Does anyone really know how many people are reading newspapers? Probably not.

The industry has yet to come up with a robust way to measure online readership. The figures for print readership have been the subject of constant controversy, bickering and suspicion. In all this, hard copy paid newspaper circulation figures  — actual copies of actual publications — have been the gold standard, broadly accepted by all as reasonably robust and transparent.

These are the figures that have enabled our newspaper publishers to claim, with pride, that Australian newspaper circulation is holding up well when compared to the situation in the US and Europe.

For years I have suspected that it wasn’t so. At various times Crikey has investigated. But until now, hard evidence was lacking.

Anyone who visits a school, a gym, a Starbucks or an airport, knows about the free or extreme discount bulk copies available — but they are all declared openly in the Audit Bureau of Circulation figures — aren’t they?

Yesterday’s leaked 2007 email would suggest not, and that there is a loophole that has been exploited. The only thing that surprises me about this is the number of copies allegedly involved … 40,000 is a big figure, and a tidy proportion of total Age circulation.

If we extrapolate across all newspaper publishers (and we would have to suspect they are all up to the same tricks, and therefore not interested in exposing them) then the whole nature and character of the Australian newspaper industry, and the frequently trumpeted claim that circulations are holding up well, would be open to question.

So how could the extra copies be sneaked in under educational sales, as the leaked email suggests?

The Audit Bureau of Circulations requires copies dropped off at educational institutions in bulk, defined as “… a sale at a price of a publication under an arrangement by or with the publisher of the publication for distribution at a learning institution”, to be separately broken out and declared.

All good and transparent.

But this declaration does not include copies bought by individuals from retailers, including campus newsagents. Nor does it include other subscriptions to individuals who happen to be students or teachers. So long as the newsagent or the newspaper publisher has the name and details of the subscribers, and so long as something — no matter how small an amount — is paid, the copy can be counted as a regular paid sale, and is not broken out under “educational sales”.

On university campuses, a commonplace is the system by which students sign up in orientation week, pay a nominal $20 for the year and get a card that they can show at the newsagent to pick up a near-free copy of the paper.

Anyone who frequents campuses knows that most of those copies are never picked up. After all, most students are not on campus all days, and are hardly known as big newspaper readers in any case.

In Crikey’s previous investigations on this issue, it has been asserted that all unclaimed copies on campuses are carefully counted and returned, and don’t make it into circulation figures. While there has always been room for scepticism about this — given that the newsagents have a vested interest in counting the copies as sold — until now there has been no evidence to support suspicions.

Another lurk I have heard about is that newsagents, who are paid close to full price on the extreme discount subscriptions, effectively have an incentive to visit or ring local schools and obtain the names of staff members. The way the maths works, it is even worthwhile for the newsagent to pay the $20 a head annual fee for a teacher’s subscription themselves, because they get paid more than that for selling the deal.

The copies are then dropped off at the school, but not counted as “educational sales” because the subscriber is a known individual.

How much of this is happening, I don’t know.

How much it matters from the advertiser’s point of view depends on whether the newspaper is actually read. It the teachers and students read the newspapers, then it is all fair enough. What also counts is whether the unread copies are properly picked up, counted and returned, thus being taken off the paid circulation figures.

Again, given that nobody in the chain has an incentive to make sure the returns are properly handled, there is room for great scepticism.

I don’t know for sure if this is the sort of stuff that the 2007 email is referring to, but these are the lurks that I have heard rumbles about for years now.

The response from the industry, we can expect, will be damage control, and muddying of the waters with people pointing out that educational sales are broken out. Nobody in this equation — other than advertisers — has an interest in clarity and transparency.

The fact that newspaper circulation figures may not be as robust as some thought makes this a sad story. It is not a cause for celebration. But it is not entirely surprising.