Newspaper sales dip, but websites gain

NEW YORK — Newspapers offered a mixed story Monday as new data showed a circulation decline industrywide — by alarming rates at some papers — while visits to their websites grew.

Average weekday circulation fell 2.5%, to 45.4 million, in the six months ending March 31, vs. the same period last year, according to a Newspaper Association of America (NAA) analysis of Audit Bureau of Circulations data from 770 dailies. Sunday circulation fell 3.1% to 48.5 million at 610 reporting newspapers.

The numbers reflect a continuation of a trend that began in the 1980s, as younger people turn to cable TV and the Internet to learn about current events. "It used to be a truism that the only thing a newspaper had to do to improve circulation is produce a better newspaper," says industry analyst John Morton. "Now, young people aren't any more inclined to pick up a good newspaper than a bad one. That isn't likely to change."

Still, results among top newspapers were varied.

USA TODAY's sales grew 0.1% to 2.27 million, even with a newsstand price increase to 75 cents in September 2004. The New York Times also was up 0.5% to 1.14 million, while the Chicago Tribune rose 0.9% to 579,079. The Wall Street Journal fell 1% to 2.05 million.

Industry circulation figures were skewed by steep losses in a few big cities, including The San Francisco Chronicle's 15.6% drop. The Boston Globe fell 8.5%, and The Boston Herald lost 9.1%. The Los Angeles Times fell 5.4%, and the Los Angeles Daily News dropped 11.9%.

"Those markets have fallen off a cliff," says Benchmark Co. analyst Edward Atorino. "If you look beyond them, you have to wonder, maybe the worst is over for the core group" of newspapers.

Investors seemed unfazed by the circulation declines. Tribune Co. shares were up 6.5% to $29.84. New York Times Co. (NYT) rose 4.6% to $25.70. McClatchy (MNI) appreciated 3.2% to $47.09. And Gannett (GCI), which owns USA TODAY, closed 2.9% higher at $56.86.

While analysts see circulation as a key benchmark for newspaper performance, the NAA, an industry trade group, urged industry watchers to also look at gains in the number of visits to newspaper websites.

It cited Nielsen/NetRatings data showing that an average of 56 million Web users visited a newspaper site in each of the first three months of 2006, up 8% from the same period in 2005.

The NAA also pointed to a study it commissioned from Scarborough Research that showed that the top 50 newspapers, with combined circulation of 21 million, attracted more than 58 million readers in print or online on a typical weekday in November. "You don't have the whole story about a newspaper's reach without the (study)," NAA chief John Strum says.

Atorino says the NAA has a ways to go to persuade advertisers to accept the new standard for a newspaper's reach. "It's not a bogus argument, but it's all in the eye of the beholder," he says. The newspapers started late (in promoting readership instead of circulation) and have done a mediocre job in selling it."