Introduction

At the start of the twentieth century commercial newspapers were becoming large industrial operations whose economies of scale, and increasing reliance on advertising revenue, kept prices low and built up an ever-expanding readership. The Daily Mail, launched in 1896, had by 1900 a circulation of over half a million. Sold for a halfpenny, the sale price was less than the cost of production. The gap was made up by advertising (Royal Commission on the Press 1949: 14–15). Replacing smaller, often family-owned businesses, most national newspapers required significant capital investment, with high running costs and with a pattern of high returns and failure rates that characterised this volatile industry throughout the century. This chapter explores the economics of newspapers in print and online publishing in Britain and Ireland. As the terrain to map is already vast, periodicals and other important sectors are ignored, to concentrate on the topography of newspapers.

Part 1: Newspaper Economics

Newspaper costs and revenues shifted with changes in production, distribution and consumption across the decades, yet some core features remained stable. Most newspapers competed in what is described as a dual-product, or two-sided market: a market for consumer sales and a market for advertising revenue. Most sales were made through individual purchase, or home delivery arranged by consumers with retailers. In 1933 an estimated three-quarters of national dailies were home delivered by newsagents, while around one-fifth of national dailies, but a much larger proportion of Sunday and evening papers, were sold at news-stands (Political and Economic Planning 1938: 67). Street vendors also played a significant role, especially for urban evening papers. Features common across Europe and the USA, including street-kiosk sales, and subscription arranged directly with publishers, were both uncommon in the UK or Ireland, until digital-era subscriptions.

The ratio of dependence on revenue from advertising or consumer sales varied considerably; however, a persistent pattern was that socalled quality papers received a higher proportion of their revenue from advertising over sales. The second Royal Commission on the Press found the ratio of advertising to sales revenue for quality papers to be 74/23 in 1937 and 73/24 in 1960, while for popular papers it was 50/49 in 1937 and 45/54 in 1960 (RCP 1962: 23).