Circ Drop Blamed Partly on Cutting 'Other Paid' -- Web Numbers Rise

By: Jennifer Saba The spring FAS-FAX report from the Audit Bureau of Circulations shows that paid circulation is on a troubling decline. It was hoped that the six-month period ending March 2006 would prove that the industry put some stops in the dam, but the Newspaper Association of America?s semi-annual circ analysis said that daily circ fell 2.5% -- one of the industry?s largest drops.*

The result was the same for the six-month period ending September 2005, during which daily circulation dropped 2.6%. In March 2005, which marked the first full period newspapers turned in numbers in the wake of several circulation misstatements, daily circ fell 1.9%.

The downward trend, to some extent, defies geography. The papers that turned in the best results ran the spectrum ?- the big nationals and the smallest dailies held steady, while major metros with circulations between 250,000 and 500,000 were the most bloodied. According to the NAA, 182 out of the reporting 770 papers experienced gains.

During a conference call with reporters, NAA Vice President of Circulation John Murray explained that smaller markets are more stable while the larger cities have transient populations.

Publishers making shrewd economic decisions -- and a renewed interest in individually paid copies, he said, brought about the declines. Indeed, many of the larger chains emphasized cuts in circulation considered less valuable by advertisers or other-paid circ. The category represents hotel, Newspapers-in-Education, third-party, and employee copies. ?You see individual newspapers making deliberate decisions,? Murray added. ?NIE has a lot of value to it but carried out to what extreme,? he said by way of example. ?That K-8 NIE program is harder to translate to an advertiser.?

The cost of selling a subscription has also gone up, and publishers are focusing on holding on to people with longer-term subscriptions rather than goosing FAS-FAX numbers with readers who might flee.

While paid-circulation numbers have been sinking, the NAA did release some good news today: More and more people are flocking to newspaper Web sites. Thirty-seven percent of all online users during Q1 visited a newspaper Web site, an 8% increase from the same period a year ago.

This is one of the first times the NAA has released Web-site readership numbers in conjunction with the FAS-FAX analysis -- which shows an industry willingness to move away from a mere paid-circulation model and embrace the idea of total audience.

The problem is, paid circulation is still considered one of the major yardsticks to measure the health of the industry. Especially in light of the fact that, as one reporter put it, many publishers are slashing staffs, closing bureaus, and reducing content.

?I would argue [the industry] is extremely healthy,? said John Kimball, the NAA's senior vice president and CMO. ?Clearly the business is concerned about declines in net paid circulation. I?m just saying the business is extremely healthy -- a lot of work is being done with robust and better Web sites with the idea of a large future audience.

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*Originally, this story said that overall daily circulation dropped 2.6%. ABC had misreported the Baltimore Sun?s 2005 Monday through Friday average. The revised numbers bring the average down to 2.5%.