From AJR, July/August 1999 issue
Bad News About Newspaper Circulation
The lastest numbers are cause for concern.
By John Morton
John Morton (email@example.com), a former newspaper reporter, is president of a consulting firm that analyzes newspapers and other media properties.
TO PARAPHRASE WINSTON CHURCHILL'S blunt opening sentence in his speech to his nation about the early weeks of World War II, the news from the Audit Bureau of Circulations is very bad.
To paraphrase Winston Churchill's blunt opening sentence in his speech to his nation about the early weeks of World War II, the news from the Audit Bureau of Circulations is very bad.
Now, it is possible to gloss over the results of the most recent publishers' statements from the bureau, which showed daily newspaper circulation declines of a half percent weekdays and 1 percent Sundays for the six months ending March 31.
You could call the decline over the previous year's figures "slight," as some in the newspaper industry have. You could note that 60 percent of newspapers with circulation greater than 500,000 showed gains. You could assert that newspaper readership remains high, with nearly six of 10 adults in the largest 50 U.S. markets reading dailies during the week and nearly seven of 10 reading Sunday newspapers, according to surveys.
But you would be missing the point. Because when you get past the largest newspapers, which importantly tend to be newspapers of the highest quality, losses of circulation greatly overshadowed gains. In the circulation sizes lower than 500,000, on average about 60 percent of newspapers either lost circulation or showed no gain. (For newspapers smaller than 25,000, about 65 percent showed losses.) For all Sunday newspapers, including the big ones, about 69 percent had losses.
What is disturbing about these figures is that by now, newspapers should have recovered from a period in the mid-1990s of ill-advised aggressiveness in raising prices and in cutting back on far-flung circulation to save on newsprint and distribution costs.
But clearly recovery is not at hand, and I fear that something fundamental is happening to many American newspapers that ultimately could brand the industry not just as mature but as fading. Weekday circulation now is at essentially the same level it was in 1955, yet national population has grown about 64 percent.
As recently as the 1980s, newspapers could raise prices and expect to take only a mild hit in circulation, say 4 to 5 percent, which they would regain within six to eight months. In the late 1990s, though, raising prices might bring a hit of 10 percent or more, and it might take years to regain lost ground, if ever.
Some of the reasons for the industry's circulation decline are beyond any remedies newspapers can undertake. Several dailies have closed or merged with others, and it has been my experience that when a daily disappears, as many as half of its subscribers don't turn to a different newspaper. The growth of competitors in broadcast, weekly publishing and, most recently, on the Internet inevitably has some impact.
Moreover, an increasingly mobile population tends to disconnect people from a sense of community, which is important to newspaper readership, especially at small-circulation papers. And changing lifestyles, with greater emphasis on recreation and other out-of-home activities, apparently cause some people to believe they don't have time to read a newspaper. These last two factors are ones that newspaper publishers probably could do something about, if they would spend the money to make their papers more attractive to readers.
Which brings me to what I fear is a fundamental cause of the circulation malaise of the 1990s. The nature of newspaper ownership and management has changed dramatically in this decade. Newspapers, especially the smaller ones, are sold and swapped around as so many economic units. (See "The Selling of Small-town America," May.)
Owning and operating a small-town daily no longer is as much a commitment as it used to be, when most were family properties. Now, these economic units are expected to perform as, well, economic units. The manager at the helm may or may not have the passion it takes to produce a good newspaper or, if the passion is there, enough energy to act on it after meeting the demands of corporate headquarters.
The big papers that had circulation growth didn't have much--fractions of 1 percent in most instances. Notable exceptions included the New York Times, up more than 2 percent weekdays and Sundays, and the two newspapers in Denver, where an all-out circulation war with heavily discounted prices swelled the numbers. But the fact that a majority of the big papers was able to resist the downward trend probably can be attributed to their high journalistic quality. That should be a lesson for the smaller papers, which make up the great majority of the nation's newspapers.
The irony in all this is that daily newspapers today are about as profitable as they have ever been, despite the circulation declines that many have suffered. Now is the time, when profits are up, to spend more on quality.