10 Questions on the ABC's of Circulation Loss

Newspaper publishers must be beginning to feel like George Bush, waking up each morning and afraid to peek out from under the covers lest The New Numbers come and grab him. The President's numbers keep dipping, and so are the publishers'. It's bad enough to have the vp/circ (and what's the half-life of that job these days?) come into your office with a drawn face. But every six months you get the face the industry's off-key music: the release of the newspaper FAS- FAX report. It's enough to give publishers Numerophobia (yes, it's real -- and treatable!).

That report offers the most immediate look at what's happening with good old newspaper print circulation, with yesterday's numbers covering the period from October, 2005 through March, 2006. As observers awaited the date, the bets revolved around whether the report would best (or worst) the last numbers, reported last November. Those showed a 2.6% daily decline and a 3.1% Sunday decline. It was tight over/under, with the new numbers almost exactly paralleling those -- 2.5% daily decline and 3.1% Sunday turn-down.

What is scary about those numbers is that it is starting to look like a trend, a  sudden acceleration we began to see with the March 2005 report.

It isn't that circ numbers haven't been in decline for a long time. Yes it used to be true that as many as seven of 10 households took a daily newspaper back 30 and 40 years. Now that's a mass medium. Those numbers tumbled down, the toll taken by radio, TV, busier lives and then the Web. And as they've tumbled, a percent or so, more and less a year, publishers have been able to keep pricing advertising up and up.

Imagine the graph: circ slowly cascading down, ad rates constantly moving up. Unless they are very close to retirement,  publishers have experienced a few night terrors as they saw the crossing of those lines. But then day arrives again, and the pricing continues.  With the further splintering of the mass market, the new wake-up call may become a bit more harrowing.

As we look at the report's numbers, a few questions are in order:

1. Isn't clearer than ever that metro papers have less time to restructure for the Web than do community dailies? The WSJ had a great piece ("Unlike Big Dailies, A Paper Prospers In Bismarck, N.D.", 2/8/06) about small papers managing the Web transition more gracefully than the big ones a couple of months ago. Take a look at the heavy losses -- Atlanta Journal Constitution (6.7%), L.A. Times (5.4%), Boston Globe (8.5%) -- and y0u see disproportionate impacts accelerating.
2. Can you see a three-way divide coming: big national papers (with national/global print/web brand and reach; community papers better able to connect and distinguish with "Local" and the big regional metros caught betwixt and between? The NYT was a bit up, the Journal just a bit down and US AT flat, all better than the regional metros. Community dailies were largely flat.
3. Speaking of national papers, and national verticals -- The Times (NEWS), The Journal (BUSINESS), USAT (NATIONAL TAB IN BROADSHEET CLOTHING) -- isn't it time for a new national sports daily? Some of us fondly remember the short-lived "The National", which lasted 18 months, after putting together an all-star sports-writing staff.  These new print verticals in business, news and sports, with their web analogs (or will it be inside-out?),  may be a winning story.
   
4. What's the Chicago Tribune's secret, with daily circ  up .9% to 579,079 and Sunday up .3% to 957,212? Publisher David Hiller cited a new "At Play" Thursday section, for instance, but I couldn't find any corollary of it on the Trib website. Owas it the Chisox' loooooooooooooong-awaited World Series victory?
   
5. Okay, where do these circ reports put the industry on Elizabeth Kubler-Ross' "Five Stages of Grief" spectrum? ( A brief tour, courtesy of Wikipedia) : Denial and isolation: "This is not happening to me."; Anger: "How dare God do this to me."; Bargaining: "Just let me live to see my son graduate."; Depression: "I can't bear to face going through this, putting my family through this." Acceptance.   Insert your own explainers, based on your own office conversations.
6. With the Seattle Post-Intelligencer down another 9% to 131,769 daily circ, how long before the rumors of it going online-only come true, providing a great case study for the rest of the press? With the Seattle joint operating agreement falling apart, the time may be close.
   
7. What's going on in the Bay Area, and does it have portent for the industry? The Chron dropped another 15.6%, on top of  double-digit losses  six months ago. And the Merc lost 7.6%. Both are among the greatest losses, signifying perhaps that in regions where comfort with web news has grown longest and web media choices seem greatest, newspapers have even more to lose.
8. Does Mark Fitzgerald's  Editor and Publisher piece on Hearst's San Francisco woes and its new partnership with MediaNews have more resonance after this circ report? Reports have the Chron losing a million bucks a week.
9. Did someone say mass? Much of newspaper pricing is based on being The Last Mass Medium. Take a look at this chart of Top 50 papers. Last column shows their market penetration, now largely in 30s and 40s percentiles. That's still a lot of bulk, but less mass than ever.
10. Isn't a cruel irony that McClatchy, which had 20 straight years of circ gains wowing the industry and Wall Street, sustained its first turndowns just as it was buying Knight Ridder? McClatchy's losses are now accelerating along with the rest of the industry.

Comments

[Ilya Cantor]

Ken,

I will add: As you probably know, in many cases newspaper circulation is an artificial number; depending on how good the VP Circ is at managing his channels in the name of maintaining ad revs versus paying for newsprint. So then the story becomes when do they let out the spigot (drop circ to more natural levels) to save money, and by how much (so as to be able to put through some semblance of an advertising rate hike.)

Regards
Ilya Cantor
http://getcareer.blogspot.com