US newspaper circulation fell 2.5 per cent in the latest six months, with paper sales continuing to decline as readers shift to online sources for news and analysis.

Papers to buck the trend by maintaining a steady readership or even increasing circulation slightly - The New York Times, the Chicago Tribune and USA Today - all saw their shares rise sharply.

The Los Angeles Times saw the biggest drop of the top 10 US newspapers, with 5.4 per cent fewer readers in the six months to the end of March compared with the same period last year, according to data from the Audit Bureau of Circulations.

Mike Kupinski, analyst at AG Edwards, said investors were encouraged that in large markets, subject to some of the most intense competition for advertising revenue from online rivals such as Google and Yahoo, newspapers were able to retain their audience.

“Newspapers deliver a large audience,” Mr Kupinski said. “Especially with so many different ways to get the news, newspapers are still very relevant.”

Average daily circulation of 770 daily newspapers fell to about 45.4m readers, compared with around 46.6m in the same six months last year. The Sunday circulation at 610 newspapers fell 3.1 per cent to 48.5m.

Analysts said some of the declines reflected stricter rules on reporting circulation, which were imposed after a number of scandals revealed practices that allowed some newspapers to inflate their reader numbers.

In addition, readers are declining as they increasingly turn to online sources for news. Reflecting this shift, many newspapers have developed online versions of their papers and invested heavily in digital services.

The Newspaper Association of America, said that viewers on newspaper web sites rose 8 per cent to 56m readers in the first quarter of this year, relative to the same period last year.

A study of online use by Nielsen/Net Ratings, the source of the online reader figures, showed that 58 per cent of people who visited news and information web sites turned to the online site of a newspaper.

“We are now starting to see the positive impact that publishers’ innovations and strategies to broaden their audience online are having on our audiences and readership,” said John Sturm, NAA president.

Newspaper shares have fallen this year amid concerns about reduced advertising revenues. On Monday, however, New York Times shares gained 4.6 per cent, Tribune Group rose 6.5 per cent and Gannett, which owns USA Today, rose 2.9 per cent.

Additional reporting by John O’Doherty

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