The sun sets on The New Day: Why Trinity Mirror's ambitious print gamble failed so dramatically
So the sun sets early on the New Day, the UK's first standalone national newspaper to be born in 30 years. Its motto was 'Life's short, let's live it well'. To that extent its premature death, aged barely nine weeks, at least partly lives up to that slogan.
But for those of us in the media commentariat (including me, here on The Drum) who had already predicted its demise, the temptation to say 'told you so' should be resisted in favour of a sense of sadness that Trinity Mirror's bold, if ill-fated, attempt to defy the soothsayers of print has entered the growing graveyard of newspaper titles.
Think, too, of talented editor Alison Phillips and her staff, some of them reportedly in tears, as news of the New Day's imminent death – tomorrow, Friday 6 May, will be the final edition – filtered through.
I know that many weren't too surprised by its fate, although the speed of the title's demise so soon after its high-profile February launch did come as a shock. But after an ambitious £5m launch with a sales target of 200,000 copies a day, the New Day's current circulation of little more than 30,000 had put it into the critical ward with the last rites looming.
The precise reason for the timing is painfully clear. Today the Trinity Mirror hierarchy is facing a testing AGM, on the back of the company's share price slumping to its lowest level in three years (just 111p on Wednesday), a staggering 40 per cent drop on the previous year. Indeed, the New Day's February launch coincided with Trinity Mirror reporting a £14.4m fall in annual pre-tax profit to £67.2m.
CEO Simon Fox and his chairman David Grigson knew they would be facing an intensive investor grilling today on the company's (mis) fortunes, with the decision to launch the New Day against the advice of many media analysts high on the list of questions. But even with the New Day forecast to lose around £1m a year, it still represents far from the biggest problem confronting Trinity Mirror.
Awkward questions are set to be asked by investors over the scale of the company's exposure to its escalating flood of phone-hacking civil actions. Trinity Mirror has run out of expensive legal appeals over the controversial £1.2m awarded to just eight test case victims, including Paul Gascoigne and Sadie Frost. After its final appeal failed on 23 March, the company announced it would set aside £41m to settle the anticipated future claims. But many legal observers reckon that's still far too little, although Trinity Mirror isn't likely to have to fork out the £500m in compensation and legal bills Rupert Murdoch has run up over phone hacking.
Even so, the hacking bill threatens to impact heavily on the prospects and expansion ambitions of a company that makes around £100m in annual profits. And it's against this backdrop that CEO Simon Fox, who invested considerable personal prestige in the New Day project, will inevitably face an uncomfortable degree of investor wrath at the AGM.
The news of the New Day's closure coincided with Trinity Mirror going into its AGM with the grim revelation that its print advertising revenues in the first quarter had fallen 19 per cent on last year. In an attempt to reassure investors, it stressed that it planned to focus on its digital strategy where advertising pickup is doing better by comparison, albeit from a much lower base.
As one City source told the Guardian this week: “No one is really buying their shares. Because of New Day, the issue with print advertising and the phone hacking costs not being resolved, a positive story isn't getting out there. Trinity Mirror did a smart deal to buy the Local World regional and local newspaper group, but that positive narrative has been obscured by the performance of New Day, together with the decline in print advertising and the hard to fathom final bill for phone hacking disaster.”
So what went wrong for the New Day? Was its fate inevitable? Was it totally misconceived from the start, or was it poorly executed? The answer to those questions will dog Simon Fox and his top team well beyond today's anguished AGM inquest.
Certainly its launch credo was a challenging one – to attract people who'd never bought a newspaper before, or had given up on the Mail, Express, Sun et al and without poaching from the group's national mothership, the Daily Mirror. The pre-launch pitch from Trinity Mirror was that it aimed to win back an audience from among the one million tabloid and mid-market buyers who have disappeared in the last few years. Quite trend-bucking ambition, by any criteria.
Then there was the little matter of its intention, as defined by Phillips, to be politically neutral and “cover important stories in a balanced way, without telling readers what to think”. She described the paper's aim as to give “time-poor readers” a “ruthless edit of the day” in 30 minutes.
The strategy was based, apparently, on extensive market research, but you have to suspect that the New Day could partly be another victim of 'focus groupitis' – the tendency of focus groups to tell those paying them what they think they want to hear rather than what the focus groupers really think.
For me, alarm bells rang particularly loudly with the New Day's publicly avowed intent to target women especially. If it didn't quite declare men an unwanted audience, it gave the impression that this was somehow a gender-specific newspaper – a feeling reinforced by the New Day's sparse sports coverage, as if playing into the cliche that the sports pages were of little or no interest to women. Well, maybe it's just the women I know, but most of them are rather partial to a more than cursory glance at the sports section.
To be fair to Phillips and her team, they were also stuck with a print run that had to go early, ahead of the flagship Mirror's command of the print presses, which would have ruled out evening football results and reports (or major late-breaking news stories) even if the newspaper had wanted to follow that traditional road. A sense of foreboding hit me when New Day sent out a staff team photo on social media the day it launched.... male faces were almost as hard to spot as the sphere in a 'Spot the Ball' competition.
It was also strange that a newspaper targeting women – and youngish women in particular – decided against having its own website, instead concentrating solely on a social media presence online. Surely both were essential if it was to make the breakthrough it wanted and get anywhere near that declared 200,000 sales target?
There was an embarrassing incident at a high-profile Media Society event when Phillips failed to show up, as billed, for a debate on the The Future of Print. Apparently there had been a mix-up on her diary, although there was inevitable speculation that the normally feisty editor might have been pressed from on-high at Trinity Mirror not to attend, as it coincided with media leaks on her paper's circulation collapse.
For my money (as a small Trinity Mirror shareholder as well as a media commentator), the New Day's launch execution itself always looked less than surefooted. Distributing 2 million copies free on its first day was smart enough and garnered considerable broadcast media attention, aka free advertising and promotion on top of the hefty (by Trinity Mirror standards) TV and radio promo spend. Yet that fairly sporadic £5m promo spend was always unlikely to be sufficient in raising awareness of a new national newspaper in today's depressed climate, and Trinity Mirror's talk of a simultaneous 'word of mouth' strategy always smacked far more of spin than substance.
Like many media commentator colleagues, I argued that Trinity Mirror should have gambled on a week-long 'freebie' strategy (even if it had eschewed the idea of a Metro-style national free title). But unofficial figures suggested that the switch on just day two to a 25p cover price saw sales figures drop to around 90/100,000 and once it ploughed ahead with a high-risk plan to make it 50p just a fortnight later, sales went south, swiftly slumping to less than 50,000 and sinking slowly but steadily ever since, down to its final, fatal figure of little more than 30,000.
In addition, Trinity Mirror had launched the New Day with a loudly-proclaimed ambition to hit its 200,000 paid for sales target and bold promises to advertisers to offer them money back if it didn't reach its sales predictions. Despite its undeniably stylish design and stapled, superior quality paper, the New Day also never seemed to convince newsagents and some supermarkets that it was a 'real' newspaper, too often being stacked on different shelves or less accessible sales spots to the other national titles.
At that point, the concept of the New Day as a low-cost operation running on extra capacity at the company's printing presses was starting to lose its lustre, with substantial losses in prospect and something of a prestige/PR embarrassment on the horizon. And by this time, rival newspaper groups had abandoned contingency plans for big promotional spends, or further price war cuts, in the event the New Day took off the way Trinity Mirror had hoped. “For all the hype, the New Day never even registered as a tiny pimple of a problem on my bum,” was how one senior board figure at one outspoken rival publisher robustly put it.
Although launching the New Day was always going to be a huge gamble in the internet age and the inexorable decline of print newspapers, Trinity Mirror's ambition was admirable. But my view always was (as previously aired on The Drum) that Simon Fox would have done better to have targeted the 'i' with its bite-sized, intelligent but essentially traditional approach. With its 240,000-strong, well-educated, youthful buyer profile (an ad director’s dream), the 'i' – the now defunct print Independent's more successful baby brother – has proved that there can still be life in print.
It's long been rumoured that Trinity Mirror approached previous owners the Lebedev family about buying the 'i' well before its recent £24m sale to rival regional publisher, Johnston Press. But a deal on price couldn't be agreed and when Trinity Mirror made a fresh approach earlier this year, talks were too advanced between the Lebedevs and Johnston Press for the deal to be hijacked.
So Trinity Mirror forged ahead with its New Day plan (having earlier and acrimoniously failed to buy the Express group from Richard Desmond) with its strongly female-oriented branding. But, with new owners Johnston Press far less familiar with running national newspapers than Trinity Mirror, and with the 'i' still young enough not to have established deep-seated brand loyalty, I would have gambled on producing a serious, robust challenger to the 'i' rather than the overly women's magazine product the New Day too often seemed.
Even so, the New Day was still likely to have survived rather longer than nine weeks if it hadn't been for the sharp slump in the Trinity Mirror share price, plus growing major investor concern over how much the final hacking bill will be and how damaging the PR backlash from it could add to the company's woes.
No doubt Fox and Grigson were already bracing themselves for a fiery grilling ordeal at today's AGM. Offering rebellious shareholders a ready-roasted sacrificial lamb in the shape of the New Day's demise was irresistibly tempting.
Paul Connew is a media commentator, broadcaster, PR adviser and former editor of the Sunday Mirror and Daily Mirror. He is also a (small) Trinity Mirror shareholder