Did Cutting Back on Home Delivery Help, Did Doubling Subscription Rates Work, Does Eliminating Saturday Editions Do The Job – The New US Circulation Numbers Are Out!

Philip M. Stone October 27, 2010 Follow on Twitter

The headline number for the US circulation numbers released this week show circulation still falling but no longer in freefall, so are the various strategies by publishers to stop the rot working? Not really.

Much has been made of the experiment in Detroit where The News has cut home delivery to just Thursday and Friday and The Detroit Free-Press to those same days plus Sunday. Their combined circulation was down 10% -- double the 5% national average. But it’s really worse because for The News its five-day paid circulation was down 12.4% and the two day average circulation for the home delivery was down a whopping 17.9%. No wonder, then, that publisher Jonathan Wolman called those results “disappointing” explaining, “Some of it is economic, and some reflects the shift among our readers to our digital platforms.”

At The Free-Press the five day average was down 9.1%, the home delivery two-day average was down 15.2% with the Sunday edition off a huge 16.2% compared to the Sundays 4.5% national average. The best that Rich Harshbarger, head of consumer marketing for the Detroit Media Partnership that handles the business side for both newspapers, could say was, “All media, certainly local media, have been challenged in the past several years to retain their audiences.” You don’t say!

Of course, the newspapers have big financial savings from the part-week home delivery but from the gloom expressed by executives one can imagine those savings do not outweigh lost revenue, especially as advertisers will look closely at those new circulation numbers.

And then there’s the Minneapolis Star Tribune, not long out of bankruptcy, that tried a unique ploy – dump the Saturday newspaper and replace it with an early Sunday edition. Now when it comes to the ABC numbers that’s a little sneaky because it means that previous Saturday circulation is now part of Sunday circulation resulting in the newspaper reporting Sunday sales up by 27,000  with the bragging headline, “Sunday Circulation Up 5.7%” so this must be a big success? Well, no, you need to look a bit closer.

In gaining those 27,000 extra Sunday sales – which means a higher newsstand price and higher advertising rates – the newspaper gave up 60,000 Saturday sales which means  it gained about one Sunday newspaper for every two Saturday papers lost. Only the bean counters will be able to translate whether this was good or bad for the overall bottom line, but you have to admit it’s an interesting strategy.

The newspaper will undoubtedly talk about the readership of its digital replicas – it sells subscriptions to the digital edition at a cut rate to its print subscribers – but here’s the problem for advertisers—there is no reporting on how many people are reading both print and the electronic editions so how do you know the real readership without duplication?

That’s the issue, for instance, also in Denver where The Post in its lead on its circulation bragged, “Online readership of The Denver Post increased over the past six months while print-edition circulation fell.”  The next two paragraphs told how great online was doing -- an 11% increase in online readership and that in September its web site had 6 million unique visitors. Then we’re told the print edition saw a 7% fall for Monday-Friday and Saturday-Sunday was down 3%.

But again advertisers reading this will ask – how many of those online visitors also subscribe to the print edition? That’s the kind of information newspapers still don’t/can’t provide which is one reason why advertisers take all of this with grains of salt.

Another trend has been for publishers that own various newspapers within a set circulation area to combine all of that circulation under the name of the primary newspaper. Thus in San Jose, California the Mercury-News now shows circulation of  477,592  putting it in eight place nationally which sounds fantastic when you think that  a year ago it was in 26th place with just 225,175 circulation.

The Mercury-News is part of MediaNews and Dean Singleton bought it off McClatchy as part of its Knight-Ridder deal. MediaNews also owns most other newspapers in the San Francisco Bay Area, save the San Francisco Chronicle, so to encourage national advertisers to make a one-time Bay Area buy for all of those newspapers they all came under the Mercury-News umbrella. Thus The Oakland Tribune became the Oakland edition of the Mercury-News;The Contra Costa Times became the Contra Costa edition of the Mercury-News, and so on. And with The San Francisco Chronicle way down at just 223,549 it’s no wonder Media News brags to national advertisers how it is dominating the country’s fifth largest market. Are national advertisers really so taken in?

But total circulation for the Mercury-News under this ploy is also falling. Six months ago that combined circulation was 516,701 but in the latest ABCs to September 30, it’s now 477,592 which means a 7.6% drop – 50% more than the national average.

And much was made that only two newspapers in the top 25 markets scored daily circulation increases -- The Wall Street Journal and The Dallas Morning News.  But is it really true in Dallas?  Look closer into the numbers and they include the 9,567 circulation for the Denton Record-Chronicle which is now folded into the Morning News. Without that addition the newspaper’s circulation actually was down 3.4%!

Dallas is home to the philosophy that circulation income should come close to equaling advertising revenue – a sharp break from the 80% advertising-20% circulation revenue model of the past.  The price of the daily newspaper doubled within a year and circulation revenue is now around 30% which shows either readers love their Morning News or advertisers are slipping away or some combination. But perhaps the bottom line there is that even with a true 3.4% decline that is less than the national average.

Looking at the top 10 markets some of the losses are worrying – The Los .Angeles Times down 8.67%, The Washington Post off 6.43%, The New York Daily News down 5.82%, The New York Times down 5.52%,  and USA Today off 3.66%.

In past circulation reports newspapers could rightly claim they had cut distribution to outlying areas and that was a big reason for circulation declines, but today that distribution exercise is mostly finished and for the numbers to still show these kinds of declines means that for the most part subscribers themselves are still choosing not to buy.

Not encouraging.

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