NEW UK DAILY FACES TOUGH TEST

Since the beginning of September some 300 or so people in Britain have found themselves readers of the most select daily newspaper anywhere in the world.

They are receiving the pilot issues of the Independent, the country's first new quality paper in more than 100 years. On Oct. 7, after the panel have given their views on the product and it has been brought up to speed, the paper will be launched to the general public.That new newspaper launches are such a rarity in Britain says something about the practical difficulties of starting new newspapers in Britain. That it should be happen now says something about the changed business climate that make such an enterprise possible.

The difficulties of running national newspapers in Britain are well known: the familiar tale of union restrictive practices, high wages combined with low productivity, refusal to use new technology, and so on. These difficulties apply in even greater measure to new projects.

Suddenly it is now only possible to launch new papers, but the evidence of Rupert Murdoch - who generates more than half of News International worldwide profits in Britain - suggests that they could be extremely profitable.

There has been one other new daily newspaper launched in the U.K. this year, the mid-market tabloid, Today. It was Today which, by using state of the art newspaper production technology, including full page on screen make-up, broke the traditional print unions monopoly over newspaper production, and with this, their high levels of manning at every stage of the production process.

This paper, which looks like a coarsened version of USA Today, first appeared in the spring. It was started by a small-scale publisher of free newspapers, Eddie Shah. In the event, the example of Mr. Shah encouraged Mr. Murdoch into a union-busting move of all his papers to a new plant, in Wapping (rhymes with hopping) in the docklands of London. Now all the other groups are struggling to cut their manning levels to match.

But in the case of Today, the product did not live up to expectations and Mr. Shah's small group was unable to sustain the losses it ran up. In the summer, control passed to the London Group, the multinational conglomerate which also owns the long-established Sunday newspaper, The Observer.

Despite the difficulties of Today, there are a number of new newspapers being planned by different groups, ranging from a new London evening paper to a new Sunday sports tabloid billed as having an even higher ratio of sex and scandal than any British paper yet. (The dummy issue of Sunday Sport being circulated to potential advertisers gives a flavor of its likely content: the lead story, in a reference to Prince Andrew's new bride, is headlined Fergie in nude photos shock.)

But the Independent is radically different from all these other ventures in three ways.

First, it is intended to be a high quality product, founded and run by journalists themselves, led by a group from the Daily Telegraph, but including recruits from all the British quality papers.

Second, rather than being backed by a large publishing empire, it is a start-up, the largest business start-up scheme ever to be launched in Britain. Capital subscribed is $30 million, coming from a variety of financial institutions.

Third, it has been backed by more market research than the launch any new newspaper in Britain. Indeed all the other launches are being made with no market research at all. The journalists set out from the position that they wanted to show that readers did not want to read the political prejudices of a strong external proprietor, but wanted instead balanced judgements of professional writers. But this is also what market research showed, too. Much of the ground work in devising the paper has been done by Saachi and Saachi, the advertising agents, who have helped tailor the product to a perceived market gap. The title itself, plus the pilot issues printed and distributed this month are key elements in this.

Thorough market research would be normal practice for a product launch, but is most unusual for newspapers. The launch is also being supported by what is for Britain, a very large advertising budget.

So the Independent is a test case not only of whether journalists can produce a financially successful newspaper. It will also demonstrate whether a business start-up on this scale can work, and whether the latest techniques of market research and sales promotion can be successfully applied to one of the world's most conservative industries.

What sort of newspaper seems to be emerging from it? Are papers products like soap powder (or some magazines) that can be positioned in the market to suit the advertisers' particular needs. In this case the aim is to get the yuppies. Will they want to read it on the evidence so far?

It is unfair to judge any product by its prototype models, all the more so a newspaper. It is rather like a theater without an audience: A dress rehearsal is never quite the same as the first night. But barring a few hiccups, like white space occurring where there should be none, what is emerging seems to be an extremely competent but slightly bland paper that does much the same job as the other quality papers.

It is strong on financial and business coverage, and has a crisp layout. But there is - in the pilot issues at least - no individual feature that makes it a significantly different alternative to the other papers on offer. In some areas, such as foreign news, where other papers have important syndication agreements, the Independent appears at a disadvantage. Radical ideas, like producing a newspaper in semi-magazine format, have been rejected.

However, if the mass of research suggests that there is no magic formula, no missing ingredi ent that readers crave, it also suggests that the concept that the paper is genuinely independent is extremely attractive to readers of quality papers in Britain.

This may be a function of the adverse publicity that the Murdoch empire has received following its move to Wapping. Though the down-market Murdoch titles have flourished, the two up-market newspapers, the Times and the Sunday Times have lost many of their best journalists, and some circulation.

It may also result in part from the change of ownership of the Telegraph

from the British family that had run it for most of this century, the Berrys, to the Canadian entrepreneur, Conrad Black. This leaves only the Guardian and the Financial Times, among the quality dailies, under British control.

The trick for the Independent team will to be translate this perceived desire for something that is indeed independent into a workable product. The central problem is that it does not have much time. It is budgeted to break even in the first year of publication, an extremely optimistic assumption if the estimates of its costings done by other newspaper managements are anything like right.

There are a number of other newspaper groups that have indicated interest in the paper, should that possibility arise. But if more outside funds were to be brought in, the Independent would lose the prime thing that distinguishes it from the rest of the pack, the own ership by the journalists themselves.

Do readers care? They may say they do, but the test is whether they will give the same answer with their money at the bookstalls as they do to the market researchers at their door.

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