More large falls in newspaper circulation

But 18 million print newspapers still sold each week

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published November 9, 2012 11:52 am AEDT

Despite declining sales, newspaper publishers are still selling more than 18 million newspapers a week, and that's despite circulation falling for the 27th consecutive quarter.

Offsetting the decline, digital sales of newspapers appear to be rising, according to the latest Audit Bureau of Circulations (ABC) release.

Metropolitan daily newspapers posted an average 6.5% fall in the September quarter, while national newspaper circulation fell 5.5%. That's the 27th consecutive quarter of falling circulation.

Related: Why I recently bought Fairfax

Fairfax Media's (ASX: FXJ) mastheads in major cities continue to decline, with figures for The Sydney Morning Herald (SMH) falling 15% and The Sun-Herald dropping 21.3%, compared to last year. But in a good sign for the company, the Sydney Morning Herald was the most read multi-platform title (print newspaper, apps and website), with 3.2 million weekly. Combined, that takes the SMH's readership growth to 38% in the past 10 years. The company's Victorian newspaper, The Age, saw similar falls to its northern counterpart, with the weekday paper falling 16.9%, and the Sunday Age dropping 15.4%.

News Corporation's (ASX: NWS) national newspaper, The Australian, saw its circulation fall by 4.6% in the quarter, but digital sales grew 16% over the last six months. Still, the company sells 11 million newspapers each week across all its titles, while its digital network attracts 7.7 million people per month.

In Adelaide, The Advertiser's circulation fell 3.7%, the Brisbane Courier-Mail dropped 2.1%, while the Hobart Mercury saw its circulation numbers lose 2.6%. The only positive print newspaper performer, was Seven West Media's (ASX: SWM) West Australian, with circulation rising 0.7%.

Most regional newspapers posted big falls too, with the Illawarra Mercury circulation falling by 13%.

Part of the decline in newspaper sales is the result of the publishing companies cutting uneconomic distribution regions, as the companies look to cut costs and focus on profitable areas of the business. Fairfax plans to introduce subscriptions for its metro online and app versions of its mastheads next year.

"The latest ABC figures clearly show that people in Australia will pay for quality journalism in both print and digital formats," The Newspaper Works CEO, Tony Hale, said. He added, "The multi-platform publishing strategies being pursued by the major newspaper publishers have produced a very promising picture of newspaper circulations."

Foolish takeaway

Much like retailer David Jones Limited (ASX: DJS) pursuing an 'omni-channel' (multiple ways of reaching consumers) approach to sales, publishers are following the same strategy, so its unlikely we'll see print newspapers totally disappear in the near future. After all, the demand for print newspapers is still there, with more than 18 million copies sold every week.

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Motley Fool writer/analyst Mike King owns shares in Fairfax Media and David Jones. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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