British Newspaper Industry on Verge of a Revolution

A revolution is rumbling through Fleet Street, where Britain’s national newspapers have traditionally made their headquarters, and the changes that are about to take place will be felt throughout the industry.

For decades, the printers have exercised nearly absolute power along Fleet Street. But now the barricades they erected to keep out computer technology, which has been accepted virtually everywhere else in the Western world, have begun to crumble.

Backed into a corner, the two biggest printing unions went out on strike late Friay against global media entrepreneur Rupert Murdoch, owner of four major Fleet Street papers, including the prestigious Times of London.

The strike followed unprecedented concessions by the unions but Murdoch, sensing events moving in his direction, has refused to yield and has vowed to continue publishing the four newspapers during the strike. Many view the battle as the printing unions’ last great stand

But the man at the center of these dramatic developments is not Murdoch or one of Britain’s publishing barons. He is a 41-year-old upstart named Eddy Shah, whose newspaper empire consists of a few giveaway papers printed and distributed hundreds of miles from London.

Will Launch Newspaper

In a matter of weeks, Shah will launch Britain’s first national daily using computer technology. He hopes to be in production by mid-March.

The new paper, a tabloid to be called Today, has a target circulation of 1.2 million and, even though it has yet to appear, it has touched off what one of its potential rivals has called “the big bang that will blow the clanking national newspaper industry into the electronic age.”

And Today is not alone. There are plans for no fewer than four new national dailies this year, all relying to some extent on the new technology that Shah has said will enable him to produce his paper at about a quarter of his competitors’ costs.

Shah said he will employ about 500 people to publish Today, compared with 6,000 at the Daily Mirror, an established tabloid with circulation of more than 3 million.

The Mirror, struggling to cut its losses, has used Today’s imminent appearance on the national scene to wrest unprecedented concessions from a union representing printers and clerical workers, including the elimination of 1,600 jobs. It is seen as a sign of the times that union officials who took part in the negotiations described the outcome as a victory.

More such agreements are expected in a wave of cost-cutting that many experts predict will streamline operations at existing newspapers and make it possible to launch new ventures.

Explosion of Activity

“This year will see the most amazing explosion of activity in the newspaper industry since the days of Northcliffe,” said Charles Wintour, the former editor of the London Standard who now edits the industry trade weekly Press Gazette.

Viscount Northcliffe, who was born in Ireland as Alfred Harmsworth in 1865, is regarded as the most spectacular figure in British newspaper history. He controlled, among other publications, the Daily Mirror, the Daily Mail and the Times and introduced such popular innovations as serials, women’s columns and social gossip.

In Britain, the national newspaper printers unions have long symbolized the power of organized labor, and their sudden shift to the defensive has important ramifications for other areas of industry. The new situation along Fleet Street, coupled with the failure last year of a national coal miners’ strike, stands as a striking example of the apparent gradual decline of trade union power in Britain.

“What is happening (on Fleet Street) is an important message of the need to give up outdated practices and adapt to new technology,” said John Carhill, an industrial relations adviser with the Confederation of British Industries. “Just like the defeat of the miners, what’s happening there will be a chastising experience for all militant unions.”

Want to Regulate Pace

The printers’ unions concede that change is inevitable. Bill Booroff, London regional general secretary of the most powerful printers’ union, the National Graphical Assn., said: “We now accept it’s coming. We just want to regulate the pace so our people aren’t thrown out of their jobs.”

During its years of unchallenged power, the National Graphical Assn. and other unions involved in newspaper production virtually wrote their own ticket, in part because many newspaper owners, independently wealthy, preferred to absorb losses rather than risk any confrontation that might endanger their holdings. Others feared that industrial action could spread to other areas of their business empires.

Robert Maxwell, the flamboyant new owner of the Mirror, likes to recall the story of a Cabinet minister who visited the paper a few years ago and asked a senior manager how he dealt with the unions. The reply: “By giving in.”

In the present confrontation with Murdoch, the unions are trying to protect printers’ jobs at a new $150-million plant in East London where Murdoch wants to print his new evening paper, the Post, and where he has threatened to move production of his other papers if the printers employed at his Fleet Street operations engage in further disruption. It is this plant he plans to use to continue publishing during the strike.

The strike vote came after Murdoch rejected the printers unions’ offer of a pledge to end unofficial strikes and to submit all future disputes to binding arbitration, concessions that would have been unthinkable just a few years ago.

Set Tougher Terms

But Murdoch has also insisted on an end to the closed shop and a guaranteed no-strike clause--terms already accepted in principle by the more moderate electricians union, which sees an electronic-age newspaper industry as a legitimate area for expansion.

Because of the printers unions’ traditional power, some unusual practices have evolved.

Although technology exists, and is widely used elsewhere, that would allow correspondents far from their home offices to file articles directly into computer systems in those offices, it is not used here. Some correspondents for British national newspapers send their stories thousands of miles by computer to a building near their newspapers, where the material is then punched by hand and telexed the final few hundred yards to the editors.

Computer terminals, purchased in anticipation of the new technology, have been installed in newsrooms but are used as hardly more than modern typewriters. Articles are printed out on paper and then set in type, in some instances with the use of machinery manufactured before World War II.

Six years ago, Murdoch installed a $15-million printing plant in Glasgow to speed distribution in Scotland of the Sun. But not a single copy of the paper has come off the press there. The printers have refused to print the paper in Glasgow unless they can set the type for it there, too. Murdoch has refused, and he pays to have the circulation for Scotland airfreighted north every night.

As a result of this sort of confrontation, seven of Britain’s nine national newspapers are in the red.

Costs Were a Factor

The problems that led to the sale last month of Britain’s last family-owned national newspaper, the Daily Telegraph, cannot all be attributed directly to the labor unions but high production costs certainly aggravated its difficulties.

Newspaper production staffs are generally estimated to be anywhere from 50% to 300% above what is needed, and wage levels are among the highest in British industry. Some Linotype operators earn up to $60,000 year, a level usually restricted to corporate directors in Britain. Other union members have so short a work day that they have taken second jobs.

The printers’ unions have pushed management out of the press and composing rooms. Union officials, not managers, look after disciplinary matters, decide on replacements and make up shift schedules.

“The NGA (National Graphical Assn.) has operated as an independent contractor in the composing room,” Wintour said.

In recent years, though, a series of developments--high unemployment, legislation reining in trade union power, the defeat of the miners’ strike--have combined to reduce the unions’ militancy, even among the strongest unions.

Two years ago, Shah defeated an effort by the National Graphical Assn. to impose a closed shop at one of his northern newspapers. The dispute went on for months and cost the union more than $1 million in fines.

Smaller Chains Won

Smaller, family-owned provincial chains elsewhere in Britain, which see computerized production technology as necessary to their survival, have also taken on the printers and won major concessions. In some instances, they won because moderate unions that had supported the printers in the past were no longer prepared to risk their members’ jobs.

When Shah announced plans for a national daily, he avoided the printers’ unions completely and they wanted nothing to do with him. For a time, it seemed that this standoff would kill the venture but Shah found that the electricians’ union--seen as relatively moderate here--was willing to work with computerized technology. The electricians have signed an outline agreement with Shah and a formal contract is expected to be approved within the next few weeks.

Feelings are running high between the printers and the electricians, and the printers now see the electricians as rivals. Britain’s umbrella organization for unionized labor, the Trades Union Congress, has sought to bring the two together but leaders of the electricians’ union have so far refused. They argue that the printers have no inherent right to negotiate exclusively when the work is in new printing plants and with new companies.

“The electronic era is our time and we will influence events,” said Tom Rice, a negotiator for the electricians’ union.

The influence is already visible. It has been as a direct result of Shah’s breakthrough that plans for the other three new national newspapers have been announced.

Other Newspapers Planned

In addition to Murdoch’s new evening daily, the Post, six institutional investors have provided support for a group of former Daily Telegraph editors who plan to start still another daily next October. It would compete with their old paper and the Financial Times as well. And Maxwell has announced that his Mirror Group Newspapers will bring out another tabloid, titled Good Day and splashed with four-color pin-up photographs.

Fleet Street executives estimate that with computer technology a newspaper can make a profit with a circulation as low as 300,000. In contrast, the Star, a national daily tabloid launched several years ago, remains unprofitable despite a circulation of 1.5 million.

In light of the rush to establish new papers, some people have expressed concern that the traditional conservative bias of the British press might become even more conservative. “I’d like to see a wider range than the present group of rich men,” Wintour, the former editor of the London Standard, said.

With the new, less costly technology, new editorial voices may soon be heard. Among others, the trade unions have been talking of starting a national paper.