Stephen Glover: A good newspaper but not a good business

Media Studies: The Times is really back to where it was before it started the price war in 1993

The Times had an average daily sale of 445,962 in February. The equivalent figure for The Daily Telegraph was 628,338. Not all that much difference, you might say. And yet the financial fortunes of the two papers are very unalike.

Last week, the Telegraph Media Group announced profits of £58.9m for 2010, an increase of 13 per cent over the previous year, or 50 per cent if one-off disposals are stripped out. The Daily Telegraph was by far the major contributor. In January, it was announced that The Times and The Sunday Times had lost £45 million in the twelve months to June 2010, admittedly half the previous year, but still pretty dire. The Times must have accounted for the bulk of these losses.

If these figures are accurate, they are certainly cause for wonderment. They suggest that, despite a remorseless decline in sales, The Daily Telegraph remains a good business. By contrast, although The Times has benefited from the recovery in advertising, as well as from a reduction in its cost base, it remains far from breaking even, and is not obviously a good business. Consider, too, that the paper lost nearly 12 per cent of its circulation in the year to February, more than any other quality title.

The paper's relatively new online "paywall" may improve matters, though I suspect the effect will not be transforming. Last November, it was announced that 105,000 people were paying £1 a day or £2 a week to read The Times and The Sunday Times online. An additional 100,000 people had a joint subscription to read the papers in print and digitally. The increase in revenue is not enormous, and has to be balanced against the loss in advertising revenue as a result of visits to the website dropping by nearly 90 per cent after charging began.

Almost all newspapers have problems of one kind or another, and The Times's are certainly not unique. The fact that its sales have been falling a little faster than the rest of the market is none the less interesting. Nor have they obviously been buoyed by the introduction of charges for online readers, some of whom might have been expected to switch to print.

The decline is not due to any lack of quality. In all kinds of ways, The Times remains an outstanding newspaper. Its sports coverage is brilliant. Its business pages are among the best. Its foreign coverage is good, as many striking reports from Libya and the Middle East over recent weeks attest. It has several highly readable commentators. Its leaders still exude authority. Its letters page remains unparalleled. Its graphics are outstanding, and its print quality is the best in Fleet Street.

And yet sales are haemorrhaging, and last month were roughly half those at the peak of the price war more than a decade ago. How I remember executives at The Daily Telegraph quaking in those days! While slashing its cover price, The Times dramatically dumbed down, so that new readers were attracted to a different sort of paper. That process has gradually been reversed as it gradually brought its cover price back in line with its competitors and, particularly under the editorship of James Harding since December 2007, slowly dumbed up again. The Times is really back to where it was before it started the price war in 1993, having damaged several rivals, not least The Independent, along the way.

The cut that makes no sense at all

Commentators often complain about the lack of "joined up" government, though I suppose it is silly to expect such a vast enterprise to move seamlessly ahead, as though directed by a single brain. Occasionally, however, there are anomalies and contradictions so lunatic that one wants to cry out.

The International Development Secretary Andrew Mitchell recently announced that Britain will maintain nearly £300m a year of aid to India. Since India's economy is by some reckoning bigger than Britain's, and since that country has a defence budget not much smaller than ours, not to mention its own space programme, which we don't, such largesse may seem excessive.

Meanwhile the BBC Hindi WorldService, which costs a mere £1m ayear, faces closure. It would already have been shut down had there not been an outcry. As it is, its daily output of three hours has been reduced to one, and the Hindi service, which has been broadcasting for 71 years, and until recently boasted 10 million listeners a day, may well be wound up altogether next year. Could anything be more idiotic? As part of the spending review, the Government transferred the funding of the BBC World Service from the Foreign Office to the BBC – or, to put it another way, from the taxpayer to the licence-fee payer. This was a bad decision since there is no obvious reason why the licence-fee payer should subsidise broadcasts he or she cannot hear. The corporation is likely to bear down harder on the World Service than on its domestic output.

It is threatening the Hindi service, which enlightens and entertains millions in the poorest parts of India, and costs practically nothing, while the Government continues to pump hundreds of millions of pounds of aid into the country. Can anyone explain the logic of that?

What the papers are saying about Libya

If 10 out of 10 signified total and unadulterated support for the Government's armed intervention in Libya, and nought out of 10 complete opposition, how would newspapers' editorials on Saturday and Sunday rate?

These are my markings. The Sun: a predictable 10. The Times: an equally predictable nine. The Independent: eight. The Financial Times: eight. The Daily Express: seven. The Mirror: six. The Daily Telegraph: six. The Guardian: five. The Daily Mail: five. Among yesterday's papers, I would mark The Sunday Times at eight, and The Observer and The Mail on Sunday at six.

How will these markings have changed in three months? If things should go badly, the Mail, Telegraph and Guardian will not find it difficult to criticise David Cameron.

s.glover@independent.co.uk