News Corp Australia's decision to no longer publish audited data of how many copies of its newspapers are circulated comes amid speculation it is looking at cost cutting by getting rid of "unprofitable distribution".
The news organisation stopped the independent auditing of its print titles' distribution and circulation by the Audited Media Association of Australia (AMAA), instead making Enhanced Media Metrics Audience (EMMA) its sole provider.
The change was described by News Corp Australasia executive chairman Michael Miller as a result of consultations with advertiser and media agency partners that made it "clear that circulation is not an indicator of how media is consumed today, and is out of step with how the advertising industry now operates".
But the decision could signal the start of the company's move to slash its unprofitable distribution, where newspapers are given out for free or very low prices at a financial loss.
The AMAA has been the provider of circulations data for 80 years and has two audits - one measuring paid-for distribution and one measuring circulation, which includes titles provided for free.
And if News did decide to cut back on free copies given out to the public, and continued using these metrics, the data would report a drop in the newspapers' distribution figures.
The EMMA measurement News Corp will now use is an annual survey from Ipsos of more than 40,000 Australians where they are asked about media consumption, lifestyle, demographics and their product usage and attitude. This focuses on readership, as opposed to distribution, and was introduced in 2013.
The data will be combined with the Nielsen Digital Ratings Monthly data to create a total monthly audience figure.
This means the last circulation audit for News Corp Australia was for the six months from January to June 2017.
This recorded The Sunday Telegraph falling below 400,000 in circulation for the first time, down 8.4 per cent from 410,137. Declining circulation in this time period was an industry-wide trend.
It's understood the costs of AMAA audits are around $100,000 - small expenses for large organisations.
But the costs of producing multiple copies of free newspapers to pump up the distribution numbers could be substantial. Industry sources indicate ending these "freebies" could equate to up to $10 million in savings for News Corp, and could see a double figure distribution decline.
Fairfax Media cut unprofitable distribution in 2014, leading to a drop in the audited circulation figures.
A News Corp spokeswoman said they were "always reviewing our distribution channels and remain focused on growing our retail and subscriber sales".
Simon Ryan, chief executive of media buyers Dentsu Aegis Network, supported moves to modernise the measuring of audience across all forms of media, but continued to see value in the old measure.
Chris Walton managing director of Nunn Media, Australia's largest independent media buying agency, said it was a "ridiculous decision" as it was a key metric.
"Am I disappointed? Yes. Am I surprised? Less so. If circulation was going up this wouldn't be happening," he said.
News Corp denied the decision had been made due to declining print circulation.
While this could pave the way for other newspaper publishers to consider the same approach, Fairfax Media managing director Australian Metro Publishing Chris Janz would only say the company had been "looking at their announcement and deciding the next steps".
The AMAA confirmed News Corp was the only major publisher to withdraw so far.
