FAS-FAX Preview: Circ Numbers To Take Another Big Hit

By: Jennifer Saba Anyone thinking the declines in circulation should ease when the Audit Bureau of Circulations releases its spring numbers on Monday will be disappointed.

According to industry sources, overall daily circulation for the six months ending March 2007 is expected to sink approximately 2.5%, while Sunday will drop around 3.0%.

Yet again, major metro papers are bearing the brunt of the responsibility for the declines. Papers that are showing daily drops of 5% or more, according to circulation sources, include: The Dallas Morning News, The Miami Herald, The San Diego Union-Tribune, The Star Ledger in Newark, N.J., The Orange County (Calif.) Register, The Austin American-Statesman, the San Jose Mercury News, and the South Florida Sun-Sentinel.

The Staten Island Advance reported that Monday-Friday circulation was down 3.9% to 59,461. Sunday dropped 4.6% to 73,203.

Gary Pruitt, CEO of the McClatchy Co., explained during a Q1 earnings call on Tuesday that his company will continue to experience declines in circulation. (It was not too long ago that McClatchy could boast of constant circ gains). To give a taste of what is to come, during Q1, McClatchy executives said daily circulation fell 3.6% and Sunday dropped 3.9%.

Some city papers eked out increases, including The Indianapolis Star, which should be one of the biggest metro gainers. Daily circulation (Monday-Friday) rose 2.4% to 261,405 copies and Sunday was up 2% to 354,312 copies, according to Bryan Sturgeon, vice president of circulation. The paper benefited when the Colts made (and won) the Super Bowl and by adding Thursday editions to Sunday-only subscriptions.

The St. Paul Pioneer Press grew its daily circulation (Monday-Friday) 0.3% to 191,736. Sunday is virtually flat up 0.1% to 251,865. Also encouraging: the paper attributed the increases to gains made in home-delivered copies.

The Kansas City Star's daily circulation (Monday- Saturday) slipped 0.7% -- a victory these days -- to 261,367. Sunday circulation was weaker, down 2.3% to 359,255.

Other papers that are expected to report small advances (or at least down less than 1%) in daily circulation, according to the same sources, include: The Charlotte Observer, The Denver Post, The San Antonio Express-News, the combined circulation of The Salt Lake Tribune and The Deseret Morning News, the St. Louis Post Dispatch, the St. Petersburg Times, The Plain Dealer in Cleveland, and The Oklahoman.

The Philadelphia Inquirer has said it is up 0.6% to about 352,600 in daily circulation.

At the big three national papers, The Wall Street Journal reported that daily circulation rose 0.6% to 2,062,000. USA Today is expected to show gains, according to sources.

The New York Times, however, will most likely be flat to down, according to comments made by executives during a Q1 earnings call last week. "We are expecting circulation declines at our properties, slight declines to mid-single digits," said New York Times Co. CEO Janet Robinson during the call. She attributed the drops to the trimming of third-party circulation -- part of the other-paid category, which also includes employee, hotel, and Newspapers in Education copies -- and a focus on individually paid categories.

That refrain is likely to repeated often next week since publishers are still paring down other-paid circulation considered to be "less valuable" by advertisers. It's a trend that started well over two years ago, thanks to the circulation scandals of 2004, when it raised the level of scrutiny on the data.

Gary Pruitt attributed half of the McClatchy decrease to the culling of third-party circulation and the typical run rate, meaning the natural losses in circulation due to readers flocking to the Internet for news.

He said that when ABC relaxed the third-party rule in the 1990s, McClatchy opposed the move. While the company was more judicious using third-party circulation, Knight Ridder wasn't. "Many newspaper companies used [third-party] to grow circulation. McClatchy didn't rely on it to a great extent, but Knight Ridder did," he said during the call.

In effect McClatchy is busy trimming third-party circulation from the 20 former Knight Ridder papers it acquired last year.

Frank Whittaker, vice president of operations at McClatchy, said during the call that while circulation is falling the company is concentrating on home-delivered copies and its raising retention rates.

While the overall numbers look bleak, there is a renewed focus on the part of publishers to increase individually paid circulation and to lower the churn rate. Since the industry is selling fewer copies, when they do snag a subscriber they want to make it count.

John Murray, vice president of circulation at the Newspaper Association of America, pointed to a heartening trend amidst the troubling data: stops are down, and retention is up.

On Tuesday, Scarborough Research released a report measuring the total audience of 135 papers in 74 markets. Many papers increased their reach by several percentage points when their online properties were taken into account.

Furthermore, the Newspapers Association of America released record-breaking online newspaper readership figures on Monday. During Q1, newspaper Web site traffic rose 5.3%, hitting an all-time high.


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