From just one Gulf War to another - A recent history of newspaper circulation

The two gulf wars provide convenient bookends for this recent history of national newspaper circulation. Here, David Owen casts an expert eye over the circulation trends between the two wars.

By David Owen

The official ABC figures give a scary insight into the dramatic changes in national newspaper purchasing patterns in our country over the past decade. From just one Gulf War to the next daily newspaper sales have fallen by over one million copies and Sunday titles are down a staggering four million or so per issue. This illustrates the scale of the problem facing most U.K. newspaper proprietors. As in any analysis these headlines conceal many an ebb and flow both within particular markets and between certain titles but you get the general gist that this circulation river is running deep red with newspaper blood.

Sunday bloody Sunday

The Sunday tabloids are the clearest example of this trend with the loss of over 30% of their readers in such a short time. All titles are in steep decline with The Mirror group leading the downward charge with about 2.5 million of their former buyers spending their hard pressed budgets on something else. Whether this is on magazines, chocolates or maybe even mobile top up cards is unclear but it certainly cannot be a simple case of competitive defection. Even The Mail and Mail on Sunday who have won many a prize rosette between them have not added readers at anything like the rate that others around have shed them.

While newspaper circulation figures offer more in the way of Fleet Street bragging rights than a strict measurement of the titles financial stability these figures are nevertheless significant. Even if a large proportion of a newspaper’s revenue stream comes from advertising the loss of so many customers has both an immediate cash impact estimated across the market at around £220 million per annum and an even more sinister effect on future advertising values. To put it simply if an advertiser is buying eyeballs then plainly the fewer eyes there are the less this exposure is worth. Naturally the marketing folk will claim that quality of eyeball is more important than quantity but this only washes so far.

Newspapers are not alone in their space anymore and competition for both national campaigns and local classified advertising is growing apace on the web and with every additional satellite channel.

The quality newspaper sector seems to be more protected from this carnage than their colleagues in the redtop market. The headline sales are good with higher figures in 2002 than the market was enjoying back in 1990. If we were the kind of readers to accept this at face value we would nod sagely and rationalise that quality papers are read by people with higher than average disposable incomes and who would always make time to keep up with the news of the day. Furthermore we may argue these people are less likely to be choosing how to spend limited resources between such competing delights such as a bar of chocolate or The Telegraph crossword.

The bulk sales bulwark

Actually while all this may be true the underlying picture is far less rosy. The smoke and mirrors practised by tabloid newspapers to improve their competitive standings are like nothing compared to the dark arts practised in this broadsheet market. Over the period under examination we can see at least four significant elements that have kept the sales looking comparatively healthy.

Firstly it takes less engineering to keep a smaller sales figure buoyant and the introduction of bulk sales as useful sales armbands became standard practice over this period. For the uninitiated bulk sales refer to the practise of selling quantities of the paper at a substantial discount to a third party business such as a hotel or an airline who in turn give them away to their favoured customers. This is entirely legitimate and actually good business for all parties as the papers sell more, the readers get a paper free, the supplier gets thanks from its loyal customers and the advertiser gets some quality high spending eyeballs to view its wares. So far so good but as with all such wrinkles ingenuity and desperation collude to stretch the concept into a less attractive package. Nowadays it is hard to open the door of a train, plane or even down at heel video shop without hitting bundles of unopened newspapers placed with little regard for the quality of the reader nor indeed for whether a reader comes any closer to reading the paper than the end of his stubbed toe. This is not so good for the advertisers for obvious reasons unless the readers have discovered a neat line in foot brail!

The truth is that bulk sales have lost their position of honour because the numbers required to make sliding figures look respectable have grown progressively beyond the natural number the market needs or wants.

Magazines buck the newspaper trend

It is interesting to note trends in the magazine sector during the 1990s. In contrast to the picture of declining circulations for the national newspaper sector painted by David Owen the magazine sector enjoyed considerable growth during the decade:

* Annual circulation of b2b magazines increased from 284m copies per year in1995 to 300m in 1998.
* The number of b2b titles increased from 4,469 in 1992 to 5,208 in 2002.
* Annual circulation of consumer magazines increased from 1,155m copies per year in 1991 to 1,351m in 1998.
* The number of consumer titles increased from 2,301 in 1992 to 3,130 in 2002.

A foreign affair

The same is true with export sales which started in earnest with a brave strategic move by the FT to print in Germany back in the mid-eighties which paid off in top spades for them but which has subsequently left the Dead Sea and the dear old Med buoyed up by dumped newsprint. In a similar way to the original bulk concept these foreign sales are in theory highly attractive to both paper and advertiser with high priced news reaching well heeled travellers sitting about in exotic locations with both time and cash to spare. In practice most UK nationals exploit this rational veneer to maintain unbelievably high sales in territories far from home. Newspapers claim that most copies supplied abroad are in fact sold to paying customers but even taking into account an extreme form of creative contracts this is hard to swallow and the stark reality is that in some markets fewer than two in ten supplies are actually sold and the rest go for donkey bedding and ballast.

Newspapers do this to keep their figures looking healthy so that advertisers will not walk away or negotiate better terms and it’s a tougher job than ever to keep the vital smoke in place. This is not just a charge levelled at qualities but quite frankly such tricks are disproportionately dramatic the lower the numbers and often these faux sales can account for a significant percentage of the declared sale.

Death by a thousand cuts?

The two other main ruses centre on price. Discounted copies for seven day commitment has served both Telegraph and Times readers well for years. The Telegraph titles share over 300,000 readers pre-paying for vouchers and nobody hides from the extreme cost that providing such competitive protection has incurred over the years. This discounted copy strategy however is only a mild mannered second cousin to the real ballsy trick which is to cut price and dare competitors to follow.

Price wars in UK domestic markets were once blissfully rare but they remain the final weapon against sales decline. A little bit like Pakistan and India eying each other over the border while fingering their nuclear buttons actual deployment of the price card requires some careful thought. Since 1993 only The Times has had any significant long-term success from price cutting when it raised its sale by over 80% within a year and retained most of those even when its price returned to normal and beyond. They probably gained most by exposing themselves to new readers who had outdated perceptions of the title and who were pleasantly surprised by both its quality and value.

The Sun on the other hand has been most consistently successful in using price as a competitive battering ram hurting brutally any publishers daring to take it on. I suspect that despite Sly Bailey’s undoubted spirit and perceived will to win even she will not be rushing anytime soon to open up another price fight with Murdoch’s bruiser. In general most titles have suffered in price wars and those that have steered well clear have done best and had more money spare to add editorial value rather than reduce price. In more recent times The Sunday Business has used price cutting as a low key sampling exercise to good effect but even they will be wary of overplaying this dangerous hand.

Where will it all end?

Where this is all heading is less certain because despite the rapidly falling headline sales and the industry obfuscation techniques UK newspaper sales remain at huge levels with over 13 million people buying copies each day. Multiply this by two or three to get at the total number of readers and you get a sense of how important a media outlet this remains and how much of the population remains engaged with their newsprint of choice. As clever commentators point out if the natural publishing medium was on screen the launch of such a portable, disposable and affordable competitor such as paper news would cause deep concern. The key question however is how quickly if at all newspapers can react to such a long term haemorrhage and how they can make a new home with an ever changing business model.

One thing is for sure that despite the sweat of circulation endeavour the magician’s tricks are getting harder to pull and the audience is starting to wise up to the sleight of hand.

From George H to George W - a market in decline
Newspaper Title199020022002 v 1990 Copies +/-
Daily Mirror3,106,4402,116,398-990,042
Daily Star (inc. The Star)915,558733,808-181,750
Tabloid market Total7,917,0916,377,983-1,539,108
Daily Express1,573,111962,879-610,232
Daily Mail1,688,4102,427,994739,584
Mid market Total3,261,5213,390,873129,352
Daily Telegraph1,081,021992,901-88,120
Financial Times288,925469,613180,688
Quality market Total2,636,1732,784,149147,976
Daily Market Total13,814,78512,553,005-1,261,780
News of the World5,042,5673,958,624-1,083,943
Sunday Mirror2,902,9011,753,753-1,149,148
Sunday Sport427,426190,288-237,138
The People2,574,9051,290,959-1,283,946
Sunday Tabloid market Total10,947,7997,193,624-3,754,175
Mail on Sunday1,896,6772,362,504465,827
Sunday Express1,695,667920,912-774,755
Sunday Mid market Total3,592,3443,283,416-308,928
Independent on Sunday326,793228,254-98,539
Sunday Telegraph590,438777,732187,294
Sunday Times1,175,9411,397,533221,592
Sunday Quality market Total2,653,1892,861,307208,118
Sunday Market Total17,193,33213,338,347-3,854,985
Source Audit Bureau of Circulation