THE Independent is now wholly tabloid, its sales are a healthy 15 per cent up year-on-year in a declining quality market and the latest surveys show plenty more young and affluent readers are taking it - just the kind advertisers lust after.
Yet circulation and readership success has not translated into extra advertising revenues - indeed some say ad revenues are down. I would estimate the lost revenue so far to be nearer to £10 million than £5 million.
The Indy has partly itself to
blame. As its tabloid strategy gathered pace, it rather high-handedly told advertisers that it would charge the same for a tabloid as for a broadsheet page. No chance, said the media buyers on behalf of their advertisers, who refused to place their ads in a tabloid paper, even a quality one, at broadsheet rates.
The more the Indy insisted, the more the advertisers dug in their heels; the loss-making paper’s finances suffered further and have not yet recovered from the stand-off.
The reduced revenue-raising power of its compact edition came as a surprise to proprietor Tony O’Reilly, which is one reason why he was relieved when the paper went entirely tabloid: if going compact produced a (probably temporary, see below) setback to ad revenues, then best not to have the substantial cost of producing both a tabloid and a broadsheet.
The advertisers’ reaction was entirely predictable, as was the Independent’s inability to make its demands stick: when you’re the weakest kid on the quality advertising block you simply don’t have the leverage to charge broadsheet prices for a tabloid page.
It is also easy to see why advertisers baulked. A tabloid page does not have the impact of a broadsheet page, so why should they pay the same money? Newspapers will rightly argue that a tabloid page has more than 50 per cent of the impact of a broadsheet page; but they will struggle to get the same revenues for a tabloid as for a broadsheet.
A tabloid double-page spread takes up the same space as a single broadsheet page but that means changing the artwork from a portrait to letterbox configuration, which means extra costs for the advertiser (and your ad no longer faces editorial, which advertisers like).
Ad agencies will eventually go down this route but it will take more than the Indy to lure them to offset the costs.
The Times, which is only partly tabloid and likely to remain that way for the foreseeable future, has been more realistic. Its advertising team has been trying to achieve 55-70 per cent of a broadsheet page’s revenue for its tabloid pages and is aiming eventually for 75 per cent.
What is true for full-page ads is true for every other size: the tabloid strategy means negotiating new and probably reduced rates for each ad shape. So why go down the tabloid route?
For a start, it is only display ad revenues that are affected. Most classified advertising in the broadsheets already appears in tabloid sections; its revenues are not reduced. Moreover, the Indy has suffered more than the Times because of its earlier arrogance. There are deals to be done which can give newspapers more than 50 per cent of the previous broadsheet page price. And going tabloid usually gives newspapers more and better colour sites: advertisers will pay more for them.
It all comes down to this: going tabloid was never likely to be an overnight panacea for newspaper revenues. It might work for sales and even readership, but advertisers need to be wooed and educated.
In the medium to longer run, if going tabloid means you can create better readership demographics (ie, more affluent, younger readers) then that will eventually translate into growing advertising revenues.
Those who make a successful transition to quality tabloid will be able to increase their rates and firm their yield. They will also have moved from managing decline to building success.
But in the short-term, display advertising revenues are bound to take a hit - the only questions are by how much and how can it be mitigated. O’Reilly will have to dig even deeper into his pockets before profitability is reached.
Just as well he’s in for the long haul.
Black cloud still haunts TelegraphCONRAD Black no longer holds sway at the Daily Telegraph, but the paper is still following his American-style neo-conservative line on Iraq - even to the extent of beating up on Tory leader Michael Howard for daring to suggest the government should be more critical of Washington’s conduct of the war.
Last Friday’s editorial saw the Telegraph taking the unusual step of praising a Labour prime minister for "keeping his nerve" while attacking the Tory leader for being "unable to resist the temptation to exploit growing public disquiet". On the same day, ex-Telegraph editor Charles Moore severely upbraided Howard for scoring points: "It won’t do for wars and their aftermath."
I can’t believe the Telegraph has the stomach for another fight over the Tory leadership. Its consistent support for the Anglo-American coalition in Iraq also shows its opinion writers were not merely following Black’s bidding. But Howard is not necessarily being inconsistent in supporting the war yet criticising its conduct. It’s what responsible oppositions do.
I detect a wider frustration among Tory newspapers which goes way beyond Iraq: they all admire Howard but are growing increasingly impatient that, under him, their party has become what they regard as a policy-free zone. Norman Tebbit complained about the lack of policy development this week. Not for the first time, this old Tory war horse was speaking for the Tory press as a whole.
Get a grip on the soap, DGNEW BBC director-general Mark Thompson has not been short of advice from the usual media pundits, who’ve piled in to tell him how to deal with charter renewal, redefining public-service broadcasting in a multi-channel age and restoring morale post-Hutton (note to outside observers: morale at the BBC is nothing like as bad as you seem to think it is).
Very worthy topics all deserving the new DG’s attention, no doubt. But a more immediate worry for him must be the decline in ratings and critical acclaim of EastEnders, the Beeb’s flagship soap, which is suffering in the face of a rejuvenated Coronation Street.
A triple bill of Corrie on Monday night, in which Todd Grimshaw told fiancée Sarah Louise Platt that he was gay, chalked up almost 13 million viewers (I wasn’t one but I’m told this sort of stuff is what passes for drama in soaps), while EastEnders hit a record low of 6.4 million last week. It recovered pretty well on Monday night, but there is concern at the Beeb that what happens off the studio set on EastEnders (apparently Dirty Den lives up to his name in his webcam-equipped dressing room) is more interesting these days than what’s happening in front of the camera.
I have no idea if this is true, since I’m strangely allergic to British soaps; but if it is, I have only one piece of advice for the new DG: forget what the chattering classes are telling you to do - and put EastEnders at the top of your in-tray.
Untimely organ donation
AS prizes for readers go, it could end up in the Guinness Book of Records as the one with the most limited appeal ever. "Your chance to play Britain’s biggest organ," blared the Times’s T2 section on Monday. Dear readers, don’t all rush at once, but it’s apparently the organ in the Royal Albert Hall. To win you had to answer ten questions on organs, such as "Which organist had an affair with Greta Garbo?" (Don’t know, don’t care). No wonder Rupert Murdoch looked grim after a reportedly tetchy meeting with Times executives recently.
24 ways to end your partyA FINE collection of media nabobs and panjandrums turned up to my start-of- summer lunch party on Sunday and I’m pleased to report they all behaved terribly well (but then, neither Piers Morgan nor Jeremy Clarkson was present).
Much alcohol was consumed and many were still there at 11pm, which is late even by the standards of my lunch parties. Rather than risk a riot by closing the bar, I had them all sit down and watch the most recent episode of Sky One’s 24 - it’s the wonderful US drama series starring Kiefer Sutherland, but you need to be an aficionado to follow it.
It had the desired effect, as some started at last to drift off; others simply fell asleep on the sofas. I decided to leave them there. Fortunately, they had disappeared by the morning.
