New Circulation Policy Takes Toll On L.A. Times

The Los Angeles Times announced Thursday that both its daily and Sunday circulation declined during the six-month period ending September 30, 2004, in part due to a deliberate decision to reduce the company's reliance on third-party sponsored subscriptions and bulk sales.

The newspaper reported an average daily circulation of 902,164 for Monday through Saturday, down 5.6 percent versus last year. Sunday's decline was even larger, as circulation dropped 6.3 percent to 1,292,274. These figures were submitted to the Audit Bureau of Circulations and are subject to audit.

In explaining the drop in circulation, besides citing the deliberate reduction in some sales, the Times also cited the impact of the national "Do Not Call" law on telesales operations.

"Historically, the Los Angeles Times has been heavily dependent on telemarketing to drive home delivery circulation growth," said publisher John Puerner in a statement. "The September declines primarily reflect the impact of the Do Not Call law."



"In addition, we've made a deliberate decision to reduce less profitable circulation, such as third-party sponsored home delivery and single copy bulk sales," added Puerner.

While the Times did not mention either the recent slew of circulation scandals or any resulting advertiser pressure, many analysts have predicted recently that newspapers will begin dialing down their usage of third-party acquired subscriptions or bulk subscriptions.

These subscriptions often involve the distribution of free newspapers in outlets such as hotels or schools, while technically they counted as paid by the ABC (see Concerns Persist as Preliminary Circulations Are Released, MediaPost Tuesday, Sept. 21, 2004 here ).

Analysts believe that in light of the recent scandals, advertisers would begin paying increased scrutiny to these line items on ABC reports.

The Time's announcement also highlights an oncoming trend in the newspaper circulation business away from telemarketing and toward more sophisticated customer segmentation and database marketing, which many analysts believe will be the norm in the future.

In a memo to employees, Purner said: "We're investing heavily in database marketing systems and capabilities to improve our ability to grow readership and target higher quality circulation through direct mail and other efforts. We're also targeting specific geographic and audience segments where we have the highest potential to increase readership."

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