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ECONOMICS REPORT - When Newspapers Lie (About How Many People Read Them) - 2004-11-05

Broadcast: November 5, 2004

This is Gwen Outen with the VOA Special English Economics Report.

The big news for American newspapers this week was the elections. But there was also news about their industry. The number of newspaper readers in the United States continues to fall. Average daily circulation fell by almost one percent in the six months that ended September thirtieth.

Shrinking circulation has been a problem for newspapers for some years. The Internet is just the most recent competitor for people's time.

American media are privately owned. Newspapers get some of their money from readers. But mostly they depend on businesses to buy advertising space in their pages.

The larger the circulation, the more a newspaper can charge advertisers. But recently, several newspapers have admitted lying about their number of readers.

In June, the Tribune Company announced that it had overstated sales of two of its papers. These were Newsday in Long Island, New York, and the Spanish-language paper Hoy in New York City. The Tribute Company also owns the Los Angeles Times and the Chicago Tribune.

In July, the Audit Bureau of Circulations punished Newsday and Hoy through a process called censure. The A.B.C. is a private organization. It examines circulation claims made by publishers, so advertisers can trust the numbers. Among other steps, the two newspapers will have to report their circulation numbers more often than usual for the next two years.

The Chicago Sun-Times also faces the same punishment. That newspaper is owned by Hollinger International.

The Securities and Exchange Commission is investigating Hollinger International and its ousted chief, Conrad Black. Hollinger says Mister Black took nearly four hundred million dollars from the company. He denies any wrongdoing.

Recently the Belo Corporation announced it had overstated the circulation of the Dallas Morning News, in Texas. The publisher will repay twenty-three million dollars to advertisers. It will also provide four million dollars in free advertising. Other publishers that falsely reported their circulations will also be repaying advertisers millions of dollars.

An Audit Bureau spokeswoman says cases like these recent ones appear to be rare. But the Securities and Exchange Commission announced last month that it would expand its investigation to other newspapers.

This VOA Special English Economics Report was written by Mario Ritter. This is Gwen Outen.