Conculsion on pricing in the UK National PressPublic Document
C H I S H O L M
Conclusions on pricing in the UK National Press.This document concludes:
Newspapers are unnecessarily losing both readership and advertising revenues, from over-aggressive, un-strategic cover pricing policies.
Circulations are declining faster, in part because of price increases.
These are impacting on advertising revenues, perhaps destructively for some titles;
Price is having less of a tactical role in terms of cross title competition.Following the previous note explaining international comparisons on pricing, this notereviews the issues for UK national press. I have confined my circulation analysis to UK daily press. As explained there are two measures of price elasticity:
The first relates to the overall market, where there are other factors affecting overall sale,such as the structural and cultural changes we are facing. So we are examining a market,within which there is a general context of slow decline. Since consumers, particularly inthe UK, move from product to product, their impression of cost plays an important role.
The second relates to the impact that individual titles pricing strategies have on thecompetitive framework and in particular market share. So if one newspaper increases or decreases price this historically has a strong impact on shifting of loyalty and purchasefrequency and therefore share within the market.I’ve analysed the ABC data back to the 1970’s and drawn the following conclusions:
The Macro Market – Consumers’ overall response
The newspaper market continues to be price elastic, and the UK specific analysis confirmsthat UK newspapers are generally suffering circulation loss due to a more aggressive pricing policies in the last four years. This is shown in the graph below: