"McPaper" Stakes Its Claim

By WILLIAM A. HENRY III

USA Today circulation tops 1 million, but losses mount

When Gannett Co. launched USA Today in September 1982, many rival publishers belittled the new daily as a misconceived ego trip by hard-driving Chairman Allen Neuharth. Gannett is the biggest U.S. newspaper chain, with 85 dailies, but its papers are mostly in smaller markets, and the combined circulation of 3.5 million before USA Today had translated into scant national influence. By launching a coast-to-coast daily, Gannett would gain visibility and clout, even if the undertaking would require steep start-up costs, arduous technical demands in printing at dozens of locations, and a hard sell to persuade advertisers to accept a new kind of vehicle.

The company had to prove there would be an audience for a paper that deliberately lacked a regional or ideological focus and that reported widely but without much depth. When the first issue of USA Today appeared, journalists likened the rainbow-bright, telegram-terse new entry to fast food and nicknamed it "McPaper." USA Today editors steadfastly retorted that they were trying to please readers, not their peers.

That strategy seems to have worked. Last week the print industry's standard-setting Audit Bureau of Circulations announced that USA Today had a paid circulation of more than 1.1 million for the final quarter of 1983, making it the third biggest U.S. daily. The paper's first-quarter figures for 1984, not yet audited, show a jump to nearly 1.3 million, close to the New York Daily News (circ. 1.4 million) and on schedule with plans to outstrip the Wall Street Journal (circ. 2 million) by 1987. The audit silenced speculation that Gannett had padded its totals with giveaways. Says Publisher Cathleen Black: "This is an important step. It gives us much more credibility."

The paper is truly national. It is sold in all 50 states and is available on the day of publication to about 70% of the U.S. population. It seems to attract the expected audience of travelers and those who have recently moved and remain interested in their home states. It also serves as a second paper for readers whose home town dailies do not carry enough national news. Gannett hopes that USA Today will become the definitive newspaper of the television generation. Unlike big city dailies that have reacted to TV competition by becoming detailed and analytic, emphasizing the things TV cannot do, USA Today offers a print version of TV news. Stories are short and neutral, and often lead, TV style, with the outlook rather than the hard facts. The paper's appeal is strongly visual: it relies heavily on pictures, charts and other graphics. Like local newscasts, USA Today stresses human interest and the pocketbook impact of events. The major difference from TV is that the paper has no stars: the writing is homogenized, with few grace notes or personal touches, and there is no showcasing of columnists.

The paper was ridiculed for some erratic early editing decisions: the first issue reported the assassination of Lebanese President-elect Bashir Gemayel on page 9, and another early issue headlined the "news" MEN, WOMEN: WE'RE STILL DIFFERENT. But USA Today has steadily become more conventionally informative. The 375 editorial staffers, headquartered in an office tower in Rosslyn, Va., across the Potomac from Washington, assemble hundreds of items per issue, only a handful of them more than 500 words long. Yet the consumer-oriented daily "Money" section solidly covers business and economics, and the editorial page imaginatively devotes its space each day to exploring a single issue. Other dailies have copied USA Today's colorful, information-packed weather map, its news highlights from all 50 states and, above all, its inclusive, statistics-laden sports section. But the paper does have conspicuous weaknesses: cover age of popular culture is spotty, and personality profiles, whether of athletes or political figures, are too few and too superficial. As Gannett anticipated, the paper is still viewed as slight by many journalists, although its executives reply that length does not equal depth. Says Editor John Quinn: "We are not up to undertaking projects of the dimensions needed to win prizes. They don't give awards for the best investigative paragraph."

Despite USA Today's accomplishments, its battle for survival is far from won. Although start-up costs were expected by industry analysts to be perhaps $25 million in 1982 and again in 1983, the paper lost an estimated $120 million through last year. The losses this year could be as much as $100 million. These deficits are believed to be the biggest ever sustained by a newspaper. To meet circulation targets, and to ensure advertisers of a stable, identifiable readership, USA Today is shifting from selling primarily at newsstands and through its ubiquitous coin-operated boxes to much more expensive home and office delivery. The costs will be somewhat offset by a planned increase in the per copy price to 35-c-.

More difficult to solve is the short fall in advertising. The average 36-to 40-page issue of USA Today is about 20% ads, considerably below the 55% to 60% figure of most metropolitan dailies. It sells only national ads and so competes primarily with magazines. Unlike weeklies or monthlies, however, the paper bills itself as "a quick read" and thus is not often kept around the house or passed along to other readers. More over, despite Gannett-sponsored research that shows USA Today has an affluent, educated audience, space buyers remain skeptical. Says Marcella Rosen of NW Ayer: "The situation is a little amorphous. There is some question who the readers are." Contends Analyst John Morton: "It has achieved an impressive circulation volume, but I am unconvinced the paper will find an economically rewarding niche."

For Gannett, however, there seems to be no thought of turning back. As if to symbolize that commitment, Neuharth announced last week that the company was moving its headquarters from Rochester, where Gannett has been based since the chain acquired its flagship Times-Union in 1918, to the USA Today building in Rosslyn. The onetime chain of small town newspapers is determinedly making itself a presence in one of the centers of national journalism .

-- By William A. Henry III.

-- Reported by Anne Constable/Washington and Marcia Gauger/New York

With reporting by Anne Constable, Marcia Gauger