Peter Kafka

Recent Posts by Peter Kafka

All The News We’ll Pay For: Why Newspapers’ Shrinking Circulation Isn’t All Bad

newspaperlessNo surprise that Americans are dropping their newspaper subscriptions, as a new batch of numbers from the Audit Bureau of Circulations showed yesterday. But before you file this under “death of newspapers,” do ponder this for a second: Declining circulation might not be the worst news in the world.

Tough times have forced many papers to rethink their circulation strategies. An obvious conclusion: Much of the money publishers were spending to print and deliver dead trees has gone to waste. New strategy: Print fewer copies, and charge more for the ones you do sell.

That’s a tactic, not a strategy, but in the near-term it might work.

In its last quarter, for instance, the New York Times (NYT),  saw its daily circulation drop by more than seven percent, but saw circulation revenue jump 6.7 percent, due to price increases. Last spring a single copy of the Times at a newsstand jumped from $1.50 to $2.00, and a Sunday Times now costs a staggering $6. But people are buying them.

Meanwhile, News Corp. (NWS), which owns The Wall Street Journal as well as this Web site, has been steadily increasing the WSJ price. And circulation revenue is up at the McClatchy (MNI) and Media General (MEG) chains.

Again, the industry can’t shrink its way to recovery. There are fewer people paying for news–on or offline–than there have been in decades, and there’s no way to paint this as a positive. But the people who still subscribe to papers value them, and it would be foolish not to capitalize on that. Editor & Publisher:

There are several reasons as to why circulation keeps dropping, aside from former readers who have kicked the print edition to the curb. Publishers have been purposely pulling back on certain types of circulation, including hotel, employee and third-party sponsored copies. No longer are they distributing newspapers to the outer reaches of the core market. The cost of delivery and the cost of materials have forced publishers to scale back.

Another shift has occurred: volume has taken a back seat to dollars.

Several major newspapers across the country have aggressively hiked prices of single-copy and home-delivered papers in search of circulation revenue and a renewed focus on loyal readers. Circulation is guaranteed to go down as prices go up, but publishers have opted to wring more revenue from readers as advertisers keep their coffers closed.