What Wall Street Thinks of Readershp: Not Much

By: Jennifer Saba It's no real shocker that Wall Street types and newspaper executives don't agree on all points. In the May edition of the Morton-Groves newsletter, however, media economist Miles Groves brings home just how differently the two camps think on the topic of circulation and readership.

Groves recalls that he recently took part in a panel at the International Newspaper Marketing Association World Congress that included three analysts and three newspaper marketing executives. The theme was how Wall Street valued newspaper properties.

"The most interesting point," wrote Groves, "was that Wall Street viewed newspaper circulation as the 'gold standard' of value." The analysts were concerned that standard has been tarnished by the circulation scandals of last year.

Despite the industry's push towards readership, Groves said that while the analysts applaud readership, circulation was and still remains the leading barometer of the strength of the industry.

"The point," wrote Groves later in the newsletter, "is that directionally readership trends, like circulation trends, are downward. The measures are not substitutes. ... Readership is great for selling advertising and for circulation development, but the key metric for industry health remains circulation. Perhaps it's time that we stop confusing the two metrics."

Meanwhile, media analyst John Morton weighs in on the latest circulation plunge. The Do Not Call list, executives taking a conservative approach to counting the numbers, and the Internet all played into this spring's bleak numbers.

But Morton wrote the real trouble is that "young people are not taking up newspaper reading in near the numbers they used to. ... The problem is real and so far intractable, despite the best efforts of many newspapers in trying to reach out to the young."