Alternatives Making Inroads p.12

By: WENDY GIMAN THINK OF alternative newspapers as the gawky kid at the beach that gets sand kicked in his face. Twenty years later, the kid is a muscle-laden entrepreneur who owns the beach. Look out, alternative papers have grown up.
Consolidation hums throughout this niche market. And the advertising numbers are reflecting more power.
""National advertising has taken off,"" said Richard Karpel, membership director for the Washington-based Association of Alternative Newsweeklies. ""It didn't even exist three years ago.""
Two national advertising groups exist for this market. One cooperative-type group has seen its numbers increase 23-fold over three years. The Alternative Weekly Network has tallied $6 million in advertising sales for 1996, up from $250,000 in 1994.
""The real money is at the daily newspaper level,"" said David Schneiderman, president of Stern Publishing that owns the Village Voice in New York City and six other alternative papers. ""The big strategy is to develop significant circulation numbers in the cities so we can challenge dailies for advertising. That's where we think the growth is.""
In two months, the company went from owning three papers in two markets to owning seven in four markets. Schneiderman, also a former editor of the Voice, believes there is a trend against dailies and paid papers.
While the Phoenix-based New Times Inc. may have more markets, Stern Publishing is looking for saturation ? covering both the metropolitan areas and their suburbs.
Jim Larkin, partner in New Times Inc., sees his competition for the advertising dollar as the whole spectrum of media, including radio, television, cable, dailies and other alternative papers.
Before Stern Publishing started buying properties three months ago, New Times was the only ""chain"" of alternatives on a national level. It has seven papers in large markets: Los Angeles New Times, SF Weekly in San Francisco, Dallas Observer, Houston Press, Miami New Times, Phoenix New Times and Denver Westword.
As for taking money from the dailies, ""We are insignificant in comparison,"" Larkin said. ""Alternatives are flies on the [dailies] hide.""
But he applauds the efforts to chip away at the enormous advertising revenue the big dailies generate.
The top 20 markets are not the only ones to see consolidation. NewVoice Communications, publisher of the 17,000-circulation Bloomington (Ind.) Voice, has found a financial backer in the form of a money-savvy chief financial officer of a Fortune 500 company. NewVoice is currently eyeing four properties. Plans are to have 10 properties by the end of next year.
What's the attraction of these papers? The alternative market has what advertisers lust: young, educated and active readers.
For example, Stern Publishing this year bought the two major alternative papers in the Twin Cities and merged them, the Minneapolis City Pages and the Twin Cities Reader. The Minneapolis market, according to Schneiderman, has the audience for a successful alternative paper ? a median age of 32 years old, highly educated and a university cultural life.
How have the alternatives captured these readers?
""Baby boomers have grown up with the weeklies,"" said Craig Hitchcock of the Bloomington Voice. There's brand recognition and expectation. These papers often cover the stories that dailies don't or won't.
The dailies, as many people interviewed point out, are losing or have lost the 18-to-40-year-old audience. Circulation is down at many paid papers.
""We grabbed them [readers] 20 years ago, and the dailies stood by,"" said Deborah Fason, publisher of Creative Loafing, an Atlanta alternative weekly.
Bloomington Voice publisher Bill Craig sums it up as: ""We [alternative papers] have 18-to-49-year- olds. They have 49-year-olds to dead.""
Schneiderman speaks as a recent convert to the free paper doctrine.
""I think that's the future,"" he declares. ""The trend is against paid, at least in weeklies, which is what we understand.""
But he admits that it has taken years for him to realize the power of giving it away. When the Village Voice, formerly $1.50 paper in Manhattan with a 130,000 circulation, decided to go free, the dailies ran with the story, declaring the paper dead.
Article headlines questioned whether the Voice could even ""give it away?""
Schneiderman dismisses those reports.
""If you are desperate, you don't give up revenue,"" he said.
The Voice gave up a few million dollars in revenue when it dropped paid circulation, but Schneiderman believes it allowed for long-term growth. Now, the circulation has increased to 223,000.
But going free is just the start of the Voice's repositioning. The Voice is focusing on the local market, rather than building a national presence.
Meaning: If you are looking for the Voice in the Texas Panhandle, you won't find it anymore. After more than 20 years of building a national presence, the Voice is abandoning its national circulation. Schneiderman plans on returning that circulation to New York City.
""The more local all these [alternative] papers are, the stronger they are, he said. ""We'd like to have a national group of papers, but each paper has to remain very local.""
Right now, Stern Publishing has a presence on each coast and in between. Besides the Voice, the empire includes the LA Weekly (a free paper that Schneiderman credits with giving the Village Voice ""the courage"" to switch), OC Weekly in Orange County, Calif., Eastsideweek in Seattle, Minneapolis City Pages and the Long Island Voice.
The Orange County, Seattle and Long Island papers ? all suburban ? mark a trend in the alternative business. Publishers have woken up and realized that there's life in the suburbs. The Voice is considering starting an edition in New Jersey, but is still waiting for market research.
""I don't know Jersey like I know Long Island,"" Long Island native Schneiderman said.
""We think we are pioneering suburban alternative journalism,"" he said. And taking a handsome share of advertising dollars.
""The first year we lost less than $20,000 in Orange County and we should have lost a half a million,"" Schneiderman said.
Orange County and Long Island are both start-up publications.
The New Times is also starting an alternative paper this fall in a smaller market, Fort Lauderdale ? though New Times sees that as part of the larger south Florida market.
Besides keeping the focus local, the Village Voice's advertising strategy remains conservative. While circulation increased by 100,000, the ad rates remained the same.
At first, Schneiderman admitted advertisers seemed to stall when the conversion to free happened in April 1996. But by this fall, the testing period seems to have subsided.
""The ad linage is growing in double-digit rates now and I attribute that to the Voice going free because circulation went up and more and more people are reading it,"" Schneiderman said. ""It's a great sales tool; even I can sell ads doing that.""
While the Village Voice plans to continue expansion in the denser markets, the Bloomington Voice aspires for a network of papers in smaller communities.
""There's tremendous potential at the end of the food chain,"" said Bill Craig, who is also president of the newly formed NewVoice Communications.
?(Stern Publishing, which owns the Village Voice in New York City and six other alternative papers, has joined New Times Inc. of Phoenix, owner of Denver Westword and six other alternatives in large markets, as alternative newspaper national chains.) [Photo & Caption
?(Giman is editor of Free Paper Publisher, published monthly by the Editor & Publisher Co.) [Caption]
?(""The more local all these [alternative] papers are, the stronger they are. We'd like to have a national group of papers, but each paper has to remain very local."") [Caption]
?(-David Schneiderman, president of Stern Publishing and publisher of the Village Voice) [Photo & Caption]

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?copyright: Editor & Publisher May 31, 1997


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