The heavies at News Limited are getting worried about the
drip-drip-dripping claims about how newspaper and magazine publishers
rort their audited circulation figures.

How else to explain this I-never-beat-my-wife story in The Australian’s
media section today, which begins with the words: “News Limited has
rejected a claim that it manipulated sales figures for its newspapers”.

News Limited chief executive John Hartigan and The Australian’s
editor-in-chief, Chris Mitchell both jump to their own defence in
attacking Crikey’s ongoing circulation-rort allegations and a story in
Tuesday’s Financial Review, in which columnist Neil
Shoebridge wrote that News “is allegedly one of the biggest
manipulators of circulation figures, particularly for The Australian.”

Hartigan accuses the AFR of “parading anonymous
and unsubstantiated rumour, allegation and innuendo as serious
journalism,” and says that Shoebridge’s “defamatory slur” is a “classic
example, made worse because it was based almost entirely on a series of
claims published by Crikey”.

He went on: “News Limited does not condone any practice by any
employee that would falsify circulation numbers, intentionally or
otherwise… We are not aware of any audit that has revealed any
anomalies or other unexplained variances in circulation… Advertisers
and others have a right to expect that circulation results are
accurate. The integrity of these results is vital to the credibility of
our industry.”

Meanwhile, here’s more from Crikey readers – first from another industry insider:

I’ve been reading your report on the circulation rorts with interest,
especially Harold Mitchell’s comments. I’ve been in the industry for an
extremely long time and know nearly all the circulation tricks – I’ve
been asked to do them consistently at a number of the biggest
publishers in the country. If a publisher owns their own distribution
company, then ANYTHING can be done. It’s as easy as tapping into the
computer system and changing the sales figure – and when the report is
printed and shown to the auditor, how on earth can they know if it’s
legit or not?

… and from another
publishing industry operator, who says that circulation fraud is
widespread among publishers of magazines audited by CAB
(Circulation Audit Bureau) – magazines and newspapers which are
distributed free-of-charge (like business-to-business publications,
street press and suburban newspapers) that produce audited CAB
circulation figures for advertisers:

You initially explored circ rorts in both CAB and ABC
context. Don’t let go of the CAB stuff as some of those B2B publishers
are just as, if not more, creative. Most of the last few Crikey emails seem
to be morphing towards just chasing the ABC and newspapers.

I
cannot divulge details, but our business has been actively trying to
acquire titles from other publishers and have come across several
instances where our due diligence found the print run to be
significantly under the CAB figure. We only stumbled on to these as the
titles we were looking to purchase were being printed by our main
supplier who gave us a quiet heads up.

This IS the biggest rort
in marketing expenditure – and I have had ten years at News Ltd, five at Pac
Pubs and now operate in the B2B world. Keep digging PLEASE!!!!! I think
the printers hold the key to getting to the bottom of this. With News
and Fairfax owning their own printing plants they may not be the
easiest to unravel.

Call the PMP and Offset boys to cough up the info – they have it.

Peter Fray

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