• by Ross Fadner , November 8, 2005

The newspaper industry turned in one of its worst 12 months ever in terms of circulation performance, according to results of the Audit Bureau of Circulations semi-annual FAS-FAX report, released Monday by the Newspaper Association of America (NAA).

During a briefing with reporters, NAA Vice President-Circulation Marketing John Murray said it was either the second- or third-worst year for newspaper circulation in the past 20 years.

"But it would be safe to say this is not the worst in 20 years," he said, noting that annual circulation fell 2.6 percent in 1991. That's the same number by which daily circulation has fallen in the six months ending September 30, according to the FAS-FAX results. In the six months prior, newspaper circulation fell 1.9 percent--a disappointing number at the time that effectively sent the industry into a tailspin, which led to advertiser migration, sharply falling stock prices and more than a thousand lost jobs. The full-year number will fall somewhere between 2.6 and 1.9 percent, the NAA said.

According to NAA data, the second-worst year for annual daily newspaper circulation was 1996, when the total fell 2.1 percent. In fact, annual circulation has only increased once--in 1987--in the last twenty years. Newspaper circulation has been falling slowly since then, but the pace of the decline now seems to be accelerating, even as reader-retention efforts are proving more effective than ever--meaning that newspaper companies are having a particularly difficult time adding new subscribers.

"That's not happy news," the NAA's Chief Marketing Officer, John Kimball, said of ABC's September FAS-FAX report. However, he stressed that circulation is not the only measurement that advertisers and analysts should use in assessing overall readership. Circulation, he noted, only measures newspaper sales--and does not include online readership or so-called pass-along readers, or those who read a paper second-hand, without paying for it.

To that end, the NAA has devised NADbase, a total readership measurement system for the top 200 papers, which measures these kinds of data points. The data is mainly based on results provided by Scarborough Research for print newspapers, and Nielsen//NetRatings for online usage. The most recent NADbase shows that circulation accounts for roughly one-third of the total number of those who read the top 200 newspapers.

Kimball said the ABC data shows that national papers performed better than the average, while large metro-area papers performed slightly worse.

The San Francisco Chronicle is the biggest example of the latter, reporting a 17 percent decline in daily circulation for the last six months versus the same period a year ago. Other big metro-area drops include The Daily News in Philadelphia, down 11 percent daily; The Los Angeles Times, down 6.5 percent daily; The Miami Herald, down 4.3 percent daily; and The Washington Post, down 4 percent both daily and on Sunday. Knight Ridder, whose biggest shareholder has called for the sale of the company, reported a daily circulation decline of 2 percent and a Sunday decline of 3.5 percent.

The hits taken by the big three were not as big. In fact, The New York Times recorded a 0.4 percent daily gain and 0.1 percent Sunday gain. USA Today, the country's biggest paper, recorded a 0.5 percent drop in daily circulation. The Wall Street Journal, which gained in online subscriptions, reported a 1 percent fall in daily circulation.

Overall, the NAA's analysis of 789 papers found that average daily circulation fell to 45.15 million from 46.35 million. This number does not include all newspapers, only those that reported their circulation numbers to ABC. The NAA found that Sunday circulation fell 3.1 percent over the same period, with data from 627 papers.