Circ Expected to Fall Steeply Again in Upcoming FAS-FAX

By: Jennifer Saba After a rough period of steep circulation declines, there was some hope that the FAS-FAX to be released next week would reveal that the bleeding has pretty much stopped.

No such luck, apparently. Instead, it's likely that overall circulation will show another large decline when the Audit Bureau of Circulations (ABC) releases its semi-annual FAS-FAX report on Monday.

Industry sources are expecting overall decreases for daily circulation similar to the last two reporting periods -- somewhere around a 2% drop in daily and at least a 2.5% drop on Sunday for the six-month period ending March 2006.

As in past periods, the larger metro newspapers will most likely bear the brunt of the decline, with daily circulation estimated to slip about 2.5% for the period. National papers like The New York Times are expected to do better. Executives with the New York Times Co. said that daily and Sunday circulation at the flagship paper will be "up slightly."

The Boston Globe, however, will take another hit, probably somewhere in the range of 8%. A spokesman for the Globe declined to comment.

During a quarterly conference call with analysts, New York Times Co. CEO Janet Robinson said the release of subscriber payment information that occurred in early February hurt the Globe. The mix up came as the paper was beginning to see some "nice gains" in home delivery, said Robinson. "It did have a substantial effect."

Knight Ridder will likely show drops in daily and Sunday circulation overall.

At the Ft. Worth Star-Telegram, daily circulation is down 7% and Sunday slipped 3%. "This loss was self-inflicted," said Wes Turner, publisher of the Star-Telegram. In both cases, the drop in circulation was due to the paper dramatically cutting back on discounted (more than 25%- less than 50% paid), third party bulk and NIE copies.

The St. Paul Pioneer Press in Minnesota, which MediaNews Group plans to acquire, reported gains of 2% in daily circ and 1.6% on Sundays. McClatchy is planning to acquire Knight Ridder.

The Times Union in Albany, N.Y., one of the largest papers to turn in its Publishers Statement before the FAS-FAX release, dropped 2.6% in daily circ and slipped 4.3% on Sunday.

At The Wall Street Journal overall circulation slipped 2%, but individually paid circ is up around 5%. Online subs for WSJ.com, which is counted in the overall number, are up 1%.

McClatchy, which broke its winning streak in September of 20 consecutive years of circulation increases, will likely show drops in daily and Sunday circulation too. Though the FAS-FAX covers a different time span, McClatchy said during its quarterly conference call that for Q1 daily circ for the company was down 2% while the Sunday circ numbers were down more.

Generally, circulation has been on a gentle decline, dropping in the 1% range. For the past few reporting periods, however, the decreases have been more dramatic. For the September 2005 reporting period daily circulation fell 2.6% and Sunday was down 3.1%. For the March 2005 FAS-FAX, daily circulation decreased 1.9% and Sunday fell 2.5%.

Some of the biggest drops occurred in the 1990s. In 1991, annual circulation fell 2.6%. It took another big dip in 1996, down an average 2.1%.

The larger drops occurring over the last several periods are the result of many factors. But perhaps most notably, the numbers show that publishers are weeding out circulation that is considered less valuable by advertisers especially in the other paid category.

Other paid circulation represents employee, hotel, Newspapers in Education, and third party sponsored copies.

The spring numbers will likely show a sharp improvement in individually paid circulation and growth in home delivery as publishers try to improve subscriber churn by concentrating on the most valuable readers.

The Tribune Co. -- many of its papers experienced big drops in circulation over the past several periods -- is making growth in individually paid circulation its top circ priority.

On a quarterly conference call, Tribune CEO Dennis FitzSimons said that the company made progress in Q1 toward its goal of stabilizing individually paid circ, which was up 1% in daily and down 1% on Sunday. Total circ for the quarter was down 3% both daily and Sunday but FitzSimons attributed the decreases to publishers scaling back in other paid circ. "The other paid category is less valuable to advertisers and managing it down reduces our newsprint and distribution expenses," he told analysts.

Also this year, publishers were hit with higher gasoline prices, which means newspapers are looking carefully at their distribution areas, trimming back to serve its core audience.

This FAS-FAX will mark the first complete report that shows circulation on a daily basis. About 792 daily papers, or 85% of ABC's membership, will file with FAS-FAX. Of those, 570 are reporting day of week. ABC requires all daily papers with a circulation of 25,000 or more to use the new format.

The move will mean a close-up view of circulation -- for the most part, publishers used blended averages only to report daily circulation. There will still be a Monday through Friday average on the report, but the new breakout will highlight days papers are most vulnerable. Run of Press advertisers might use the information to put pressure on rates.