LONDON: Death by a thousand cuts - Rupert Murdoch's weapon of choice for besting rivals - has cost the media magnate's shareholders millions of pounds in the UK, claims Sly (Sylvia) Bailey, ceo of Britain's largest newspaper publishing group Trinity Mirror.
Bailey was referring to Murdoch's traditional use of massive price-cuts to slay competitors - used with deadly effect in the early days of UK satellite TV when in November 1990 NewsCorp's Sky Broadcasting acquired sole rival British Satellite Broadcasting after a war of price attrition.
Similar tactics were employed last year when the Scottish edition of Murdoch's The Sun newspaper slashed its cover price below cost to just £0.10 ($0.19; €0.15) in a bid to snatch readers - and thereby advertisers - from TM's Daily Record which held firm at £0.40.
Claims Bailey: "The Sun has spent many millions of pounds going absolutely nowhere. They [News International] failed to monetise the circulation into advertising revenues. The Daily Record has increased its advertising share."
But TM's 2006 results, published on Thursday, are a casualty of this, and other, trading factors. The company, which owns five national daily and 240 regional newspapers, saw its full-year adjusted pre-tax profits decline by 14% to £185 million ($360.0m; €273.08m).
Rationalizing a fall in circulations at group flagships Daily Mirror (-6.3%) and Daily Record (-7.2%), Bailey proclaimed: "We do not discount our cover price. When you look at circulation, you need to look at more than the headline numbers. We have a number of [rival] publishers who are artificially distorting the numbers by discounting."
The Sun has also suffered. Latest ABC figures show average net circulation in the six months to November 2006 down by 3.38% on the same period last year [WARC News: 12-Dec-06].
Data sourced from Telegraph.co.uk; additional content by WARC staff