November 8, 2007

USA Today and WSJ Mask Serious Circulation Problems at Most Other Major Papers

Filed under: Business Moves,Economy,MSM Biz/Other Ignorance — Tom @ 5:20 pm

It is understandable, but not forgivable, that business reporters at Old Media newspapers might think that the economy is in bad shape. They first have to get past how poorly most of their employers are doing. The industry as a whole has not been doing well, and it’s been that way for quite some time.

This table illustrates that point (September 30, 2007 figures are at this post, which originally came from this Editor & Publisher article, which will soon disappear behind its firewall; March 31, 2005 figures were estimated in reverse using annual percentage changes reported as of March 31, 2006, because older data I thought would remain available no longer is):

NewspCirc033105and093007

Daily circulation at the top 20 US newspapers as of September 30 is down 7.6% from 2-1/2 years ago. USA Today is the only paper that has increased its circulation. Excluding USA Today and the Wall Street Journal, which have mostly held their own, the remaining 18 in the top 20 have dropped by 10.6%. I believe that there’s less than meets to the eye to the drop at the WSJ, because the publication has many online subscribers who do not receive the print edition.

I did not do a Sunday comparison, but the situation appears to be just as bad, if not worse. For example, the New York Times’s Sunday circulation declined over 7% in just the past year.

The one near-exception to the carnage in the non-WSJ-USAT 18 is the New York Post, which has dropped less than 2% in the past 2-1/2 years, and actually has has several periods of increasing circulation during that time.

Please don’t tell me that bias, errors of omission, and errors of commission have nothing to do with the steep declines at the other 17, and that it’s all because of the Internet — especially at the papers having percentage declines that go well into double digits.

Cross-posted at NewsBusters.org.

______________________________________

UPDATE: Welcome, Instapundit readers! Some fun with numbers — the 10.6% decline in the past two years for the non-USAT-WSJ 18 noted above is 4.4% a year, compounded. That may not seem right, but .956 to the 2.5 power is .894, or a 10.6% reduction. That’s pretty steep.

UPDATE 2: The WSJ’s print vs. online situation makes it clear that the paper, despite flat print numbers, has in reality grown significantly since the dawn of the Internet. This New York Times (ahem) correction lays it out:

An article in Business Day on Tuesday about circulation declines in the newspaper industry misstated the number of subscribers to The Wall Street Journal Online who are counted in the newspaper’s print circulation. About 350,000 online customers — not all 1 million — also pay for a print subscription and are counted in the weekday print circulation of 2 million.

So the WSJ has 650,000 paying subscribers (1 million minus 350,000) who are online-only, including yours truly. Add that 650,000 to the paid print base of just over 2 million, and you have what is by far the largest group of paying daily news publication subscribers in the country.

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42 Comments

  1. Tom – is the data you’ve archived from E&P for the average net paid weekday circulation? I’ve tracked the decline of the NYT using the circulation data they put in their 10-Ks, so I’m wondering how directly comparable the figures are – they seem high to me.

    Comment by Ironman — November 8, 2007 @ 6:33 pm

  2. #1 Ironman, the linked post says “Total Paid Daily Circulation, Monday through Friday average.” I don’t know what’s in the 10Ks without more looking than I have time for, but if E&P seems high, it might be because it includes newstand sales and discounted-copy sales. Maybe the 10K is paid subscriptions, or even paid full-rate subscriptions.

    Comment by TBlumer — November 8, 2007 @ 6:54 pm

  3. Use the Internet Archive at archive.org to find archived copies of web pages. If the URL fails use the Website link. It’s invaluable.

    Have the circulation scandals been taken into account?

    Poynter Online at poynter.org has an excellent article by Rick Edmonds from 2004. “Ignoring the Elephant in Newspaperland – Effective circulation losses are 50 percent worse than we have been told.”

    “We have just had this unprecedented wave of faked numbers by four big-city papers: Newsday; its Spanish sister daily, Hoy; the Dallas Morning News; and the Chicago Sun Times.”

    I believe circulation counting methods were adjusted afterwards, giving higher, but probably softer, numbers.

    Comment by Ydobon — November 8, 2007 @ 9:55 pm

  4. Do you know if USAToday includes hotel give-aways? That seems to be the only paper in most business hotels these days, and seems to be an unfair bias for their numbers.

    Is the NYPost more right-leaning than left? And where would the Washington Times fall on your list?

    Comment by sbaxter — November 8, 2007 @ 9:56 pm

  5. Reflections of a Newsosaur calls it Sunday, Bloody Sunday, with an excellent graph of total circulation for each of the last 20 years. It’s grim.

    The previous article on the site stated “publishers, editors and ad sales people…ought to be scared as hell about the future of their industry.”

    Meanwhile Recovering Journalist has The Chasm. The first of a three part series. “we will see unspeakable changes in the industry over the next few years…some newspapers will close.”

    Grimmer.

    Comment by Ydobon — November 8, 2007 @ 10:33 pm

  6. #2 – Adding in newsstand and discount sales would make sense, but without having seen how the NYT’s circulation auditing firm determines the average net paid figure they use in their 10-K though, I’m reluctant to mix and match the numbers.

    If I had to choose a number to cite however, I’d trust a number in a post-SOX annual report a lot more than one in a trade publication. For all his flaws as a manager, I don’t think Pinch wants to invite an SEC investigation.

    Thanks for following up!

    Comment by Ironman — November 8, 2007 @ 10:50 pm

  7. #4, I’m sure USAT uses hotel giveaways because the hotel almost surely pays for them (deeply discounted). NY Post leans rights, and the WashTimes circulation is apparently about 100,000 per Wiki.

    Comment by TBlumer — November 8, 2007 @ 11:02 pm

  8. #3, I don’t do that enough. Thanks. I found something related that’s nice to have, but not exactly what I wanted. I’ll take it.

    Comment by TBlumer — November 8, 2007 @ 11:07 pm

  9. Also remember this is the first month they reported statistics under the new revised calculation system. So I don’t know if this is straight hard copy circulation numbers.

    For details on the change
    http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003668121

    For stats on the visitors at the top 100 newspaper websites a spreadsheet can be downloaded here

    http://www.naa.org/TrendsandNumbers/Newspaper-Websites.aspx#spotlight-Total-Web-Audience

    Comment by Right2thePoint — November 8, 2007 @ 11:23 pm

  10. I would agree that USAT seems to have a unique model where they get entities other than the targeted reader to pay for the paper. Which seems to work for them.

    Comment by dave — November 9, 2007 @ 7:16 am

  11. [...] I admit it, I am alien to newspaper ways.   Some elements at the PD were trying to do something about a bad situation, It appears that Diadiun is not in that camp. Filed under: media by — Dave @ 10:19 pm [...]

    Pingback by NixGuy.com » Jeff Jarvis vs. Ted Diadiun on WO — November 9, 2007 @ 7:17 am

  12. bizzyBlog, good work on tracking the Newzee’s circ figures…helps to keep ‘em honest….how long till the bankruptcy tally is published?

    Comment by Vaquero — November 9, 2007 @ 8:37 am

  13. As one of our most respected founding fathers, Benjamin Franklin had many accomplishments during his life. One of record was his successful newspaper published out of Philadelphia. While there were many other newspapers published during this time, his newspaper, by a wide margin, was the most popular. Why? Franklin explained that his paper was not biased to either the left or right. He said he would not alienate either political side with articles or editorials in his newspaper. As a result of this policy, everyone enjoyed reading Franklin newspaper, which drove his readership to very high levels.

    His successful newspaper empowered many of his future accomplishments.

    The New York Times and many other newspaper have clearly shown that a left wing agenda is more important to them then having a viable business model. Readers and many investors have come to realize this and have pulled away. If political bias was a good business model, you might enjoy a ‘Bud Right’ this evening.

    Doesn’t this show that the guys who try to influence our thinking, aren’t really all that smart that they would let their business continue to decline in such a fashion? Benjamin Franklin had common sense, Pinch and his pals display a profound lack of it on a daily basis.

    Comment by Matt Smith — November 9, 2007 @ 8:38 am

  14. [...] [Top Story] T. Blumer offers estimated comparative sales for the United States’ top-30 newspapers over a 30-month period, and the results aren’t pretty: [...]

    Pingback by Journalista - the news weblog of The Comics Journal » Blog Archive » Nov. 9, 2007: Shorter Journalista 16 — November 9, 2007 @ 8:44 am

  15. #9, I’m afraid that we’re going to see print-copy sales get de-emphasized and maybe even disappear in the next 12-18 months.

    I don’t object to the new measurements, of course. But they should supplement the circ numbers, not replace them. I’m afraid the industry wants to see the circ numbers go away.

    #13, Rush predicted many years ago (at least 8-10) that the nets and the newsies would not let business considerations get in the way of their agenda when their business began to suffer as a result of their agenda. As usual, or at least so far, he has been right.

    Comment by TBlumer — November 9, 2007 @ 9:39 am

  16. #3, I think this post-dates the scandals, but the proof would be in seeing the original 3/31/2005 numbers (before audit/scandal adjustments, if any) instead of the ones I reverse engineered from 3/31/2006 data.

    Updated response to #3: I just noted that the Dallas Morning News was not able to be compared because I did not have a 3/31/06 figure for it. I believe that may have been because of a circ scandal at that paper.

    Just looked it up ….. it happened a year earlier:
    http://www.ajr.org/Article.asp?id=3836

    Apparently in March 2006, the Audit Board of Circs still did not feel they could report anything credible.

    Comment by TBlumer — November 9, 2007 @ 9:42 am

  17. It would appear that those sticking closest to the left in the list above, have fallen the most (NYT,WP, SFC), while those who are more balanced (although still not very balanced), NYP WSJ, have fallen the least. Anyone else notice that? I wonder if advertisers will.

    Comment by Brad Garton — November 9, 2007 @ 10:15 am

  18. USA Today and WSJ Mask Serious Circulation Problems at Most Other Major Papers…

    This story has been submitted to Stirrdup. Your support can help it become hot….

    Trackback by Support this story on Stirrdup — November 9, 2007 @ 10:37 am

  19. Could the fact that none of the MSM (including newspapers) are neither timely nor truthful and people are starting to realize this. That’s why I canceled my newspaper. All I read were the same lies of spouted by the regime.

    Comment by JSG — November 9, 2007 @ 10:48 am

  20. #17, that is exactly right. The three that are doing the best job are gaining, or bleeding the least. The real outliers are paying dearly. Even in the most recent 12 months, the NYT, which (finally) had a fall in circ greater than the average of the others after treading water for the last couple of years.

    Comment by TBlumer — November 9, 2007 @ 10:55 am

  21. [...] 9, 2007 The Shrinking Star Ledger Posted by Cranford Pundit under Uncategorized   Here’s a fun chart. It is tiresome thatso many bloggers and new media types revel in the schadenfreude that old-time newspapers are in their death spirals. But I can’t resist. [...]

    Pingback by The Shrinking Star Ledger « The Cranford Pundit. — November 9, 2007 @ 11:21 am

  22. #15

    They’d rather die on their knees than live on their feet.

    Fred Reed at fredoneverything.net gives the best insider view of news reporting I’ve ever seen. Search his site for “journalism” or “newspaper.”

    An Oozing Of Gray Sludge – Reflections On Our Media of Communication explains it all.

    “Tuesday, April 20, 2004 – I love the media. They remind me of a man who bangs on his thumb with a hammer and wonders why it hurts.”

    “I don’t wonder why circulation falls. I wonder why it hasn’t fallen more.”

    Comment by Ydobon — November 9, 2007 @ 11:30 am

  23. Do the NYT circulation numbers include the piles located every day in buildings around my campus? Most of them disappear unread into the fine arts building to bravely defend table tops and other horizontal surfaces.

    I imagine my school is not the only one trying to foist off a few hundred copies a day on the student body.

    As for USA-Today, if hotels are willing to buy them to give to guests, I see no problem with that. At least someone is still buying them…

    Comment by Tim in PA — November 9, 2007 @ 11:34 am

  24. From “Bloody Sunday” linked above. “Sunday traditionally accounts for about half the total ad sales for the typical newspaper.”

    That’s why the NY Times 7.59% Sunday loss is such a big deal. Looks like the Sunday and daily circs need to be averaged together to give an accurate reflection of revenue loss. So it may be worse than the daily data shown above.

    Awesome work in any case.

    Meanwhile, via McClatchyWatch, McClatchy Meltdown. Deathwatch.

    Comment by Ydobon — November 9, 2007 @ 11:45 am

  25. #23, if the school is paying for those copies of NYT, yes. Otherwise, I would assume no, unless the NYT has figured out a way to fool the Audit Board of Circ auditors.

    #24, I don’t have as much Sunday data, but it something I intend to get to 6 months from now, assuming the industry still publishes clean circ numbers, which I have reason to doubt, based on some of the new metrics being touted.

    Comment by TBlumer — November 9, 2007 @ 12:12 pm

  26. Somebody asked if the NY Post was more right-leaning than left. Some will say balanced, some will say right-leaning, but two things are clear- it’s the least left of any of the NY dailies, and more telling: It’s owned by the same guy who owns Fox News.

    Comment by Gomez Addams — November 9, 2007 @ 12:36 pm

  27. If your library has the Editor and Publisher yearbook, you can find the circulation figures (daily and sunday) for each of these newspapers.

    Comment by Lou Shumaker — November 9, 2007 @ 12:51 pm

  28. I don’t think right or left leaning has all that much to do with it…I think the problem is one of being insipid. There are more ads than news articles, few investigative reporters, reporters interviewing each other (let’s not rock the boat with a new idea or analysis – aka laziness) rather going to the source of information, the sports section is the biggest part of most newspapers (yawn…), what is pawned off as news are car wrecks and stabbings. What is left of the “news” is presented as a personality parade rather than issues. It has all got too tiresome. All they have IS a business model…a model similar to our political model where one tries not to say anything worthwhile or stimulating and hope no one notices…and they want me to pay for it and then haul it up to the street for weekly recycling. No thanks. TV news is right behind them. Luckily we all now have options.

    Comment by igag — November 9, 2007 @ 1:21 pm

  29. When newspapers fudge the numbers from the St. Petersburg Times in 2004. Doesn’t directly relate to the current circulation, but the reporting on the circulation scandal is good.

    It also included this information on circulation calculations, which may or may not still be accurate.

    “Faced with gloomy numbers, the U.S. newspaper industry and its audit bureau agreed in 2001 [3 years prior to the scandals] to change the way they count paid circulation.”

    “Previously, only papers sold at 50 percent or more of the cover price counted as paid circulation that could be counted in the setting of ad rates. Under new rules, the bar was lowered to 25 percent.”

    “The change meant that newspapers could increase circulation by selling highly discounted subscriptions. There was one treacherous side effect to these cut-rate deals: New readers attracted by bargain prices tend to drop the paper when the discount ends, so newspapers have to spend more on marketing to retain the same number of subscribers.”

    “Another circulation change allowed publishers to include as paid circulation papers sold at bulk discount to entities such as airlines, hotels and sports teams that distribute them to patrons. These so-called third-party sales, which are hard to track and of questionable value to advertisers, grew rapidly.”

    “(Newspapers donated by subscribers or underwritten by third parties for students through the Newspapers in Education program are considered paid circulation and were prior to 2001.)”

    A 2004 article from the American Journalism Review reported newspaper circulation churn rates at 58%. Every year over half of subscriptions ended.

    “Churn is the newspaper industry’s soft underbelly.”
    “churn continues to grow.”

    Comment by Ydobon — November 9, 2007 @ 4:34 pm

  30. I’ll be frank. The churn number shocks the bleep out of me. It seems ridiculously high, but there it is.

    Comment by TBlumer — November 9, 2007 @ 4:43 pm

  31. #30 TBlumer wrote, “The churn number shocks the bleep out of me.

    Glad it wasn’t just me. Read the fraud methods, add in the circulation “counts”, and those numbers aren’t just soft, they’re a soap bubble.

    I’m an utter novice, so I have to ask, do advertisers really pay for this?

    Comment by Ydobon — November 9, 2007 @ 4:53 pm

  32. Looks like that 58% churn rate isn’t annual. Maybe semi-annual. Look at this from 2003.

    Newspaper cold calling headed to deep freeze? from Newspaper & Technology.

    “Most newspapers have a yearly churn rate exceeding 100 percent, publishers have to get four new orders for every existing subscriber merely to maintain their current subscription levels.”

    The primary recommended solution? “Establish a task force to address the issues.”

    In other news, on Oct 11, Roy Peter Clark of Poynter Online told journalists of their Duty to Read the Paper, specifically hardcopy. The reaction in the comments there and around the journosphere was discouraging.

    yearly churn rate exceeding 100 percent” in 2003 before the DNC blocked cold-calling for those vital four new orders for every existing order.

    Paid subscriber base?

    Comment by Ydobon — November 9, 2007 @ 6:55 pm

  33. #32, I believe the churn rate looks high because people don’t subscribe after trial periods.

    Bear with me: If you have 100,000 subscribers in a town with 1,000,000 bodies (not adults) and maybe 400,000 households, you’re doing everything you can to go after the other 300,000.

    If you lose 20K from your base and pick up 20K in newbies, your turn is 20%, if every trial subscriber becomes a newbie.

    If it takes 100K trial subscribers to generate the 20K in newbies, you’ve got 100% turnover (20K who left plus 80K who didn’t sign up after trial, divided by 100K). That’s not pretty, but it’s not as dire as it appears.

    I think this scenario is probably in the neighborhood of what is happening. However, my scenario doesn’t explain the “four new orders for existing subscriber” quote, so I may be missing something here — or the quote is off track. In my scenario, it took five new orders to get one NEW subscriber.

    Maybe newsies reading this can shed more light.

    Comment by TBlumer — November 9, 2007 @ 7:44 pm

  34. The “free” USA Today at hotels is paid for by the guest. Most hotels have a clause in the registration form that a guest signs that accepts the charge for the paper. A guest usually has the option of opting out of the charge. So, yes, hotel “comps” are technically paid circulation. It would be interesting to learn how much of USA Today circulation comes from this method of circulation.

    Comment by vibemanjoe — November 10, 2007 @ 9:57 am

  35. #33, That’s a plausible scenario, but the article is too vague for reliable back analysis. Clarity was sacrificed for sensationalism. Readers should not have to do speculative back extrapolation to understand the facts of a story.

    Interesting how attempting to analyze newspaper circulation problems shows up poor reporting, which may well explain the circulation drops to begin with.

    Try this. The 58% churn number really means 42% of the subscriber base retains its subscription throughout the reporting period, presumably 6 months. Four times that many people come and go during that same period, or 168% if you seek sensationalism. So the “internal churn rate” of the flighty 58% of the circulation would be 2.9, giving an average duration of 2 months per individual churner.

    Think of a restaurant where 42% of the nightly clientele are regular customers. Individuals of the other 58% change out every two months, and could be paying discounts of up to 75%.

    Comment by Ydobon — November 10, 2007 @ 11:43 am

  36. Sinking Circulation

    the total paid circulation of both the Post and the Rocky Mountain News tumbled by 11.9 percent — a total much worse than the average 2.6 percent dip experienced by newspapers nationwide. The Sunday Post’s figures were even worse, sliding 13.5 percent.

    ‘third-party sales,’ a term used to describe papers delivered to non-subscribers in upscale areas as part of agreements with advertisers.

    There’s some other stuff in the article if you want to try and dig it out.

    Re the San Fran Chronicle’s 22% drop over the last two years, from last April, When Do You Stop the Presses?

    At Hearst Newspapers’ San Francisco Chronicle, according to a deposition given by James M. Asher, the company’s chief legal and business development officer, losses of $330 million piled up between mid-2000 and September, 2006, better—or should I say worse?—than $1 million a week.

    and

    One senior executive describes the climate like this: ‘If you told me 24 months ago that revenues would be declining as much as they are today, I’d say you were smoking dope.’

    Read the whole thing.

    Comment by Ydobon — November 10, 2007 @ 7:29 pm

  37. Recovering Journalist has Cooking the Books, a post on the new circulation calculations.

    Some points:

    “newspapers will be considered paid…regardless of the price”

    “There will no longer have to be payment for third-party copies or Newspapers in Education”

    “Hotel and employee copies…will be reclassified under a new paid-circulation category.”

    Reaction:

    “Phew. That’s some creative accounting. Those papers given away to schools or left unread in front of hotel room doors just became big winners. What’s next? Counting papers that are thrown away when the presses mess them up? Counting papers scattered around newsrooms? Counting any reader who looks at a paper over somebody’s shoulder on the bus? (Oh, wait–I think the new “readership” numbers may actually count those!)”

    Link-through to Editor & Publisher at the link.

    Comment by Ydobon — November 13, 2007 @ 7:52 pm

  38. #37, Wow.

    They’ve also apparently eliminated the possibility of a circ scandal. As long as you printed a paper, no matter how used, it counts. Brilliant!

    Do you think they’ll retroactively restate according to the new standards, or just announce a “huge improvement” 6 months from now?

    Comment by TBlumer — November 13, 2007 @ 10:45 pm

  39. I wonder what the correlation is between circulation and revenue from advertising – I suspect that ad revenue is even further down.
    The centralisation of news has worrying consequences for democracy…

    Comment by crash course — November 14, 2007 @ 10:57 am

  40. #39, ad revs are down a lot, and in general I believe you’re correct that the % down is greater than the circ losses.

    I don’t quite understand your centralization comment, esp when most national and international news still originates from a very few sources (AP, AFP, BBC, Reuters).

    Comment by TBlumer — November 14, 2007 @ 11:25 am

  41. #38 TBlumer wrote (quoted in italics),

    Wow.

    Yeah.

    They’ve also apparently eliminated the possibility of a circ scandal.

    Circulation figures will be meaningless, or nearly so, and (probably) have been for some time. Good odds the new procedures are ratifying/codifying existing practice, like many computing standards did.

    As long as you printed a paper, no matter how used, it counts. Brilliant!

    Their only limits now are paper, production, and delivery costs. The next step is debasing the concept of “printing a copy.” Use less ink on a second stage black-and-white only print run during normal downtime to save money and put the results uncollated into the dumpster?

    Do you think they’ll retroactively restate according to the new standards, or just announce a “huge improvement” 6 months from now?

    No. I don’t think they can afford the investor attention that might bring. They’re Wile E. Coyote after he’s run off a cliff. They won’t fall until someone notices.

    Which, to be honest, is what caused the investigation that led to the circulation scandals. Advertisers noticed they weren’t getting results commensurate with the reported circulation.

    Now circulation numbers are just to fool the punters. Advertisers are probably watching return on ad money like hawks.

    Comment by Ydobon — November 14, 2007 @ 1:32 pm

  42. #38 TBlumer wrote, “Do you think they’ll retroactively restate according to the new standards, or just announce a “huge improvement” 6 months from now?”

    The last relaxation of the rules, in 2001, barely held weekly circulation even, and only for one year. Then drops resumed and worsened, despite the looser standards.

    No effect on reported Sunday circulation, production costs probably too high.

    The news audience, paper and electronic, has been shrinking since long before the Internet, and despite a large population increase.

    Comment by Looking Glass — November 16, 2007 @ 5:00 pm

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