The World Association of Newspapers found that global paid-for circulation rose 2.57% year on year and 9.39% over the past five years.
However, when free dailies were added to paid-for daily circulation, global circulation increased by 3.65% year on year to 573m.
Free dailies now account for nearly 7% of all global newspaper circulation and 23% in Europe alone, according to WAN.
WAN also found that ad revenues in paid-for dailies were up 0.86% year on year in 2007, which was also an increase of 12.84% over five years. Print remains the world's largest advertising medium, with a 40% share.
The five largest markets for newspapers were: China, with 107m copies sold daily; India, with 99m; Japan, with 68m; the US, with nearly 51m; and Germany, with 20.6m.
Circulation sales were up 6.72% year on year in South America in 2007, up 4.7% in Asia, down 0.49% in Africa, down 1.87% in Europe, down 2.14% in North America and down 4.28% in Australia and Oceania.
However, the number of paid-for newspaper titles increased everywhere except North America, where it was down by 0.56%. The number of newspaper titles was up 5.3% in Asia, up 4.55% in Australia and Oceania, up 3.99% in Africa, up 2.54% in South America, and up 0.48% in Europe.
The number of newspapers online also grew 13.77% year on year in 2007 or 50.77% over the past five years.
Timothy Balding, chief executive officer of WAN, said: "Newspaper circulation has been rising or stable in three-quarters of the world's countries over the past five years and in nearly 80% of countries in the past year.
"And even in places where paid-for circulation is declining, notably the US and some countries in western Europe, newspapers continue to extend their reach through a wide variety of free and niche publications and through their rapidly developing multimedia platforms."
The survey, which WAN has published annually since 1986, includes information on all countries and territories where newspapers are published -- a total 232.