Anemic Newspaper Circulation Numbers Due To Obsolete Strategies

October 30th, 2009 12:54 PM

The latest newspaper circulation numbers, measuring copies sold from April through September of this year, show a 10.6 percent decline in daily newspaper sales, the first double-digit drop in circulation ever. Newspaper readership is now at its lowest level since before World War II.

The biggest losers during this six-month period, as reported by NewsBusters's Tom Blumer, were the San Francisco Chronicle (down 25.8 percent daily), the Newark Star-Ledger (down 22.2 percent daily), and the Boston Globe (down 18.5 percent daily).

The New York Times's sales during the period fell to 927,861, the first time the paper sold less than 1 million copies in that time span in decades. The Wall Street Journal saw a 0.6 percent increase in circulation, making it the most purchased newspaper in the country. The Journal surpassed USA Today, whose circulation declined by over 17 percent.

The consensus among media commentators seems to be that many newspapers are making futile attempts to preserve an anachronistic revenue structure without actually changing the ways in which they do business.

Former newspaper executive Alan Mutter, who blogs at Newsosaur, insisted that the scramble to present a facade of a large readership is an attempt to preserve a failed advertising model.

Back in the day, the “mass” audience assembled by the “mass” media was of paramount importance to the successful sale of advertising. But reach is a ridiculously retro concept in this day of targeted interactive media and sophisticated marketing analytics.

Circulation statistics, like the depressing ones released yesterday, are an anachronistic artifact of the ancient era when newspapers and broadcasters aimed to deliver the largest possible audience to advertisers.

Anyone who remains focused on assembling the most eyeballs or bellybuttons in a market is pursuing exactly the wrong goal. Today, it’s all about quality, not quantity.

Advertisers have little incentive to pursue to the voluminous advertising model traditionally marketed and employed by major newspapers. An ad on Google's sidebar that appears when users search for related terms (an ad for a political candidate when users search for 'taxes', for instance) is far more cost effective.

It no longer makes sense to blindly market a product or service. With new media technologies come the ability to dictate who will see one's advertisement, and who is most likely to respond. Beyond a vague estimate as to the interests or desires of a particular newspaper's readership, such specificity is almost impossible to gauge.

Mutter notes that some newspapers have picked up on this trend, and have abandoned disingenuous strategies for improving their circulation numbers to make the papers more appealing to advertisers.

Other publishers curbed costly promotional programs that artificially fluffed circulation by selling papers at deep discounts for a limited time to people who then had to be replaced by offering still-cheaper promotional discounts to a new batch of expensively acquired “subscribers.”  (There is no way to tell how much the decline in promotional discounting may have been offset in the latest reporting period by the change in rules that allows papers to count a copy sold for a penny as being fully paid.)...

publishers would be well advised to develop targeted print and interactive products that deliver demonstrable value to the growing cadre of advertisers focused on maximizing the efficiency of their purchases, not paying for bloated audience numbers.

The decline in advertising revenues, writes newspaper veteran Ken Doctor, has spurred some newspapers to up their print and home delivery prices. By doing so, he writes, these papers failed to take into account the new media environment in which they are working, and assumed that higher prices would mean more revenue.

most newspaper companies have embarked on a premium print pricing strategy, in some cases doubling single-copy prices and upping home delivery significantly. And, yes, these increases have provided a circ revenue bump just as ad revenue tanked (both McClatchy (6.7%) and Media General (11%) recently reported quarterly circ revenue gains). Yet, they've made the value proposition for print harder to justify. Now, add the recession-induced pocketbook concern to all the greater changes in the news world, and publishers may have shone a spotlight on the print newspaper product.

They have moved it from being a necessity, a habit, to a discretionary buy.

By adopting this strategy, newspapers planned to "Acknowledge that newspapers are a niche buy ... and price accordingly." But these papers have not adjusted their reporting and publishing styles accordingly (the New York Times did slash 100 newsroom jobs, but it remains a large international news operation). Many still market their papers as a one-stop shop for the day's news.

Some papers, however, have pursued this strategy with seeming success by reducing the areas to which the paper is delivered. Hence by trimming operating expenses, they are able to increase revenue, even with a smaller web of distribution.

But for newspapers that traditionally have a liberal take on the news, a new political attitude may be necessary in pursuing the niche approach. As home deliveries become more expensive and urban newspapers begin to cater to a more local readership, liberal op-ed pages that may have held broad appeal among papers' suburban audiences will turn off readers who do not share those political views.

Hence an integral party of the specialization of newspaper content must consist of an assessment of the target readership, and a review of content to make sure that it will appear to those readers.

Other newspapers, rather than restricting their print distribution, have pursued a 'charge online to save print' strategy that Martin Langeveld, writing for the Nieman Journalism Lab, says is "backing the wrong horse."

It’s because print is now a niche business that newspapers are able to show the growing circulation revenues mentioned by [NAA President and CEO John] Sturm. Readers can’t be forced into print by online prices, although they certainly may pay for niche content online and they should pay, handsomely, for the luxury of a home-delivered newspaper. Meanwhile, the industry’s all-out focus should be on seriously growing its online audience.

But Langeveld notes that online newspaper presence is seriously lacking. "Newspapers have a pretty tiny share of online attention and are losing ground online just as they are in print."

An online presence is also essential to secure the advertising revenue that print outlets no longer enjoy. Online content can be very effective in marketing products in a targeted fashion.

But to establish an online presence, newspapers must abandon the cudgel of pay-walls designed to convince readers to stick with the print edition. Though charging for online content is not necessarily detrimental, doing so as a means to encourage retrogression is futile and self-defeating.

Streamlining newspaper operations by accepting the all-but-inevitable roll as niche publications they will be forced to adopt can allow newspapers to operate at a profit. But those papers will have to make sure that the new, smaller readership that they wish to reach will find what they are looking for in these new, leaner papers.

Whatever newspapers do, it is clear that the status quo is unacceptable. The new circulation numbers will send a message to all editors and corporate brass that a new business model is needed, before the industry goes the way of the telegraph.