Digital Subscribers Buoy Newspaper Circulation

“Overall circulation industrywide is flat and digital is growing,” said Neal Lulofs, an executive vice president with the Alliance for Audited Media, which released the figures on Tuesday. “Newspapers are engaging with readers in a variety of media types, wherever and whenever.”

The 593 audited daily newspapers had a 0.7 percent daily circulation decline, the group reported. The Wall Street Journal had the highest circulation, at 2,378,827, a 12.3 percent jump from the same time the year before.

The New York Times overtook USA Today for second place with a circulation of 1,865,318, a 17.6 percent rise from a year ago. USA Today’s circulation was down 7.9 percent, dropping to 1,674,306. The Los Angeles Times and New York Daily News followed in fourth and fifth places.

The figures include both print and digital subscriptions.

For the 519 Sunday newspapers audited, total circulation declined 1.4 percent. The New York Times ranked first with an average circulation of 2,322,429, a 15.9 percent increase from the same time the year before.

The Houston Chronicle ranked second, despite a 5.8 percent decline to 1,042,389. The Los Angeles Times was third; its circulation remained essentially flat at 954,010.

Mr. Lulofs cautioned that the growth for some newspapers could be attributed to how they have incorporated the community newspapers they own into their figures. For example, The Chicago Sun-Times counted an 11.6 percent rise in daily circulation, which included 55,241 copies sold by its regional papers. The Orange County Register recorded a 26.8 percent increase in its daily circulation, largely from the 84,071 copies generated by its branded newspapers.

Other papers showed growth because they started to include more varieties of digital editions, Mr. Lulofs said, citing The Star Ledger of Newark, an Advance Publications paper that has been facing potential cuts in its daily coverage. The paper’s daily circulation jumped 22.2 percent, with its digital circulation more than doubling in the last year.

Still, these digital figures should not be dismissed as simple maneuvering, Mr. Lulofs said. Digital circulation for The Wall Street Journal grew by 62.6 percent, to 898,012 in March 2013 from 552,288 in March 2012.

Last week, The New York Times Company announced that paid digital subscribers to The Times and The International Herald Tribune had grown to 676,000 by the end of March.

Hulu Says Number of Paid Subscribers Has Doubled

Hulu, the online video Web site that has both free and paid services, said Tuesday that it had doubled its number of paying subscribers in the last year, to four million.

The announcement comes at an uncertain time for Hulu, as two of its owners, the Walt Disney Company and News Corporation, weigh whether to sell the company. Last month, the founding chief executive of Hulu, Jason Kilar, stepped down; one of his top lieutenants, Andy Forssell, is now the acting chief executive.

Hulu was not expected to say anything new about its ownership structure at a Tuesday morning event for advertisers in New York. The event, part of the Digital Content NewFronts this week, was set up to promote several original series that will premiere on Hulu this year.

Among the shows that will be distributed exclusively by Hulu are “Quick Draw,'’ a comedic Western set in 1870s Kansas, and “The Awesomes,” an animated series about superheroes from the minds of the “Saturday Night Live” star Seth Meyers and the “Late Night With Jimmy Fallon” producer Michael Shoemaker. They are the third wave of original shows for the service, and the most ambitious to date. The first wave, in 2011, was led by the Morgan Spurlock documentary series “A Day In The Life;” the second, in 2012, included a political sitcom called “Battleground” and a travelogue by Richard Linklater called “Up to Speed.”

That said, Hulu’s most popular shows remain those that it licenses from their owners and from other media companies. Hulu says it has more than 470 such partners and more than 70,000 full television episodes on its free and paid services combined.

Content costs are rising as the online television marketplace becomes more competitive; last week, Yahoo snapped up the exclusive rights to old clips from “Saturday Night Live,” something that Hulu used to feature on its own site.

In this crowded environment, commissioning shows is one way to stand out. Hulu has been in the news this week because it is one of only two places to watch “All My Children” and “One Life to Live,” the canceled ABC soap operas that were resurrected online by a production company, Prospect Park. The other outlet for the shows is Apple’s iTunes store.

Along with “The Awesomes” and “Quick Draw,” Hulu’s other two original series this year are “Behind the Mask,” a documentary series about sports mascots, and “The Wrong Mans,” a drama about two innocent men tied up in a criminal conspiracy. “The Wrong Mans” is a coproduction of the BBC and Hulu.

At the advertiser event on Tuesday, Hulu will also promote a number of shows that have been televised in other countries, but are exclusive to Hulu in the United States. They include an animated series from Canada called “Mother Up!” as well as “Prisoners of War,” an Israeli drama that inspired Showtime’s “Homeland.”

The company will also describe several ideas for original shows that are “brand contingent,” meaning they will be made only if advertisers sign up to support them. One of these ideas involves the chef Mario Batali in conversation with celebrities; another is a performance series to be hosted by Carson Daly.

In addition to announcing that its paid service, Hulu Plus, had topped four million subscribers for the first time, up from two million in the previous year, Hulu said it had reached a new revenue record in the first quarter, but did not specify what that record was. In 2012, according to the company, it earned $695 million in revenue, up from approximately $420 million in 2011.

Sprint Narrows Loss but Loses Subscribers

While Sprint, the No. 3 U.S. mobile service provider, recorded higher-than-expected revenue, it said the Nextel network shutdown was also stunting growth in its remaining network because large business customers were leaving.

Sprint added 12,000 customers to its network, compared with the average estimate of almost 198,000 from five analysts contacted by Reuters. Their expectations ranged from 110,000 to 275,000 net additions.

The company's top priority was to convince Nextel customers to move to the Sprint network ahead of the final shutdown at the end of this quarter. Some Nextel business clients also canceled subscriptions to Sprint's remaining network, Chief Executive Officer Dan Hesse told analysts on a conference call.

Including the Nextel network defections, Sprint lost 560,000 subscribers, compared with the analysts' average estimate of a loss of almost 525,000.

By contrast, top U.S. mobile provider Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group Plc, added 677,000 subscribers in the quarter, and second-ranked AT&T Inc added 296,000.

Macquarie analyst Kevin Smithen said Sprint was also facing tough competition from a new marketing push by smaller rival T-Mobile USA, a Deutsche Telekom unit.

"The AT&T and Sprint results confirm that T-Mobile USA has been taking share in the last few months," Smithen said.

However, he said he was impressed that Sprint's first-quarter loss narrowed to $643 million, or 21 cents per share, from $863 million, or 29 cents per share, a year earlier. Analysts expected a loss of 33 cents per share, according to Thomson Reuters I/B/E/S.

Smithen said Sprint was reducing costs faster than expected from the wind-down of the Nextel network, which is based on an older technology called iDen.

Sprint's revenue rose to $8.79 billion from $8.73 billion. Analysts had expected $8.71 billion.

The company now expects 2013 adjusted operating income before depreciation and amortization to reach the high end of its previously announced target of between $5.2 billion and $5.5 billion, excluding costs of closing strategic transactions.

Sprint's board is evaluating a $25.5 billion acquisition offer from No. 2 U.S. satellite TV service Dish, which has challenged the company's October agreement to sell 70 percent of itself to SoftBank for $20.1 billion.

During a conference call with analysts, Sprint did not comment on the Dish offer but said the SoftBank deal could close as soon as July 1.

Sprint shares were up 0.3 percent at $7.12 in early trading. At Tuesday's close, the stock had risen 14 percent since Dish announced its unsolicited bid on April 12 as investors bet that SoftBank might sweeten its offer.

(Reporting by Sinead Carew; Editing by Jeffrey Benkoe, Gerald E. McCormick and Lisa Von Ahn)

Sprint Posts a Big Loss on Decline in Subscribers

As a result, the company’s loss more than doubled from the third quarter of 2011, although it was smaller than most analysts expected.

This was the first time Sprint Nextel lost overall subscribers in two and a half years, as customers gave up on the moribund Nextel network and the company failed to sign up enough of them on the Sprint network.

It was also the first time Sprint Nextel reported quarterly results since it agreed this month to sell a 70 percent stake to the Japanese telecommunications company SoftBank for $20.1 billion. The deal has not closed yet, but Sprint has already borrowed money from SoftBank.

Sprint lost 423,000 subscribers in the July to September period, as trends across its product lineup were weak.

Excluding recaptured Nextel customers, it lost contract-signing subscribers from the Sprint network for the first time in years. Customers on contract-based plans are the most lucrative, and keeping them has been a linchpin of the turnaround plan of Daniel R. Hesse, the company’s chief executive.

For noncontract plans, Sprint, based in Overland Park, Kan., added just 19,000 customers, the smallest number in more than three years.

Sprint’s report comes after a strong performance by Verizon Wireless, the country’s largest carrier, which added 1.8 million subscribers, and a more lackluster report from No. 2 AT&T, which added 228,000.

Sprint reported a loss of $767 million, or 26 cents a share, for the quarter, compared with a loss of $301 million, or 10 cents a share, in the period a year earlier. Revenue rose 5 percent, to $8.76 billion. Analysts polled by FactSet expected a loss of 43 cents a share on $8.81 billion in revenue.

Media Decoder Blog: DirecTV Reports Its First Drop in U.S. Subscribers

DirecTV on Thursday reported its first drop in net subscribers to its service in the United States, highlighting the challenges for pay television providers in a saturated marketplace.

The company said that it more than made up for the decline by adding a record number of subscribers in Latin America. Over all, DirecTV reported a 1.4 percent increase in net income, to $711 million, or $1.09 a share, in the second quarter of the year, from $701 million, or 91 cents a share, in the same quarter last year.

Michael White, the chief executive of DirecTV, said in a statement that the growth in operating profit was “an early indication of successfully executing on our long-term strategy of striking a more optimal balance between growth and profitability.”

In recent months, Mr. White has said that the company wants to focus on making more money from current subscribers in the United States, rather than on recruiting new ones. DirecTV is already the country’s largest provider of satellite television service, with nearly 20 million subscribers. It lost 52,000 net subscribers in the United States in the second quarter, after having gained 81,000 a quarter earlier.

Analysts had expected a decline in the number of subscribers, though they thought it would be somewhat smaller. They also expected DirecTV to increase the average amount of revenue per subscriber — and there the company outperformed, with a year-over-year gain of 4 percent, to a total of $94.40 per subscriber per month.

DirecTV “appears to be benefiting from wise, economic consumer retention efforts — a long-term positive,” wrote Vijay Jayant of the ISI Group in a note to investors on Thursday.

In Latin America, a much newer market, the company sacrificed gains in the average amount of revenue per subscriber to expand its base. In the second quarter, the company gained 645,000 net subscribers there, its best single-quarter result ever, a reflection in part of cheaper rates for packages of TV channels. In his statement, Mr. White pointed to “20 percent revenue growth in the quarter” in the market.

DirecTV’s headline-making spat with Viacom over a new contract for its cable channels was not a factor in the earnings because the contract did not expire until the end of the quarter. Viacom’s channels were blacked out for more than a week in July, and it is unclear whether DirecTV’s subscriber totals were affected by the absence. DirecTV, like other TV providers, has been trying to contain programming costs in recent years.

Media Decoder Blog: DirecTV Reports Its First Drop in U.S. Subscribers

DirecTV on Thursday reported its first drop in net subscribers to its service in the United States, highlighting the challenges for pay television providers in a saturated marketplace.

The company said that it more than made up for the decline by adding a record number of subscribers in Latin America. Over all, DirecTV reported a 1.4 percent increase in net income, to $711 million, or $1.09 a share, in the second quarter of the year, from $701 million, or 91 cents a share, in the same quarter last year.

Michael White, the chief executive of DirecTV, said in a statement that the growth in operating profit was “an early indication of successfully executing on our long-term strategy of striking a more optimal balance between growth and profitability.”

In recent months, Mr. White has said that the company wants to focus on making more money from current subscribers in the United States, rather than on recruiting new ones. DirecTV is already the country’s largest provider of satellite television service, with nearly 20 million subscribers. It lost 52,000 net subscribers in the United States in the second quarter, after having gained 81,000 a quarter earlier.

Analysts had expected a decline in the number of subscribers, though they thought it would be somewhat smaller. They also expected DirecTV to increase the average amount of revenue per subscriber — and there the company outperformed, with a year-over-year gain of 4 percent, to a total of $94.40 per subscriber per month.

DirecTV “appears to be benefiting from wise, economic consumer retention efforts — a long-term positive,” wrote Vijay Jayant of the ISI Group in a note to investors on Thursday.

In Latin America, a much newer market, the company sacrificed gains in the average amount of revenue per subscriber to expand its base. In the second quarter, the company gained 645,000 net subscribers there, its best single-quarter result ever, a reflection in part of cheaper rates for packages of TV channels. In his statement, Mr. White pointed to “20 percent revenue growth in the quarter” in the market.

DirecTV’s headline-making spat with Viacom over a new contract for its cable channels was not a factor in the earnings because the contract did not expire until the end of the quarter. Viacom’s channels were blacked out for more than a week in July, and it is unclear whether DirecTV’s subscriber totals were affected by the absence. DirecTV, like other TV providers, has been trying to contain programming costs in recent years.

AT&T Posts Higher Profit and Holds On to Its Subscribers

That was the lesson of AT&T’s latest earnings report on Tuesday. The company posted a healthy profit in the second quarter and said it was “encouraging” that most of its customers had remained loyal despite the rising costs of its wireless data plans and other policy revisions.

The company reported that its net income rose 8.7 percent to $3.9 billion, or 66 cents a share, in the second quarter from the year-ago quarter. It emphasized that its churn, the rate at which subscribers leave the carrier, was at a record low of 0.97 percent.

All this despite the fact that AT&T has, in the past year, made a number of controversial changes to its policies, like raising the costs of its data plans, doubling its upgrade fee for new phones and throttling the speeds for customers with unlimited data plans. Along with other carriers, like Verizon, it has made these types of moves as the business starts to focus on how much people use mobile data to work and play, not how much they talk on the phone.

John J. Stephens, AT&T’s chief financial officer, said that 27 million smartphone customers, two-thirds of the total, were subscribers to the company’s tiered data plans, and that of those, 70 percent had chosen the more expensive plans.

In response to an analyst’s questions about mobile revenue, he said the company felt comfortable because even though it raised its data plan prices for new subscribers in January, customers were not leaving.

“The fact that’s been taken into account with low churn is just another encouraging piece,” he said.

Mr. Stephens added that the company had dealt with customers who still had older, unlimited data plans by imposing its new throttling policy, in which it slows data speeds after a customer hits a certain limit of use.

“Those extraordinary consumers have been addressed, and that process has been in place for more than a few months now,” he said. “Quite frankly, once again, I look to churn as an indicator of how that’s being accepted and how that’s impacting our customer base, and we feel good about the progress we made there.”

AT&T, based in Dallas, said revenue climbed to $31.6 billion in the quarter, about even with last year but a 2 percent increase when adjusted for the sale of an advertising unit, which includes the yellow pages business.

Analysts had expected 63 cents a share on revenue of $31.7 billion, according to a survey by FactSet. Shares of AT&T were down 75 cents, or 2.12 percent, at closing Tuesday.

The company also said that strong mobile device sales, new customers and revenue from subscribers drove growth in the quarter. It sold 5.1 million smartphones and added 320,000 contract subscribers, the most valuable type of customer. Its average monthly revenue per subscriber increased 1.7 percent, to $64.93.

The iPhone continues to be an important product for AT&T. The company activated 3.7 million of them in the quarter, more than the 2.7 million iPhones sold by Verizon in the same period. AT&T said 22 percent of customers buying iPhones were new to the company, meaning it is managing to lure some subscribers away from other carriers.

Following a move by Verizon, AT&T recently introduced shared data plans, which allow subscribers to share a set amount of wireless data across multiple devices, like smartphones and tablets. Unlike Verizon, AT&T will offer these shared data plans as a new option on top of its current tiered plans. Verizon discontinued its tiered data plans for new subscribers in favor of the shared plans.

Chetan Sharma, an independent mobile analyst, said he found AT&T’s low churn rate the most remarkable part of its earnings report.

“That means they’ve got a grip on their subscriber base,” he said in an interview.