A watershed for national papers

Rupert Murdoch has a simple view of the future as far as British national newspapers are concerned. He believes that one day there will be only five daily titles left. It scarcely needs saying that the Murdoch crystal ball foresees that at least two of the survivers will be his. Last night he went some way to making the prophecy come true by announcing the closure of one of News International's five titles, Today.

It seems unlikely this will prove the fuse that ignites the wholesale rationalisation of British newspapers Mr Murdoch foresees (the easing of competitive pressures implied by a rise in the cover price of the Times would indicate the contrary), but there is no doubt that this is a watershed of sorts. Add to the closure the present fevered level of speculation over the Express titles, rumoured meetings between Mr Murdoch and Lord Rothermere of Associated, and there is quite enough to think that something siesmic is in the offing.

Closing Today could hardly have been a difficult commercial decision to make. Harder to explain is why News bought the title from its then owner, Tiny Rowland, in the first place, or why it was prepared to tolerate accumulated losses of an astonishing pounds 140m for as long as it did. The clear bet is that at least some of Today's 500,000 readers will move to other News International titles, particularly the Times. That view reflects Mr Murdoch's belief that newspapers are like any other commodity - price-sensitive and driven by the usual market forces of under- and over- capacity.

The circulation gains made by the Times since the price war began lend some support to that view. Far from proving the point that there is too much capacity in the market, however, the only effect so far of the cover price war has been to plunge large parts of the industry, including the Times, into losses which, in the long term, look as unsustainable as those of Today.