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Herald's circulation declines

Daily figures fall 4%, Sunday sales off 14% at struggling tabloid

The Boston Herald's average paid daily circulation fell 4 percent over the past year, and Sunday circulation dived nearly 14 percent, the Audit Bureau of Circulations reported yesterday.

The declines come at a difficult time for the Herald and the newspaper industry. The Herald recently said three of its equity partners want to cash out, and it needs new investors to pay them off. Publisher Patrick J. Purcell has also raised the possibility of a sale.

In addition, the Herald has been relying increasingly on so-called bulk sales to bolster circulation. In those sales, single parties, such as a hotel, school, airline, or other business, buy many papers, typically at a discount, and distribute them, often for free. Bulk sales accounted for 19 percent of the Herald's daily circulation, or almost one in five papers.

Traditionally, advertisers have looked less favorably on bulk sales, because it's difficult to track how many papers end up in the hands of readers, and who those readers are, industry specialists said. Bulk buyers must pay at least 25 percent of the papers' basic price in order to be counted as paid circulation.

But many publishers have also cut back on bulk sales, in part to ease advertisers' concerns about the reliability of circulation data since last year's admission by Long Island's Newsday that it had inflated circulation figures. Advertising rates are based on circulation.

In the six months through the end of September, the Herald's average daily paid circulation fell to 230,543 from 240,759 a year earlier, while its Sunday circulation fell to 131,833, from 152,813.

Most newspapers are struggling with declining circulation and advertising. Average daily US newspaper circulation fell 2.6 percent over the past year, according to an analysis of Audit Bureau of Circulations data by the Newspaper Association of America, a trade group in Vienna, Va. Many newspaper companies, including The New York Times Co., parent of The Boston Globe, have recently reported lackluster earnings and said they are cutting jobs.

The Herald's daily circulation decline was about half the Globe's, which fell 8 percent in the past year and was disclosed last month by the Times Co. The Globe attributed half its circulation decline to its decision to reduce the number of bulk sales.

The Globe's average daily circulation fell to 414,225, compared to 451,471 a year ago. Its Sunday circulation slid to 652,146 from 707,813, an 8.25 percent decline.

The Herald, owned by closely held Herald Media Inc., has increased its daily bulk sales by more than 60 percent in the last year.

Purcell did not respond directly to questions about bulk sales. In a statement, he said, ''The current economic climate has affected the newspaper industry as a whole and that, coupled with ABC rule changes and the elimination of unprofitable distribution, accounts for the majority of our circulation loss."

The 19 percent of the Herald's daily circulation accounted for by bulk sales was up from 11 percent a year ago. In contrast, the Globe cut its daily bulk sales by 37 percent, and they accounted for only about 7 percent of daily circulation, compared to 10 percent a year ago.

''We believe our emphasis should be on higher-quality circulation that we can get through home delivery and single copy sales," said Alfred S. Larkin Jr., senior vice president at the Globe. ''Most advertisers believe these are the most valuable readers."

Purcell, through a spokeswoman, declined to comment on efforts to find new investors for Herald Media. He has retained Wachovia Capital Markets LLC and Dirks, Van Essen & Murray, which specializes in newspaper mergers and acquisitions.

Dirks, Van Essen & Murray represented the Eagle-Tribune Publishing Co., of North Andover, in its recent sale to Community Newspaper Holdings Inc., of Birmingham, Ala.

With paid newspaper circulation in steady decline, publishers increasingly are pressing advertisers to consider other measures of their reach, industry specialists said. Publishers want them to consider that many people can read a single newspaper copy, and that many more read online editions, which are typically free and not counted in circulation figures.

''Advertisers need to take a realistic look at whether or not a person pays 50 cents for a piece of newsprint is the best way to measure readership," said Stephen Burgard, director of Northeastern University's School of Journalism. ''Paid circulation has been the fulcrum, but the model is changing. It's clear the industry on both sides -- publishers and advertisers -- needs to reevaluate."

Robert Gavin can be reached at rgavin@globe.com.

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