Sunday papers: the real-life game of survival

The only surprise in the decision to raise the cover price of the Independent on Sunday is that it went up by only 10p to £1 80. Given the much-vaunted view of the company's ceo, Ivan Fallon, and its editor-in-chief, Simon Kelner, that newspapers are too cheap, we might have expected a larger price hike. Then again, people would surely have noted the vast value-for-money difference between the little Sindy and the behemoth that is the £2 Sunday Times.

There has been a crop of Sunday paper price rises, and more are likely. (Will the Sunday Express and The Observer follow soon?) The reason is obvious: advertising revenue is either falling or flat. Sales revenue is sliding as circulation declines. Meanwhile, production costs are rising. However, publishers know that there are risks involved in raising prices, especially on Sundays. Look at the official ABC circulation stats. Over the last six months, the average sale of the 10 London-based national Sunday titles was 12,012,420. In the same March-August period in 2005, those 10 titles averaged 12,482,791, a decline of 3.77%. The serious papers have been performing better than the populars - mainly due to format changes and consequent promotional spend - but the incline they enjoyed is levelling out once more. In other words, the circulation future looks bleak. With multi-section Saturday papers having been bulked up to Sunday levels, many people are not bothering to buy on Sundays at all or, if they do, they are no longer buying two or three titles. (Newsagents report that multiple-buying on Sundays is rapidly dying out).

Therefore, owners and managers are caught in a bind. They know that the effect of Sunday price rises will further depress sales. Yet they also realise that their only hope of gaining revenue is a price hike? We have to see this in the context of these papers' overall economics too. Few of them are profitable. Indeed, if it were possible to know the real state of affairs at some publishers - by extracting the details of their Sunday titles separate from their daily counterparts - it would probably reveal that only two generate profit: the Sunday Times and the Mail on Sunday.

For the moment, though, there is no question of closures. Instead, there is one game of risk and one race against time. The game is to survive while others go to the wall. That means using every possible trick - promotional gimmicks, tactical discounting, production cost-cutting - to manage decline well enough to have a chance to be the last man, or men, standing. The race is to win converts to new media products, luring people to the "brand" website by using all the bells and whistles (podcasts, vodcasts, pdfs, blogs, mobile phone alerts). And then, having done so, to sell that audience to advertisers to obtain a new stream of revenue. This is not a TV reality show. It is a real-life game of survivor and a real-life race to the death.