Prudential Dissects ‘Quality’ Circ Trends at Largest Papers

By: Jennifer Saba

Prudential Equity Research’s latest circulation report on so-called “quality” circulation charts 50 of the largest newspapers but also comments in-depth on 10 of the papers to dig out trends.

Some papers seem to have turned around the trend toward more (and more) “other paid copies.”

The Boston Globe, for example, made vast improvements this time around. Discounted copies at the paper were down 30.8%. Other paid circulation dipped 1.2%. Within that category, third party home delivered dropped from 7,185 copies a year ago to just 469 copies. The report noted that the Globe was the only newspaper to show a sequential decrease in NIE copies. That category was down 18% from the September 2004 period.

At the Philadelphia Inquirer other paid circulation dropped 23.2% due mainly to a 31% decline in NIE copies. The paper has also slowed its use of third party copies, down 20.6%.

The research firm singled-out the Tribune Co. for the significant progress executives made lowering other paid “Across the five Tribune papers we looked at,” the report said, “other paid circulation was down 18.4% in the period.”

Prudential judged the numbers of two Tribune papers, the Los Angeles Times and the Chicago Tribune. The report noted that Times had one of the sharpest drops in full paid home delivery — down 18.1% — of any of the newspapers examined. Single copy sales at the paper decreased 9% and discounted copies grew 70%.

The Times has been cutting down other paid circulation though not in all categories. Newspapers in Education (NIE), total third party copies, and employee copies are all down, 7.4%, 48.3%, and 15.7% respectively, while hotel copies are up 121.1%. Total other paid circulation is down 6.1%.

At the Chicago Tribune, the NIE category dropped 40.4%. And like the Times, hotel copies grew a lot (129%). Total third-party copies also increased with a 62.7% gain though it represents a small part of total circulation.

The Tribune’s Vice President of Circulation Vincent Casanova, while acknowledging that advertisers are asking for detailed circulation information, questions the methodology used to compile the Prudential report. “It leads to conclusions or scores that might not be reflective,” he said. “All factors are given equal weight.”

Employee copies representing 1.1% of total circulation is weighted the same as a 50% increase in other paid, he explained. “I’m not sure an advertiser or even an investor would look at those two factors equally.”

NIE remains on the rise over at The Wall Street Journal, at least according to Prudential. The category rose 43.3%. All told, overall school copies make up 7.1% of the paper’s total circ, one of the largest percentages of all the newspapers in the study, Prudential said.

Why the concern? The Journal relies heavily on “sophisticated advertisers” in the technology and financial categories. “The increasing number of student readers, though helping to broaden and diversify the demographics of readers, seems incompatible with the intended audience of these typical Journal advertisers,” the report said.

Calls to the Journal were not immediately returned.

The Washington Post scored well on the report’s circulation quality test. Additionally, it appears that the Washington Examiner, the free daily launched in March, has had little impact on the Post, according to the report. Full paid home delivered copies fell 2.9%. Full paid single copies declined 7.5%, a decrease experienced in many other metro markets. Other paid circulation dropped 2.2%, though the paper still has a higher-than-group average of NIE copies (4.3%), which comprises 5% of its total circulation.

At McClatchy’s Star Tribune in Minneapolis — recently beset by allegations that the paper inflated its circulation — full paid home delivery was up 1.2%. Full paid single copies fell 5.2% and discounted copies declined 4.6%. Other paid circulation grew 7.7% driven by a 14.5% increase in NIE copies.

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