Industry tries new routes, but numbers keep sinking. After youth focus, what's next?

By: Jennifer Saba Until about five years ago, the newspaper industry treated the idea of readership the way most Democrats considered Howard Dean: vaguely interesting, but not worth the vote. Now things have changed. At the Newspaper Association of America's annual convention in April, it was almost the only thing people were discussing. Panel after panel carved up demographics seven ways from Sunday in trying to identify the best means to reach each segment. Obviously, readership is a subject that many

papers now take very, very seriously.

Just how seriously, however, remains to be seen. Because a mere week and half after the NAA confab, the Audit Bureau of Circulations delivered a body blow: In the FAS-FAX for the six-month period ending March 2004, half of the nation's 38 largest papers reported daily circulation declines. While increases were miniscule ? fractions of a percent ? some of the decreases were whoppers (see related story, p. 10). Large dailies like The Washington Post, The Atlanta Journal-Constitution, and The Arizona Republic, for example, lost three percentage points or more in weekday circ.

On the same day that ABC released its numbers, the NAA issued its latest analysis of readership. The study suggests that daily and Sunday readership, just like the circ numbers, is slipping. In 2003, the NAA analysis reported that 54.1% of people in the top 50 markets read a daily newspaper, down from 55.4% in 2002. Sunday newspaper readership shrank as well: In 2003, the number was 62.5%, as opposed to 63.6% the year before. "There is a continual gradual decline," says Randy Bennett, vice president of readership integration for the NAA. At best, he adds, "We're in a holding pattern."

Perhaps most dispiriting, given the industry's recent efforts: John Lavine, director at the Readership Institute, noted that the biggest decline in readers was in the 18-24- year-old group. Yet there was some good news regarding that segment. "One-third of them who do read are heavy readers. Sixty-one percent pick up the paper at least once a week," he says. "That's a group in trouble, no question. But it's also true that their usage is anything but gone. They're very much with us. It's a matter now if the industry will act to build on that."

The industry is addressing youth readership with a flurry of new products, the latest the Boston Globe Foundation and WriteBoston's quarterly paper?T.i.P. ?for Boston-area high schools distributed for the first time in May. But youth-oriented papers are still huge gambles. At a May conference hosted by the International Newspaper Marketing Association, the publisher of Quick ?Belo's new Dallas daily, considered a success so far ? told the audience that circ would automatically drop 50% if they charged for the product. A.M. Journal Express, another free Dallas-based daily aimed at young commuters, recently folded after six months in operation, claiming that the timing was off.

"I'm not saying any of this to say there are not significant problems with the decline of circulation. There are," Lavine says. "Four years ago the industry recognized the problem, and hundreds of newspapers have made huge efforts to bring about change. The industry is really starting to innovate."

That may be, but it raises the question: Is the industry innovating fast enough, and do readers care?



Bracing for the worst?

One source responsible for readership at a large daily, who asked not to be named, says the answer is no: "I think we're in a lot more of a difficult situation than people want to admit publicly. It's almost like a perfect storm."

She rattles off several factors, including an explosion in alternate media, a change in telemarketing regulation and shift in attitude about paying for information. "There was a time when the conversation would be about core readers and marginal readers," she says. "We're going to see that there is no such thing as a 'core reader.'"

Other industry executives fear that a recovery in advertising and classifieds, which seems to be occurring, will only act as a flimsy Band-Aid on a problem that cuts deep.

"My concern is with the economy turning around, some companies will mistake a revenue revival for a recovery of the fundamental problems they are facing," says Bill Tanner, director of strategic research at The Dallas Morning News, about a decline in readership. "But I have Warren Buffett on my side."

He's referring to a recent Reuters story which quoted Buffett, who heads Berkshire Hathaway, saying that "the economics of newspapers in the United States are very close to certain to deteriorate over the next 10 to 20 years." And this is coming from a self-described newspaper addict and investor. "When [Buffett] starts to question the newspaper business model," Tanner says, "owners and publishers should question the model as well."

The Morning News, which recently launched two papers aimed at new readers, Quick and Hispanic al dia, is faced with the same problems that confront many other papers. Its circ dropped a fair amount this period and its readership dipped. "We have classically older readers," Tanner says. Readership, he guesses, is also declining.

And, breaking it down further, it's his guess that the core of "owned readers" (those who truly value the content provided) is dropping for the industry as a whole, while "rented readers" (those who get the paper through discounts and third parties) are becoming more numerous.

The Fort Worth Star-Telegram has been focusing on readership for quite some time as well. Gary Kromer, director of research, says they have been pushing readership as opposed to circulation?which, he's quick to add, still matters? in everything they do.

That said, the Star-Telegram declined in circ in the latest FAS-FAX (after steady gains last year) and in readership, which the paper measures in frequency. "We've seen a growth of cumulative readership across the week and month. The impact is coming from less frequent readership," he notes.

Kromer adds, however, that two positives are springing from this. First, he's noticing an increased interest in readership numbers across internal departments. Second, the data is forcing the paper to think in different ways: "We're closely examining some of the shortcomings and we're taking concrete steps to improve performance in those areas and, more important, to improve people's perception of our performance."

The Star-Telegram noticed, like many papers across the country, the Hispanic boom and has invested in the Spanish- language newspaper Diario La Estrella. The Star-Telegram also discerned from readership information that people were more interested in the subjects of personal finance, technology, health and family. "We've made it a goal here to address those issues," Kromer says.

People at the paper are concerned about declines in circ and readership, he notes, "but no one sees it as 'oh my God, we're going out of business next week.'

"I don't know which is worse," he wonders, "to have a sudden drop or a slow long-term trend? They are both pretty painful."

In Florida, however, The Orlando Sentinel's readership efforts are beginning to pay off. Bill Steiger, vice president of audience development, says that daily readership went up 4%, though Sunday remains flat. "On a weekly basis, our products and services collectively touch about 80% of Orlando adults. Our goal is to have that be 90% on a weekly basis, and 100% on a monthly basis," Steiger says.

But still he struggles. Rallying the troops internally is one challenge that almost every paper faces. And in terms of advertisers, getting them to buy based on circ and readership numbers is an uphill trudge. "It's like getting the European community to embrace the Euro," says Steiger about advertisers and readership numbers. "It's a challenge but it's a way that every other media sells. It's the fairest way. Being part of the ABC readership profile helps, but it's used more as a planning tool and ultimately we want to see it used as a buying tool."



Getting buyers on board

Kevin Campbell, director of marketing and sales at ABC, says that since his company started tracking reader profiles in 1999, they are beginning to see some traction. Two-hundred and seventy-five of roughly 800 U.S. daily papers that ABC tracks are enrolled in reader profiles.

Campbell admits more papers could support the reader profile survey. In terms of participation, the large metros are above expectation, mid-market papers (circ of 25,000 to 250,000) are right on track and papers with circ below 25,000 need to improve, he says.

"Advertisers are soaking [readership information] up like a sponge. They've been begging us for this information," Campbell says. However, he acknowledges that the readership data is used more in the planning stage, and that for buyers to start taking the data seriously ? i.e., using it to negotiate rates ? more newspapers must participate.

"The challenge in my mind is a cultural change," Campbell says. "Newspapers need to start using readership information as a complement to circulation and get away from handshake deals."



More resources are needed

It's a good thing that the industry is taking the necessary steps to increase readership, and those efforts should be applauded. It will however, take time ? and money.

"Philosophically, the emphasis on readership is there," says one source who works at building readership at a large daily. "But there is a big gap between saying it's important and really subordinating departmental needs. I think that papers sincerely want to do something about it, it's just more difficult than we would like to admit.

"We're talking about a lot of big steps that need to be taken across a lot of departments all in the same direction and that's difficult to execute. The idea that you're going to take 40 years of newspaper operations and turn it on its ear is insane."