New Statesman & Society leader, 26 August 1994
This week, Rupert Murdoch raised the price of the Sun from 20p to 22p – leaving it 5p instead of 7p cheaper than the Daily Mirror and just 3p cheaper than the Daily Star – amid speculation that a price hike was also imminent for the Times, which has been selling at 20p for the past two months.
The reason for Murdoch's move, and for the speculation about the Times, is simple. By the time most NSS readers get this issue, his company, News Corporation, will have published its full-year figures. Murdoch was worried that investors would be scared off by the hole that the newspaper price war has blown in News Corporation's profits – so it was necessary at least to make it look as if he was thinking of calling the whole thing off.
Whether he is really contemplating a truce only time will tell, although it would certainly seem to make sense with the Sun. The latest Audit Bureau of Circulations figures, pub¬lished earlier this month, show the Mirror's circulation increasing by 1.28 per cent in July despite its price disadvantage, while the Sun was up by only 0.31 per cent. After a year at 20p, the Sun's average daily sale has soared from 3.5 million to 4.2 million, while the Mirror's has declined from 2.7 million to 2.5 million. Now, however, the Sun has got just about all the readers that it is going to get by price-cutting – so it would be sensible for News Corporation to start paring back on the costs of the tabloid price war.
The quality market is more complex. Two months at 20p have seen the Times rise to an average daily sale of nearly 600,000. In the first half of 1993, the paper was selling just over 360,000. And the Independent, with an average of just under 260,000 in July, down about a third in 18 months, is suffering badly (although it claims to have recovered sales since it joined the price war it had hitherto shunned by dropping its price to 30p at the beginning of the month). Murdoch might well be thinking that it is worth keeping up the pressure on the Independent for a couple more months in the hope that it will be forced to close.
For that, quite simply, is the sole purpose of Murdoch's price-cutting. Newspaper reading is declining in Britain, and so is the newspapers' share of the advertising pot. There is, moreover, no sign of either trend being reversible – and for Murdoch that means one thing. He must kill off the competition to ensure that his titles increase their market share to compensate for the smaller size of the market. At the popular end of the tabloid market, the target is the Daily Star, a paper so bad that only its employees will miss it. In the quality market, the target is the Independent. But the loss of the Independent would be a serious blow to British public life.
This is not to claim that the paper's politics are wonderful: its mix of free-market economics, civil libertarianism and social concern is not particularly to NSS tastes. Still less is it to deny that the Independent is partially re¬sponsible for its current predicament: if it had not made the mistake of launching the Independent on Sunday to kill off the short-lived Sunday Correspondent, it would not have been forced into the bout of editorial cost-cutting and the desperate search for new investment that, along with a ham-fisted redesign, led it into the spiral of directionlessness and circulation decline from which it has never recovered.
But the Independent remains a serious paper, and its point of view deserves a place in the daily press. Murdoch's ability to subsidise a price war against the Independent with profits from other parts of his worldwide media empire – just as he used profits from the Sun to subsidise Sky television in its battle with British Satellite Broadcasting – is a grave threat to the press pluralism essential in any democracy.
Yet it is at just this point that Labour has chosen to indicate that it is thinking of relax¬ing its stance on media cross-ownership to allow newspaper publishing companies to own terrestrial broadcasting channels. Labour arts and culture spokesperson Mo Mowlam was reported a fortnight ago to have decided on an essentially deregulatory approach. Although she subsequently claimed that all that was happening was an open-ended review of Labour's media policy commitments, it is significant that she has not denied that Labour policy is moving in precisely such a Murdoch-friendly direction.
Why the change of heart? The charitable explanation is that Labour is simply recognising brutal economic realities – that, with the media increasingly global, it is going to be giant transnational media conglomerates that matter, and that if Britain is going to be home to some of the major global players, there can't be too many legal constraints on cross-ownership. That is a coherent argument, although not one with which this magazine agrees: limitations on the extent to which any particular corporation can dominate the media in Britain need have no knock-on effect on that corporation's ability to compete elsewhere in the world.
The more worrying theory doing the rounds is that Labour hopes to curry favour with Murdoch. Labour politicians know that he is not averse to backing parties nominally of the left when it suits his commercial interests – and of course he has indicated, albeit in the most guarded way, that it is conceivable that he might support Tony Blair. Labour's dalliance with deregulation, the argument goes, is in preparation for a pre-election Faustian pact like that between Murdoch and the Australian Labor Party of Bob Hawke and Paul Keating. A glance at the cesspit that is Australian Labor politics should be enough to convince anyone tempted by such a course to reject it forever. Whatever he says, Murdoch remains the enemy of everything – equality, democratic pluralism, freedom of expression, decency and honesty – at the centre of the left's project.
