Forget the doom and gloom. It's still worth investing in newspapers

For all the concern over circulation figures, the numbers are still impressive. And at the top end there's even cause for satisfaction

We buy an average of 12.5 million national newspapers each weekday and 14 million on Sundays. That needs saying from time to time, because so many commentators, analysts and academics so often give the impression that the newspaper, if not on life support, is certainly in intensive care. We are a long way from that.

We buy an average of 12.5 million national newspapers each weekday and 14 million on Sundays. That needs saying from time to time, because so many commentators, analysts and academics so often give the impression that the newspaper, if not on life support, is certainly in intensive care. We are a long way from that.

The Barclay brothers may be ordering staff cuts at the Telegraph to bring down their costs, but they still paid £670m for the titles, a lot of money for a corpse. They would not be investing their planned £150m in new presses, nor The Guardian £60m in presses to print their semi-compact relaunch, if they did not see a future where people bought newspapers and proprietors made profits.

So as we move on to gloomy (for some) analysis, remember those figures - 12.5 and 14 million. A lot of papers were sold last month, as every month. But the trend remains down, and in January 2004 about 750,000 more copies were sold each day than in January 2005, a reduction of just under 2 per cent. This despite the continuing tsunami coverage, the Iraq elections, Brown and Blair, and a deluge of free CDs.

Deconstruct the market, however, and you find that the pattern is not consistent across all sectors. The so-called quality sector of the market - Times, Telegraph, Guardian, Independent - grew by 4.2 per cent year on year, 112,000 copies a day. At the same time the middle market - Mail and Express - fell by 2.4 per cent, and the popular tabloid market - Sun, Mirror, Star - fell by 4 per cent. All these figures are comparisons with January 2004.

So the news is cheery for those who have their doubts about the influence for good of the tabloid diet of sex, soap and celebrity, and the mid-market diet of war on scroungers, economic migrants and single mothers. Whether it's education, diet, free CDs or the compact format, it is the upmarket press that has upped aggregate sale. The numbers are small, of course, in comparison with the red-tops: qualities up 112,000, red-tops down 270,000.

In that quality sector the story continues: compacts do well, broadsheets less well. But it was less stark last month. The Independent and The Times are up 3.3 per cent and 3.9 per cent respectively. The Telegraph has reversed a pattern of year-on-year decline with its first rise, 0.6 per cent or 5,800 copies, since October 2001. The Guardian's circulation fall continues, down 1.7 per cent, or 6,000 copies.

The Times can have no regrets about following The Independent so rapidly into the compact arena. It continues to sell more full-price copies than the Telegraph. Such figures are interesting and underline the fact that in newspaper sales nothing is as clear as it seems.

The paper you buy tends to cost you the cover price. The one on the hotel desk, lying outside your bedroom door, given to you by the air stewardess - all these are free. There are many points in between these two extremes. The Telegraph does well out of its subscriptions, special offers to targeted people inviting them to buy the paper seven days a week for less than the cover price. Advantage: the purchaser is locked in for the period of the subscription, and the sale is included in the circulation figure. Disadvantage: reduced sales revenue, and the subscriber may well have been a Telegraph reader anyway, buying the paper at full price.

Full-rate cover-price circulations tell a different story from the gross figures we use in the tables, and are referred to as the circulation of a particular title. Paid for at full whack, January 2005 sales in the quality sector were: Times 515,000, Telegraph 502,000, Guardian 307,000 and Independent 186,000.

The Sunday market is more patchy. Year-on-year sales are up for The Sunday Times and The Independent on Sunday, for the Express and Mail, and down for the rest. Sales are down 1.9 per cent. When you realise that the News of the World and The People account for half of that you can see where the threat to newspapers lies.

On the right road with the latest code

The Editors' Codebook gives one a feeling that progress is being made in the imperfect newspaper industry. Published on the day of the The Wedding announcement, on the day the PM reduced himself and his office by taking the Kilroy trail to daytime TV, it struck me as rather uplifting.

It is a commentary on the code of practice devised by editors and administered by the Press Complaints Commission, and was written by Ian Beales, for 20 years a regional newspaper editor, and now secretary to the PCC's Code Committee. He has struck exactly the right note, of the "firm light touch", the only way self-regulation can work.

Privacy complaints account for a quarter of the total, reflecting the "widespread conflict over where legitimate public exposure ends and public prurience begins".

He contrasts Julia Carling's complaint about a report of her and husband Will's relationship with the Princess of Wales (rejected) with Selina Scott's over a report of unsubstantiated claims of an affair 15 years earlier (upheld). The concern of Sam Mendes and Kate Winslet to protect the privacy of their children shows that this issue is not going away.

It is a minefield, but at least the politicians have been kept off the case. Camilla should read the Codebook for clues on how much privacy she might be entitled to in her new life. Not much.

Peter Cole is professor of journalism at the University of Sheffield