Circulation has always been a critical part of the business of journalism as well as the practical reason for producing journalism in the first place. We can see examples of this throughout the history of journalism as well as today.
When the first mass media outlets in the form of printers who owned printing presses arose the one thing that kept them down was lack of circulation. Due to a lack of literacy and the expense of printing circulation was low so there were not many newspapers.
As printing became cheaper and printed materials were more accessible to the common man, literacy rose. With the rise in literacy came a hunger for printed information, giving the printers the circulation they needed to run weekly or even daily newspapers.
Today we have seen the same factors that originally led to an increase in circulation now cause the opposite. Technological advances like the Internet and social media have actually lowered circulation among newspapers.
As the news business has become more and more competitive, online editions and the free availability of news has increased. This increase has caused users to turn away from traditional sources for the cheaper alternative.
Many newspaper companies, at least the ones that have survived, have adjusted their business model to reach the audience that has left them. An example of this can be seen in the New York Times, which has a print edition, online edition, phone or device edition, and a feature that sends stories to users email addresses.
Subscription offers for all of these can be found at: http://www.nytimes.com
All of this shows the importance of circulation not only for the business of journalism, but also for journalism itself. Without circulation, journalism is not only unaffordable to produce but also pointless, as producing journalism has no practical use without an audience to consume it.