While all the talk is of cross-media ownership, takeovers and the
forthcoming explosion of digital television, we should keep our eye on
the ball, and watch what the real players are doing. Exploring radical
cost-cutting options is the short answer.
For example, this week sees the introduction of a significant new phase
of co-operation between the Telegraph and United News & Media, owners of
the Daily and Sunday Express. Together they jointly operate the huge
West Ferry printing plant on the Isle of Dogs, the most efficient in the
Now the two companies are taking a further step, merging their
distribution systems, the complicated delivery network which helps
produce 14 million national newspapers each day.
This was one of the last cost-saving deals negotiated by Stephen
Grabiner, the former MD of the Telegraph, who has been lured away from
the broadsheet group to run all of the print titles owned by the merged
Sharing distribution is in fact one of the easiest steps to take after
joint production, in the ongoing search for economies. It is especially
appealing to those who recognise that investment and future
concentration of resources must be directed both at editorial, to
staunch the drift away by readers, and marketing - the promotions and
advertising to exploit that hard won audience.
This is why no one really expects the Guardian to refurbish its London
print works. Since its plant was badly damaged by the Canary Wharf bomb
in February, the paper has also been contract-printed at West Ferry. It
is an open secret that what was at first sight an emergency solution has
become custom and practice. The paper has benefited from the process.
Handing your production to a professionally run factory can be
liberating, provided you know you will be fairly treated by an utterly
professional operation. The Financial Times, also withdrawing from its
own London print works, recently reached the same conclusion, without
the intervention of the IRA.
But the next question is whether it is possible to merge other so-called
back office operations: should newspapers follow ITV and commercial
radio, and form a few large and effective sale houses, to sell
The difference is that ITV companies, except in London do not compete
head to head for revenue. On the other hand, despite the price war most
papers have a set of core readers, and two streams of funding: cover
price and adverts. And for all their ability to set agendas, they are
smallish businesses with a shrinking readership. Faced with the tough
choice of closing down foreign bureaux or sharing an advertising sales
team is not easy. But the best brains in the business suspect that is
what lies ahead.