Magazine article Marketing

Media Analysis: Murdoch Counts Cost of Ambition

Magazine article Marketing

Media Analysis: Murdoch Counts Cost of Ambition

Article excerpt

With losses doubling, have the boss's plans for The Times become too much to bear? Alastair Ray investigates

Everyone has dreams, but they can prove expensive. Rupert Murdoch's ambition to have the number-one quality daily in the UK is proving particularly pricey. The latest results for Times Newspapers Limited (TNL), which includes The Sunday Times, show that in the year to 30 June 2003, it cost him pounds 28.65m. That is nearly double the losses of the previous year (pounds 16.3m) and the prospects for 2004 look even more bleak.

A marketing push last autumn for The Sunday Times' The Month, plus extensive advertising for the compact edition of The Times, have added to TNL's already hefty marketing budget.

Figures from Nielsen Media Research show that spend on The Times in non-News International media was up more than 140% in the year to 31 March 2004, rising to pounds 13.1m from pounds 5.4m. Total marketing spend for TNL, which includes The Times' educational supplements, was up nearly 80% at pounds 23.7m.

Publishing compact and broadsheet editions also brings added costs, boosting the paper's already high returns, as well as paper and distribution expenses.

'The 35,000 to 40,000 extra sales The Times has added with the tabloid edition have just mopped up what the paper lost in 2003,' says Hugo Drayton, managing director at The Telegraph Group.

Influencing factors

At a time when The Telegraph Group is said to be on course for a profit of pounds 45m-pounds 50m a year, the poor financial performance of TNL's titles raises one question: can TNL blame the state of the advertising market for its problems, or should it be looking closer to home?

Although no one at TNL was willing to comment, a former insider believes it has only itself to blame. 'It's a careful and conservative place these days,' he says. 'The risk-taking and the dynamism is gone.' Others rubbish this, pointing to TNL's bold move in launching the tabloid edition of The Times in contrast to the more cautious approach of the Telegraph and Guardian.

Industry experts believe that while The Sunday Times is making some money, The Times is a big drain. 'The Times has never made any money. It has always been a difficult newspaper,' points out Mike Anderson, managing director of the Evening Standard. 'The transformation to compact is expensive and difficult to monetise.'

The most likely argument is that TNL's figures look bad because they coincide with a weak advertising market. Pearson announced that losses at the FT last year were pounds 32m - a jump on pounds 9m the previous year - as the title was hit by a pounds 23m loss in ad revenue.

Industry estimates suggest that all the broadsheets lost share of display column inches to the tabloids year on year in the three months to 4 April 2004. …

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