Get the Union-Tribune — For Almost Nothing

How would you like to buy a whole year’s home-delivery subscription to the Union-Tribune, Thursday through Sunday,for $29.95? That’s particularly enticing, because if you want only six months of the same thing, you pay more than double: $72. And if you want a year for Friday through Sunday — only three days each week — you pay $123, four times as much.

Goodness gracious! Those are anomalous prices. Yet they are listed as “basic prices” in the Union-Tribune’s March 29, 2009 newspaper publisher’s statement to the Audit Bureau of Circulations (ABC), the outfit that rides herd on publications’ circulation claims.

According to the audit bureau, basic price is “the price at which the publication may be purchased by anyone at any time.” First I called the U-T to ask what it would cost me to get a one-year subscription of Thursday-Sunday papers. Answer: $134.16. I asked a friend to call. Same answer: $134.16. Then I called the U-T and said that the $29.95 was a basic rate listed with the Audit Bureau of Circulations. Could I get that rate? Answer: “That’s a special promotion for customers that receive their third renewal notice.”

Clearly, that rate doesn’t go to anyone at any time. Was this a scam? Use of deep price slashes to pump up lagging circulation? The strategy is questionable, but I wouldn’t call it a scam.

I noticed that the Orange County Register had a similarly incongruous rate: $37.11 Thursday-Sunday for a whole year, but $66.82 for a half year; Friday-Sunday was $144.78, almost four times what Thursday-Sunday went for.

I called the Register and asked if I could get that $37.11 rate. “It’s no longer available,” I was told.

I called and emailed the U-T’s head of circulation and got no response. But Larry Riley, vice president of circulation of Orange County Register Communications, was very helpful. “Newspapers have a tradition of discounting,” Riley said. “Newspapers may have 50 different prices,” including deals for college students, senior citizens, etc.

Hey, I understand that. I have haggled for both new and used cars. I have put in lowball offers for real estate. I have shopped at the Grand Bazaar in Istanbul, where every price is listed but none is firm.

For years, the audit bureau would say that if a newspaper got at least half the listed price, the deal would count as paid circulation. “In March of 2006, the ABC relaxed their discount policy and allowed us to cut by 75 percent and still count it as paid circulation,” says Riley. Then this year, the board decided that anything goes: if a newspaper can fetch only a penny, the transaction qualifies as paid circulation.

There is a difference with the Register: if you got the $37.11 rate back when it was available, you would have had to pay the entire sum up front. If you called the Register and specifically inquired about that low price, it would have been quoted. If you asked something like “What’s the cheapest price available?” you would have been told about the $37.11, says Riley.

Riley uses flexible pricing to match the desires of advertisers. A certain number of households in a certain zip code might find in their mailbox an offer to buy the paper at the super-low basic price. It’s an example of target pricing. About 12 to 15 percent of people in the market get the low basic rate. “I can’t offer deep discounts marketwide,” he says.

At the U-T, you don’t have to pay the $29.95 up front, according to an order taker. I asked some former U-T circulation executives about that incredibly low $29.95 basic price. “It sounds like smoke and mirrors,” said one. “When I was there, we didn’t do anything that drastic.”

“It’s incongruous but allowed,” said another.

“I was never involved in pricing issues, but I do remember that we had a heavily discounted rate in Temecula,” said Jules Veuger, a former circulation manager.

Neal Lulofs, senior vice president of the Audit Bureau of Circulations, said that since a newspaper can now be sold for a penny and recorded as paid circulation, the basic prices listed with his organization probably won’t be as important.

For now, it appears that only about 30 of 700 audit bureau members have been using the deep-slash strategy. In some cases, Media-

News Group, the financially troubled Denver-based owner of a number of papers, including some in Southern California, has had 12-month basic rates that are lower than 3-month rates. In any case, circulation salespeople have for years had the latitude to slash prices — now, to almost nothing.

So what is the Union-Tribune’s circulation, anyway? Beginning in recent days, the U-T has been listing “readership” on its front page. In late July, daily readership was listed as 672,612 and Sunday as 876,325. However, according to the audit bureau, daily circulation as of March 31 (the last report) was 261,253, a good deal less than half of so-called readership. Sunday circulation was 330,848, also far less than half what the U-T claims is its readership.

The U-T is using numbers from Scarborough Research. It defines daily readership as the number of adults (18 or over) in the local market who “read or looked into” the printed version at least once during the past five days. Sunday readership is the number of adults reading or looking into the paper at least once during the past four Sundays.

That’s a lot different from circulation. And more favorable to the U-T, whose daily circulation has plummeted 31 percent and Sunday swooned 27 percent in the last decade. Sunday single-copy sales (such as those purchased from vending machines) have plunged 56.9 percent in the past five years, the biggest drop among newspapers with circulations above 100,000.

Scarborough now has what’s called an “integrated newspaper audience” for publications. It purports to measure the percentage of adults in a market who have read the printed edition or visited the website during the past seven days. Under this concept, the U-T reaches 67 percent of the local market in a week. There is some skepticism about those Scarborough estimates.

And now the big question: Will we see the “penny press” again? Beginning in the 1830s, some newspapers were hawked for a penny. In the 1830s and 1840s, there were three penny-press papers in New York City alone. Now that newspapers can sell a paper for one penny and count it as paid circulation, are prices going to plunge? It’s more likely they will go up. In the past, papers always figured that they got their revenue from ads, not circulation. So circulation per se was often unprofitable. But now that the ads are not coming in, papers have to get revenue from circulation.

According to the Columbia Journalism Review, the New York Times, which recently raised prices even as circulation dropped, will soon reach the point at which circulation revenues will pass ad revenues.

Says Riley, “More and more papers will be raising prices. There is no doubt about it. Advertisers are struggling, and they have been subsidizing the cost of circulation. Now circulation departments have to generate more revenue.”