Brydon: Sun on Sunday – strong and profitable product, but won’t revive the market longterm
Speaking to MediaTel Newsline this morning, Alan Brydon, head of investment at MPG Media Contacts, and a former advertising sales director of the Evening Standard, says that the launch timing has caught everyone out, but he expects a strong product, which will turn in a profit – to the detriment of other titles in the sector…
“I think everybody, including all but a few people at NI were surprised by the timing and speed. I suspect that this was Mr Murdoch’s idea when he arrived in town last week, and nobody had a good reason to disagree – it will cause a lot of people a lot of work in the next few days! One key factor is that this speed takes away any opportunity for competitors to plan major defensive marketing and promotional campaigns, but in terms of distribution, advertising, etc, it will all need to be sorted more quickly than might have been ideal.
“I have no doubt that they will produce a very good product though, and that after a few weeks it will be even better than at launch.”
Does Brydon see a 7-day paper as an attractive new advertising proposition?
“I’m really not sure about the actual proposition for advertisers – clearly, it will bring people back into the newspaper market, but MGN, Express Group and maybe even Associated will lose sales, so the incremental gain may not be that big. Also, it remains to be seen how much duplication with The Sun there is… a sensible guess just from the name would be that this will be greater than used to be the case with NotW, and if that is the case, the advertising proposition might be less strong. Advertisers will, I think, still see it as a separate entity, and there will be a separate market – but there may be opportunities for News Int to sell eg ‘Wed-Sun’ flexibility to retail, car, or other advertisers, rather than eg ‘Wed-Sat’ as at present (this will of course depend on circulations).”
The new title may bring some additional revenue to the market, but Brydon believes much of its circulation could reverse the gains other titles have had since the NotW closed, and can’t see it altering the sector’s overall decline.
“Following on from this, it is difficult to see many millions of pounds of revenue piling back into the press market. We will need to see ‘settle down’ figures but I think most people would guess that at least 50% of Sun on Sunday ‘gain’ will come from other titles, ie clawing back what NotW lost to them. Also, the question of duplication with The Sun will be key – again we won’t know this for a while, but it will be crucial to advertising decisions. But however good the product and the figures are, it won’t alter the overriding fact that the newspaper medium is in difficult times, and that – Euros and Olympics aside – isn’t going to change. The world really did keep spinning once the initial shock of NotW closing had died down – there are too many other ways to solve a marketing communications problem nowadays for a Sunday newspaper, however good, to change the world of overall downward circulations, and overall declining revenues.”
“I think the idea of ‘settle down’ circulation needs a caveat up front – by the time the initial ‘false’ launch circulation is settling down, we will have the Euro football, and then the Olympics. Of course, it could be argued that there will always be something ‘special’ so these aren’t completely atypical, but I think nevertheless that we’ll want to see what happens after all the summer activity has gone until we make any definitive call. I’m sure the launch promotional activity, cover price incentives, etc will be huge, and anyway curiosity will guarantee a big start. If I was forced to put a figure on it… I’d guess at least 3 million to start with, falling back to a genuine ‘settle down’ figure of around 2 million – but I wouldn’t be surprised if by the Autumn it is a bit below this.
“With print capacity, reduced staff costs for a 7 day operation, etc, this will, I suspect, allow the title to be profitable, and if nothing else, allows Mr Murdoch to get back on the front foot, doing what he seems to love most.”