Papers Struggle To Add Circ., But It Just Doesn't Work

It's no surprise that the newspaper industry has been struggling to grow its circulation, but publishers may be doing worse than many think, according to findings of a study released Thursday by the Newspaper Association of America. As it turns out, newspaper publishers are actually doing a better job of retaining existing customers, which means they're doing a relatively poor job of adding new ones.

The NAA study, dubbed Circulation Facts, Figures, and Logic, puts a positive spin on faltering newspaper circulation by showing that subscriber churn--that is, the percentage of subscribers publishers need to replace in order to maintain last year's home-delivery circulation--has fallen 6.8 percent since 2002, to 56 percent.

Well, if circulation has declined 2 percent this year, it means that publishers are replacing even fewer subscribers, because they're losing fewer to begin with. With less to make up for--in fact, this is the lowest subscriber churn for a decade, according to the study--newspapers are still falling short of parity.



New efforts at growing subscriber bases don't seem to be paying off either. Another study by The New York Times and Scarborough Research analysts shows that free city dailies like Metro New York, BostonMetro, and amNew York have proved ineffective at building newspaper circulation in four major U.S. markets.

Several such start-ups are industry publisher investments, but none have made a noticeable dent in city-area readership. As it is, most free daily readers already read another paper, and the total circulation for four markets is just 2 million.

The NAA study shows that publishers now rely less on telemarketing to drive subscription sales than they have in the past. In 2004, telemarketing was a source of 31 percent of all subscriptions, compared with 43 percent in 2000. Post Do-Not-Call, newspaper companies have struggled to find other effective marketing methods.

Home delivery is still the dominant sales channel for newspapers--accounting for 76 percent of sales in 2004, versus 71 percent in 2002. The study also noted that a substantial number of sales are coming from face-to-face selling and kiosk sales programs. To help retain subscribers, many publishers have implemented post-sale follow-up and flexible billing programs.

"Circulation Facts, Figures & Logic" is a biennial study; this is the sixth edition in 12 years. The report is a compilation of data from 521 newspapers of all circulation sizes. The numbers reported are the median--or exact middle--answer.

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