The Audit Bureau of Circulation, which keeps the "official" circulation counts (which form the basis for advertising rates) for newspapers in the U.S., recently released their numbers for the six months ending last March. Weekday circulation was lower than last year's numbers for 18 of the 25 largest U.S. newspapers, even with using expanded definitions that let newspapers combine separate editions under different titles into one total. (earlier, the ABC had allowed newspapers to count digital subscriptions).
The two highest circulation papers, the Wall Street Journal (2.12 million) and USA Today (1.83 million) posted slight increases (about one percent or less). The NY Times was third (920,000), down about 4%. Four of the other five papers posting gains relied on the new rules to pad their numbers. For example, the San Jose Mercury News included circulation counts from other San Francisco Bay Area newspapers sharing content and ownership (Contra Costa Times, Oakland Tribune, etc.) - those other papers accounted for 370,000 of the San Jose Mercury News' reported circulation of 578,000.
The ABC's expanding definition in search of higher numbers is not unique. Nielsen, which provides viewership numbers for television, has also been expanding viewing. Ratings were originally defined in terms of the percentage of households (with TVs) that watched a program at a particular time, on a particular channel. Recently, Nielsen redefined viewership as seeing the program, on any channel, within a week of its first airing; it added viewing off of DVRs in 2005, and is working on how to count viewing where the program is delivered by Video on Demand or from Internet sites. It's in one sense a disturbing trend, to redefine measures to look better (just as the government definition of inflation (CPI) has been redefined so that today's reported 2% inflation would be 10% under the definition used until the last 25 years).
The long-term trouble, however, is that these circulation and ratings numbers are used as the foundation for advertising rates - but the advertising is not generally sold for the full extended definition. As this discrepancy between reported overall viewing and readership numbers and the "real" numbers of people exposed to a specific ad placement increases, the system loses its credibility. The advertising industry is already skeptical about the validity and usefulness of Nielsen's numbers (as seen in the continuing debate over the latest round of proposed expanded definition); it won't help the newspaper industry for the ABC numbers to be similarly viewed.
Source: "New rules don't stop newspaper circulation fall," Yahoo Finance