Up and Down 17th Street: Papers' reports don't tell whole circulation story

Published February 8, 2006 at midnight

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A funny thing happened to the failing newspaper in Denver's long-running battle for supremacy. Five years into the truce, the Rocky Mountain News is outselling The Denver Post by more than 10,000 copies a day, by one measure.

The News, you recall, took the collar as the "failing newspaper" when the two sought Justice Department approval in 2000 to merge their business operations.

Today, the papers' circulation numbers have a remarkable consistency in Audit Bureau of Circulation reports - making the News' good news not readily apparent.

In the six months ended Sept. 30, 2005, The Post's circulation was 264,301, with the News reporting 263,425. One year earlier, The Post reported 275,292, with the News at 275,136.

These numbers are total circulation, which include all papers that qualify as "paid" under the audit bureau rules. But some copies are more "paid" than others.

Newspapers report how many copies they sell for 50 percent or more of the paper's "basic" price, which must be declared in a report to the audit bureau. They then report how many they sell for a price between 25 percent and 50 percent of the basic price. Finally, there's a number for "other paid" circulation that doesn't fit into the first two categories.

A look at copies sold for at least 50 percent of basic price shows the News selling an average of 225,985, Monday through Friday, in the six months ended Sept. 30. The Post sold 211,171, more than 14,000 fewer.

The spread has been growing. In September 2004, the News sold 242,157 copies in this category and The Post 230,137, a margin of 12,000.

How, then, does The Post come out on top when the total paid circulation figures are reported? The answer comes from a kind of "other paid" copies called "third-party sales," or, "sponsored copies."

These are papers that get dropped on doorsteps of people who haven't actually requested them. Instead, an advertiser that wants to target specific neighborhoods - think a retailer opening a new store - pays to have them delivered to nearby homes for free.

In the six months ended Sept. 30, there was an average of 21,872 copies of The Post sold each day, Monday through Friday, through third-party sales. The figure for the News was 7,076.

Voila. There goes that 14,000-copy lead for the News.

The issue of third-party sales has been a controversial one inside the newspaper industry. The New York Times did a 2,700-word story on the practice last January that questioned how valuable the circulation is if readers don't actually request the paper.

It led with an anecdote from Denver, because the Times noted The Post distributed more than 100,000 Sunday papers through third-party sales in the six months ended in March 2004. At 13.2 percent of total paid circulation, The Post used the technique more than any of the other Sunday papers it studied.

"We understand newspapers use them to generate new readership, but we don't necessarily value those newspaper sales as highly as we do copies that the reader has actually paid for," Bob Shamberg, chief executive of Newspaper Services of America, told my colleague John Accola last month.

Kirk MacDonald, CEO of the Denver Newspaper Agency, says "there's absolutely nothing wrong with" third-party sales. The agency has conducted three separate studies, which have found that adults in half the households read the third-party papers. Of the half of households that do read, three-fourths read every Sunday and six of 10 of the daily readers read the free papers every day.

"The idea they're not of value to readers is simply inaccurate," MacDonald said.

They also clearly have value to the Denver Newspaper Agency, which wants the two papers to have balanced circulation numbers so the two Denver papers - the "winner" and the "loser" - appear to be equally good buys for advertisers.

David Milstead and James Paton take turns writing Up and Down 17th Street. Contact Milstead at 303-892-2648 or milstead@RockyMountainNews.com.

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