We had a hard time finding the good news in Monday’s report that U.S. newspaper circulation has fallen more than 10 percent, based on an analysis of 379 daily papers. Thank goodness for the newspapers whose publishers helped them understand why losing hundreds or thousands of paying readers is good.

Most papers acknowledged deep declines in circulation, but explained it in one of the following ways:

• We had to clear out all the bulk copies sold at discount. (I’m still not sure how this one works because I recall publishers saying this a couple of years ago. How many deadwood readers are there?)
• We shrank our coverage area so of course we lost some circulation. It tells advertisers that they’re getting a BETTER quality of reader.
• We’re charging more for the paper so circulation revenue has risen, and anyway, who wants to rely on a business as fickle as advertising (the one that lined our owners’ pockets for the past 150 years.)?
• Readership is rising on the Internet.
• At least we didn’t get whacked as bad as the next guy.

All these statements are true, and they all are good business moves. What I can’t find among the numbers is what percent of print decline at many of these papers is because of the other reasons that you hear from people. Some are legitimate, some aren’t and some are just silly. All say one thing: Many people don’t pay for the paper anymore, which means there’s less money to keep them in business. (Don’t believe us? Ask the Rocky Mountain News and the Seattle Post-Intelligencer):

• I hate my newspaper
• My newspaper doesn’t have anything interesting in it
• News is boring
• News is free on the Internet
• My newspaper is biased to the right/left/middle/other Little League team than the one my kid is on
• My paper stopped running Garfield in the funnies. It doesn’t run Hints From Heloise anymore.
• You can’t get good TV listings anymore
• I don’t care about anything that happens in the rest of the world or outside my front door.
• There’s not enough local/regional/national/world news here.
• The sports section sucks.
• It always arrives too early/late for me to read it.

Here are samples of how some papers handled Monday’s news:

San Francisco Chronicle headline: Chronicle’s strategy shift starts to pay off

The Chronicle said Monday that reshaping the newspaper’s business model is paying off financially even though, as anticipated, it has resulted in a sharp decline in circulation. For the six months that ended in September, The Chronicle’s daily circulation dropped 25.8 percent to 251,782, compared with the same period in 2008, the steepest decline among major U.S. metropolitan papers. …

Frank Vega, publisher of The Chronicle, said the newspaper’s loss in circulation was an expected result of moving away from a business model that depends mainly on advertising and instead relies on readers for a greater share of revenue.

The Chron also adds that subscription price increases and other changes have given it some profitable weeks after losing $50 million last year.

The Detroit News: Detroit newspapers lose less circulation than other big dailies

The steeper losses at other newspapers boosted the Detroit publications’ rankings among the largest in the country. The News pulled ahead from 50th place to 46th; the Free Press jumped from 20th to 17th.

“We radically changed our delivery model and throughout the industry we have seen greater losses,” Janet Hasson, senior vice president of audience development for the Detroit Media Partnership, said in a statement.
The Des Moines Register: Newspaper circulation falls, including at Register

Register Publisher Laura Hollingsworth said much of the decline is due to strategic changes, such as eliminating discounts, reducing unprofitable delivery in far corners of the state and increasing home delivery and single copy prices.

“Our unduplicated audience reach in central Iowa is higher today than it was a decade ago,” Hollingsworth said.

As you can see, things are doing well, so please stop telling everyone that they’re not.

(Photo: Reuters)

Earlier this week I brought you the brewing circulation tussle between USA Today and The Wall Street Journal, and which paper will be able to claim to be the largest one in terms of circulation. You can read that here, but for the recap, here are the main points:

• Editor & Publisher reports: USA Today was set to report that circulation fell “17% to 1.88 million for the six months ending September 2009, a drop of about 390,000 copies. The decline could also threaten USA Today’s position as the No. 1 newspaper in the country by circulation.”
• The Wall Street Journal and The Associated Press report that the Journal would be the largest paper by circulation, according to the Journal.
• USA Today responds, “We are confident that even with this latest economic impact, USA TODAY will remain the nation’s number one newspaper in total print circulation when the ABC statements are released October 26th.”

As I wrote at the time, it seems that the Journal is counting print and online subscriptions together, and why not? Both are made up of paying subscribers. USA Today, of course, is counting printed newspapers.

We won’t know until their circulation numbers are published on October 26 what the final, comparable figures would be. But today, the Journal revealed its latest numbers:

Circulation was 2,024,269 as of the six-month period ending in September 2009, compared with 2,011,999 in the same period a year ago. Individually paid circulation, a number that advertisers like to watch, grew to 1,437,853. That’s impressive, having any growth at all.

As to how it stacks up to USA Today, and who will be able to claim to be the No. 1 newspaper publisher by circulation, we’re going to have to wait until the 26th.

(Photo: Reuters)

USA Today and The Wall Street Journal aren’t waiting for Oct. 26, the day North American newspapers report their latest circulation numbers, to begin tussling over which one has the biggest paper.

Editor & Publisher made the first move on Friday when Jennifer Saba reported that USA Today was set to report that circulation fell “17% to 1.88 million for the six months ending September 2009, a drop of about 390,000 copies. The decline could also threaten USA Today’s position as the No. 1 newspaper in the country by circulation.” The news came in a memo from USA Today Publisher, David Hunke, to his workers.

Spicy stuff, considering that when we write about its owner, Gannett, we say it is the largest U.S. newspaper publisher that publishes USA Today, the largest newspaper by circulation.

The Wall Street Journal’s Shira Ovide wrote up the news too, adding this: “After USA Today’s memo, the Journal said it is now the largest U.S. newspaper by weekday circulation.” Andrew Vanacore at The Associated Press, featured the Jornal echoing that statement: “Dow Jones, the Journal’s parent company, declined to give out the newspaper’s circulation figures for the period, but spokesman Robert Christie said, ‘The Journal is now the largest newspaper by circulation.’”

We wrote up the story too, going along the same lines. The next day, however, we got this statement from USA Today’s communications vp Ed Cassidy – a bit too late to run it as an update to our old story. Still, it piqued my interest in a big way because it doesn’t go along with the lines of what we reported earlier:

We are confident that even with this latest economic impact, USA TODAY will remain the nation’s number one newpsaper in total print circulation when the ABC statements are released October 26th.

So how do we figure this? It’s hard to conclude when the numbers haven’t come out yet. I suspect that both papers can make the claim to be No. 1 because the Journal is counting copies to subscribers who get only the online edition as adding to the total number of print subscribers. Newspaper publishers argue over whether those copies “count,” but it seems like they should considering that people pay for Web access in the same way that they do for print.

Or am I wrong? Should circulation — a key measure for businesses of whether and how much to spend on advertising in newspapers — not count online subscriptions? I’m all ears.

(Reuters photo: The Wall Street Journal)

Here are some of the day’s stories about the media industry:

Recession sends Americans to the Internet (Reuters)
S. John Tilak writes: “More than two-thirds of American adults — or 88 percent of U.S. Internet users — went online for help with recession-induced personal economic issues and to gather information on national economic problems, a study released on Wednesday said.”

BBC and Government Fall Out Over Financing Plan (NYT)
“The BBC and Britain’s Labour government, which has a history of support for the “Beeb,” have fallen out over a government plan to share some of the broadcaster’s £3.6 billion in public funding with its commercial television rivals,” writes Eric Pfanner.

USA Today introduces Newsdeck site for top headlines (Editors Weblogs)
“To give visitors another way to view the news, USA Today has introduced a site it calls Newsdeck that compiles the top headlines in an easy-to-read format. Users can scroll through stories in eight categories, including News, Money and Sports, with the ability to switch back and forth between the latest news and the most popular articles.,” writes Liz Webber.

Bing’s First Month A Bust (Business Insider)
Dan Frommer writes: “Microsoft’s U.S. search market share was 8.4% in June, up from 8.0% in May, according to comScore. It would have been a disaster if Bing didn’t grow at all with all that advertising and free promotion vianews coverage, so at least it’s up a little.”

In other news:

• If you want readers to buy news, what exactly will you sell? The case for a free/paid hybrid (CJR)
• Cost cuts bear fruit for Gannett (FT)

News about the media industry:

Netflix looks to future but still going strong with DVD rentals (USA Today)
“Netflix CEO and co-founder Reed Hastings doesn’t think his 58 distribution centers are in immediate danger of becoming obsolete, but he knows that day will come. He believes DVD rentals have four to nine years to keep growing, despite inroads in Internet delivery of movies to set-top TV boxes and other video-on-demand options,” writes Jefferson Graham.

Is the bell tolling for Clear Channel? (San Antonio Express-News)
David Hendricks writes: “Analysts believe Clear Channel, now with about $22 billion in total debts, will have trouble making scheduled payments later this year. The company, already down to about 800 stations from its peak of about 1,200 stations, either will have to start selling stations itself or go into bankruptcy, where lenders will put stations up for sale.”

Foes No More, Ad Agencies Unite With Internet Firms (NYT)
Eric Pfanner writes: “With consumers spending more and more time online, analysts say Internet companies and ad agencies have no choice but to work together to develop ways to make money from digital media.”

In other news:

• U.S. gov’t to release $4 bln soon for broadband (Reuters)
• Politico’s Washington Coup (Vanity Fair)
• Average Twitter user has 126 followers, and only 20% of users go via website (Guardian)
• First Came Gizmodo, Then Engadget. Now, GDGT (NYT)

Gannett Co Inc has not been too generous lately with making its executives available to media reporters. And why would it? Few newspaper publishers have because there’s little good to say about the business.

Ad sales are tanking, as usual. Debt is looming (what else does it ever do?). Lots of self-styled media experts can’t let a day go by without writing a few blog posts telling publishers that they brought it on themselves and they deserve to die.

With that merry backdrop, I was surprised to get invited to a press conference and an interview with Gannett’s latest picks for editor (John Hillkirk) and publisher (Former Detroit Free Press Publisher David Hunke) of USA Today. Gannett brought them to New York to meet the insular Manhattan media world, which is responsible for writing all those obituaries that you’ve been reading about newspapers lately.

Here are some excerpts (paraphrased as well as verbatim) from our conversation on Wednesday afternoon at Gannett’s New York bureau at Madison Avenue and 54th Street:

Advertising revenue is down by some 30 percent versus last year. Publishers say much of this is because of the recession. How far down would ad revenue be without the financial crisis?

About 10 percent, Hunke guessed.

Nobody we talk to in the newspapers around the United States is very happy. At Gannett, they’re dealing with layoffs, furloughs, you name it. What can management do?

“There is a problem… These are crushing times for people in this country… People are getting nervous and afraid… Management has to shoulder the duty to do more to communicate,” Hunke said. That means keeping the door open and talking to employees at USA Today, he added.

When will the bad times end?

“I don’t know,” Hunke said. “We’re not going to get better [in advertising declines] in the third or fourth quarter, but I don’t think it is getting worse… That’s a far cry from me delivering good and warm news.”

On plans, announced Wednesday, to charge for an electronic edition of USA Today:

• It will cost $120 a year, or $10 a month.
• USAToday.com stays free.
• Hunke would not say how much money he expects it to make. This is an important question because there already is a very free way to get the paper’s contents. And while Hunke said it’s not an interim step toward making the paper available on an electronic reader, this still could be the ultimate goal.

This may not be groundbreaking news, but it is a sign that at least some top officials in the U.S. newspaper business are trying to inspire some confidence by offering up plain talk about the state of the journalism industry instead of saying as little as possible and hoping that everyone is satisfied with that.

(Photo: Reuters)

Newspapers are in the business of making information public so readers can benefit. Newspaper publishers are in the business of revealing as little as possible unless someone springs a leak.

In the case of the two-dozen newspaper publishers who met in the Chicago area to discuss ways to get people to pay for the news they read online, the leak landed in the hands of The Atlantic. Here is an excerpt:

There’s no mention on its website but the Newspaper Association of America, the industry trade group, has assembled top executives of the New York Times, Gannett, E. W. Scripps, Advance Publications, McClatchy, Hearst Newspapers, MediaNews Group, the Associated Press, Philadelphia Media Holdings, Lee Enterprises and Freedom Communication Inc., among more than two dozen in all. A longtime industry chum, consultant Barbara Cohen, “will facilitate the meeting.” …

There was a dinner Wednesday and, according to the agenda, Thursday begins with a quick declaration of goals at 8 a.m., then an 8:10 a.m. session labeled, “Fair Syndication Consortium/Attributor.” …

That first session is followed by “Journalism Online: Presentation on proposed service to charge for access to newspaper content and to license that content that (sic) online aggregators” (the assistance of at least one of the many copy editors sent packing by the attendees might have been sought).

It’s now safe to wager that most attendees, who were scheduled to include Michael Golden of the New York Times, Gary Pruitt of McClatchy and Tom Curley of the Associated Press, will be dragged into charging for at least some online content.

In other words, the papers are trying to figure out how they can charge people for news on the Internet after largely giving it to them for the past 10-15 years. They have to do this so they don’t have to shut down when print advertising revenue gets so low that they can’t afford to stay in business anymore.

Many people say that newspapers have to come up with industry-wide ways to charge and to do a bunch of other things. The only problem with that is antitrust law. No one wants to be caught colluding — it breaks the law, after all. Not to worry: according to the Newspaper Association of America’s statement, antitrust lawyers were there.

From John F. Sturm, president and CEO, Newspaper Association of America:

Newspaper industry executives met in Chicago today under the auspices of the Newspaper Association of America to discuss how best to support and preserve the traditions of newsgathering that will serve the American public.

Following hearings in committees of both the House and Senate, the group discussed business topics such as protection of intellectual property rights and approaches to the Congress and Administration to address these and other issues.

With antitrust counsel present, the group listened to executives from companies representing various new models for obtaining value from newspaper content online. The participants also shared success stories in driving new revenue to their newspapers products.

Some publishers are arguing for Congress to approve an antitrust rule change that would let them get together to solve the problems that thwart them from delivering journalism these days. Whether such a change could ever happen is up in the air. Either way, it apparently never hurts to start talks on the early side.

(Photo: Reuters)

Gannett watchdog Jim Hopkins has spent a lot of time and money running his blog dedicated to keeping a close eye on, and usually criticizing, the company. Not anymore. Come Oct. 1, Hopkins said on an entry on his blog on Tuesday, he will “stop active management.”

Here are the relevant excerpts:

I had planned to post this on July 1, the start of the third quarter. In fairness to my more than 10,000 monthly readers, however, I’m moving up the publication date. …

My plan did not, however, anticipate the rate at which readers would post comments: I am now anticipating at least 50,000 over the next 12 months. For both news-gathering and ethical reasons, I am committed to reading them all.

That would be OK, except the tone of comments shifted in December — for entirely understandable reasons. Many of Gannett’s 41,500 employees came to understand what was taking place in the company. They are now fear-filled, desperate, angry — even suicidal, on occasion. Blogging can be very stressful, of course, Now, I’m finding it may be psychologically harmful, too.

This is not about Corporate winning or losing; this is about adhering to my plan. …

I intend to lock the blog in place, with all content and comments visible. No more comments will be allowed, nor removed. Basically, Gannett Blog will become a point-in-time snapshot of a Fortune 500 company in transition. I hope to find a permanent custodian for the content, in lieu of Google’s Blogger division.

Hopkins was a longtime Gannett reporter who took a buyout from the newspaper publisher. He started the blog as a watchdog project, applying his investigative skills to the company at a level that few other reporters do. His posts are usually critical of the publisher’s managers, and contain their share of vitriol, though not the kind of abuse that Gannett received on the blog from people — usually anonymous employees — leaving comments on the site. Some of those posts have relied more on rumor than fact, but it’s likely that Hopkins has more sources inside the company than anyone else who writes about it.

I asked Hopkins some questions via e-mail, but haven’t heard back yet. I will update this post with his answers. I am also waiting for a comment from Gannett spokeswoman Tara Connell, the target of more than a few tomato tosses by angry readers. (No comment, says Tara Connell.)

What I asked Hopkins:

- How much of a role did money play in this decision? Can you not afford to keep the blog going anymore? How short did you fall of your quarterly/monthly/annual funding needs?  (Hopkins previously said he was trying to raise $24,000 a year from various sources to supplement his income, and suggested $20 for readers as a “voluntary subscription fee.” In the spirit of complete disclosure, I paid one, as I am a regular reader of the Gannett blog, the same way that I am of The Wall Street Journal, which I also simultaneously cover and pay or. Either way, we don’t know yet if he met his goal.) ANSWER: Hopkins says he was on track to make $15,000 this year and was happy with that. It was not designed to make a profit, he told me, but to cover costs: “I never intended to make any money off it.”

- What psychological harm is it doing to you? ANSWER: The kind that makes Hopkins not want to do it anymore.

- What does stopping active management mean? It sounds like you are ceasing to manage it entirely, meaning no more new posts, etc. Do I read you correctly? ANSWER: Yes.

(Photo: Reuters)

Let the bleeding begin. USA Today publisher Gannett kicked off earnings season for media companies this morning, posting a 60 percent drop in quarterly profit.

Here are some key points:

• Revenue fell almost 18 percent to $1.38 billion.

• Publishing ad revenue fell 34.1 percent from last year, with U.S. ad revenue down 28.2 percent and British ad revenue down 38.7 percent.

• At USA Today, ad sales fell 33.5 percent, and the number of paid advertising pages fell to 527 from 826 last year. USA Today’s paid circulation also likely will fall after Marriott International said this week that it would no longer automatically deliver the paper to its guests.

Don’t expect advertising revenue to look much better for biggest media companies as they roll out their numbers over the coming weeks. As Bernstein analyst Michael Nathanson recently pointed out in a research note, investors have been “looking past the horrid near-term trends to a happier place somewhere out on the horizon” but with earnings here “the recent run-up in media stocks will have resistance as the market realizes that recent trends are not likely to reverse any time soon.”

Keep an eye on:

• Dominos has found itself in the center of a publicity storm after two employees filmed a prank in one of its restaurant’s kitchens and posted it online (NY Times)

• ABC Entertainment Group President Stephen McPherson is under increasing pressure to produce a break-out hit (NY Post)

• Twitter is talking to big web companies about partnerships, but isn’t looking to sell itself (NY Times)

• Publicis Groupe agencies have added Hewlett-Packard’s personal systems group account in the Europe, Middle East and Africa region following a review (Adweek)

Before we get to the point of this blog post, let’s see what’s up with Gannett lately.

Its stock rocketed some 40 percent last week, something many experts and news outlets said was because a big investor doubled its stake because it thinks that Gannett’s newspapers might have a future. It rocketed again on Monday, though it’s down 20 percent today (Tuesday). Some of that’s likely because of short sellers covering their bets on the stock’s movements.

Not only that, the company rejected the latest overture from a possible buyer on its Tucson, Arizona paper, prolonging the agony over whether the paper will close or not. Quarterly earnings are on their way this week too, which the company already said would be less than hot. Finally, USA Today is going to show up in fewer hotel rooms now that Marriott said it will start offering customers the option to get no paper at all.

Against this backdrop comes the latest press release:

USA TODAY is now making a selection of its blogs and online communities available for Amazon Kindle, a portable reader that wirelessly downloads books, blogs, magazines and newspapers to a crisp, high-resolution electronic paper display.

USA TODAY blogs and online communities featured on the Kindle include: Cruise Log, with the latest news and trends in the world of cruising; Game Hunters, an online community with a focus on video games and “interactive awesomeness;” Lifeline Live, your ticket to celebrity and entertainment news; OnDeadline, offering breaking news and must-read stories; Game On!, covering the latest sports news; The Oval, an online community dedicated to tracking the Obama administration; Pop Candy, unwrapping pop culture’s hip and hidden treasures; and Today in the Sky, delivering the latest news and analysis about airlines, airports and air travel.

All blogs and online communities cost between $0.99 and $1.99 to download. Subscriptions to USA TODAY, the nation’s top-selling newspaper, have been available to Kindle users since December 2008 for a monthly subscription cost of $11.99. For your convenience, issues are auto-delivered wirelessly to your Kindle at the same time the print edition hits the newsstand.

Will people go for it? Tell us what you think.