The British newspaper industry is currently engaged in a brutal price war that most observers believe will result in the death of one or more of the country's national newspapers.
Both the British "quality" papers and the racier tabloids have been cutting prices, some maybe permanently. The publishing war has boosted circulation for papers that reduced newsstand prices - while decreasing sales for those that have not matched the cuts.But unlike American publications, British papers rely more on sales than on advertising revenue, so the price war is lowering profits for all involved. Observers believe that a final shakeout is imminent and that the major loser would be the respected Independent. Former deputy editor Stephen Glover observed that the circulation war could "lead to the death of the Independent and the grievous wounding of the Daily Telegraph."
The conflict began last July when the Sun, the best-selling tabloid owned by press baron Rupert Murdoch (now based in Los Angeles), slashed its cover price from 25 pence (39 cents) to 20 pence (31 cents). Competing tabloids responded in kind.
In September, the Times - Britain's Establishment paper until it was taken over by Murdoch 13 years ago - shocked the industry by cutting its price by the equivalent of 23 cents.
The Murdoch publications are thought to be losing money in the short term with their lower prices, but precise figures are unavailable because most British papers are part of larger companies that do not break out profit-and-loss statements for individual units.
The Murdoch ploy does seem to have unsettled the Daily Telegraph, which has watched the Times' circulation soar over the half-million mark for the first time in its history - more than 40 percent over the previous year - as the Telegraph dropped below 1 million daily.
Last month Conrad Black, the Canadian proprietor of the Telegraph, announced that he was cutting the price of that paper from 48p (72 cents) to 30p (45 cents).
At the announcement, the stock market shares of the Telegraph dropped precipitously, losing more than one-third of their value in two days of trading.
Black declared: "Rupert is opening his arteries here. He is trying to kill us. He doesn't care about The Independent, he's going for the market leader. I am not in the business of putting others out of business. I am the predators' chief prey."
However, with the price cut, the Telegraph is believed to have again moved up over the million mark in circulation - even though its profits suffer.
As the Telegraph struggled with the price-cut decision, The Times quickly lowered its price even more.
Most financial experts suggest that The Times is now losing several cents on every paper sold. But with a worldwide money-spinning empire, Rupert Murdoch can absorb such loses in the expectation of eventual gains.
The Independent's founding editor, Andreas Whittam Smith, complained: "What we are witnessing is a return to the industry's ugly past, dominated by proprietors inebriated with the power that newspaper ownership is thought to bring."