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Newspaper Circulation Drops Not So Bad?

For the past several years, newspapers have been reporting on their own circulation declines with a strange degree of intensity. They write prominent, mournful, self-flagellating stories of their own decline that remind me of a friend who used to sniff his own underarm when he knew it was particularly randy. Every six months, when the circulation figures are reported, a new round of articles appears. Here are the current examples, from today’s Baltimore Sun, New York Times, and Seattle Times.

Not everyone is convinced that newspapers are dying, of course. Jack Welch wants to buy the Boston Globe; Dow Jones just managed to find a buyer who paid $282 million for six smaller newspapers; and of course several months ago, McClatchy bought Knight-Ridder. Circulation declines notwithstanding, these transactions suggest an underlying value that the newspapers’ own articles do not reflect.

The media executive Allan D. Mutter makes a very interesting point on his blog about circulation declines: a lot of them are essentially intentional. That is, circulation figures are falling in part because many newspapers — in response, I am guessing, to recent audit scandals at Newsday and elsewhere — have stopped distributing free or cheap copies of their papers, which used to be helpful in padding circulation figures. Mutter explains:

To avoid reporting a vertiginous plunge in circulation all at once, most publishers have been whittling away at their non-strategic circulation for the last few years. If and when circulation stabilizes, you will know they have finished their housecleaning. The trimming is taking place in three areas:

+ Vanity circulation: Publishers increasingly are deciding to stop schlepping papers to thinly penetrated locations far from their core markets. Beyond being an expensive indulgence, vanity circulation is little prized by most advertisers. It makes perfect sense to say bye-bye to the boonies.

+ Discount circulation: Although 60% of a typical metro’s circulation consists of loyal subscribers who pay full price, a paper trying to maintain level circulation from year to year is forced to run continuous discount promotions to gain enough “readers” to make up the other 40%. As most advertisers will readily agree, it makes perfect sense for publishers to get off this high-cost, no-win treadmill.

+ Third-party circulation : A few years ago, newspapers got the idea that they could beef up their circulation by getting third parties, like hotels and car dealers, to buy discounted papers that then would then be given to “readers” for free. Given the high cost of producing – and the dubious value of advertising in – giveaway papers, it makes perfect sense for the industry to junk this junk circulation.

I am not saying that newspapers have no worries. They do: online competition, a history of overstaffing and union obstructionism, overheated Wall Street profit expectations. But if Mutter is right, and if people like Jack Welch are serious, then the papers should perhaps hold off a bit longer on writing their own obituaries.