Editorial Comment:  Over the last year or two, we have been reading reports that more U.S. citizens are turning away from broadcast news to the Internet for their source of daily news and commentary. In the past, the U.S. government has had control of the media through its corporate owners. The Internet has been undermining that locus of control and loosening the grip of the corporate government on the "hearts and minds" of the people. While the Internet is continues to grow and remains free from government control, we encourage you, the reader, to strengthen the Internet media by supporting your favorite websites. You can help support Axis of Logic - an all-volunteer service - by contributing financially and with your time and skills. Thank you! - Axis Editorial Board

NEW YORK, -Circulation fell broadly at major newspapers in the six-month period ending in March as the industry struggled with the impact of do-not-call rules, competition from other media and the migration of readers online.

Newspaper circulation reached a recent peak in 1984 but has been declining steadily over the past decade as other forms of media compete for the attention of readers, including cable television and the Internet.

The Newspaper Association of America, a Vienna, Va.-based industry group, reported that average daily paid circulation declined 1.9 percent in the most recent six-month period for the 814 newspapers reporting comparable data to the Audit Bureau. Average Sunday circulation for the 643 newspapers reporting those figures fell 2.5 percent.

Both were wider than the declines of 0.9 percent in daily circulation and 1.5 percent in Sunday sales in the previous six months reported by the Audit Bureau, a circulation reporting group based in Schaumburg, Ill.

Gannett Co.'s USA Today remained the top-selling paper in the nation, with total paid circulation edging up 0.05 percent to 2,281,831. The Wall Street Journal fell 0.8 percent to 2,070,498. The New York Times rose 0.24 percent to 1,136,433, and the Los Angeles Times's daily circulation, including Saturdays, fell 6.5 percent to 907,997.

Other major papers posting significant declines included the Chicago Tribune, the flagship paper of Tribune Co., whose daily circulation fell 6.6 percent to 573,744. Hearst Corp.'s San Francisco Chronicle fell 6.1 percent to 468,739.

Despite the long-term erosion in paid circulation, major newspaper companies have continued to produce profit gains in recent years as advertising � which makes up the bulk of newspapers' revenues � has held up much better than circulation.

Over the past five years shares of major publishers like Gannett, Tribune and Knight Ridder Inc. have outperformed the S&P 500 index, with the exception of Dow Jones & Co., which has been dragged down by a prolonged drought of financial and technology advertising at The Wall Street Journal.

Federal do-not-call regulations, which fully went into effect early last year, were partly to blame for this period's circulation decline. As recently as 2000, telemarketing accounted for 43.4 percent of all new newspaper subscribers, according to an NAA study, but that figure fell to 39.1 percent in 2002 and 30.9 percent last year.

Also, a recent spate of circulation overstatement scandals at several major newspapers has led publishers to be more cautious about counting certain kinds of circulation, fearful of more backlash from advertisers. Tribune's Newsday, Belo Corp.'s Dallas Morning News and Hollinger International Inc.'s Chicago Sun-Times have been censured by the Audit Bureau for overstating circulation.

As circulation has declined, newspapers have sought out other ways of reaching readers, especially younger readers who are more likely to go online for news and information.

Many newspapers have upped investments in their Web sites, and several have launched free editions such as Belo's Quick in Dallas or The Washington Post Co.'s Express. Several publishers are also launching Spanish-language editions in an attempt to reach out to immigrant communities.

However, many in the publishing industry and on Wall Street remain concerned that newspapers are not adapting fast enough to the migration of readers from print media to the Internet.

Last month Rupert Murdoch, chairman of the media conglomerate News Corp., told a gathering of news executives that newspapers have ''sat by and watched'' as a new generation of readers gravitated to the Internet.

''Unless we awaken to these changes which are quite different than those five or six years ago, we will, as an industry, be relegated to the status of also-rans,'' Murdoch said.

In an attempt to capture some of the advertising dollars and readers that have migrated online, several major newspaper companies have spent heavily to acquire online companies in recent months. Dow Jones bought MarketWatch Inc., a provider of financial news and information, for about $500 million in cash, while The New York Times Co. paid $410 million for About.com.

The Audit Bureau's numbers are based on a broad array of major newspapers, but do not count all daily U.S. newspapers, which number about 1,400.

According to a separate annual tally of all U.S. daily newspapers compiled by the NAA, the last big decline in overall circulation came in 1996, when circulation fell 2.1 percent across the entire newspaper industry.

John Murray, the vice president of circulation affairs at the NAA, says many newspaper publishers have made a conscious decision to trim back circulation that was expensive to acquire and may produce poor levels of actual readership.

Publishers are also becoming more willing to spend more money to acquire subscribers who are more likely to keep the subscription for a longer time, he said.

To that end, newspapers are trying to sign up more customers to pay for their subscriptions automatically through credit card charges, which tends to keep them around longer, he said. Currently about 10 percent of all home subscriptions pay by credit card, versus 5 percent two years ago.

http://famulus.msnbc.com/famulusgen/ap05-02-104758.asp?t=apcom&vts=5220051625