Newspaper strategies for survival

According to The Economist newspapers look doomed. Young readers are abandoning them for the internet and television. Some tabloids have shed about two-thirds of their circulation since the mid-1980s. Britain’s newspaper market is unusually competitive: there are nine national daily papers with a circulation of more than 200,000. Advertising has migrated online more quickly than elsewhere. Since 2009 more advertising money has been spent on the internet than on newspapers. British papers receive no government funding and face a fearsome tax funded competitor in the BBC.

Yet Britain’s papers are also exceptionally innovative and there seem to be three main trends in finding a strategic way forwards.

News Corporation and its four British titles—the Times, the Sunday Times, the Sun and the News of the World—are moving behind an exceptionally tough online paywall. Unlike the Wall Street Journal, also owned by News Corporation, the Times does not allow people to read any articles free on the web. Its prices are steep: £2 per week after the first month. They don’t mind that this has lead to a drastic drop in traffic as this business model doesn’t relying on advertising for revenues. The firm would rather extract more money from dedicated readers directly. They can also also diversify, with packages like the Times wine club.

Britain’s second great innovator takes the opposite view. The Daily Mail model works on the basis that online advertising works fine—if you are huge. With 35m unique visitors each month, it is now the world’s second-biggest newspaper website, according to comScore, which measures online traffic. It may take the top spot when the New York Times goes behind a paywall this year.

The third approach has been taken by the new owners of the Independent and the Evening Standard, a London paper that they have made a freebie. In October they launched i, a cut-down Independent, priced at 20p—one-fifth the price of most quality daily newspapers. They have very little online presence and bargain that young people do want to read newspapers—they just don’t want to pay much, or anything, for them. The Evening Standard’s circulation has more than doubled since going free, to 700,000. Distribution costs have plunged. Papers are now handed out in central London and moved around the capital by Tube: because they are free, commuters often leave them on trains.

It will be interesting to see how many of these three rival approaches will be able to achieve long term success.