The Audit Bureau of Circulation's Fas-Fax report for the six months ending March 31 revealed an overall drop in newspaper daily circulation of 0.9%, and daily circulation fell 1.7%, according to the number-crunchers at the industry trade group Newspaper Association of America.
"The current [decline] is not too bad," said David Cole, publisher of newspaper-related newsletters NewsInc. and The Cole Papers. More troubling, though, is what he called circulation's "cumulative problem: Pretty much every six months it drops another 1%."
The previous ABC report for the six months ending last Sept. 30 showed daily circulation fell 0.4% and Sunday circulation fell 0.7%.
The biggest declines this reporting period, according to NAA's analysis, were felt disproportionately among the smallest papers. Dailies with circulation under 25,000 fell 1.9%, while dailies with circulations between 25,000 and 49,999 dropped 1.7%. Total Sunday circulation fell 1.7%. The three national newspapers, The New York Times, The Wall Street Journal and USA Today, all posted slight gains in daily circulation.
The largest dailies, those with more than 500,000 in daily circulation, were essentially flat, declining just 0.01%. That's some good news for the very papers that have felt the brunt of the current economic slowdown. Despite the circulation strength those dailies demonstrate, they're hit hardest by the decline in help-wanted classifieds. The publicly traded newspaper companies that boast the biggest dailies in their portfolios-New York Times Co., Dow Jones & Co. and Tribune Co.-have scrambled to make up revenue shortfalls.
Still, that group of 500,000-plus circulation dailies-consisting of just 11 newspapers-also got a substantial boost by Hearst Newspapers' San Francisco Chronicle. The Chronicle posted a 13.4% gain as Hearst switched its horse in the Bay area from the afternoon Examiner to the morning Chronicle, and took some of its old subscribers along for the ride.
Traditionally, newspaper executives and observers say, midsize dailies-those with between 25,000 and 75,000 in circulation-have tended to weather economic storms better than their big-city brethren, even though their circulation story is weaker this time around.
Figures by media investment banker Veronis, Suhler & Associates show that in the past decade, the steepest industrywide circulation declines were posted in the recessionary year 1991-when overall daily circulation dropped 1.9%-to which the shuttering of several major newspapers in '90 and '91 was doubtless a major contributor. Close behind was '95 and '96, when soaring newsprint prices forced publishers to cut unprofitable circulation and overall daily circulation declined 1.8% and 1.5% respectively.
Kevin Lavalla, a Veronis, Suhler managing director, foresees the potential for similar circulation cuts later this year, as publishers contend with newsprint costs rising while revenues sink.
The relative strength of the largest papers-the top-tier of which are national products catering to the information and business elite-lends some credence to a theory of Mr. Cole's that newspapers may do well to change their marketing position.
"As long as we see ourselves as a mass medium, it's a problem," Mr. Cole said about the circulation decline. "At the juncture we start looking at ourselves as a class medium"-one selling demographics-"then the deterioration in circulation ceases to be a problem."
Mr. Lavalla, while seeing potential, via zoned editions, for newspapers to plumb better customer targeting, nonetheless took issue with Mr. Cole's hypothesis.
"Look at a city-say Pittsburgh. There's a ton of TV, a ton of radio and one newspaper," he said. "Newspapers are the mass-market medium"-meaning that's the one niche they own.
Mr. Cole, to an extent, agreed. "Therein lies the rub," he said. But, he warned, "If circulation keeps dropping, and you can't use class or mass as your argument, then you don't have an argument to advertise in your newspaper."