Circs slide but profits are another story
Newspapers continue to fall on hard times — and the L.A. Times is falling a little harder than most.The daily saw the biggest circulation drop — 8% — among any of the country’s top 20 newspapers for the six-month period that ended in September. It still enjoys the fourth largest circulation in the country, though, selling on average 775,766 copies per day and continues to post double-digit profit margins — just not enough to satisfy parent Tribune Co., apparently. According to Audit Bureau of Circulation figures released Monday, the average circulation at 770 U.S. newspapers dipped 2.8% during the six-month period tracked. The circulation slowdown hit nearly across the board: The New York Times slumped 3.5% to just under 1.1 million copies, while the country’s biggest title, USA Today, was down 1.3% to a hair under 2.3 million. The Wall Street Journal fell 2% to 2.04 million, and its Saturday edition, launched a year ago to much ballyhoo, was down nearly 7%. The only two papers in the top 20 to post a circulation boost were Gotham’s warring tabloids, the New York Post and the Daily News. The Post’s circ climbed 5.3% to 704,011 copies, edging just past the News, which grew 1% to 693,382. The Post, owned by Rupert Murdoch’s News Corp., jubilantly gloated about passing its longtime rival — even though its added circulation has failed to stem the paper’s millions of dollars in losses each year. Six years ago the Post started an expensive “price promotion” that cut its cover price in half to 25¢, costing the paper millions each year in lost revenue (the News’ price is 50¢, while the New York Times goes for $1). But the Post’s biggest problem is that it gets about half the advertising revenue the News does (though, according to research firm TNS Media Intelligence, the News’ ad revenue is down 4% for the year through August, while the Post’s is up 5%). While newspaper circulation has been falling for decades, the numbers causing the biggest concerns to publishers are the declining advertising revenues as marketers choose to divert their dollars to nonprint outlets such as the Internet. Though the Newspaper Assn. of America described Monday’s circulation report as possibly the largest and most across-the-board slide in recent memory, it explained that some of the circulation drop came because newspapers are cutting back their spending on circulation-boosting programs, such as selling discount copies in bulk to hotels to distribute to their guests. Since advertisers want to reach people who actually buy papers, rather than find them on a hallway floor, papers can’t command high ad rates for such “other-paid” circulation. The Newspaper Assn. also greeted the grim circulation report with more optimistic figures showing that when the Web is figured in, more people are reading newspapers today even if they don’t buy print copies. According to the group, newspaper Web sites were visited by 57 million people in the third quarter, up 24% from last year. By comparison, the average circulation for all the daily papers in the country is 43.7 million. The problem for papers, though, has been figuring out a way to make money off their newfound electronic readership. Major newspaper owners have been consistently looking to cut costs. Such budget trimming has tipped off an ownership soap opera at the L.A. Times involving its Tribune Co. owners, the Chandler family and a host of wealthy Angelenos who’d like to buy the paper. For Hollywood studios, the falloff in newspaper circulation has prompted them to reconsider whether it makes sense to advertise in print dailies or whether they’d be better off diverting dollars to new media like the Web. According to insiders, online now commands an average of 5% of a studio’s ad budget for a tentpole film. “There are a number of clear trends: Network (dollars) are moving to cable, and print is going to online,” said one studio exec.