Newspapers, the mass-less mass medium

The devastating double-digit drop in daily newspaper circulation in the last 12 months leaves little doubt that the classic mass media model will not work for newspapers – or perhaps any other medium, either.

Publishers who think their businesses are going to live or die according to the number of bellybuttons they can deliver probably will see their businesses die. The smart ones will get busy on Plan B, assuming there is a Plan B and it’s not already too late.

The undoing of newspapers has been under way for decades and should come as no surprise to anyone who has been paying attention.

As of now, this quintessential mass-media product reaches barely a third of the nation’s households. There’s no telling how low penetration might go. Here’s how we got there:

Daily newspaper circulation fell a record 10.6% in the 12 months ended in September to an average of 39.1 million copies, representing a 38% drop from an all-time peak of 63.3 million in 1984. Circulation now is lower than it was prior to World War II.

Because the nation’s population has more than doubled in the post-war era, the percentage of households buying newspapers has plunged. Newspapers today are purchased on average in only 33 out of every 100 American households, as compared with 98 homes in 1970 and 53 households as recently as 2000. Details are in the table below.

Notably, the drop in newspaper penetration began well before the commercial debut of the Internet in the mid-1990s. The move away from newspapers was prompted by the rising popularity of television and other pre-web electronic distractions, plus growing work, commuting and family demands that attenuated the time and attention people could spend reading newspapers.

There’s no doubt the arrival of quick, cheap and reliable Internet connectivity cut into demand for newspapers. The long-running decay in newspaper sales began to accelerate in 2005, dropping 8% in 2008 and 10.6% in the most recent period, marking the first double-digit decline in history.

The sourest economy since the original Great Depression didn’t help. But don’t blame the economy for something that has been under way for decades – or expect things to get better when the economy recovers.

Despite the obvious, long-running decline in circulation penetration, an amazing number of otherwise intelligent newspaper executives have been spending entirely too much time trying to spin audience numbers instead of acting to save what’s left of their rapidly wasting franchises.

A particularly stunning example of this self-delusion is the rule change that took effect on April 1 that allows publishers to count a paper costing as little as a penny as a fully paid copy by the Audit Bureau of Circulations, the industry-funded group that is supposed to keep publishers honest. Previously, publishers had to charge at least 25% of the cover price for a paper for it to count as paid circulation.

This change means that the dismal circulation numbers announced yesterday potentially are bleaker than they otherwise would appear to be. Not a great way to build trust among advertisers, is it?

In fairness, it should be pointed out that a portion of the decline in newspaper circulation in the last few years has been self-actuated.

Seeking to control costs at a time of disastrously plummeting revenues, publishers pulled back on vanity circulation to distant points beyond their core markets. That’s why, for example, the Atlanta Journal-Constitution no longer covers Dixie like the dew.

Other publishers curbed costly promotional programs that artificially fluffed circulation by selling papers at deep discounts for a limited time to people who then had to be replaced by offering still-cheaper promotional discounts to a new batch of expensively acquired “subscribers.” (There is no way to tell how much the decline in promotional discounting may have been offset in the latest reporting period by the change in rules that allows papers to count a copy sold for a penny as being fully paid.)

A few publishers – like those in Detroit and Mesa, AZ – deliberately reduced circulation by respectively eliminating home delivery on some days of the week or simply lopping days off their print-publication schedules.

Publishers like the New York Times and Dallas Morning News have begun requiring consumers to pay far more towards the cost of producing a newspaper than publishers ever have dared. This will tend to reduce total circulation but make the remaining sales more profitable than they have been.

The combination of contracting consumer demand and rising publisher parsimony almost certainly means circulation will continue to trend lower.

In light of this, publishers would be well advised to develop targeted print and interactive products that deliver demonstrable value to the growing cadre of advertisers focused on maximizing the efficiency of their purchases, not paying for bloated audience numbers.

Back in the day, the “mass” audience assembled by the “mass” media was of paramount importance to the successful sale of advertising. But reach is a ridiculously retro concept in this day of targeted interactive media and sophisticated marketing analytics.

Circulation statistics, like the depressing ones released yesterday, are an anachronistic artifact of the ancient era when newspapers and broadcasters aimed to deliver the largest possible audience to advertisers.

Anyone who remains focused on assembling the most eyeballs or bellybuttons in a market is pursuing exactly the wrong goal. Today, it’s all about quality, not quantity.

The problem is that some newspapers already have let so many readers and advertisers get away that they may have left too little left to sustain viable businesses.