Recession brings back the rivals' old weapon

PRICE CUTS in the broadsheet newspaper market had been rare until Rupert Murdoch reduced the cost of the Times from 45p to 30p last September, writes Maggie Brown.

In 1929 Lord Camrose halved the price of the Daily Telegraph to a penny and saw its circulation double to 200,000. This was a period of volatile circulations when readers were courted with a variety of gifts from encyclopedias to free insurance.

Peter Stothard, editor of the Times, looks back to that era, when the Times lost out in the battle for a mass middle-class readership, in explaining the current plans for building circulation towards that enjoyed by the Sunday Times and eventual hopes of profit.

Papers operating in the same market niche traditionally shadowed each other's price rises until the 1990s: this was partly because of the heavy fixed costs of printing. After the production unions were forced to accept reform, newspaper groups first invested in new presses, produced new sections and added value to their products, then grappled with recession. The Daily Telegraph's price cut to 30p is a particular about-turn: it had been leading the march to raise prices.

In 1987 Lord Rothermere, chairman of Associated Newspapers, killed off the London Daily News, launched to rival the Evening Standard, by using price as a weapon. He revived the Evening News and sold it for 10p compared with the 20p charged by the LDN. The latter was killed off in five months.

Magnus Linklater, former editor of the LDN, now editor of the Scotsman, said yesterday: 'Newspapers which weren't price sensitive have become so, because of the recession: upmarket ABC1 readers are concerned about price. Price-cutting wars are a new situation for broadsheets and not particularly healthy.

'They divert attention from the business of producing newspapers, and get us into a desperate war which can only result in one newspaper, or perhaps more, going to the wall.'