Newspaper circulation drop accelerates April-Sept

Circulation at newspapers shrank at an accelerated pace in the past six months, driven in part by stiff price increases imposed by publishers scrambling to offset rapidly eroding advertising sales.

Average daily circulation at 379 U.S. newspapers plunged 10.6 percent in the April-September period from the same six-month stretch last year, according to figures released Monday by the Audit Bureau of Circulations.

It's the largest drop recorded so far during the past decade's steady decline in paid readership - a span that has coincided with an explosion of online news sources that don't charge readers for access. Many newspapers also have been reducing delivery to far-flung locales and increasing prices to get more money out of their remaining sales.

The latest decline outstripped a 7.1 percent decrease in the October 2008-March 2009 period and a 4.6 percent decline in last year's April-September window.

As both publications indicated earlier in the month, The Wall Street Journal surpassed USA Today as the top-selling newspaper in the United States. The Journal's average Monday-Friday circulation edged up 0.6 percent to 2.02 million - making it the only daily newspaper in the top 25 to see an increase.

USA Today suffered the worst erosion in its 27-year history, dropping more than 17 percent to 1.90 million. The newspaper, owned by Gannett Co., has blamed reductions in travel for much of the circulation shortfall, because many of its single-copy sales come in airports and hotels.

The New York Times stayed in third place at 927,851, down 7.3 percent from the same period of 2008. Its Sunday edition remained the top weekend seller at 1.4 million, a decrease of 2.6 percent.

Sunday circulation at all the newspapers covered in the ABC survey fell 7.5 percent in the latest six-month span.

The circulation numbers are just the latest sign of distress in the shrinking newspaper industry.

Newspapers are trying to recover from a steep drop in advertising revenue - traditionally their main source of money. The worst U.S. recession since World War II and the lure of the Internet have combined to make the industry's annual ad revenue $20 billion less than it was three years ago.

To compensate, many of the nation's largest publishers are raising the subscription rates and newsstand prices for their print editions.

Some newspapers also are planning to charge for access to at least some sections of their Web sites. Besides bringing in more revenue, the online fees could cause more people to keep subscribing to the print editions if fewer stories are available for free on the Web. But it would also threaten to shrink their online audiences, making it more difficult to sell the Internet ads that are gradually replacing some forms of marketing in print.

Although higher prices for print editions alienate some readers, enough of them are footing the bill to funnel more money to newspapers.

For instance, circulation revenue at The New York Times Co. and another major newspaper publisher, McClatchy Co., climbed by 7 percent during the summer, even though they both lost subscribers.

Bringing in more money from readers is now more important than trying to preserve circulation, according to Mark Adkins, president of the San Francisco Chronicle. His newspaper suffered a nearly 26 percent drop in circulation in the April-September period to 251,782. But the remaining subscribers collectively pay the Chronicle more than its much larger audience did in the previous year, Adkins said.

The Chronicle now charges $7.75 per week for home delivery, up from $4.75 in the previous year. Weekday copies sell for $1 on the newsstand, up from 75 cents.

"The new circulation revenue has become an important part of our business model," Adkins said. "We are pretty pleased."

The Dallas Morning News attributes about half of the 22 percent decline in its weekday circulation to higher prices. The newspaper, owned by A.H. Belo Corp., averaged circulation of 263,810 during the period. Despite the erosion, the Morning News now gets about 40 percent of revenue from circulation, up from the industry's traditional average of 20 percent.

"While we knew our reported circulation would be down, the key was that we were growing circulation revenue significantly," said Morning News Publisher Jim Moroney.

Both the San Francisco Chronicle and The Dallas Morning News say they are investing their additional circulation revenue in improvements aimed at retaining their remaining audiences - with the hope the advertisers will want to connect with a more engaged and loyal group of readers. There's a potential downside, too: If newspaper circulation keeps tumbling, advertisers may demand rate cuts and could even shift more of their marketing budgets to media that reach more people.

Other newspapers such as the Detroit Free Press and The Detroit News have curtailed their home delivery schedules to save money. Since March 30, Detroit's two biggest dailies have limited home delivery to Thursdays, Fridays and Sundays - the editions that sell the most advertising. Readers can get electronic versions of the newspapers on the other days or buy a print copy on newsstands.

The Free Press, the bigger of the two newspapers, ended the latest reporting period with average weekday circulation of 269,729, down 9.6 percent from last year.

A few newspapers, mostly smaller ones, added subscribers during the reporting period. Of all the newspapers with a paid circulation of more than 50,000, the York Daily Record in Pennsylvania saw the biggest increase - rising 16.5 percent to 55,370. The newspaper's publisher and managing editor didn't return messages Monday.

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AP Business Writer Barbara Ortutay in New York contributed to this story.