If anyone doesn’t understand what drives newspaper executives to
fabricate their circulation figures – as Crikey has been reporting
every day for the past two weeks – have a look at the latest
six-monthly Audit Bureau of Circulation figures released this morning.
(Actually, you’ll have to look hard, because most papers have buried
the bad news in their back pages).

The figures are a bloodbath (see The Australian’s summary here ) In Sydney, the SMH and Telegraph are haemorrhaging — the Herald is down 4.7% (Monday-Friday) and 4.1% (Saturdays), and the Telegraph is down 6.6% and 0.3% respectively. Read the Herald’s report here Unfortunately, TheTele’s miniscule report on page 57 is not on its website.

In Melbourne, things aren’t quite as bad, with The Age down 1.9% on weekdays and 2.7% on Saturdays, while its rival Herald Sun held circulation on weekdays and rose 0.2% on Saturdays. See The Age report here.

The Financial Review fared even worse. Although it dropped
“only” 3.4% on weekdays, this is off a much lower base. It has fallen
below 85,000 for the first time in nine years, according to its rival The Australian. As for the Oz itself, it rose 1% on weekdays but fell 2.2% on Saturdays. And the Canberra Times, Courier-Mail, Adelaide Advertiser, Hobart Mercury and NT News all lost ground on weekdays, while the West Australian grew 0.2%. The Saturday picture was just as bad, with all metro and national newspapers losing ground, except the Herald Sun and NT News which put on less than 0.5% each.

The biggest losers are the SMH, Telegraph and AFR. The Tele switched editors in an attempt to liven itself up, but the Herald’s
situation is dire – it shed another 10,422 sales in the past six
months and now stands at 210,600 copies sold on weekdays, compared with
229,000 when current CEO Fred Hilmer started his tenure in 1999.

The fact that The Herald’s buyers are deserting the paper in numbers
should be sending shock waves through Fairfax – but it isn’t, because
the company doesn’t have one director with print media understanding.
But everything’s OK, according to Fairfax commercial director Alan
Revell, who tells the SMH that things will get better because
of “improved marketing, on-time distribution and making our papers
stand out more in newsagents” – all apparently fresh new initiatives
that have never been contemplated by the savvy publisher before.

Over at the Fin, publisher Michael Gill explains his paper’s
continued decline as “consistent with ongoing trends reflecting
sustained contraction in financial services activity” – a piece of
embarrassing gobbleygook that ignores the reality that “financial
services activity” is booming, the share market has been booming and
recruitment advertising has been booming.

CRIKEY: These latest “audited” figures are even more disastrous when
you allow for the “fudge factor” – all the unpaid or heavily
discounted copies that are “audited” as “paid circulation”, but are
actually dumped at hotels, airlines, schools, trade shows, exhibitions,
cafés, sports events, or are “sold” in bulk to associated companies, or
are simply missing from newsagent returns. Crikey believes this fudge
factor could be worth as much as 25% of some newspapers’ official
audited circulations – a fraud that could result in the major
publishers being prosecuted and being forced to refund tens of millions
of dollars to duped advertisers.

In its gloomy circulation report today, the Fin referred to
Crikey’s ongoing investigation into circulation rigging, and reported
that Media Federation of Australia president John Sintras has asked the
ABC’s chairman, News Limited executive Stephen Hollings, for a “full
investigation” of Crikey’s claims. “We want to know if publishers are
being fraudulent,” Sintras says today in the AFR . “We want to know that the auditing process has integrity”.

Well, John, if a proper independent investigation took place, it would show that cooking the circulation books is as easy as… ABC.


Meanwhile, Crikey readers continue to send us more information about
the great circulation rorting game. A current editor of a trade mag
writes:

If you want to see the worst rorts, the trade press and the ethnic
press are the two places you should look at first. Why? Well because
they are perhaps the most ad-driven areas of publishing in the country,
yet they are also the worst offenders when it comes to dodgy
circulation figures.

For example, there is one ethnic newspaper in Melbourne that claims an
(unaudited) circulation of 20,000, yet in reality it is less than a
quarter of that. This is quite serious since most ethnic newspapers
make most of their money from government (local, state and federal)
advertising which uses these figures when determining where and when to
place ads.

A number of trade rags push up their circulations by counting copies
that go to dead people, people who no longer work in the particular
company or by mass give-aways at trade shows (which usually end up in
the rubbish bin). These highly pumped-up figures are then used to dupe
silly advertisers into parting with their cash.


And an ‘old print publisher’ writes:

Regarding the circulation scams, one you’ve missed is the bogus invoice
for paid copies at full price. Its simple. Get a company where you know
the people well enough, could be XYZ Pty Ltd, ask your mate to send
you a proper invoice for buying 10,000 copies of a magazine each month
and just show it to the ABC with your newsagent and subscription files.
Voila! Up goes your circ. Even easier is a related company within a
group.

No money changes hands, it’s just a piece of paper that is never checked.

Peter Fray

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