NYTimes circulation up as it restricts Web access

Circulation at The New York Times soared in the latest six-month reporting period because the Times now charges for access to its website and people who sign up are counted as subscribers.

The Times had print and digital circulation of 1.2 million on average from Monday through Friday. The figures released Tuesday by the Audit Bureau of Circulations cover the six months that ended Sept. 30.

The latest figures represent a gain of 25 percent from the October-March period, when average circulation was at about 917,000. However, the comparison does not factor in seasonal fluctuations.

Circulation figures affect advertising rates at newspapers, which count print ads as their main source of revenue. Print ad revenue has declined in recent years as readers and advertisers shift to the Internet. The economic downturn has worsened the decline. Some newspapers have seen growth in the digital ad revenue they derive from their websites and mobile apps, but it hasn't been enough to offset losses in print advertising. The New York Times' digital subscription model is being closely watched as a possible solution to the industry's revenue shortfalls.

The Times is the third-largest U.S. newspaper on weekdays. The Wall Street Journal is No. 1 with average weekday circulation of 2.1 million, and Gannett Co.'s USA Today ranks second with 1.8 million.

The Times had the highest Sunday circulation with 1.6 million. Neither the Journal nor USA Today publishes on Sunday.

The Times' circulation grew after it started charging fees to readers of its digital content. That began just before the start of the latest circulation reporting period. Digital subscriptions are included in the circulation totals. Newspapers aren't allowed to count visitors to free websites as circulation.

The Times' circulation might have fallen were it not for the digital subscriptions. The Times had about 771,000 print subscribers in the latest period, compared with about 816,000 in the October-March period. Still, the Times said Sunday home delivery subscriptions grew slightly from last year; many people bought or kept a print subscription because it comes with free digital access.

The Audit Bureau of Circulations did not release industry-wide totals that could be compared with last year because of major rule changes in how circulation is counted.

In recent years, circulation has been declining at newspapers in part because readers are shifting from printed editions to free news sources on the Web and on mobile devices. For most newspapers, digital subscriptions have not caught on. The exceptions are primarily publications with national clout.

During the April-September period, the Times had average weekday digital circulation of 380,003 and Sunday circulation of 371,933. News Corp.'s Journal also offers digital subscriptions and had a weekday average of 537,469.

Outsell Inc. media analyst Ken Doctor said that if the Times continues to persuade people to buy digital subscriptions, it could bring in $50 million to $75 million per year in additional circulation revenue. That will be important, he said, as print advertising revenue keeps falling.

Citigroup analyst Leo Kulp believes the Times won't collect enough from digital subscriptions to offset a decline in print ads. As a result, he downgraded the Times Co.'s stock last week.