Reacting to the fallout from the circulation scandal that swept up several major newspapers, including Tribune Co.'s Newsday and Hoy, Los Angeles area papers are taking a hard look at how they calculate their readership.
Anticipating closer scrutiny by the Audit Bureau of Circulations, publications are paring certain categories of sales from their newspaper counts.
Several have halted what had been the standard practice of including "other paid," a category denoting full readership. These are copies given to employees for free, donated to schools as part of the Newspapers in Education program, and sold in bulk to airlines, hotels and businesses that provide free papers to customers.
"I've just closed an audit at one of our 85,000 circulation newspapers and they adjusted me for a discrepancy of 119 copies," said Jack Klunder, senior vice president of circulation at Los Angeles Newspaper Group's eight L.A. dailies. "That could be something like two teacher affidavits from the Newspapers in Education program weren't returned to us."
LANG, a unit of MediaNews Group Inc., owns the Daily News of Los Angeles, the Long Beach Press Telegram and several smaller, regional dailies.
"With the 'new' Audit Bureau, they'll adjust your figures for any little infraction," he said. "They're doing field testing and calling subscribers directly at all the papers."
In an analysis of 44 daily newspapers published last month, Deutsche Bank Securities Inc. found that the "other paid" category accounted for 10.3 percent of all circulation nationwide, up from 4.8 percent two years earlier.
Tribune's Los Angeles Times, the region's largest paper, reported sharply lower circulation figures that it attributed in part to an intentional reduction in "other paid" sales.
A Times spokeswoman said the paper would not comment on its circulation, but in an Oct. 28 bulletin to employees, Publisher and Chief Executive John Puerner said that the paper had made "a deliberate decision to reduce less profitable circulation, such as third-party sponsored home delivery and single copy bulk sales."
In the note, Puerner said the decision played a role in bringing its unaudited Monday-to-Saturday paid circulation for the six months ending Sept. 30 to 902,164, down 5.6 percent from the year earlier. Its unaudited Sunday circulation of 1.3 million in the same period was 6.3 percent lower than the year-earlier period.
While ads in papers counted as "other paid" are still seen by readers, they are considered less valuable than those included in single copy and home delivery numbers.
Bob Shamberg, chairman and chief executive of Newspaper Services of America, a media planning agency that places ads in newspapers nationwide, said advertisers want readers to see their ads at home, where most purchasing decisions are made.
"While discounted editions are valuable to newspapers for prospecting new subscribers, certainly our pre-printed insert and run-of-press advertisers don't consider those valuable, and usually opt out of advertising in them," he said. "What's the value of a person in a hotel room seeing an ad? Our view is, the most valuable are single copy and home delivery sales. 'Other paid' has little or no value to advertisers."
LANG reported that its papers, which also include the San Gabriel Valley Tribune, Pasadena Star News, Inland Valley Daily Bulletin, Whittier Daily News, San Bernardino Sun and Redlands Daily Facts, had a combined circulation of 518,075 Monday through Friday and 576,051 Sunday for the six months ended Sept. 30.
"We de-emphasize 'other paid,' the whole category," Klunder said. "We try to keep the entire category at less than 10 percent of our total circulation. In September, 'other paid' was 9 percent of our total weekdays and Sunday it was 8 percent. Our philosophy is that it has very little value to advertisers."
Officials of the Chicago-based Audit Bureau did not return calls.
The moves come in response to circulation scandals in which Long Island, N.Y.'s Newsday had overstated its September 2003 weekday circulation by about 40,000 and its Sunday circulation by about 60,000. The New York edition of Spanish-language Hoy was found to have overstated its weekday circulation by 15,000 and by 4,000 on Sundays. Other publisher's papers in Texas and Chicago were also found to have inflated circulation.
In July, the Audit Bureau responded by implementing a censure rule for papers found to have circulation discrepancies of more than 5 percent.
If such discrepancies are found, the paper will be audited every six months, rather than once a year, and excluded from ABC's next six-month report. Most papers are audited annually in March and provide their own accounting each September. ABC compares the numbers to the papers' revenue records once every year.
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