The Media Column: 'It's not your fault, but you are not paying enough for your newspaper'

Check your small change. You are, I should tell you, just a little poorer than you imagined. You may not have noticed, but yesterday the price of your Independent went up by 5p, to 60p.

It's not my job to tell you here why your purchasing decision this morning was a wise one. I could reel off a list of brilliant writers, draw your attention to razor-sharp analysis and the most stimulating voices in journalism. But I won't. For I am not here to impart good news. The truth is that you've been a cheapskate for too long.

It's not your fault - we'll point the finger in a moment - but you are not paying enough for your daily newspaper.

This is not special pleading from The Independent. All the broadsheets are itching to raise their prices. Others will inevitably follow, slowly but surely, within the next few weeks and months.

Don't take my word for it. Jeremy Deedes, managing director of the Telegraph Group, calls the current situation a "nonsense". "Obviously, we'd all like to see newspapers going back to a sensible price." Marc Sands, marketing director of Guardian Newspapers, says that he knows of no other market "where prices have remained the same for seven or eight years". Ivan Fallon, chief executive of Independent News and Media (UK), talks about "nine years of frozen prices... it's crazy". In fact, the only broadsheet newspaper group that won't publicly join in the otherwise unanimous chorus is News International, publisher of The Times, which caused the trouble in the first place. The company "doesn't really discuss pricing", sniffs a spokeswoman.

Until 10 years ago, received wisdom was that broadsheet newspapers were not particularly price-sensitive. Wise, well-off folk defined themselves by the paper they read, and a few pence discount here or there was not going to change their minds. Price-cutting was a rather grubby game played by the tabloids from time to time, but the grown-up newspapers inhabited a different world.

As everyone now knows, things were not quite like that. In September 1993, Rupert Murdoch slashed the weekday price of The Times from 45p to 30p. Most of his rivals were forced to follow suit. By August 1994, The Independent and The Daily Telegraph were both 30p, too. So Murdoch cut again - to 20p. He saw sales rise from 370,000 in August 1993, to 598,000 a year later, an unprecedented rise of more than 60 per cent.

Alas, broadsheet readers enjoy a bargain as much as anyone else. As Max Hastings, editor of The Daily Telegraph at the time, recalls in his memoirs: "I was dismayed almost daily to meet rich men who told me laughingly that they had switched to The Times 'because your paper is so expensive'." Yet even Hastings had seen signs of the trouble ahead, writing to his proprietor, Conrad Black, three years before Murdoch's price cut, when his paper was a mere 5p more than The Times: "Acquaintances - even those who own racehorses - complain bitterly about the price distinction between The Times and the Telegraph, to our disadvantage."

In normal times, such as we have not seen for a decade, a broadsheet's cover price ought to bring in about 45 per cent of total revenue, the rest coming from advertising, says Deedes. With cover prices so low for so long, and a crippling cut-price subscription scheme in place, just a fifth of his income comes from the paying punter.

This was (just about) sustainable when advertising was booming. Not so now that advertising income, too, has been taking such a hammering. The economics are almost comical. According to Deedes, "many of us are not even covering our marginal costs on Saturdays" - the more papers he sells, the more he loses.

So, how much should we be paying? Considering just the weekday price - Saturday, when every paper sprouts extra sections, is a special case - Fallon reckons that 75p is a reasonable target. Deedes is bolder still: why not 95p, the price he pays for a cup of tea at his local railway station?

Fallon, who points out that pagination has gone up greatly since prices were last near this morning's level, predicts that The Independent's move will not be a lonely one. "I hope that others will follow, and I think they will. This is a reality check. Things cannot go on as they were."