Media: Mathew Horsman on Murdoch's cheeky manoeuvres
Tuesday 11 June 1996
The circulation stats of any newspaper are, of course, crucially important. They help determine advertising rates, even if the published prices are seldom etched in stone. The brute sales figures are also supplemented by readership surveys and marketing analyses, to provide other information about a given title's readers: whether they are male or female; professional or clerical; rich, not so rich, or poor. (Of course, we don't talk about rich or poor but rather about "ABC1s" and"Ds",andother pseudo-scientific rubbish aimedatmaskingthe rough, dehumanising calculations we are making about consumers.)
One of the industry's favourite circulation fiddles has been bulk sales, knownas"sampling". These are newspapers that are virtually given away (that is, sold at a low, discounted price) to hotels and airlines, or given out at shops.
We know far more about bulk sales than we used to, ever since the ABC insisted they be separately accounted for in the official figures. From the advertisers' perspective, bulk sales are not as good as fully paid circulation. If readers pay 40p for the Telegraph, they are more likely to read it than if the newspaper is freely available by the stack in the hotel lobby.
But certain samplings are not counted as bulk sales if they are cleverly conceived. Microsoft's recent offer of a free Times was counted as paid (Bill Gates footed the bill, after all).
The bulk market has seen more than its share of Fleet Street fighting. Rupert Murdoch's News International, which publishes the Sun and the Times, managed to steal the bulk sales contract at Forte hotels from the Telegraph, but only after Granada won a bitter takeover of Forte earlier this year. Granada's chairman, Gerry Robinson, is also chairman of satellite broadcaster BSkyB, 40 per cent of which is owned by Rupert Murdoch, of course.
The newspaper industry's attention has been refocused on bulk sales this month because of an extraordinary letter sent to Fleet Street rivals by News International, asking that all publishers adhere to ABC rules. Rivals were gobsmacked. "Hypocritical," said one senior publisher, and you can see his point. Is this the same NI that distributes 20,000 copies of the Times a day through Forte hotels? Or that last year gave the Sun away at Woolworths?
Is this the same NI that launched the price war, spending millions of pounds to "buy" readership? Is it the same company that last week slashed the price of the Times on Monday to 10p for the rest of the summer?
There is clearly some desperation at the Times, where circulation has been stuck at about 670,000 for months, despite the paper 10p less than the Independent and the Telegraph. Mr Murdoch has, apparently, told his executives at NI to get the circulation to one million at whatever cost. The 10p Monday Times is the first step.
There is no denying the success of the two-year price war, which raised the Times from the 350,000 level. But it is unlikely to go much higher now, whatever its owners do.
The prime target of the initial price campaign was the Telegraph, the broadsheet market leader. Yet Conrad Black's title still sells more than a million a day (including bulk sales), roughly where it was when the battle began. Indeed, there is evidence that much of the growth at the Times came from the title's own readers, who began to buy it more frequently when the price came down. True, Black had to slash his price too. But since the war abated, the Telegraph has held up well, even at 40p.
The 10p Times is also targeted at the Telegraph, which is a leader in sports and hence sells well on Mondays, when it covers the weekend's events. How disappointing for Murdoch, then, that the ABC refused to count the extra sales put on by the Times (179,000 last Monday) because NI paid more to newsagents and distributors (10.4p) than it got from buyers.
Murdoch may have the last laugh, however. If you don't count Mondays, then the average daily sale for the remainder of the week goes up. This is because Mondays are usually bad, while Saturdays are strong. Thus, by dropping the Monday sale and overweighting Saturday, the average daily figure is actually higher, perhaps by 8,000 copies. A good wheeze.
Even more daring is the gambit NI used yesterday, paying 8p directly to newsagents, and the rest through a special bonus to make up the difference. Will the ABC allow this fiddle to pass unremarked, ensuring that all extra sales on Mondays henceforth count in the official figures?
Which brings us back to NI's letter on bulk sales. If the Times wants a fair fight for circulation and "clean" ABC figures for all, then it will need to clean up its own act. No more subsidising readers (clearly an example of predatory pricing from a would-be monopolist) and no more bulk sales on generous terms. No one is saying the Times is alone in using time-honoured tricks of the trade to affect circulation numbers. Both the Independent and the Telegraph have joined the cheap Monday bandwagon, using vouchers. The Independent even bought 100,000 copies of the Times yesterday, in an act of "predatory purchasing". Everybody plays these games, but, Mr Murdoch, not everyone does so sanctimoniously and hypocritically.
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