KEY POINTS:
Rupert Murdoch's News Corp will slash the price of its Sun tabloid, Britain's biggest-selling daily newspaper, by more than a third in southeast England from today.
The cover price will be cut by 15p (45c) to 20p (60c) in London and southeast England, a spokeswoman said.
The move
comes just weeks after Murdoch said he would not launch a price war involving the Wall Street Journal following the US$5.6 billion ($8 billion) acquisition of Dow Jones.
It was not clear whether the price-cutting strategy by the company's News International arm in the UK, which publishes the Sun, News of the World and broadsheets such as the Times, will be short-lived.
News International, which publishes a free afternoon London newspaper, thelondonpaper, is raising the price of the Times to 70p from 65p today.
The Sun's price cut will be closely watched in the industry because of the circulation pressures facing many newspapers as more freesheets enter the market and the web and new multimedia services give readers broader sources of news and entertainment.
"This is a very aggressive move and is pretty much the last thing the industry needs," said Numis media analyst Richard Hitchcock.
"The Sun has been aggressively priced in various parts of the country, and this move probably reflects the competition from the freesheets."
Associated Newspapers, part of the Daily Mail & General Trust, last week announced it would boost distribution of its free Metro morning newspaper by 250,000 to 1.36 million across 16 cities in Britain.
Associated also publishes the free London Lite afternoon paper, which has a circulation of around 400,000, the paid-for Evening Standard with 275,000 copies and the Daily Mail morning tabloid.
In the wider London market alone, where the Sun gets around 20 per cent of its readers, Associated said it would start distributing an extra 205,000 copies of the free Metro paper.
"This is good news for advertisers looking to communicate with the cash-rich, time-poor commuter," Metro managing director Steve Auckland said at the time.
Murdoch was a pioneer of price-cutting strategies in the UK newspaper market more than a decade ago.
In the summer of 1993, after the tabloid market had been in a period of declining circulation, a cut in the Sun's cover price sparked an instant turnaround.
Graham Stewart, in his The History of the Times, wrote that the price cut helped the Sun's sales soar by 368,000 in the next month.
On August 8 when Murdoch sketched out his plan for the future of Dow Jones and his long-coveted Wall Street Journal, he said he would not cut the prices of advertising or subscriptions.
The Sun's price cut will make it half the price of the Daily Mirror, owned by Trinity Mirror, whose chief executive Sly Bailey has refrained from price cuts.
- Reuters
