Pennies from heaven p.8

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By: David Noack The Mile High Club heats up as Denver newspapers battle for customers

While The Denver Post and the Denver Rocky Moun-tain News battle for circulation supremacy, the immediate winners are readers who have signed up at fire-sale prices.
The latest skirmish in one of the most competitive newspaper markets in the country has also been one of the most aggressive, with subscription rates barely amounting to token payments. Most of the circulation push was handled by direct mail, telemarketing, and solicitors.
The tabloid News, owned by the E.W. Scripps Co., through a limited and targeted direct-mail effort, offered new customers Sunday through Friday editions at $3.12 for the first year and one cent for the second year. The subscription drive started in November, but News officials would not say whether the drive has ended.
The Post, owned by William Dean Singleton's MediaNews Inc., responded with their own Sunday through Friday offer at $3.12 for the first year, $6.24 for the second year and $9.36 for the third year. Their campaign, which also began in November, recently ended.
Both papers are vowing not to let the other gain an edge by offering deeply discounted prices in order to gain a circulation advantage.
The bargain subscription rate offers come after the most recent Audit Bureau of Circulations (ABC) Fas-Fax report that ended Sept. 30 of last year showed the News gaining on the Post.
The News added an average of 29,024 copies, for a 9.6% circulation gain to 331,978, putting it within 10,000 copies of the Post, which added 4,138 copies, for a 1.2% circulation boost to 341,544.
The Mile High City papers also increased their Sunday circulation. The News captured 17,453, or a 4.2% gain to 432,931 and the Post garnered 13,477, a 2.9% jump to 484,657. In 1990, the News led the Post by more than 100,000.
Linda Sease, the News' vice president of marketing and public relations, says, "Our decisions regarding pricing are based on one simple fact: We will not let our competitor buy the market through discount."
She declined to say how many new subscribers were gained or when the current campaign will end. "That is competitive information that we are not willing to share. You'll have to wait until the March publishers statement," says Sease.
The Newspaper Association of America (NAA) declined to comment on the circulation war.
ABC is keeping a watchful eye on these kinds of circulation price wars. Their main concern is that the paper recovers at least half of whatever the price happens to be.
The Post, which in the past has not responded to the News' circulation effort, this time decided to respond.
"This was really one of those competitive things where, are you going to let them stand there alone and scoop up a lot of your business or are you going to compete and neutralize what they're doing. Since we did not challenge them the year before, [the News] probably felt they had an open run this time," says Vernon Mallinen, the Post's circulation and marketing director. He says that while the paper gains more subscribers, it hurts "your long-term revenue."
"In a vacuum, we would not have done this. We can't allow them to buy the market. Last year we had sufficient growth in lead on them. Even when they did it, it allowed us to widen our lead, but we don't want to be so confident that we allow them to sneak one in on us," he says.
Mallinen declined to say how many new subscribers the paper picked up, but adds, "You can use an adjective like considerable."
One Post circulation source says that once this kind of offer is known publicly, there is a subscriber churn rate, where readers cancel their existing plan and sign up under the new price.
Ken Noble, president of Noble Consultants, a media consulting firm in Port Aransas, Texas, says that in such a competitive market, each paper is closely watching the other.
"I can't dispute the potential problems involved in a circulation war. If you don't cut price and your competitor does, what does that do to you?" says Noble.
James Brodell, a journalism professor at Metropolitan State College in Denver, says readers are getting a bargain.
"It seems to me that we get a real good deal. I can't imagine a suburban daily in some of the other cities in Colorado, I can't imagine how they can compete," says Brodell.
He speculates that in order to finance this circulation push, the papers are not spending money elsewhere.
"The money has to come from somewhere and some of it must be coming from the editorial budget, although the Post, I think, is producing more news than it has been. I'm not sure it is necessarily the most thoughtful news," says Brodell.
A Post source, who did not want to be named, agreed with Brodell's assessment but declined to say which departments are being hit.

?(What a deal! The Denver Rocky Mountain News offers potential subscribers a year subscription for just $3.12. They can get a second year for just a penny more.) [Photo & Caption]
?(The Rocky Mountain News seduces subscribers with its new sales pitch in an effort to boost circulation.) [Caption & Photo]
?(Editor & Publisher Web Site: http:www.mediainfo. com) [caption]
?(copyright: Editor & Publisher, January 16, 1999) [Caption]

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