For those convinced the newspaper business is teetering on the edge of a cliff, there’s plenty in the latest Audit Bureau of Circulations figures to justify the pessimism. But there are signs of hope too for the optimists who spy a shiny digital future around the corner.

There’s no avoiding the calamitous print circulation declines in the December quarter. Total print sales were down 7.1% year-on-year with only one newspaper, the Saturday West Australian, picking up readers. It was “the worst newspaper audit on record”, according to media analyst Steve Allen.

Fairfax Media‘s metro papers were again the worst performers: The Sydney Morning Herald and The Age Monday to Friday sales both fell by 14.5% year-on-year to 157,931 and 157,480 copies respectively. The Sun-Herald, yet again, won the wooden spoon with a 22.9% drop to 313,477. The Sunday Age slipped 14% to 191,139. The Australian Financial Review was down 7.7% on weekdays (66,709 copies sold on average) and 3.3% on weekends (78,978). The Canberra Times dropped by 7.6% on weekdays to 27,974.

At News Limited, the results weren’t as ugly — but the downward trend is clear. The Australian, after steadying its circulation in recent years, fell by 8.4% Monday-Friday to 122,428 and by 9.6% on weekends. These figures, curiously, didn’t score a mention in The Oz‘s report today. Editor-in-chief Chris Mitchell preferred to focus on the paper’s uptick in the Roy Morgan readership results (which are out of whack with sales data). According to Mitchell, The Oz is stripping back on discounted print sales — a claim not borne out by the data.

A whopping 20% of the paper’s weekday sales are in the accommodation, airline, education or bundled categories — far more than Fairfax’s papers.

In News’ tabloid stable, The Daily Telegraph was down 4.1% to 333,424 while Melbourne’s Herald Sun slipped by 4.7% to 450,090. Brisbane’s Courier-Mail fell by 3.7% to 185,770; Adelaide’s The Advertiser was down by 5.6% to 166,178. Hobart’s The Mercury lost 4.4% of its sales.

Seven West Media‘s The West Australian slipped by 5.1% on weekdays to 176,105, but lifted its Saturday circulation by 1.3%.

Newspaper publishers, unsurprisingly, have downplayed the results. With the emergence of online paywalls and tablet editions, they say total masthead sales are where it’s at.

The Australian‘s online paywall experiment is faring better than many had expected, with the number of  digital subscribers up by 27% on the last quarter to 39,539. This gives the paper total masthead sales of 158,325.

In its audience report, Fairfax also spruiks its total masthead results (which combines print and online replica sales):

“Growth in digital editions is offsetting the fall in print consumption. The total masthead sales on The Age grew 1.6 per cent on Saturday compared to the September quarter and grew 0.4 per cent on weekdays, according to official figures from the Audit Bureau of Circulations. Total masthead sales for the SMH on Saturday grew 3.5 per cent and fell just under 1 per cent on weekdays.”

There’s no doubt the public is ravenous for online content: 150,000 people use The Age and SMH iPad apps each day and 2.8 million people click on the SMH‘s website each month.

But while the growth in digital sales may be offsetting the fall in print consumption, it isn’t nearly offsetting the fall in print revenues. Fairfax and News Limited will have to milk serious money out of their online readers to make up for the income that’s been lost — and is never coming back — from declining newsstand sales, display advertising and classified ads.

The wall of silence from the Herald Sun on its digital subscriptions suggests it won’t be easy. If the publishers pull it off, that really will be a good news story.

Peter Fray

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