I suggested three weeks ago that the current six-month circulation period, ending September 30, would be the worst yet for the newspaper industry.
This morning’s results show daily circulation off 10.6 percent and Sunday down 7.5 percent compared to the same period a year ago, and it gives me no pleasure to say I told you so.
To recapitulate, there are a bunch of factors driving the extraordinary losses:
- Readers continue to migrate from print to the Internet — sometimes to newspapers’ own sites, sometimes to aggregators.
- Papers, metros especially, are voluntarily trimming circulation to remote areas because they are more expensive to serve and less valuable to advertisers.
- So-called “start pressure,” the selling of new subscriptions to replace lost ones, has taken a hit from cost-cutting.
- Decisions at many papers to aggressively increase subscription and single copy prices has resulted in fewer copies being sold, though circulation revenue has increased.
- This period is the first to include the full impact of the recession, in which some consumers are dropping subscriptions and others buying the paper less frequently.
- Smaller news staffs and news space make the product weaker and less appealing.
Among the biggest losers in the top 25 papers are the San Francisco Chronicle (down 25.8 percent daily), The Boston Globe (down 18.5 percent daily) and The (Newark, N.J.) Star-Ledger (down 22.2 percent daily).
All three of these papers were on course to lose unacceptable amounts of money this year and made especially drastic cuts as a result. And even in better times, the Chronicle was notorious for weak household penetration over an enormous area, so pulling back to its geographic center and getting smaller was inevitable.
Winners for the six months include The Wall Street Journal, which is up 0.6 percent and replaces USA Today as the largest-circulation paper in the U.S. The Journal is the very rare paper that has expanded editorially over the last year and has a parent company, Rupert Murdoch’s News Corp., willing to spend generously to market subscriptions (print and online, in this case).
The Denver Post and The Seattle Times both benefited in daily circulation from the closing of competing metro papers, though that kind of gain tends to melt away over time. Among the 25 largest papers, The Arizona Republic had the best Sunday performance, with a loss of only 0.9 percent.
Not so long ago, robust online growth was a counterpoint to mildly negative circulation news. Now, with print circulation much more alarming, newspaper Web audiences continue to grow modestly — though time spent on site is flat.
But the industry is basically stalled in the much-talked-about move to some form of paid online content or getting a better deal from big aggregators like Google. As The New York Times notes in a story this morning, the first signs of an online advertising recovery seem to be passing newspapers by.
The best that can be said is that by dint of stringent budget control, papers are mostly returning to operating profitability, and share prices have rallied. McClatchy CEO Gary Pruitt described the cuts in an earnings conference call to analysts last week as “extremely painful. We had hoped to avoid [them], but we couldn’t. We are committed to doing what it takes but no more.”
What is worrisome is that advertising declines and new rounds of cost-cutting continue in a cycle that further weakens papers’ usefulness for advertisers and readers.
