Big Media in Trouble
Troubled by last week's circulation scandals at Hollinger International's Chicago Sun-Times and the Tribune Co.'s Newsday and Hoy, Merrill Lynch's Lauren Rich Fine released a report today calling into question the reliability of circulation figures for the entire industry. "Our biggest fear," the report said, "is that these two announcements may not be isolated incidents."
The worst consequence could be declining ad revenue, if advertisers doubt the reliability of circulation figures. The report says that the most vulnerable spot will be preprint inserts as they are purchased entirely on circ reach. It added: "Circulation is likely to remain a controversial topic in the near term."
The report also takes to task the Audit Bureau of Circulations, saying that the overstatement of circ figures seems to "suggest that there may be loopholes in the ABC audit system" and "at the very minimum, it suggests that ABC's audits need to be completed much sooner." Many newspapers use the ABC publisher's statements to sell advertising because there is a lag in the ABC audited reports. All newspapers are audited once a year. Those with a circ under 25,000 have the option of going through an audit every two years.
Matt's Chat
If they can't be truthful with their advertisers; how can we trust them with, you know, the
news?
