Preview of Upcoming FAS-FAX Report: More Bad News

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By: Jennifer Saba

Expect another bloodbath for many papers when the Audit Bureau of Circulations releases the fall newspaper circulation FAS-FAX report on Oct. 30.

Industry sources who have seen the numbers tell E&P they anticipate that for the six months ending September 2006, top-line daily circulation will fall roughly 2.5% while Sunday will drop approximately 3%.

The declines keep coming, even after several periods of losses — and easier comparisons that were supposed to ease the slide.

Yet again, major metros are expected to shoulder most of the blame for the decline in numbers. Sources suggest that some major papers that got hit hard in the recent past will take it on the chin again. They also point to a decline in single-copy sales and the continuing impact of many papers reducing other-paid and third-party copies.

For a few reporting periods, at least starting in March 2005, circulation was expected to take some hits since several scandals swept the industry in the summer of 2004. Publishers were taking extra caution when reporting the numbers.

However, it’s been two years — and circulation continues to slide at a quicker pace than in years past. For the six-month period ending in March 2006, daily circ slipped 2.5% and Sunday decreased 3.1%. In September 2005, daily was down 2.6% and Sunday dropped 3.1%. In March 2005, daily fell 2% and Sunday was down 2.5%.

While the circulation fraud was contained to a handful of papers, the industry still experienced fallout when analysts and advertisers began scrutinizing the data — including the rise in other-paid circulation, a category that represents hotel, employee, Newspapers In Education (NIE), and third-party copies.

While there is some value in this kind of circulation — especially NIE copies, if the program is used correctly — industry observers noticed that the category was used to inflate a paper’s top-line circulation number and in turn, giving newspapers a reason to raise ad rates.

Since all the fuss over that category, many newspaper companies have taken steps to decrease other paid. Many still are in the process.

There are other factors at work for the decline, too: Single-copy sales are decreasing.

And while there is an emphasis on home-delivered copies, many publishers have to mind costs — including circulation acquisition and retention — and will only pony up so much to get people to subscribe.

There is also a general feeling that publishers are not so anxious about showing gains in circulation as in years past; rather, they are more focused on pruning circ that is not considered valuable to advertisers or readership, even if that means a drop in top-line numbers.

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