Cooking the Books

There's an old joke in the newspaper business about the publisher who decides it's time to retire, and decides to pick a successor from his senior staff. He calls each one of them in for an interview.

First up: The paper's accountant. The publisher says, "How much is two plus two?" The accountant looks at him quizzically, thinks about it for a second, and says, "Well, based on generally accepted accounting practices, two plus two equals four." The publisher thanks him and sends him out of the room.

Next up is the paper's lawyer. The publisher asks him, "How much is two plus two?" The lawyer thinks for a few seconds, and then makes his case, arguing that, based on a recent decision in the Third Circuit and other precedents, two plus two must equal four. The publisher thanks him and sends him away.

Finally, the publisher calls in the paper's circulation manager. Once again: "How much is two plus two?" The circulation manager gets up from his chair, closes the door, draws the blinds over the windows, moves close to the publisher and whispers, "How much do you want it to be?"

Which brings us to today's announcement that the Audit Bureau of Circulation is dramatically changing the way that newspaper circulation is calculated. With a nod to the circulation manager in the joke, let us count some of the ways:
* "A flexible pricing model where newspapers will be considered paid by ABC regardless of the price for which the copy was sold."
* "There will no longer have to be payment for third-party copies or Newspapers in Education for the circulation to count."
* "Hotel and employee copies, currently under other-paid, will be reclassified under a new paid-circulation category."

Phew. That's some creative accounting. Those papers given away to schools or left unread in front of hotel room doors just became big winners. What's next? Counting papers that are thrown away when the presses mess them up? Counting papers scattered around newsrooms? Counting any reader who looks at a paper over somebody's shoulder on the bus? (Oh, wait--I think the new "readership" numbers may actually count those!)

Newspaper circulation is dropping because customers are rejecting the product, not because papers are failing to count every freebie or near-freebie they're scattering to the winds. Cooking the books isn't going to solve the problems of relevancy, competition from the Web, and failure to truly innovate (except maybe in the circulation-accounting department, apparently).

Ironically, of course, the ABC recommendations come from a committee made up of both advertisers and publishers—so the advertisers, who want wider circulation for their ads, are complicit in this numbers game. In fact, rationalization for the ABC changes comes from the VP for advertising at Walgreen, Craig Sinclair, who explains, "Our aim was to streamline the audit process, clearly define important measurement standards, and improve overall communication between newspaper buyers and sellers."

Wow. This guy has real publisher potential!

Comments

[Steamboat McGoo]

I don't see a problem - so long as the IRS gets paid taxes on all those "paid" distributions.