Tabloid Format May Not Deliver Success
The compact revolution within the newspaper industry has not had the success that publishers had hoped for, with misleading increases in circulation figures disguising the sector’s increasing struggle with advertisers, according to a new paper published by The McKinsey Quarterly.
Jacques Bughin and Henrik Poppe, authors of the new report, believe that this trend is set to continue, despite attempts from the newspaper industry at winning back its shrinking readership.
The rise of the tabloid format is once such attempt, with several important broadsheets across Europe converting themselves into tabloids, resulting in circulation rising by an average of 6-8% in the year following the change, according to the report.
The UK Independent, saw its circulation increase by 18% within the first six months following the launch, in September 2003, of its ‘compact’ tabloid edition, helping push circulation to the highest figures since 1997 (see Compact Edition Boosts Independent’s Market Share).
However, Bughin and Poppe argue that the switch to compact brings with it a number of risks; the danger of public perception of tabloid papers and effects on the workforce. The decreasing size of the paper has severe consequences for the publications advertisers, with shrinking advertising space resulting in advertisers possibly being unwilling to pay the same price for what they see as less consumer exposure and recognition.
Advertisement placement in compact papers may also rise cause for concern; there are fears that an advertisement in the back pages of a 100-page tabloid will have less impact than an advertisement at the back of a 50-page broadsheet. Although advertising losses vary, Bughin and Poppe estimate that a format change puts as much as 20% of a newspaper’s ad revenue at risk.
A recent report in the Media Guardian, confirms The McKinsey Quarterly’s fears about the short lived success of compact papers, arguing that historically the switch to the smaller size has fallen on hard times. The broadsheet Mail was the first to switch sizes, resulting in a decrease in circulation figures from 1.8 million to barely 1.7 million within the first six months of the format change. It was not until 1994 that the Mail finally started to increase sales, up to its current mark.
The Daily Express enjoyed an instant circulation boost when it first made the switch in 1977 rising to 2.5 million, but then slipped to 1.5 million by the end of the decade. The News of the World and Sunday Express both saw an increase in circulation resulting from decreasing size, but this was short lived.
Elsewhere, a recent report by analysts PricewaterhouseCoopers is more optimistic about the newspaper industry, predicting that the following years will see the sector strengthen (see Newspaper Industry Predicted To Strengthen). PwC do stress however, that the value for advertisers of the switch from broadsheet to tabloid, will depend on the process running smoothly and the final negotiated position with the advertisers on the relative value of ads in the new format.
Overall, history suggests that size changes within the newspaper industry are a short-run phenomena, with editorial and technical content being the most influencing factors on newspaper sales. However, Bughin and Poppe cite the dominating tabloid format in European countries, such as Scandinavia which has seen 1-3% circulation rises as a result of the switch in format.