Magazine article The Spectator

Murdoch May Be the New Northcliffe, but He Has Backed a Loser with the Tabloid Times

Magazine article The Spectator

Murdoch May Be the New Northcliffe, but He Has Backed a Loser with the Tabloid Times

Article excerpt

There is a tendency in media circles to think that Rupert Murdoch is a genius who rarely makes mistakes. It was Murdoch who in 1986 master-minded the removal of his printing operations to Wapping, smashing the unions and slashing his cost base as a consequence, and allowing more timid publishers to follow suit. It was Murdoch who in 1993 reduced the cover price of the Times, causing panic at the Daily Telegraph and consternation at the Independent, and encouraging both papers to follow the Times downmarket as its circulation soared. Murdoch, so the received wisdom goes, may be a brash dumber-down, but he is a brilliant media businessman, the nearest thing the modern age has produced to Northcliffe.

Well, perhaps he is. But in allowing the Times to go tabloid he may have made, if not a fatal mistake, a decision which has taken the paper into a kind of cul-de-sac. Of course, sitting in his office in America, and planning his next step towards world domination, he probably was barely aware of developments in Britain, and merely reacted to the advice of his underlings. 'Boss,' they may have said, 'the Independent has gone tabloid. We had better do the same.' I don't imagine that the decision was motivated by a feeling that the Independent constituted much of threat to the Times. Murdoch's thoughts must have been more on his more formidable competitor, the Daily Telegraph, and the likelihood that it would produce its own tabloid edition. He was in the position of a mafia boss who hears that a small-time crook has moved into a new part of the city, and feels that he should get in on the action before his real rival muscles in.

More than six months on, it does not seem such a smart move. Whereas the Independent has gained in circulation, and is now available only in tabloid form, the Times produces both a tabloid and a broadsheet edition. The tabloid has certainly gone down well with some commuters in the south-east who no longer have to wrestle with a paper of tent-like proportions on the early-morning train from Basingstoke. But the overall effect on circulation has been negligible, and sales have barely increased year on year. Arguably they might have fallen if the Times had not produced its tabloid edition: the paper had been losing circulation slowly since it increased its cover price closer to that of its rivals, which it had previously savagely undercut. This, however, is not much of a consolation if you consider the amount of money that the tabloid experiment is costing.

First there are the marketing costs - perhaps £10 million - and then there are the salaries of the extra journalists who have been taken on, as well as increased distribution costs and higher wastage as the result of more unsold copies. The Times in any case haemorrhages quite serious money. In the year to June 2003, it and the Sunday Times together lost £28.6 million. The Sunday Times is handsomely profitable even in an advertising recession which shows few signs of lifting, so the Times must be losing bucketloads of money, though there are those who argue that these figures are creatively engineered for arcane accounting reasons. Of course, News International and its parent, News Corp, have vast resources, so there is no need to panic. But the costs of producing the tabloid are more painful when they are added to already substantial losses.

No one would mind if there were some prospect that these costs could be reduced, but there seems not to be. …

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