Latest FAS-FAX: Cause for Either Alarm or Relief, Say Experts

RSS
Follow by Email
Facebook
Facebook
Twitter
Visit Us
LinkedIn

By: Jennifer Saba

Two opinions emerge when deciphering the latest figures released from the Audit Bureau of Circulations. Depending on whom you ask, the new FAS-FAX report — which showed an overall drop of 0.9% in daily copies and 1.5% drop Sunday copies — is either encouraging, because it could have been much worse, or discouraging, revealing an industry that continues to slide.

“I’m surprised that the losses are as deep as they are,” said John G. Miller, a managing partner at Mediaedge:cia, a media buying agency in New York. “San Francisco is down 6% against a weakened competitor? The losses are big at these major papers.”

Peter Appert of Goldman Sachs wrote that the declines were larger than in the past, but that, all things considered, they could have been worse. “Investors will perceive this data to be ‘good news,'” said a note that was issued yesterday.

Many insiders point to a twin-punch explanation for the drop: the Do Not Call list and the industry’s conservative approach to counting copies in the wake of the circulation scandals.

“We knew we had a formidable task this six-month period,” said John Murray, vice president of circulation at the Newspaper Association of America, who thinks the numbers are heartening. “We were going to feel the first full impact of the Do Not Call regulations.”

But Miller noted that the industry has seen changes in telemarketing coming for a long time and that every reporting period there are declines. “I’m surprised that there is not a leadership vision. What is the industry going to do about this? I don’t see a marketing effort or a change in direction in how they grow circulation,” Miller said. “No one seems to be terribly disturbed about it.”

Indeed, Appert warns in his note that the weak numbers this period will “put added pressure on newspaper ad rates moving into 2005, suggesting another year of modest growth revenue.” He retains his “Cautious” rating on the industry as the firm is doubtful the industry can retain a 2%-4% ad increase rate for the next year.

While acknowledging the perception the industry appears slow-footed, Murray said that many newspapers have implemented changes with new subscriber acquisitions and retention programs, all of which take time to show results. “The improvements the newspapers are making are complex,” Murray said. “It will take a while to quantify.”

Murray points to the recent NAA circulation analysis for the six-month period ending September 2004 that found one-third of all newspapers measured recorded gains in copies. “There was no pattern to the papers,” he said about those that increased in size. “That’s what is reassuring. It tells us we don’t have problems with a type or size of market. The fact is simple: Some newspapers have adapted more quickly than others.”

Leave a Reply

Your email address will not be published. Required fields are marked *