View from City Road: Murdoch outpoints Black on timing

Round one to Rupert Murdoch, who last week decided to meet Conrad Black head-on by cutting the cover price of the Times by a further 10p a copy.

The preliminary circulation figures for Mr Murdoch's 20p-a-copy Times, and Mr Black's 30p-a-copy Telegraph indicate that both increased weekday sales by about 70,000 copies as a result of their lower cover prices.

But maintaining the status quo is definitely not what Mr Black was about when he opted to drop the Telegraph's price from 48p a copy nine days ago.

Rather, the spur for his decision was the way the Times's rising circulation following its initial price cut to 30p last September was beginning to undermine the premium price the Telegraph had traditionally charged for its advertising. His objective was to widen the relative gap between the Telegraph and the Times.

Given that the Telegraph group's pockets are a lot shallower than Mr Murdoch's News International, the pounds 1.25m the price cut has so far cost looks awfully like money down the drain. These are early days; in many respects the war is still a phoney one. The new readers of both newspapers will be still in the process of deciding whether they like the formula on offer. The trick will be to ensure that they decide to become permanent subscribers. Moreover, in advertising terms the quality of the new readerships will remain unclear for months.

But Mr Murdoch can point to his success in holding on to new readers following the first price cut. The Times languished at 354,000 copies a day before last September's initial price reduction from 45p to 30p. With 600,000 copies in sight - and virtually assured for his Saturday edition - he looks even more threatening to Mr Black today than he did a week or so ago. His pounds 400,000 of lost revenues over the past week seem like money much better spent.