Reflecting on the latest circulation figures

In Japan, advertising accounts for just 35 percent of newspaper revenue. In Britain, it’s 50 percent. And in the United States, ads have traditionally amounted to a whopping 87 percent of newspaper income. That’s why it can truly be said that, in the U.S., newspapers have always given away the news, charging only for paper and delivery.

These days we pay for computers and broadband access while getting the news for free — same as it ever was. That is among the most important explanations for why news organizations are going to have a difficult time persuading more than a handful of readers to pay for online access. I wish them well. But the challenge is enormous.

One thing some readers will continue to pay for is the convenience of print. (Spare me your nostalgia for the romance of print. Print persists for one reason: it’s still more ergonomically friendly than any electronic version. Someday that will change.)

After yesterday’s newspaper circulation figures were released, showing a continued but slowing decline in print sales industry-wide, Boston Globe publisher Chris Mayer issued a memo — a copy of which was obtained by Media Nation — attributing the Globe’s continued slide to last year’s decision to raise the price to as much as the market would bear. (Here is the Boston Herald’s take.)

The idea is that there’s a sweet spot. Up to a point, you can raise prices and make more money, even if the total number of print readers declines. Somewhere, though, there’s a top to the curve, and the challenge is to find the top and not raise prices so much that revenues start to fall. The result, unfortunately, is that you end up with a niche product for an elite readership. But it’s either that or die.

And here’s a good piece of news. There’s also a sizable subset of readers who will pay for electronic editions like Times Reader and GlobeReader, which are cheaper than print but more convenient than newspaper websites that keep you chained to your desk. Given that iPad editions have barely kicked into gear, that’s a promising sign.

The full text of Mayer’s memo follows.

Dear Colleagues,

Earlier today the Audit Bureau of Circulations issued their Fas-Fax report for the six months ending September 30th. The Globe has shown year-over-year declines in line with our expectations, as a result of our circulation and pricing strategy instituted last summer.

The good news is the rate of circulation decline has slowed as we cycle through the impact of the price increases. One indicator is the comparison between September’s report and March’s report. Viewed this way, the declines are 2.8% for Sunday and 4.2% for daily. These are encouraging trends for our business and in line with others in our industry.

The past few months has also seen continued excellence in our reporting and positive contributions to the community. Our Spotlight Team investigation of patronage in the state’s probation department; our sensitive series of stories on bullying; the amazing coverage of the Amy Bishop case; coverage of the earthquake and aftermath in Haiti and its impact in Boston; and our current coverage of the political races are just a few examples of the important journalism we’re delivering.

The Globe’s circulation, now at 368,000 on Sunday and 223,000 daily, still makes us the largest newspaper in New England by a wide margin. The year-over-year decreases of about 15.7% on Sunday and 12.0% daily were expected and budgeted.  To offer some context, we raised prices last summer in most areas by 30% to 50% to grow circulation revenue and stabilize the business.

Of course, circulation numbers are not the end of the story. Print and online media work in concert with one another to build audience. It should be noted then that in terms of readership, during an average week, the Sunday Globe, the daily Globe and Boston.com together will reach 51% of all adults in the metro Boston area.  It will also be reported in Monday’s Fas-Fax that Boston.com’s local audience grew by 2.9 %.

The recently announced two-brand digital strategy is now officially under way and we are developing launch plans for our new subscription-based Web site BostonGlobe.com, and the next generation Boston.com. And, watch forperiodic launches of digital products in the upcoming months.

So, as we look ahead we will continue to execute on our strategy, building on the strong foundation of quality journalism, original content, broad audience reach, higher reader engagement, advertising effectiveness, and strong connection with the community that is reflected by, and results in, our more than 50% of the market.

We can all share a sense of optimism and purpose as we focus on our future success.

— Chris

Photo via Wikimedia Commons.

12 thoughts on “Reflecting on the latest circulation figures

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  2. tobe berkovitz

    “Print persists for one reason: it’s still more ergonomically friendly than any electronic version. Someday that will change.)”

    Correctamundo. I read 4 print versions of newspapers in the morning (I have the world’s best delivery guy, the papers are on the door step at 5am). I don’t miss a lot and blast through them in about a hour. When I travel and read the papers on my laptop it takes forever and I always miss something that would have been of interest to me. Maybe an E-Reader would speed things up but I have enough techno gizmos for now.

  3. Jerry Ackerman

    “These days we pay for computers and broadband access while getting the news for free — same as it ever was. That is among the most important explanations for why news organizations are going to have a difficult time persuading more than a handful of readers to pay for online access. I wish them well. But the challenge is enormous.”

    One difference is that the newspapers absorbed the cost of the newsprint and the delivery trucks and the drivers and the paper girls and boys. They don’t own the Internet or any of its pieces (e.g., Akamai, the millions of miles of fiber, etc., etc.). The consumer pays for those pieces separately. On paper it would seem those factors would cancel each other out. But I’m not so sure. What the newspaper-owned delivery system DID offer, though, was a defined, identifiable, and (handily) geographically compact and segmented target market, one that advertisers could not buy anywhere else and would be difficult to replicate. The Web is getting better at this but has a distance to go.

    Lacking other business models, it’s easy to imagine that, in the end, the “free” content now available will be reduced to lowest common denominator. And as painful as the transition might be, that situation may finally lead to a renewed appreciation of the YGWYPF rule – you get what you pay for.

  4. L.K. Collins

    Ref: The table summary of electronic circulation.

    Interesting to note how well Detroit’s News and Free Press in the nation’s 11th largest market did against New York Times, one of the country’s acknowledged “papers of record”.

  5. Rick Peterson

    Meanwhile, the evil Rupert sits in his lair, stirring the cauldron of capitalism. WSJ;up 1.8% for the last 6 months. Probably due to the White House not getting it for free any more….

  6. Peter Sullivan

    Oh no Rick, not the cauldron of Capitalism!!!!!!
    Funny, the only person with a notion to grow a newspaper in these troubled times and all you can point to is a hand out to the White House. Typical

    How’s the circ at the Daily Worker trending.

  7. Laurence Kranich

    The thing that worries me as a Globe supporter (and Herald too for that matter) is that Boston is not on that list of top 25 E-editions. We’re allegedly one of the most literate cities, and the economy is somewhat better than many other places. So you would think, as the Globe circulation plunged 53% since 2000, that more people would be buying their well-thought out, heavily promoted GlobeReader product (or the PDF edition). But only 6,529 people are doing that, and that is a 25% *plunge* in just one year.

    Source:http://www.nytco.com/investors/financials/boston_globe-circulation.html

    1. Dan Kennedy

      @Laurence: I wouldn’t worry yet. Within the next year, you are going to see an iPad app for the Globe that supposedly will be much nicer than GlobeReader, coupled with moving most Web content behind a paywall. Put those things together, and you should see a significant spike. Remember, the Detroit papers are doing so well with e-reader distribution because they ended seven-day home delivery. As for the Herald, it’s not going to do any in-house development — it needs an off-the-shelf solution. Perhaps that will come.

  8. Rick Peterson

    @PeterSullivan: Ever hear of sarcasm? New around here? Me a com-symp? I have no idea what the Daily Worker is doing but I can guarantee you that I know more than you do about what takes place at Dow Jones now and what will happen when the move to 53 State St. takes place next month.

  9. L.K. Collins

    I-Pad penetration in the Boston market is what, Dan?

    The Detroit papers’ pay wall “works” because the publisher reduced the availability of the dead-tree version. They enjoyed the benefits of the shift because the paper continued to provide content that Detroit readers wanted to read, some of which was created by their own staff about matters of local interest.

    On the Cape, the Cape Cod Times has announced that they will go behind the wall. But, since the Times has become a reprinter of material published elsewhere, they may not find similar success.

    Right now, the only thing of real value in the paper is the column by Sean Gonsalves, always thoughtful, always well written, always an interesting perspective.

    That I will miss.

    If I’m lucky, Google will snarf a usable link. I gave up the CCT years ago for issues of content. No reason for me to pay them then, less reason to pay them now.

  10. Pingback: What IS the future of print publishing? « VanishingPoint

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