, the Sunday Times raised its price in September to £2 ($3.90, €3), the highest in the UK, and the sticker shock has so far cost it more than 100,000 circulation.

The Latest UK National Newspaper Audit Is Little Short Of A Disaster For the Paid-Fors And Either Their Giveaways Aren’t Helping Any More Or If It Weren’t For Them Who Knows How Really Bad It Might Have Been
The Sunday Times raised its price to £2 and lost 37,376 subscribers (2.32%) over September although the accountants can make the case they’re still doing better from the price hike. The Evening Standard raised its price by 10p to fight two free newspapers, and it lost 2.54% on the month and is down a whopping 14.38% on the year. And the Daily Express having returned to normal price after a 10p reduction for several months now finds itself worse off than ever.

Three Different Approaches By UK Nationals to Stem Steep Circulation Losses: Daily Star, Daily Express -- Lower the Newsstand Price And Up the Brand Advertising; Daily Mirror, Guardian and the Independent -- Raise the Cover Price; Observer -- Go Compact. And All Seem to Work!
The year-on-year circulation numbers for the UK nationals show circulation down although all had a good 2006 start in January. But how to stem the overall losses? Two pricing ideas are now in play – raise the cover price and lower the cover price. The third option is to resize, and the January ABCs seem to indicate that everything can work.

With Circulation Spiraling Down and Internet Advertising Increasing, What Is The Newspaper Industry’s Solution for a Financially Successful 2006? It’s to Hike Up Advertising Rates and Increase the Cover Price! When Will They Learn?
It’s really not rocket-science marketing. The number of eyes looking at your product is decreasing, and the advertisers who pay the bills are spending more elsewhere. In that type of environment what do you need to do to maintain and grow the cash flow? One might think the prime aim would be to entice new readers and new advertisers, but that doesn’t seem to be the trend as 2006 begins. The newspaper industry instead seems to be going back to last year’s formula that fell flat on its face – charge more for less.

“When Will They Learn” – ftm in July Decrying the British Newspaper Marketing Practice of Giving Away DVDs. “ They’ve Got to Learn. That’s Got to Stop” – Rupert Murdoch, November 2005
The very British newspaper marketing practice of giving away DVDs to boost circulation has now been damned by the publisher who probably is responsible for giving away more DVDs than any other. To Rupert Murdoch it just doesn’t make sense any more.

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The other notable price increase was a year ago by the London PM paid-for newspaper, The Evening Standard, that, as part of its plan to compete against two new free newspapers, raised its newsstand price from 40 pence to 50 pence. The ABC figures show its circulation down 11.38% to 277,555 copies but dig into those numbers and the results are really much worse. A year ago the circulation was 317,511 of which 12% (some 38,000 copies) were bulk sales to hotels, airlines and the like at greatly discounted prices. Today’s 277,555 figure includes 34% bulk sales (95,111 copies). Do a like-on-like of full price sales and it is 182,444 today compares to 279,433 of a year ago, down almost 100,000 copies (34%).

The one downward reversal in price is The Sun with Murdoch’s leading tabloid desperate to keep its circulation above 3 million. It has embarked on a campaign in London and its suburbs to hawk the newspaper on the street at 20 pence, instead of the newsstand 35 pence. The newspaper says it is for a limited time, but other tabloid publishers fear it is the start of another Murdoch price war.

The British nationals are famous, of course, for all the DVD and CD giveaways to prop up their numbers. The most famous was in August when The Mail On Sunday gave away Prince’s new unreleased-in-the-UK CD. The promotion cost the newspaper about £1.25 million ($2.5, €1.85 million) in license fees and promotion but it added some 600,000 newspaper buyers on the day, and the newspaper claims there is some glue, ending August 1% up on a year earlier.

So the questions is being asked what can the Mail on Sunday do to top its own success with the Prince CD, and the answer seems to be it is going to distribute September 16 a DVD of the movie, “The Riddle” an independent British film that has not been released in the UK. The newspaper is printing up 2.8 million DVDs looking for the same results as from the Prince CD – selling extra copies of the newspaper and because of all the promotion advertisers will clamor to be included in the newspaper at premium rates.

According to movie analysts you should figure that about 30% of covermounts actually will get played, so that means around 800,000 plus DVDs could get watched and for the UK that is far more people watching the film than it could have expected in theatrical release. The newspaper has not said how much it is paying for the rights, but the producers say it is in “six figures”.

The film starring a British cast was made for around £2.5 million ($5 million, €3.7 million) so to make money it will need more than what it receives from the newspaper, but will it really have a life after being a cover mount? A week after the cover mount the newspaper gives up all rights to the movie and then the producers are then free to produce their own DVDs or even get a theatrical release or a TV sale.

On the regional newspaper front newspapers are continuing on how to keep up their readership following some dramatic circulation falls. In Manchester, the Evening News last year started giving away 50,000 copies downtown while still selling the newspaper in the suburbs. A year on and it is now giving away more than 90,000 copies downtown, and its paid-for sales have fallen 24.2% over 12 months to 86,923, meaning it now gives away more newspapers than it sells. But with the combined 180,000 circulation management claims it is still the country’s largest regional newspaper and as long as it can keep eyeballs reading the newspaper and advertisers still interested in reaching those eyeballs then the newspaper is not overly concerned by the loss of circulation revenue.

A small regional newspaper has now hit on another novel idea. With a circulation of just 13,664 the Reading Evening Post had little to lose by experimenting and it decided to give away 80,000 copies of the newspaper on Wednesdays while still charging the other days. In addition it also gave away 1,600 copies each day to companies, business parks and schools bringing total paid for and free distribution to 15,600 a day.

It must have liked the results because it has now announced it is going to expand the Wednesday policy to Monday – Friday.