How does USAT’s ‘Blue Chip’ program survive?

Publishers say they’ve voluntarily slashed sponsored and third-party circulation, helping explain the latest round of big circulation declines disclosed today by the Audit Bureau of Circulations. This leads me to wonder about Gannett flagship USA Today‘s circulation model.

The Dallas Morning News, for example, reported a 10.6% drop in daily circulation, to 368,313, after parent Belo said it was reducing less-valuable copies distributed by third parties. As I understand it, here’s how that circulation works: One day, you open your front door to find a copy of that day’s paper in the driveway. The paper bears a note that says, “Courtesy of ABC Furniture Co.” You haven’t asked for a subscription; it’s coming to you unsolicited.

Such third-party readers are now less valuable to advertisers because it’s assumed many of those papers go unread — leading me to USA Today, which held to its No. 1 rank in today’s new ABC report. A huge proportion of the paper’s circulation is so-called Blue Chip accounts: Hundreds of thousands of papers sold in bulk daily to hotels for delivery to individual rooms. Many guests grab those papers on the way downstairs to breakfast.

But many also simply step over the paper, leaving it behind for the housekeeper to recycle. Rival New York Times Publisher Arthur Sulzberger Jr. once took a shot at USA Today, when its slogan was “Never Gray.” Three years ago, comparing his paper’s tiny bulk sales to USA Today‘s, Sulzberger said the slogan should instead by, “Never Read.” (More recently, USA Today adopted the unfortunate new slogan: “We’re all in this together.)

Is USA Today‘s Blue Chip program immune to pressures on third-party circulation? Your thoughts, in the comments section, below. Use this link to e-mail feedback, tips, snarky letters, etc. See Tipsters Anonymous Policy in the green sidebar, upper right.

[Image: this morning’s USA Today, Newseum]

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22 Responses to “How does USAT’s ‘Blue Chip’ program survive?”

  1. Anonymous Says:

    Jim — Your comments show a fundamental lack of understanding about “blue chip” copies. First, to call them bulk sales is misleading. Blue Chip copies certainly don’t fall under the “ABC Furniture Store complimentary copies” you use as an example. That is one type of bulk sale, which usually is reserved for local newspaper advertisers targeting a particular zip code demographic or regional area. It’s a short-lived sale. There are two kinds of blue chip copies under USA Today’s umbrella. One are copies purchased by a hotel, airline, etc. and distributed to customers as a courtesy. The other are copies of the paper paid for by the customer and distributed to their hotel room. Both are paid circulation. There is extensive research conducted by a research firm well respected in the hotel industry showing that the number one amenity preferred by hotel guests is a newspaper and the number one newspaper preferred by hotel guests is USA Today. USA Today also routinely allows hotels to conduct head-to-head customer surveys to determine which newspaper customers prefer and invariably the choice is USA Today. Sulzberger Jr.’s comments aside, he would love to have USA Today’s blue chip numbers, but knows that won’t happen. Also, it is a mistake to equate USA Today with other regional newspapers, including the New York Times. Travelers of all stripes – business, vacation, etc. — accept USA Today as THE national newspaper and are drawn to it when away from home for that national perspective. The New York Times, which is a helluva newspaper, at the end of the day still is a New York Newspaper and is not a publication people elsewhere in the country will pick up as their only newspaper. They might pick up the Times or the Wall Street Journal, but they also are likely to pick up USA Today. Regarding the leave-behind factor for housekeepers, that is true with other newspapers, including the New York Times and Wall Street Journal when they are distributed in hotels. The number of USA Today copies left behind are very few by comparison. Most major hotel chains have made USA Today their “brand standard.” The point here is that USA Today meets and fills a need that other newspapers can’t. Now, whether that will continue into the future is a question that will be answered somewhere down the road.

  2. Anonymous Says:

    A funny thing and not very material since its not like Gannett folks travel THAT much, but when I travel and my hotel makes an assumed sale of USA Today (i.e. there’s a note on my key holder that says if you don’t want to be charged 75 cents then tell the front desk), I ponder that since Gannett is technically buying this newspaper then can it really count as paid circulation?

  3. Anonymous Says:

    You’re also ignoring the fact that, unless the paper is literally left at the door where it was placed, a housekeeper finding a copy in the room does not mean that the copy was not read.

    Whenever I travel and do not attend a breakfast meeting, I nearly always eat in my room and read my copy of USAT. Depending on what my schedule looks like and whether I’ve finished reading, I may or may not take the copy from the room.

    The only sure way to answer the question of “is it read?” is with carefully conducted research. USAT has done that, and the answer is “yes.” Whether you choose to believe the research is another matter, and one that no one at USAT can control.

  4. Jim Hopkins Says:

    I realize that “bulk sales” doesn’t sound as marketing positive as “Blue Chip,” but it’s accurate. USA Today is selling hundreds of thousands of copies at a discount. Yes, some hotel guests know they’re paying for the paper. But I suspect most think of it as “free,” and so don’t treat it with the respect they treat something they’ve paid for.

    Also, you wrote that The New York Times “is not a publication people elsewhere in the country will pick up as their only newspaper.” I do not believe that is true. Pound for pound, the NYT is a fundamentally better paper than USAT — and I say that as someone who devoted nearly eight years of my career to USAT. While both have their strengths, I find more of what I need to know, sooner, in the NYT print, or on its website, then they’ll find in USAT print or online.

  5. Jim Hopkins Says:

    To Anon@1:59 p.m.: I think many hotels pay half the cover price — 37.5 cents — for each copy of USAT, and then charge guests that same discounted price. I believe — and, again, I may be wrong — that publishers must charge at least 50% of the cover price in order to get it counted as paid circulation under ABC’s rules.

  6. Anonymous Says:

    Jim — I suppose we could discuss this point forever, but I’m not quibbling about the quality of the journalism of the New York Times. The Times is in a league of its own. (Although, the Washington Post did okay this time around on the Pulitzer front) But I’m sure you’d agree that the Times and USA Today are different newspapers. Also, I would argue that USA Today has some of the finest journalists in the business on its staff and that USA Today readers are served very well by those journalists. And, yes, I include you in that mix because you turned out some fine journalism while you were there. The point, though, is that the Times does not have the universal appeal that USA Today does. USA Today does what it does very well and the focus is on serving the reader, as it is with any newspaper. I won’t argue with your point about timeliness of content. I’ve found that to be true with other Web sites versus USA Today. However, on a daily basis USA Today’s final edtion is as competitive as anybody’s.

  7. rmichem Says:

    Speaking of numbers counting mistakes. Somebody better tell the censors taker,that they made a mistake. Smith is not the most common name as they suggest, just by reading Jim’s blog, you have to concluded that it is Anonymous! In so far as USA TODAY, daily circulation numbers. A three hundreds room hotel, will buy three hundreds, copies of USA TODAY, just to make sure, that each Guests, has one. If that Hotel, is only averaging, fifty, rental days. The 250 left over USAT, goes in the trash? What wrong, with that is. It is from my understanding, THAT THE 300 COPIES, total, is add on to the over all circulation, fee, that is charged advertisers. That is over billing, that is FRAUD.

  8. Anonymous Says:

    Actually, hotels only order (and change their order daily) based on occupancy. It would be silly of them to order and pay for more copies than they need. Moreover, ABC audits the catagory. They review an assortment of hotels and match draw to their occupancy level. There is a small allowance for additional copies ordered that are left in the lobby or dining room. If you go over that allowance the copies don’t coount.

    As far as NYT vs. USAT, I’m a business traveler and USAT fills my needs wheras the NYT does not. Doesn’t mean one is a better paper than the other. Beauty is in the eye of the beholder, right?

  9. Anonymous Says:

    Bottom line: newspapers are more savy in devising ways to “purchase” their papers so they can count as paid. And, ABC seems more lenient.

    In regard to Cincy, the JOA’s end resulted in no afternoon daily. And, the Bonus Issue program which at last count, adds 60,000 “paid” copies each time its used, expanded to 54 weeks annually.

  10. Anonymous Says:

    Jim: You might ask someone to pull the ABC detailed circ figures for you. The last I looked, USAT outcirculated NYT in every state except NY.

  11. rmichem Says:

    So anonymous, hotels, only order,and change their order daily, to buy newspapers, they need for that day. Yeah, I can see a truck, full of papers, pulling up at 2AM, with the cigar chunking driver, saying to the night clerk, some kids, trying to earn money to go to barber college, how many copies, you need for today? YOU EVER SEEM ONE OF THOSE DELIVERY CONTRACTS, THAT GANNETT HAS WITH, THE HOTELS, BUYING USAT, in volume.

  12. Anonymous Says:

    Anon 5:15 — What’s that about a “Bonus Issue” program in Cincinnati padding the circulation by 60,000 and expanding to 54 weeks? Tell us how that works? Is it used in other Gannett markets?

  13. Anonymous Says:

    to rmichem

    Do you even work at a newspaper?

    For someone who is in the industry you sure demonstrate a lack of knowledge about how certain departments and functions work.

    No wonder so many of the comments on this blog are whining. It’s pretty clear that many of the posters live only in their own little silo.

  14. Anonymous Says:

    Current ABC laws only require you charge 25% of cover price to qualify as paid third party circulation.

  15. Anonymous Says:

    ANON 9:31 – Basically, Bonus Day issues are supposed to give readers additional value in the newspaper while delivering a Sunday home-delivered audience, hence an additional 60,000 sample copies or so are delivered in pre-designated areas each time. Subscribers are charged Sunday rates; the Enquirer counts each copy as paid, and, there’s no opt out for subscribers.

    Bonus Days have increased annually, at last count, up to 54 times a year so it’s easy to see how that drives average paid copy numbers up. The Enquirer includes holidays and has included issues with monthly calendars, gift guides, veteran’s coverage, etc. I believe it was called Bonus/Premium days at one-time and ABC forced a change. More was on the rate card but that’s since been removed to include only a mention of holidays.

    Not sure about other Gannett sites, but guess is that it will be coming to NJ if they don’t have a program in place as that’s were the Enquirer’s former VP of circulation went earlier this month.

  16. Anonymous Says:

    6:59 a.m.: So an extra 60,000 copies are printed up for the driveways of certain select Zip codes. It wasn’t clear in your post if they’re free or if those recipients are charged. If they’re free, how can the paper get away with counting them as paid circulation? Does ABC give its blessings to this practice? Sounds awfully shady.

  17. Anonymous Says:

    You mentioned the new slogan: “We’re all in this together.” Is there a way to ask USAT marketing VP Susan Lavington what this means and why we chose it? I think she’s the one who came up with the slogan. Also, what do the USAT circulation marketing folks think of the tagline?

  18. Anonymous Says:

    Mr. or Ms. rmichem:

    In fact, I have seen a “delivery contract.” I’ve even signed a few myself. For the record, I haven’t seen a cigar smoking driver in the past few years. Have you seen either?

    Also for the record, drivers don’t ask hotels how many copies of USA TODAY they need. That is done earlier in the day via phone calls, faxes and through e-mail directly with the hotels.

    Most hotels are pretty savvy when it comes to projecting their occupancy; they can tell these things pretty darn close by the middle of the afternoon. They then order based on these projections and add a little extra for walk-in customers, which they are also pretty good at projecting.

    I guess I need to ask what’s your beef with Blue Chip copies to hotels? And I agree with the previous poster that asks if you are in the business. Also, why do, you use, so many, commas? I just have to know the answer to that one!

  19. Anonymous Says:

    8:02 AM – Recipient copies are free.

    It’s my understanding the difference between what subscribers pay for a regular edition and higher priced “Bonus Days” issues is used to buy copies for recipients, thus they count as paid. ABC allows it, though it raised issues.

    Frankly it’s disingenuous. It’s used too often and subscribers really shouldn’t have to pay more – at least in this manner, for content they deserve anyway. Plus, if subscribers had a clue about the practice, they couldn’t opt out anyway – other than to quit.

  20. Anonymous Says:

    10:36 a.m.: Subscribers, as with any bill-payers, should be irritated by subscription rates fluctuating every month because of those bonus days. Anyone here know if circulation departments get a lot of calls from subscribers on this practice?

  21. Anonymous Says:

    8:31 – The billed rates don’t fluctuate as circulation manages subscriber’s cost expectations upfront well – the key here being the agreed upon price.

    And, what they pay all depends on the offer they accept, and there’s certainly a few being pitched. Good thing too as another Bonus Issue arrived on May 1st.

  22. Anonymous Says:

    …it’s May 5th and Cincinnati now has two Bonus Day issues under it’s belt for the month.

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