With Los Angeles Times circulation numbers plunging to 1960s levels, executives of Tribune Co. are trying to reverse the slide, hiring a new vice president of circulation and spending $10 million on a new marketing campaign.
The newspaper's weekday circulation dropped 6 percent in the reporting period ended Sept. 30, 2004, and Tribune officials have said they expect a similar drop when the Times reports its circulation for the six months ended March 31.
"Our goal is to substantially reduce the year-after-year decline in paid circulation, particularly in home delivery," said Tribune Publishing President Scott Smith during an April 15 conference call with analysts.
Though most large American newspapers have been hemorrhaging circulation since the 1980s, the decline at the Times has been especially steep. The last number reported to the audit bureau 902,164 for the six months ended last Sept. 30 was the lowest weekday circulation since 1968.
Despite circulation woes, Tribune reported a 4.7 percent increase in operating profits in its publishing division, which includes the Times, the Chicago Tribune, New York's Newsday and several smaller newspapers.
Tribune did not break out numbers specific to the Los Angeles Times.
But the plunge has troubled analysts, who peppered Tribune executives with questions on the trend during the recent conference call.
"We would strongly encourage them to go out and do whatever they can to improve their paid home delivery," said Bob Shamberg, president of Newspaper Services of America, which places advertisements for major national retailers.
The paper is spending $8 million to target potential subscribers with mail and e-mail pitches. Last month, a $2 million marketing campaign was launched that invited Southern Californians to "Find Yourself in the Times."
The direct mail and e-mail campaign is intended to compensate for the effect of the federal "Do Not Call" law that went into effect in 2003 and has hurt newspapers nationwide.
It has particularly impacted the Times because of its historically high subscriber turnover called churn that has resulted in a reliance on short-term deals to win subscribers. Outgoing Publisher John Puerner has blamed much of the recent circulation decline on the curbs.
The Times circulation would be down "slightly more" than the previous 6 percent decline when the Audit Bureau of Circulations releases its latest biannual figures in May, Smith said during the conference call.
The difficulties come as the Times faces a likely cutback in advertising due to the forthcoming purchase of May Department Stores Co. by Federated Department Stores Inc., which operate Robinsons-May and Macy's, respectively. More recently General Motors Inc. withdrew advertising over complaints about editorial coverage in the Times.
In the past, said newspaper economist Miles Groves, the Times was too focused on building circulation at any cost. Former Publisher Mark Willes, who ran the newspaper five years before Tribune bought it in 2000, had publicly vowed to double circulation to 2 million.
"Moving away from telemarketing toward more expensive forms of building circulation is going to cost (Tribune) less in the long term if it gets the subscriptions to stick," Groves said. "Marginal circulation, if it's not circulation that advertisers care about, might end up being incredibly expensive."
Smith said past Times strategies were part of the problem. Those strategies included offering deep discounts to win and keep readers, as well as bundling the newspaper with La Opinion, a Spanish-language daily formerly owned by Tribune.
"We're in a transition there between a bunch of high-churn circulation and more sustainable circulation and readership," said Smith, who added the circulation declines were expected during this transition phase.
These efforts come as the Times brings on Jack Klunder to be vice president of circulation. The executive was senior vice president of circulation at the Los Angeles Newspaper Group, a chain of suburban dailies owned by Denver-based MediaNews Group Inc. that has had mostly steady circulation.
Klunder did not respond to requests for comment made through Times spokeswoman Martha Goldstein.
Like other papers, the Times is increasingly emphasizing readership over circulation, noting that several people might read a single copy while others access it on the Internet. The Times has an average daily readership of 2.4 million and an average Sunday readership of 3.5 million, according to its executive vice president and general manager, Jeff Johnson, who is replacing Puerner as publisher.
Tribune executives say they also are delivering loyal subscribers who meet favorable demographic profiles, such as a higher education level.
Brenda White, director of print investment for the media buyer Starcom USA, said that while advertisers are interested in readership data, it's only circulation that can be verified. She noted that advertisers are particularly interested in hard data because of circulation-inflation scandals at several newspapers, including Tribune's Newsday.
"What is audited? Circulation is audited," White said. "I need proof that those copies are delivered to homes and newsstands that they end up in the hands of (readers)."
Shamberg said advertisers value paid home delivery over other circulation categories, but that advertisers are likely to respond favorably to the Times' efforts to build more long-term readership only if the circulation losses are stemmed.
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