Every picture tells a story

The booming celebrity-magazine market is on a collision course with the paparazzi, who are upping their prices for snaps of the rich and famous. Kirsty Mouatt, the newest and youngest editor in the most dynamic market in the magazine sector, accuses the "paps" of exploiting the intense competition and charging publications exorbitant fees for their pictures: "It's very frustrating that we are now paying far more than we should be for these pictures. They are not worth that much," she says.

At the age of 29, Mouatt presides over a magazine with a circulation of 400,000. The success of New! is testimony to the apparently insatiable public demand for celebrity gossip. After the launch of Hello! a decade ago came the rival OK!, joined later by Heat, Closer and Now. The most recent arrival, New!, was launched in February by Richard Desmond's Northern & Shell. The market has increased by 50 per cent in the past 18 months.

Ian Lock, chief executive of the Periodical Publishers Association, says: "Right now, celebrity is the thing, and it's catching an existing generation and probably a whole new generation of readers."

The explosion in the market has provided great opportunities for those prepared to spend hours up trees, training long lenses on the homes of the famous. The death of Diana, Princess of Wales, as she tried to evade the photographers that constantly tracked her, cast a temporary shadow over the paparazzi. But the relentless rise of the celebrity magazine means that the pap has never been in greater demand. Mouatt admits that her magazine and its rivals are bankrolling such photographers. "They are the winners," she says.

In recent months, as competition has increased, the bidding for exclusive pictures has been "furious". Big agencies such as Splash and Big Pictures, and top paparazzi such as Jason Fraser are skilled at playing the titles off against each other. "They start bidding wars among the magazines, and the more magazines you have, the higher these pictures are going to go," says Mouatt.

Celebrity magazines are often asked to pay £20,000 for a set of pictures of a celebrity walking in the street. For New!, that would wipe out the revenue from over 33,000 sales. The pap prices could yet rein back the celeb-mag market.

But as Mouatt points out, the early success of New! shows that there is no shortage of readers. "There's a hunger for celebrity gossip, and to fuel it we create more celebrities," she says. Hence the "symbiotic" relationship between the magazines and the reality TV shows that provide future stars.

And it is, above all, the public's changing relationship with the people they see on TV that's at the heart of this growth in celeb mags. Whereas once, eight million people bought the Radio Times and TV Times for news about Angela Rippon and Benny Hill, they now want telly titbits that are juicier.

So Mouatt, an English graduate from University College London, makes no excuses for combining flattering celeb profiles with pictures of Geri Halliwell's cellulite or "That's snot nice" – a feature on famous people sneezing: "Readers like to see that celebrities who look all glossy at public events can actually look quite rough when they nip out for a pint of milk."