What? You Gained Circ?

By: Jennifer Saba And Joe Strupp Keith Foutz is a happy man. As corporate circulation director for Western Communications, one of his papers, The Bulletin, in Bend, Ore., has pulled off a feat that relatively few newspapers today can claim: Circulation is actually growing ? strongly.

The Bulletin joins a group of about 145 newspapers (20% of 789 dailies reporting their circ to ABC) that posted gains in daily circulation in the September 2005 FAS-FAX, according to the Newspaper Association of America.

For that six-month period, the Bulletin reported significant increases. Daily circ grew 7.5% to 29,308 copies, and Sunday circ rose 5.4% to 30,104 copies. What's more, this is considered "quality circ" now coveted by advertisers and analysts. Only 4.6% of its daily circulation is other paid. (That category includes hotel, employee, Newspaper-in-Education, and third-party copies.) Other-paid circ on Sunday accounts for a scant 1.3%.

And discounted copies? Well, the Bulletin doesn't discount. "Our strategy is based on quality versus quantity," says Foutz. The Bulletin uses normal methods of selling copies, such as kiosks, carrier promotions, or single-sheet inserts. But the rub is, subscribers or would-be subscribers have to pay a minimum of three months in advance, in full.

Foutz says that translates to about 88% of its 24,000 home subscribers. Of those, about 14,000 pay six months or longer up front. He explains that being part of a family-run company helps matters since the pressure isn't as great to continuously produce higher profit margins.

"Our circulation strategy is driven by circulation numbers and not circulation revenue," he says. That means fewer rate adjustments. The Bulletin has kept its subscriber price point at $10.50 per month for the past five years.

And while many newspapers have been in the habit of cutting content ? most recently, the Los Angeles Times kicked its Outdoors section out the door ? the Bulletin is adding. The newspaper redesigned its business section, increasing coverage of stocks and local businesspeople. It also created a health and fitness section.

In addition, the paper rewards its carriers for "perfect service" to ensure that customers are satisfied with delivery. If a carrier can go one week without any subscriber service calls, then the Bulletin provides plastic bags and rubber bands for bundling the paper for free.

The Bulletin isn't the only paper making strides. The Bakersfield Californian increased its circ as well, with daily up 1.5% to 63,252 copies. About 5.9% of its circulation is considered other paid and, like the Bulletin, the Californian doesn't discount on weekdays.

The paper ropes in and keeps readers by pushing its automatic-payment program. "We do not have to chase them down for a payment each month," says Cristi Tallman, the Californian's circulation director. "About 80% of our subscribers are on a long-term or automatic payment plan. That is how we keep our churn low, with six-month and 12-month plans."

In addition, the paper has upped its kiosks program, strategically placing a dozen or so outside major retailers.

The Indianapolis Star was one of the few big metros to grow its circulation using many of the same methods. Daily circ inched up 0.3% to 252,862 and it doesn't have any discounted copies. Brian Priester, the Star's vice president of circulation, credits growth and lower churn to automatic payment programs as well. "We have concentrated a lot on retention this year, getting as many people as we can," he says. Nearly half of the Star's subscribers are on the auto-payment plan.

And here's something that is increasingly rare: The Palm Beach (Fla.) Post, which reported a 0.6% rise in daily copies, is stepping up its promotional activity and adding staff. It's in a growing market, and the paper isn't resting on its laurels. Publisher Tom Giuffrida is marketing the Post using television, radio, and outdoor ad campaigns.

There's also some other good news to come out of an otherwise bleak FAS-FAX. Although overall circulation numbers for the industry dropped ? daily circulation decreased 2.6% and Sunday circ fell 3.1% ? a closer look at the numbers reveals that several papers are making good on their promise to thin out other-paid circulation. A report from Prudential Equity Research analyst Steven Barlow reveals that of the top 50 newspapers measured, other-paid circ declined 2.8%. In the prior six-month period ending March 2005, the category had increased 10%.

Some of the papers with the steepest overall drops, including The Sun in Baltimore and the San Francisco Chronicle, were hit ? but possibly helped, in the long term ? by completing about-turns in the other-paid category. (Call it the "loss-is-more" strategy.) The Chronicle experienced one of the biggest drops in overall newspaper circulation, with daily down 16.5% to 400,906 copies. However, according to Prudential, it was one of the better performers in decreasing its other-paid circ, which was down 33.2% compared to the same period a year ago.

The Sun also showed much improvement in this category, topping all 50 papers with a sizable 68.8% decline in other-paid circ. The paper now counts just 5,203 papers in that category, one reason its total daily circulation fell 8.5% to 247,193.

The Orlando Sentinel, where daily circ slipped 11.1% to 219,838, posted an other-paid circ decline of 57.2%. Since January 2005, the paper has been making a concerted effort to cut its hotel copies.

And the New York Post, which is never shy of boasting about its accomplishments, also reported one of the best drops in other-paid circulation, down 51.7%. Overall daily circ slipped 1.7% to 662,681.