PAPERS FIND ODD CIRCULATION CRONY IN CABLE: BY SCRATCHING EACH OTHER'S BACK, REACH IS EXTENDED, SOLIDIFIED

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Newspapers and cable TV companies might seem like an odd combination to fight flat-growth circulation, yet the creative partnership is becoming a trend around the country.

Circulation growth was flat last year, according to Editor & Publisher. Daily circulation volume was down .4% to 56.7 million newspapers and Sunday circulation volume was off 0.5% to 60.5 million newspapers.

Newspapers in California, Georgia and Pennsylvania are among those who have befriended a longtime competitor -- cable TV -- to crank up their readership by sharing information and access to readers and viewers.

CIRCULATION NOW 61,000

Gwinnett (Ga.) Daily Post grew from a weekly to a three-times weekly in 1995 and now is a Tuesday through Sunday paper with a circulation of about 61,000 in a market with an estimated 180,000 households. About 52,000 readers came in as a result of its partnership with two local cable companies.

"[Before the cable partnership], our competition had 50,000 [households] and we had 14,000. That left a lot of homes not reading the newspaper," says Bill Herbert, circulation director at the Daily Post.

The main option to boost circulation was a telemarketing effort -- but the paper did something different.

The Daily Post now supplies the information and staff for GNET a cable station aired by Genesis Cable Co. and Gwinnett Cablevision. In return, cable subscribers receive home delivery as part of their basic cable package.

Cable "pays us $2 per month per subscriber. Our annual rate is $48, so they are paying 50% of the annual rate," says Mr. Herbert.

SHORING EACH OTHER UP

"We are in a huge market and we needed some way to get newspapers out to the masses," says Mr. Herbert. "The cable companies and newspaper company were on unsolid ground. By joining forces we shore each other up."

But, just as importantly, advertisers are sold on the concept.

"Our ad rates increased. A lot more advertisers who never dreamt about using us are advertising in our paper," says Mr. Herbert, citing advertisers such Best Buy Co., Kroger Co., J.C. Penney Co. and Winn-Dixie Stores.

Ron Wood, group VP at Los Angeles Newspaper Group, says the Long Beach Press-Telegram and the Los Angeles Daily News have had cable agreements for several years.

The cable companies pay the newspaper half the published Sunday subscription rate and the newspaper provides the cable guide.

These agreements "were always intend to be circulation building. The whole idea is if you can get the subscriber to be a Sunday reader you could upgrade them to a daily service," says Mr. Wood. "A newspaper has the ability to leverage its Sunday numbers."

ROOTS IN DENVER

The first known newspaper/cable partnership was established in 1983 when the Denver Post partnered with United Cable to boost its Sunday circulation.

The partnership was formed during a circulation war between the Post and the Rocky Mountain News.

The Post negotiated with United Cable to publish an upgraded TV listings guide in exchange for cable-paid delivery of the Sunday paper. The agreement gave the Post a wealth of suburban readers.

"One Sunday the circulation was 340,000, the next Sunday it was 410,000. It was like dropping a hydrogen bomb down the smokestack of the competitors," says former Denver Post Editor David Hall, now editor of the Cleveland Plain Dealer.

The Pittsburgh Post Gazette, which has merged subscriber lists with TCI of Pennsylvania, also claims positive results -- including new advertisers HBO and Showtime.

According to Tom Pounds, director of circulation at the Pittsburgh Post Gazette, the partnership does not have any audit implications because the cable subscribers have a choice of whether or not to buy a newspaper subscription through the cable company.

"As long as you are collecting half of your Sunday rate it is a qualifying rate for ABC purposes," says Mr. Wood.

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