Laura Hollingsworth, publisher of The Des Moines Register, says the newspaper has a growing readership on smartphone and tablet computers, as well as on its website. The company experienced a drop in circulation last year after it increased its subscription prices and began charging people to read its digital content.  Photo by Duane Tinkey
Laura Hollingsworth, publisher of The Des Moines Register, says the newspaper has a growing readership on smartphone and tablet computers, as well as on its website. The company experienced a drop in circulation last year after it increased its subscription prices and began charging people to read its digital content. Photo by Duane Tinkey

The Des Moines Register’s circulation dropped by more than 7 percent in 2012, after the paper increased subscription prices, began to charge people to read it online, and discontinued a long-standing deal with Kum & Go LC that gave the convenience store’s customers a free newspaper with a tank of gasoline.

The Sunday paper’s paid circulation dropped by 16,435 to 189,538 between September 2011 and September of last year. The Monday-Friday circulation dropped by 7,633 to 97,518 during the same period, according to the Alliance for Audited Media, the organization that audits the circulation of magazines, journals and newspapers.

Register Publisher Laura Hollingsworth acknowledged the circulation drop, but she said it only reflects part of the picture of the Register’s financial health.

“All the number says is what the paid circulation for the newspaper is,” she said. “It’s got nothing to do with audience, with brand, with readership.”

Hollingsworth said the “Kum & Go maneuver” was the result of Register and Kum & Go executives taking a hard look at the bottom line of that agreement and deciding to discontinue it. That alone reduced single-copy sales of the Register significantly, she said.

Although paid circulation for the printed newspaper has dropped, Hollingsworth noted that readership of the Register’s website is up, as are the numbers of people reading Register content on their mobile phones and tablet computers. And although the audit bureau numbers show only about 2,600 paid digital-only subscriptions, “we haven’t even marketed that for a minute.”

Hollingsworth said the number of unique visitors to the Register’s website was up by 11 percent in 2012 and mobile unique visitors grew by 35 percent. “People are looking at this print number, and I’m looking at phone numbers,” she said.

The Register continues to have strong readership, Hollingsworth said, buttressing her statement with statistics from another organization that measures media readership. According to a 2012 report by Scarborough Research, a national market research company, the Register has much stronger readership in its market than the national average. That study measures penetration, or how many households out of the total market are reading the paper.

Scarborough said the Sunday Register has a 48 percent penetration rate, compared with a 23 percent national average. And in another measure of unduplicated print and online readers, the Register has a 64 percent average penetration rate compared with a 35 percent national average.

But readership doesn’t pay the bills, says Charles Edwards, former publisher of the Register and now dean of Drake University’s College of Business and Public Administration and School of Journalism.

A national study on the health of newspapers, published by the Pew Trust in conjunction with the Poynter Institute, a media education center, concluded that a precipitous drop in advertising over the past decade is the biggest economic threat to the country’s newspapers.

“Dramatically, almost overnight, the business model gets turned upside down,” said Edwards, who was the Register’s publisher from 1984 to 1996. When Edwards was publisher, he said newspapers had a monopoly of sorts as a vehicle for advertisers to reach local consumers. Newspaper revenue was about 80 percent advertising and 20 percent subscription then.

Now advertising dollars are “being spread across multiple platforms,” said Edwards, and online ads are much cheaper than print advertising.

Rick Edmonds, a media business analyst for the Poynter Institute, said newspapers are looking for different revenue streams because online advertising isn’t coming close to making up for the loss in print advertising. In a 2012 article, he reported that the newspaper industry in 2011 was gaining $1 in digital advertising for every $10 in print advertising it lost. In the first half of 2012, that ratio got worse: $1 digital gained for every $25 in print ad revenue lost.

“Digital advertising is cheap. Even if you can sell some more, the prices keep going down. It’s very tough to show growth on your basic bread-and-butter advertising,” Edmonds said in an interview.

That’s why he thinks the strategy of the Register’s parent company, Gannett Co. Inc., to increase subscription prices as newspapers began charging readers for digital content was a smart one. And the Register’s $150 a year for a daily and Sunday subscription was “pretty low. That was probably due for some increase,” he said.

In June, those readers’ subscription cost nearly doubled and included full access to Register content on its website as well as on mobile platforms. Readers who were reading content online for free, were limited to reading just 12 articles a month before their access was blocked.

Kurt Allen, vice president for marketing and strategy of Des Moines Register Media, said the actual price for the printed paper rose 20 cents a day for people taking both the daily and Sunday. But with the required digital access, the price for the daily and Sunday Register is $23 a month or $276 a year, according to the Register’s website.

Edwards said doubling the subscription prices will test the loyalty of Register readers, particularly older readers. “The question is are these people loyal enough – do they want the paper so much – to pay extra for a (digital) product they might never use,” Edwards said.

Edmonds said Gannett took its 80 community newspapers’ websites to paid access in 2012 and reported about an 11 percent loss of circulation. Even with that loss of subscriptions, revenues jumped from the increased subscription rates.

The Register’s 7 percent circulation loss is below the Gannett company’s average loss, he noted.

Edmonds said the bottom line is that circulation and advertising no longer can be newspapers’ only revenue streams, he said. The most successful models these days are media companies that find other revenue streams. “Social marketing associations to local businesses, that’s working very well,” he said. “Events and sponsorships also seem to be relatively easy to sell.”

Allen said the Register is expanding its revenue sources through Des Moines Register Media, which reaches more than 500,000 “actively engaged consumers” every week and provides marketing solutions to local business. This year, that program is expected to bring in more than a million dollars in revenue.