Audit Notes: the rise of circulation, LAT’s Facebook trend, mobile ads

This Ken Doctor piece on how circulation is becoming the most-important revenue stream at newspapers is a must-read:

Unexpectedly, newspapers — of all things — are becoming the leaders in reader-supported media. As the public journalism movement (the enterprising start-ups led by the likes of The Texas Tribune, California Watch, and MinnPost) and public media (née public radio) pioneers move to increase their share of reader funding through voluntary membership (read subscription), newspapers are, almost accidentally, leading the way. The reason is obvious: There are millions of people used to paying for news — and now, courtesy of mobile news proliferation and All-Access plans — their expensive subscriptions are being ported over to the digital world.

How much money are we talking about? Worldwide, according to research I’ve done in my work with Outsell, circulation revenue — worldwide in 2011 — totaled about $30 billion. In the U.S., daily circulation revenue probably adds up to about $9.5 billion.

That’s a large sum, and it’s a key puzzle piece for the future.

Is it true digital revenue? Well, of course not. Does that matter? Where newspapers started bundling advertising — print, with a little digital — in combined buys in the ’90s, now they’re bundling print + digital subscriptions, even as they also sell “digital only” ones. All-access models make for a new indistinguishable blur — are people paying for print, for digital, or for news itself? — and that’s a head-turner.

That’s a critical point. By mixing digital and print subscriptions, newspapers are setting themselves up to make it much easier to charge for newspaper when the presses stop running.

— Here’s the nut graph of a Los Angeles Times trend story about how “Some teens aren’t liking Facebook as much as older users”:

With more than 900 million users, Facebook remains the most popular online hangout. But some young people are turning their attention elsewhere. They are checking out new mobile apps, hanging out on Tumblr and Twitter, and sending plain-old text messages from their phones. Their goal is to hook up with smaller circles of friends and share their thoughts and feelings away from the prying eyes of Mom and Dad.

And three paragraphs down:

Researchers who track the technology habits of teens say there is no statistical evidence that Facebook is becoming a teenage wasteland.

Oh, that.

I guess I have to give the paper credit for admitting this is a three-anecdotes-is-a-story piece, but without any real evidence, we have no reason to believe “some teens aren’t liking Facebook” isn’t a bogus trend—something that was happening five years ago.

— This presentation on the state of the Web by the analyst Mary Meeker shows how the challenges of digital advertising are only increasing.

CPMs, what advertisements cost for every thousand pageviews, are already terribly low for traditional Web browsing, at an average $3.50.

But mobile is where most of the growth is, and its tiny screens aren’t nearly ads conducive to ads. Mobile currently brings just 75 cents per thousand views. Consequently, average revenue per user on mobile is far lower than on the desktop. That’s pressuring Google and Facebook, not just hidebound news organizations.

Meeker argues there are reasons for optimism that that will increase as business figure out how to exploit it, but it’s unclear whether or how advertising platforms would have much upside.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.