(By Michael P. Smith)

Three years ago, Eugen Russ, who owns a small newspaper company in the Vorarlberg area of Austria, decided to apply the research he discovered on the Readership Institute's Web site. He pored over the Impact Study and decided to put its findings into action.

Two years ago, he sought me out and asked me to have a beer with him while he showed me what was on his laptop. He had taken his newspaper and redesigned it, created sections and features and added new innovations - all based upon our study. He was nervous but he asked what I thought.

What I thought was he had created the best application of the "ordinary people" imperative that I had ever seen. I was very excited and we began to exchange emails. Last year John Lavine went to Vorarlberg and coached Eugen and his team in strategy. In January, Steve Duke made the trip and taught them about our experience research.

At WAN, Russ' newspaper Vorarlberger Nachrichten was named the worldwide Newspaper of the Year by the Innovation International Media Consulting Group, which does an annual report and survey for WAN. On two different occasions at the congress Russ very prominently and carefully - even spelling out www.readership.org for the translators - gave credit to us.

We provided the fodder but his leadership turned it into the best newspaper in the world.

Circulation and advertising up continue to grow

Newspaper circulations world-wide rose slightly in 2005 while newspaper advertising revenues showed the largest increase in four years. WAN CEO Timothy Balding gave his annual report.

Global newspaper sales were up 0.56 percent over the year, and had increased 6 percent over the past five years. Much of the sales growth last year was again in Asia.

When free dailies are added to the paid newspaper circulation, global circulation increased 1.21 percent last year, and 7.8 percent over the past five years. Free dailies now account for 6 percent of all global newspaper circulation and 17 percent in Europe alone. The U.S. number is still unreported.

Advertising revenues in paid dailies were up 5.7 percent last year from a year earlier, and up 11.7 percent over five years.

Balding: "Overall, the audience for newspapers keeps on growing, both in print and online. Newspapers are increasing their reach through the exploitation of a wide range of new distribution channels, ranging from daily free newspapers to online editions. They are proving to be incredibly resilient against the onslaught of a wide range of media competition."

The survey, which WAN has published annually since 1986, includes information on all 216 countries and territories where newspapers are published. The highlights:

• Paid circulation grew 0.56 percent worldwide in 2005, taking global sales to a new high of 439 million daily. With free dailies added, daily circulation increases to 464 million.
• The total number of paid-for daily titles was down .3 percent in the world in 2005 and up 8.1 percent since 2001. The total number of paid and free titles increased by 0.06 percent in 2005 and by 8.9 percent since 2001.
• 2005 saw the best advertising performance in four years, with a revenue increase of 5.7 percent.
• The audience for newspaper web sites continued to grow and was up by 8.71 percent in 2005 and 200 percent over the past five years.
• Average readership is estimated to be more than one billion people each day.
• Seven of 10 of the world's 100 best selling dailies are now published in Asia. China, Japan and India account for 62 of them.
• The five largest markets for newspapers are: China, with 96.6 million copies sold daily; India, with 78.7 million copies daily; Japan, with 69.7 million copies daily; the United States, with 53.3 million; and Germany, 21.5 million. Sales increased in China and India and declined in Japan, United States and Germany in 2005.
• Circulation sales were up 1.7 percent in Asia in 2005 over the previous year, up 3.7 percent in South America, up 0.2 percent in Africa, down 0.24 percent in Europe, down 2.5 percent in North America and down -2 percent in Australia and Oceania. The North American declines were primarily in evening newspapers. (North American numbers are reported by NAA for the US and NADbank for Canada.) The U.S. numbers do not include circulation of the free metro dailies.
• Daily paid newspapers in the European Union saw a 0.61 percent drop in circulation in 2005, and 5.26 percent over five years. When free dailies are added, year-on-year circulation increased 1.34 percent and five-year circulation grew 0.05 percent.
• Newspapers in seven European Union countries increased their total circulation in 2005. They were: Austria 0.42 percent, Czech Republic 4.88 percent, Ireland 2.16 percent, Italy 0.03 percent, Poland 9.80 percent, Slovenia 19.44 percent, and the United Kingdom, 0.05 percent.
• Those reporting losses were: Belgium -1.35, Denmark -2.64, Estonia -0.39, Finland -0.67, France - 1.6, Germany -2.5, Greece -4.05, Hungary -0.68, Latvia -2.25, The Netherlands - 3.67, Portugal -3.88, Slovakia - 4.17, Spain 0.94, and Sweden -1.34.
• In Japan, newspaper sales fell by 0.97 percent in 2005. Over five years, sales were down 2.81 percent.
• China newspaper sales continue to perform well, up 8.9 and 18 percent over one and five years.
• In Latin America, where it continues to be difficult to obtain reliable data, Brazilian newspaper sales were up 4.09 percent in 2005 but down 11.4 percent over five years. Chile reported sales increases of 0.33 percent last year.
• Indian newspaper sales increased 7 percent in 2005 and 33 percent in the five-year period.
  Australia recorded a decline of 2.23 percent in sales in 2005, while New Zealand newspaper sales were down 1.35 year-on-year and down 4.58 percent over five years.
• The Japanese have surpassed the Norwegians as the world's greatest newspaper buyers, with 634 daily sales per thousand adults in Japan and 626 per thousand in Norway. Finland comes next with 518 followed by Sweden with 481. The U.S. is No. 5.
• The Belgians spend the most time with their newspapers -- 54 minutes a day -- followed by Ukrainians, 50 minutes, and Canadians, 49 minutes.

Global newspaper advertising revenues saw their biggest increase in four years and were up 5.7 percent in 2005, following a 5.28 percent increase in 2004. The highlights:

• Newspapers' share of the world ad market held relatively steady with 30.2 percent, marginally down from 30.3 percent in 2004. Newspapers remain the world's second largest advertising medium, after television, and are expected to retain this position for many years.
• Twenty-one countries saw newspaper advertising market share growth in 2005: Argentina, Austria, Belgium, Chile, Colombia, Egypt, Finland, Germany, India, Indonesia, Kuwait, Lithuania, Malaysia, Panama, Poland, Russia, Saudi Arabia, Singapore, South Africa, the United Arab Emirates, and the United States.
• Over five years, newspapers in 24 countries and territories saw increased market share: Argentina, Belgium, Colombia, Costa Rica, Czech Republic, Denmark, Ecuador, Egypt, France, Greece, Iceland, India, Ireland, Japan, Kuwait, Lebanon, Malaysia, Myanmar, Norway, Pakistan, Poland, Puerto Rico, Russia and Slovenia.
• Newspaper advertising revenues in the USA, by far the largest newspaper advertising market in the world, increased by 1.51 percent in 2005 and 7 percent over the last five years.
• Internet advertising revenues continue to grow rapidly, and were up 24 percent in 2005, the highest growth for five years.

Free dailies continue to grow:

• A total of 169 free daily newspapers had a combined circulation of 27.9 million daily, with 18.6 million of those copies distributed in Europe. A presentation by the CEO of Metro International claimed that Metro has 18 million readers a day.
• The size of the free daily market in several countries is impressive: in Spain, free daily distribution represents a huge 51 percent of the market; in Portugal 33 percent; in Denmark 32 percent, and in Italy, 29 percent.
• Here come the Icelanders. The company that owns the very successful home delivered free daily that now dominates the Iceland market will launch in Denmark and Norway this year. A Viking invasion in reverse.
  

And, one other note:

Twenty-eight more newspapers moved to tabloid format in 2005, and 85 have converted since 2001.