Emmet Oliver Media & MarketingIn 1993 Rupert Murdoch radically altered the UK newspaper industry with swinging cuts in the price of the Times. Apart from the Guardian, most newspapers were forced to respond, often taking a huge hit to their bottom line in the hope that Murdoch would eventually move onto another tactic to drive circulation. Prices in the UK are only coming back to their pre-1993 levels now.
In many ways, the price war of that time was more important than the more traumatic events at Wapping in 1986 when News International upped sticks from Fleet Street and moved to the London docklands. Murdoch has always cited Wapping and the price cuts as two seminal events in UK newspaper history, but he has often said he regrets his failure to launch a freesheet newspaper before his rivals.
Next week Murdoch, who remains the largest shareholder with John Malone in News Corporation, will have a chance to expel any regrets he has over freesheets when News International introduces its freesheet into London, entitled thelondonpaper.
The freesheet will be a direct competitor for Associated Newspapers, which owns the Ireland on Sunday and the Daily Mail (Irish edition) in the Republic.
Associated already offers Metro in the mornings in London, but morning paid-for sales are not in jeopardy from Murdoch's new paper. Murdoch is clearly not going to cannibalise his own range of morning papers and is concentrating his fire at 4.30-7pm. During this period, News International has no papers on the market.
The battle of the London freesheets spells trouble for the Evening Standard, London's only remaining paid-for evening newspaper, owned by Associated. It has decided to offer a paper called London Lite as a spoiler to the Murdoch title, even if it is likely to do greater damage to the Evening Standard. London Lite was published yesterday with a Ryanair story on the front page.
At certain times during the evening, Associated will be giving out London Lite free, while selling the Evening Standard for 50p (€0.74) nearby. While this does not appear to make much sense, clearly the strategy is to defend its patch against Murdoch's new product at all costs.
Martin Clarke, who used to run Ireland on Sunday, is editing the new London Lite. While Clarke was known for his populist touch in Ireland, his papers have been dismissed as being too self-obsessed and middle brow by the new Murdoch arrival. Stefano Hatfield, editor of thelondonpaper, said of the new publication this week: "It's a paper written for readers rather than for other journalists. I don't care about what you might call the MediaGuardian set, the chattering classes of journalists. We are very focused on the real reader in the street."
Johnston's Irish hopes
The rationale for the expansion into the Irish regional newspaper market by UK companies is becoming clearer. Yesterday Johnston Press, one of the largest regional publishers in the Republic, announced its results for the first half of 2006. While revenues were up significantly, the company's pretax profits dropped by almost 3 per cent to €79.8 million. The accompanying commentary from chief executive Tim Bowdler was less than encouraging about the UK newspaper industry. "The second half has started as the first half finished, with no discernible improvement in advertising revenues".
His comments are in line with general sentiment in the UK press. So far, the Irish market has avoided this gloomy scenario. This might be why last September Johnston decided to plunge into the Irish market, spending €240 million.
In September it bought the Leinster Leader group and Local Press. This gives it ownership of papers like the Dundalk Democrat, the Limerick Leader and the Tallaght Echo. The purchase of Local Press added 12 newspapers in Northern Ireland, including the Belfast NewsLetter.
It has not filed accounts since making the acquisitions last September and because its Irish revenues make up less than 10 per cent of the group total, the company does not have to disclose Irish figures in the UK accounts.
While the company is almost despondent about the UK advertising market, it must be glad it moved into the Irish market last year because press advertising has remained solid in Ireland in 2007. The wider trends are showing no sign of improvement. Press advertising - at rate card values - fell in 2005 slightly to €925 million. However, this was almost three times the size of what the television sector received, so it remains a healthy market for Johnston to exploit.
eoliver@irish-times.ie
