An American Dream Abroad p. 14

By: STACY JONES FROM LONG ISLAND, N.Y., Hesh Kestin and his miniscule staff of 15 plan to make money by providing editorial slices of American life to a growing list of European, Middle Eastern, African and Asian countries.
Kestin, former European bureau chief for Forbes magazine, launched the American in June in 25 countries. It is currently available in 60 foreign countries. Distribution in the United States is limited to newsstands in New York and Washington, D.C., and in Barnes and Noble bookstores throughout the country.
The paper's objective, at the time, was to give Americans living abroad and American travelers something they've never had ? a Sunday newspaper . . . with a twist.
One surprise the American's president and publisher had: non-Americans make up 50% of the publication's readership.
"Most people are terribly interested in the U.S. and not just politically," explained Kestin. The paper's initial success "is a reflection of the feeling around the world that the U.S. is the unopposable model for what the 21st century society will be like."
The upstart American's key competition is USA Today and the International Herald Tribune. Despite the long international presence of those two papers, they are already at a distinct disadvantage. Unlike the American, neither publishes on Sunday.
The lack of competition bodes well for future prosperity. The American's other bit of strategic genius involves the basic issue of profit.
Foregoing the traditional newspaper method of making money through advertising, Kestin chose a simpler route. "We make money on each copy," he said.
At $4 a copy, on average, the American is more expensive than most newspapers abroad. But this pricing concept allows the paper to earn 80% of its revenues from the customer. The result is that after eight months the American's books are showing no signs of red.
The American's current circulation of 17,000 is above the company break-even point of 14,000 copies.
Determined to run a lean enterprise, Kestin isn't sure if advertising has a place in the American. With more advertising comes more pages, said Kestin. More pages translates into higher air shipping costs. More costs mean less profit. And we know, less profit means less money for the paper's frugal owners.
As far as content, the American, backed by Kestin and a "small, transatlantic group of investors, doesn't bother with boring business briefs or run-of-the-mill international news. It offers the good, the bad, the irreverent and the interesting of life in the U.S.
"We assume readers are already reading the Wall Street Journal or the Herald Tribune," said Kestin. "What they want on Sunday is a good read."
The 40-page tabloid is filled primarily with wire stories from a pool of 87 syndicated newspapers. Original articles come from regularly contributing columnists and the American's one staff writer.
Leisure and gossip are giving ample attention.
Among the regular features is the "Sleaze Please" column which editors warn readers is information that has "absolutely no redeeming social or educational value."
The paper's Concierge is a pullout section that lists tourist attractions, events and services for the week ahead in 38 European cities.
Printed in London and Frankfurt, each issue is sent via ISDN line. The newspaper owns no presses.
"We use every electronic advance to put out newspapers," said Kestin. "The only piece of paper here is a paycheck."
Given its promising beginning, Kestin is working even harder to ensure more good times ahead.
"In talks with strategic partners, I'm convinced the way to grow is to grow quickly," said Kestin.
In three years, circulation goals are 50,000, though the owners expect to reach that in two years. The next step would be to top 100,000 circulation.
An Asia edition is expected by the summer and the American will focus more on increasing sales in the United States, which now stands at 600.
Why such aggressive growth plans?
"Because I'm one of the owners and I want to make money," said Kestin.
?("We assume readers are already reading the Wall Street Journal or the Herald Tribune. What they want on Sunday is a good read.") [Caption]
?( ? Hesh Kestin, president and publisher, the American) [Photo & Caption]
# Editor & Publisher n March 1, 1997