Long-term survival, however, depends on attracting more revenue from those digital customers within its enlarged digital reach
Merger of Mirror and Express newspapers hard to fathom
In my long career in newspapers I worked for both the Daily Express and the Daily Mirror (as well as The Telegraph, The Times and The Independent) when they were bitter rivals, highly profitable and sold nearly 10 million copies a day between them.
No more. Today these once great British newspaper titles sell less than 1 million copies and, far from slugging it out in a rapidly declining market for newspapers, have decided to merge.
To mark the occasion, Trinity Mirror, which is acquiring the Express for £127 million (Dh645.4m), solemnly announced it is changing its name to – wait for it – Reach, as in audience “reached” through its enlarged print and online offerings. The new corporate logo has produced the usual taunts that greet meaningless rebrandings, prompting comparisons with Diageo (Guinness), Monday (PwC Consulting), Everything Everywhere (Orange, T-Mobile) and, best of all, Strategy&, which used to have the more memorable name of Booz & Co.
But there is a generation of users who probably don’t even realise – why would they? – that Accenture used to be Andersen Consulting or that Consignia bore the grander and more easily understood name: Royal Mail. No doubt, in time, those of us who have to will get used to Reach.
Newspaper mergers or takeovers, although comparatively small in monetary terms, have always been significant events. When Rupert Murdoch bought The Times and Sunday Times, to merge with his Sun and News of the World in 1981, it made headlines around the globe and still haunts Mr Murdoch to the point where his 21st Century Fox is struggling to complete its acquisition of Sky. The purchase of The Telegraph by Conrad Black in 1986 was also a Fleet Street sensation, as was its resale to the Barclay brothers 18 years later.
The $1.3 billion sale of the Financial Times to the Japanese publisher Nikkei in 2015 sent ripples through the entire financial community, which feared change and meddling with its culture and independence – wrongfully as it has turned out. Mr Murdoch’s purchase of The Wall Street Journal for $5bn in 2007 was greeted with outrage, although Jeff Bezos’ acquisition of The Washington Post five years ago was widely welcomed on the grounds that he is so rich he will keep the paper going through thick and thin. Mr Bezos, founder and biggest shareholder in Amazon, paid the Graham family just $250m for it, a sad reflection of newspaper values in recent times, particularly for such an esteemed publication. For an insight of the title in action at its peak under its great editor Ben Bradlee, I strongly recommend the film The Post with Meryl Streep as Katharine Graham and Tom Hanks as Mr Bradlee.
In its day, the Express, under its old proprietor Lord Beaverbrook, was as significant as any of these titles, with one of the highest circulations in the world (nearly 5 million a day), and huge political influence in Britain. For years its anti-European editorials set the tone of the whole debate and even today has become possibly the most extreme Brexiteer of all the financial press (although The Telegraph and Daily Mail compete hard for the position).
The Express' vendor, the former adult magazine publisher Richard Desmond, has stripped both costs and cash out of it for more than a decade, leaving it with just a skeleton editorial staff, a lesson in what efficiency can still achieve in the newspaper world. Beaverbrook would roll in his grave at what has happened to his once-great publication – but he would be even more baffled by his empire being swallowed up by a company calling itself Reach. That would be adding insult to serious injury.
The Mirror is in no better shape and has seen a 20 per cent fall in its circulation in the past year. When I worked for it as a young financial journalist in the late 1960s, it sold 5 million copies a day. Today it sells 563,000. Like all newspapers around the world, its big hope is the internet – although, also like everyone else, it is finding digital revenues hard to come by. It claims 33.4 million unique online browsers a month and while newspaper revenues continue to fall, online revenues were up 7 per cent in the past year.
But the digital figure is still only £83.9m (compared to nearly £500m of publishing revenues), which, as the Financial Times pointed out on Tuesday, comes to just £2.51 per browser per year – less than the cost of a single copy of the FT. Every newspaper group in the world has the same problem – unless you are Naspers in South Africa and happen to own 35 per cent of Tencent in China – leaving them with only one option, which is to cut even more costs. A joint Mirror-Express company can still find synergies even in their already reduced state, and hope that circulations eventually level out.
Long-term survival, however, depends on attracting more revenue from those digital customers within its enlarged digital “reach”. The fact that the Express title has survived at all is a minor miracle.
The Independent is now digital only, The Guardian is losing the best part of £1m a week and The Times has never made a penny in its 233 year history.
It is not surprising that Mr Desmond is exiting. The puzzle is why Trinity Mirror - or Reach - is buying.