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Fueled by Pay Wall, New York Times Passes USA Today for No. 2 Spot

Soon to Seek New Subscribers With Cheaper Packages

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The New York Times increased daily circulation by 18% in the most recent reporting period, vaulting it past USA Today to become the second-largest U.S. newspaper, according to figures released today by the Alliance for Audited Media.

The Times' average daily circulation rose to 1.87 million in the six-month period ending March 31, the alliance said in a statement. News Corp.'s Wall Street Journal remained the No. 1 paper in the U.S., with its circulation climbing 12 % from the period a year earlier to 2.38 million. The Gannett Co.-owned USA Today, which introduced a redesign last fall under new editor Larry Kramer, dropped to third after daily readership declined 7.9% to 1.67 million.

The New York Times has seen a surge in online subscribers since the company instituted a so-called paywall in 2011, prompting readers to pay for online access. The Alliance for Audited Media's daily circulation figures include people who read the paper on a range of devices, including Amazon's Kindle. USA Today does not charge for online access, relying entirely on advertising for digital revenue.

"These gains can largely be attributed to the continuing popularity of the Times' digital subscription packages," The New York Times Co. said in a separate statement.

The company is being helped somewhat by reporting rules at the Alliance for Audited Media, formerly the Audit Bureau of Circulations, that let publishers count readers multiple times if they access a paper on different devices. For instance, a person who reads The Times on a personal computer, a smartphone and a tablet in a single day would be counted as three readers. While The New York Times' digital readership stands at 1.13 million, the publisher only had 676,000 paying online subscribers as of the end of March.

But The Times' circulation still would have increased even without that rule. Online subscribers, counted once each, increased 45% between the end of March 2012 and the end of March 2013, according to the company.

The majority of The Times' growth comprises people who were not digital subscribers signing up to pay for online access, a spokeswoman said, and not, for example, existing digital subscribers accessing the paper on more devices than they were previously. Print subscribers receive unfettered digital access but are counted only once in the paper's circulation reports, as print subscribers, and do not appear in its counts of paying digital readers, the spokeswoman added.

The Times Company announced plans last week to create more digital products and services, aiming to make up for tumbling advertising sales. The new offerings, such as a lower-priced online packages and specialized subscriptions that focus on areas such as politics and technology, will be rolled out in late 2013 or early 2014.

The publisher is targeting potential customers "numbering in the many hundreds of thousands," Chief Executive Officer Mark Thompson said at the time.

The Times' current pricing plans range from $15 to $35 a month, depending on how many devices the reader plans to use.

~ Bloomberg News ~

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