Does cutting costs cut circulation? Government Sachs thinks so.

Here's newspaper industry analyst Peter Appert of Goldman Sachs (who naturally follows the NYT Company very closely) speaking about declining circulation and where it might come from.

Appert, if you follow him, is, in MHO, one of the few decent newspaper analysts out there.

Below taken from a RICHARD PÉREZ-PEÑA piece in the NYT. (Not of course that a NYT journalist would any sort of axe to grind on this point. He could have quoted many newspaper analysts, from analyst conference calls for NYT Co. results, banging on about more cost cutting.)

Analysts have warned in recent years that by offering steadily less in print, newspapers were inviting readers to stop buying. Most papers have sharply reduced their physical size — fewer and smaller pages, with fewer articles — and the newsroom staffs that produce them.
“It just seems impossible to me that you’re cutting costs dramatically without having some impact on the editorial quality of your product,” said Peter Appert, a newspaper analyst at Goldman Sachs. “I can’t prove that this is driving circulation, but it’s certainly something that if I were a newspaper publisher would keep me up at night.”

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Daily circ at The New York Times fell 3.5% to 1,000,665 copies

According to ABC for the 507 newspapers reporting in this period, daily circulation slipped 4.6% to 38,165,848 copies.

Most Major (U.S.) Papers Continue Circ Decline

By Jennifer Saba

Published: October 28, 2008 7:55 AM ET updated Tuesday
NEW YORK For those holding out for some improvement in print circulation, this morning brings disappointment. The Audit Bureau of Circulations released the latest figures for the six- month period ending September 2008 and the report shows major drops in circulation at the big metros.

According to ABC for the 507 newspapers reporting in this period, daily circulation slipped 4.6% to 38,165,848 copies. For the 571 papers, Sunday dropped 4.8% to 43,631,646 copies.

For comparison purposes, in September 2007 reporting period, daily circ fell 2.6% and Sunday was down 4.6%.

Across the country, publishers have put in place plans to cater to core readers and subscribers. It's too expensive to bulk up circulation in unprofitable areas such as third-party, newspapers in education, and bonus day copies. Not in the core market defined by the newspaper? You are out of luck, at least for the print edition.

All daily averages below are for Monday through Friday. The percent change compares this September period to the same period last year.

Daily circ at The New York Times fell 3.5% to 1,000,665 copies.

The Wall Street Journal (as we reported last week) was virtually flat, up about 117 copies on a daily basis to 2,011,999. USA Today was also up a fraction of a percent to 2,293,310 copies.

But The Washington Post's daily circulation declined 1.9% to 622,714. Sunday was down 3.1% to 866,057. At the Los Angeles Times circ decreased a little more 5% daily and on Sunday to 739,147 and 1,055,076, respectively. Daily circulation at the Chicago Tribune was down 7.7% to 516,032. Sunday declined 5.7% to 864,845 copies.

The San Francisco Chronicle lost 7% of its daily circulation to 339,430 copies while Sunday was down a hair more, 7.4% to 398,116. The San Jose Mercury News was down slightly, 1.9% to 224,199 and Sunday was down much more, 4.3% to 241,518.On the East Coast, daily circulation at The Boston Globe plummeted 10.1% to 323,983 copies. Sunday circ was down 8.4% to 503,659. The Baltimore Sun’s daily circ declined 5.9% to 218,923 while Sunday fell 3.8% to 350,640.

Daily circulation at The Philadelphia Inquirer slipped 11.0% to 300,674 copies. Sunday plunged 13.7% to 556,426. At the Daily News in Philly, daily circ slipped 13.2% to 97,694.Daily circ at The Arizona Republic declined 5.5% to 361,333 while Sunday 3.6% to 463,036. Its sister paper the Indianapolis Star lost 3.3% of its daily circ (244,796 copies) and 4.6% of Sunday to 321,760.In Florida circulation fell steeply at the Miami Herald -- its daily circ was down 11.8% to 210,884. Sunday was down 9% to 279,484. The Orlando Sentinel lost 3.3% of its daily circ to 206,363 and about the same on Sunday (-3.2%) to 307,976 copies. The St. Petersburg Times reported that daily circ was down 6.8% to 268,935. However, Sunday rose almost 1% to 390,289.Daily circ at the Denver Post dropped 6.5% to 210,585 and at the Rocky Mountain News it was down 6.6% to 210,281. The combined Sunday circulation for the JOA papers declined 9.1% to 545,442.

In Detroit, the Free Press lost 6.8% of its daily circ to 298,243 copies. The Detroit News’ daily circ plunged 10.0% to 178,280 copies.

The St. Louis Post-Dispatch was down 9.1% to 240,796. But Sunday grew, up 0.8% to 423,588.The Houston Chronicle's daily circulation skidded 11.6% to 448,271. Sunday was even worse, down 15.7% to 584,164 copies. Daily circulation at The Atlanta Journal-Constitution was down 13.6% to 274,999 and Sunday fell 2.3% to 464,805.

Here are some numbers for McClatchy papers: The Kansas City Star’s daily circ declined 2.3% to 239,358 while Sunday dropped 5.3% to 324,837. Daily figures for the Ft. Worth Star Telegram were down 3.7% to 194,257. Sunday decreased 2.9% to 280,447. The Charlotte Observer lost 3.9% of its daily circ to 193,577 copies. Sunday fell 3.7% to 252,300.

In the twin cities, daily circ at The Star Tribune in Minneapolis dropped 4.2% to 322,360. Sunday lost 8.6% to 520,828. The St. Paul Pioneer Press increased its daily circ by a fraction -- up 0.2% to 184,973 while Sunday gained the same to 246,431 copies.

Some Advance Newspapers: The Star Ledger in Newark, N.J., down 10.4% to 316,280 daily copies. Sunday skidded 14.6% to 455,699. The Plain Dealer in Cleveland decreased its daily copies by 8.5% to 305,529. Sunday was down 7.7% to 411,061. The Oregonian in Portland dropped 8.4% to 283,321 daily copies while Sunday fell 7.1% to 344,950. Daily copies at The Times-Picayune in New Orleans dipped 2.4% to 175,530. Sunday fell 2.8% to 194,248.

The tabloids in New York both saw declines in daily copies. The New York Post’s daily circ decreased 6.2% to 625,421. At the New York Daily News, daily circ was down 7.1% to 632,595.

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USA Today newsstand price to rise 33 pct to $1; paper cites 12-year high in newsprint costs

AP

USA Today price rising to $1 on newsprint costs

Friday October 10, 3:43 pm ET

By Anick Jesdanun, AP Business Writer
USA Today newsstand price to rise 33 pct to $1; paper cites 12-year high in newsprint costs
NEW YORK (AP) -- USA Today said Friday it will raise its newsstand price by 25 cents to $1 to offset rising newsprint costs.
The 33 percent increase could affect the nation's highest-circulation newspaper more than price hikes affect the other two national newspapers, The New York Times and The Wall Street Journal, because USA Today is more dependent on single-copy sales. The cost of the Times went up 25 cents in August, while the Journal's price rose 50 cents in July.
Even after the increase, USA Today's newsstand price will be less than the $1.50 now charged for weekday editions of the Times and $2 for the Journal.
Neither home delivery rates nor distribution agreements with hotels will be affected by the newsstand price increase for Gannett Co.'s flagship newspaper, which takes effect on Dec. 8. One-third of USA Today's sales are in hotel-guest copies.
Larry Lindquist, USA Today's senior vice president for circulation, said newsprint costs have risen to a 12-year high and further increases are expected later in the year.
"We remain confident that the continued strong demand for USA Today from consumers, and our price relative to our competition, means that the marketplace will support this adjustment to our newsstand price," Lindquist said in a statement to The Associated Press.
Rumors of the price hike at Gannett Co.'s flagship newspaper circulated earlier on a blog maintained by a former Gannett editor.
Newspapers across the country have been facing flat or declining circulation and plunging advertising revenue primarily because of the migration of readers to the Internet. A weakening economy has further driven down ad sales this year.
USA Today's price increase could help the paper generate more revenue if circulation doesn't drop drastically as a result. But it's not likely to offset completely the losses it's seeing in advertising. The latest figures available show that ad revenue declined 13.5 percent in August compared with the same month in 2007.
USA Today passed the Journal to become the top-selling paper in the United States in 1999. Current weekday circulation is 2.28 million, down slightly from a peak of 2.34 million in 2004, the same year the paper last increased its newsstand price, from 50 to 75 cents. USA Today has not seen circulation slip as much as other large dailies.
In fact, in the latest reports from the Audit Bureau of Circulations, USA Today was one of the few to post a slight gain -- 0.27 percent in the six-month period ending March 30, compared with the same period a year earlier.
USA Today does not publish on weekends, but its average daily circulation exceeds that of any Sunday paper, which generally has higher sales than weekday papers.
Rick Edmonds, media business analyst at the journalism think tank Poynter Institute, said many papers have been cutting back on newsprint use, in part because they have fewer ads to run. But Edmonds said newspaper price increases may be inevitable as advertising drops and papers find the cost of newsprint up 20 percent from a year ago.
Newsprint prices have been rising largely because most of it is produced in Canada, whose currency until recently had been rising against the U.S. dollar, Edmonds said.
The newsstand price increase "makes sense, but it puts the burden on the publishers to make sure there's that much value in the paper," he said.
Gannett shares rebounded in trading Friday from a 9.1 percent loss early in the day to a 5 percent drop, or 66 cents, to $12.61 by late afternoon.

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François Desmaisons, former IHT circulation director

OBITUARY
PARIS: François Desmaisons, 82, former circulation director of the International Herald Tribune, died Aug. 7 in Golf-Juan, France. The cause of death was heart failure, his family said.
Desmaisons joined the newspaper in 1953 when it was the European edition of The New York Herald Tribune, the predecessor of the IHT, which is now owned by The New York Times.
He became circulation director in 1960 and oversaw the expansion of the paper from a Paris-based publication directed largely at American tourists and expatriates in France to an international operation with printing sites throughout the world.
Sales grew from 30,000 copies a day to 200,000 following the opening of facsimile sites - at the time an extraordinary innovation - starting with London in 1974, Zurich in 1977 and Hong Kong in 1980. The IHT currently is printed in 35 sites and has a circulation of more than 241,000.
Desmaisons retired in 1991 but remained as a consultant until 1994.
"François was a pioneer in international circulation development, widely respected around the world, a man who profoundly loved the newspaper industry," said Alain Lecour, former associate publisher of the IHT.
During World War II, Desmaisons served as a liaison officer between French forces and the British and U.S. armies in Normandy and Paris. He later saw combat in the south of France and was awarded the Croix de Guerre. After the war, he worked as a translator at the United Nations in New York for several years before returning to France.
http://www.iht.com/articles/2008/09/03/europe/desmaisons.php


IW: When I first joined the IHT, as Director for Belgium and Luxembourg, based in Brussels back in 1994, is it Francois that I remember as serving out the last days of his time at the IHT in Paris?

Was he the man Didier Brun, the young Franco-Swiss gun who was to be promoted to take over his job, introduced me too? My memory is perhaps failing me, and I am confusing Francois with another man who was literally in the process of packing his things.

So I'm a little confused.

Richard McClean, the new, ex-FT IHT publisher had wanted young blood, and picked out Didier from advertising (classifieds I think it was) to be the new Circulation Director. I can't remember if it was him, or Francois, who was on the masthead as Circulation Director when I was recruited.

Alain Lecour was also seen as part of the ancien regime, and was given a very nice job in Spain as circulation director for that country, presumably as part of the deal.

1993/1994 really was a watershed in the IHT's history, as much as the overseas print sites introduced by Francois were too. McClean marked the beginning of a more earnest approach to making the IHT more profitable, the end of the extravagant annual global sales conferences, the fun really. I arrived, and represented, amongst another new hires, the end of fun.

Sadly, however, the FT had already stolen a lead in Europe's business heartland, by starting to print in Frankfurt.

IHT management and editorial were way too complacent about this young upstart in international newspaper publishing, and completely failed to anticipate or react to their rapid expansion until it was way, way to late to retake the high ground seized by the FT.

That high ground was the hearts and minds of senior European business decision makers, and although, ostensibly, the IHT had been trying to position itself into this market since it became the IHT, it had failed to do so.

Leading European industrialists might have been readers, but it was the FT that first realised that one had to reach the entirety of these companies 'C-suites' to bring in the ad dollars. The chairman of Europe's largest companies don't buy network computer systems, it's their senior executive in charge of IT.

But neither IHT owner at that time had the ambition or willingness to invest that the FT did. And there went a hell of an opportunity which would have saved the NYTs a great deal of money all these years later.

It was to be another decade before the NYT was ready to activate its global ambitions, and therefore 1993 - 2003 was to be a decade of relentless cost cutting and, de facto, making sure the IHT could not succeed, thus marking an obstacle to the NYT's eventual plans to either buy out the WP at a reasonable price or go on their own with the INYT.

For years we slaved away at a paper that the NYT wanted to keep just above water, until it was ready to strike. Somewhat cynical one might say, as naturally the board certainly didn't tell any of us that.

The FT built of their Frankfurt printing, were instrumental in quickly setting up a reader survey that became the gold standard for European advertisers (EBRS) and which suited their readership, and the rest is history.

The IHT has been trending down every since.

NB: I note that the above obituary doesn't report the IHT's highest circulation figures, some of which were obtained under Francois' career, and which exceed today's circulation. I think IHT circulation was in high 100,000s in 1994 - 14 years later it has seen some spikes (largely caused by local publishing partnerships) but remains more or less static at 241,000.

NB The highest the IHT circulation has ever been was in post WWI France, in excess of 300,000. A similar peak occurred directly after WWII, indeed the IHT was one of the first newspapers to begin reprinting after the liberation of Paris, gaining paper stock from the U.S. army's Stars and Stripes.

By the 1950s however it was on its knees.

Unfortunately the IHT's owners then mistook availability (via the new print sites) and the resulting dramatically increased sales, for sustainable reader loyalty.

Just because it was available didn't make it any good but it sure helped circulation figures. At that time foreign newspapers simply weren't available globally, so for anyone travelling, who couldn't read the local press, the IHT was essentially a distress purchase.

The FT made their newspaper available, and it was a much better product for the audience both newspapers had to compete for.

Much of the IHT's 241,000 circulation remains bulk sales to airlines, which, given fuel costs, is likely to decrease.


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