NEW YORK (Reuters) - U.S. newspaper circulation fell 2.1 percent as of the end of March, according to data released on Monday, illustrating the migration of readers to the Internet and publishers' efforts to trim less valuable discount subscriptions.
The decline reflects an ongoing movement of readers from paid print editions to mostly free online papers, but experts said it also shows an effort by publishers to stop counting discounted and bulk copies in their circulation figures.
"When you're at a hotel and you trip over USA Today going out the door, that's an example," said Alan Mutter, a former editor at the Chicago Sun-Times and San Francisco Chronicle, who runs a journalism blog called Reflections of a Newsosaur.
Average paid daily circulation fell to about 45 million copies, based on a Newspaper Association of America analysis of data on 745 newspapers released by the Audit Bureau of Circulations.
Circulation at Gannett Co. Inc.'s USA Today was flat at 2.2 million copies, and Dow Jones & Co. Inc.'s Wall Street Journal rose slightly to 2.06 million copies.
More papers reported drops, including The New York Times, down almost 2 percent to 1.12 million copies, and The Washington Post, down 3.5 percent to 699,130 copies.
Discounted copies cost publishers more in terms of newsprint and delivery, but are not considered as valuable to advertisers who rely on paid circulation to determine how much ad space they buy.
"This should be a good thing for advertisers because they're getting a much more highly-qualified audience," said Mutter, who is also a managing partner at new media investment firm Tapit Partners.
The numbers also reflect publishers' decisions to limit the distribution area of their papers.
Belo Corp., which operates the Dallas Morning News, saw a more than 14-percent drop in circulation for the second half of 2006, compared with the same period in 2005. It attributed some of the decline to a decision to limit distribution outside the Dallas-Fort Worth area.
The paper wants circulation that gives advertisers "the strongest possible return on investment rather than increasing circulation with subscribers having marginal value who are expensive to attract and retain," said publisher Jim Moroney.
FEWER SUBSCRIPTIONS SOLD
Tribune Co., which is going private in an $8.2 billion deal, said weekday circulation at the Los Angeles Times fell 4.2 percent and was down 2.1 percent at the Chicago Tribune.
Both papers said in separate statements that they are focusing on individually paid circulation -- which they said reflects a commitment to audiences who are "most likely to respond to advertiser messages."
Newspaper Association Chief Marketing Officer John Kimball said it is not clear how much of the circulation drop is due to cleaning up subscriber rolls.
"Probably half of the decline might be represented by newspapers taking an overt strategy of selling fewer subscriptions," he said. "You can make a hell of a lot of phone calls pretty easily and sell discounted promotional subscriptions. it's very expensive circulation."
The Newspaper Association and some U.S. newspaper industry experts are urging advertisers to pay more attention to readership rather than paid circulation. That includes estimates for how many people share copies as well as estimates for online readers.
"Circulation numbers are still very important as a base measure of a paper's impact in its market, but it's very clear that readership as opposed to circulation is the much more important metric," said Goldman Sachs analyst Peter Appert.
If he shares his copy of The Wall Street Journal with a colleague, Appert said, "the impact from an advertising standpoint is two people are reading it."
