When Rupert Murdoch takes a 28 % salary cut for the year, you get an idea of the plight of the newspaper market currently. His company, News Corporation, which owns the Sunday Times and The Times made a loss of $3.3 billion for the year ending 30th June. Comparatively, The Times and Sunday Times fared better than most in the latest 6 month average newspaper circulations to July. The Times was down 3.9% year on year but the Sunday Times actually posted a small increase of 2.4%.
Both daily and Sunday Independents fared the worst, with the daily falling nearly 17% and the Sunday title reporting a drop of over 22%. This is a newspaper group in serious trouble and closure is a distinct possibility. It has until 25th September to secure a renegotiation of its debt.
As ever, it is the need for cash today rather than yield tomorrow that is dictating the fortunes of the newspaper market. To reduce costs, News International is closing its free London evening newspaper, The Londonpaper. The tough London evening market was also confirmed by the disappointing circulation figures reported by the Evening Standard. A year on year drop of 15% is not what new owner Alexander Lebedev would have hoped for.
The Observer, with speculation of closure swirling around, continued a familiar pattern of declining sales with a 7.5% fall for the latest six months. One rumour is that it will transpose itself into a weekly magazine news title. There is not really a precedent for this in the UK market and little hope of success is predicted by commentators if it does follow this course.
There are signs that display ad sales for newspapers, anticipated to be down18% for the year, are beginning to turn from the downward trend, but it is online where newspaper publishers are looking for improved profitability in the near-term. The whole subject of paying for content, versus the current, largely free content model that most newspapers follow for their online platforms, is the hot topic. The paid-for model does work, The Financial Times revealed that digital income now accounts for 20% of its revenues, up from 14%. The FT’s subscription base for the paid-for access to FT.com also increased by 18%.
ABC Circulations Jan-Jun 09 – Newspapers
