The Effect of Content Mix on Circulation Penetration for U.S. Daily Newspapers

Article excerpt

For a generation, the U.S. newspaper industry has suffered from stagnant circulation performance and declining penetration, but some papers manage to maintain healthy penetration. This project investigated whether content mix could account for the variance in penetration among papers in a national sample, but found content does not have a significant impact on circulation variance after controlling for the influence of market characteristics.

When University of Wisconsin researchers Bruce Westley and Werner Severin did their groundbreaking research on newspaper readership in the early 1960s, they could say with some accuracy: "Reading the daily newspaper is doubtless one of the most thoroughly institutionalized behaviors of Americans."1 Indeed, what made their research into nonreaders interesting and valuable was that, in their time, nonreaders were the unusual case rather than the common one.

But today, the situation is vastly different. One survey found that only 42% of the U.S. population reads a paper every day.2 The sense within the U.S. newspaper industry is that a generation of "flat line" circulation-stagnation in the total number of newspapers sold-is a major problem. This decline is well established and documented. Picard3 discusses a nearly 50% decline in penetration rates from 1950 to 1990. Putting it another way, about as many daily newspapers are sold now in the United States as in the mid-1950s, even though the national population has grown by 64% since then.4 Recent statistics from the Newspaper Association of America put weekday circulation at 55.6 million and Sunday circulation at 59 million.5

An interesting and important question for the industry is: what, if anything, can journalists do about it? Can circulation be affected by decisions that reporters and editors make about newspaper operations, such as the amount or types of content that compose the newspaper? Or have demographics, competition, and other external factors made declining penetration inevitable and irreversible?

The conventional wisdom in the industry is that local news and lifestyle coverage are thought to build circulation by giving readers what they want and what they need but cannot get from other sources.6 Recent academic research has focused on the connections of newspaper business success and editorial quality, operationalized by content measurements such as newshole.7 The goal of this project is to empirically and systematically evaluate content determinants of circulation to see whether the conventional wisdom is correct or not, and also to contribute to the ongoing conversation about content-based quality measures and business success with a detailed analysis of the relationship of content to circulation performance. The key question in this study will be whether content variables, defined as space devoted to specific types of news, can account for the variance in circulation penetration across a broad sample of newspapers.

Theoretical Basis

Traditional economic theory says that supply and demand in a market combine to create an equilibrium point that matches quantity produced with quantity consumed and also sets a price. But newspaper circulation performance doesn't neatly follow this model. A half-century ago Ray8 demonstrated that non-price competition was a key factor in newspaper demand because of imperfect competition. A few years later Landau and Davenport9 determined that cost-price theories did not apply to newspaper supply-demand models. Picard10 found newspaper circulation demand is inelastic with respect to price. Lacy has repeatedly demonstrated that content offers a form of product differentiation for newspapers that operate in markets where different media are imperfect substitutes for one another, echoing what Ray and Landau/Davenport had said a generation earlier. Lacy and Simon elaborate: "Traditional utility theory is not entirely satisfactory in explaining reader demand . …