Desmond hints at tabloid price war when price of Daily Star is halved

Richard Desmond, the owner of the Express and Star newspapers, has suggested he could kickstart a tabloid price war on July 1, when the Daily Star's price will be cut by 50 per cent, to 10p, writes Esther Bintliff .

In an interview published by The Independent yesterday, Mr Desmond said that halving the price would attract more readers to the Daily Star, whose net daily circulation of 822,934 in May was less than the 1.2m circulation at the Daily Mirror and 2.9m at The Sun, according to ABC figures.

"The most cost-effective way for us to get the numbers is to reduce the price," he said.

Newspapers have seen their circulation fall steadily since the 1970s, but the decline has been accelerated by the supply of news online.

The downward pressure on revenues was exacerbated by the fall in advertising during the recession, encouraging many publishers to experiment with different pricing models, online paywalls and mobile apps.

The Sun already operates a regional pricing model, with its national cover price of 30p reduced to 25p in the Granada, Tyne Tees and Yorkshire regions, and just 20p in the Carlton and central regions of England.

Trinity Mirror, the owner of the Daily Mirror, which is sold at 45p, said yesterday it had a policy of not engaging in price wars.

Douglas McCabe, media analyst at Enders, said the Daily Star's price cut would put some pressure on the other tabloid newspapers, but noted that discounting was not guaranteed to be successful because newspapers were not perfectly substitutable commodities.

"Every title has core readers who are very loyal, and a bunch who are quite loyal, and then others who are quite promiscuous in their reading habits," said Mr McCabe.

"Ultimately it will boil down to loyalty versus value. That's why discounting is no guarantee of success."