Who Said Print is Dead?

By: Mark Fitzgerald And Jennifer Saba As if Craigslist, an aging readership, and a new generation hooked on blogs and social networks didn't give them enough to worry about, alternative newspapers now have a revived competitive threat: their hometown dailies. Mainstream daily newspapers are churning out a dizzying catalogue of free print products -- many of them aimed squarely at the club-hopping, trail-hiking, speed-dating young audience that has sustained alternative papers for more than a generation.

"All kinds of competition have been muscling in a market niche that the alternatives have had to themselves for a long time," says Erik Wemple, editor of the Washington City Paper. On top of burgeoning Web competition, he adds, "now everybody is doing free distribution, and listings-driven publications."

Gannett Co. alone has launched youth-targeted free weeklies at 10 of its dailies across the nation under its Young Readers Publications program. Mainstream dailies are increasingly turning out free tabs full of music and entertainment listings and short-attention-span news. Tabs like Quick (The Dallas Morning News); tbt* (The St. Petersburg Times); RedEye (the Chicago Tribune), and The Orange County (Calif.) Register's OC Post are turning up the heat on alt- papers that once virtually owned the young readers in their markets.

Richard Karpel literally confronts this new competitive landscape for alt-papers every time he rounds the corner from the Washington, D.C., offices of the Association of Alternative Newsweeklies (AAN). A long row of newspaper boxes looms like an enemy encampment. An apartment book. A weekly arts and entertainment guide. The Onion. A gaggle of other specialty pubs. And not just one but two new dailies: Express, published by The Washington Post, and The Examiner, published by the Anschutz Co.

They're all free. Take one.

"I can tell you half of them weren't there five years ago," says Karpel, the AAN's executive director. "Everyone is talking about the 'death of print,' and the funny thing is, you see more newspapers than before. When you are in a market like Boston or New York or Washington, D.C., you are just being niched to death."

Mainstream papers aren't content to just stack these freebies in the corner, either. They are adopting single-copy distribution strategies on steroids.

Amy Austin, Washington City Paper's publisher, says that though the alternative's classified advertising has been as problematic as any other print paper's, its bottom line has not been greatly impacted by the Onion (which launched in the city this spring) or by the two daily tabs.

But the Washington Post's entry is definitely a competitor for circulation, she adds: "I think with Express they do a very heavy-handed job of hawking at the metro stops that is something the Post can afford to do, and something that has not been part of our circulation mix. When you are trying to get someone to reach down in a box and pick it up -- it's easier to take the Express."

In another big city, Chicago Reader Publisher Michael Crystal confronts the new competitive dynamics every time he rides the L train in a car full of people reading RedEye, the Tribune's youth-skewing quick-read daily. "It's a competitive environment, as you well know, and RedEye plays into that, and is very visible," he says. The mainstream-produced tab is succeeding in getting into the hands of commuters, Crystal concedes, "but you generally see people putting it into the trash can when they get off the L."

RedEye has grown up a lot since its launch in 2002. Distribution has been ramped up to 150,000. A free home-delivery weekend edition was added in May. The Tribune says the youth tab is making money, and while it won't talk figures, the product's ad mix (heavy on the clubs and bars that gravitate to alt-papers), plus its ubiquity along commuter lines and in certain hip neighborhoods, gives the claim some credibility.

RedEye General Manager Brad Moore claims the tab is impacting the Reader, Chicago's longtime heavyweight alternative. With a median age of 37, up from 34 a few years ago, RedEye is attracting a younger demographic, too.

But the Reader, which each Thursday hits the streets with an inch-thick paper in three book-like sections, has kept its circulation steady at about 120,000, while readership has ticked up in the past year, Crystal says. Its audience's median age has held at about 40 for several years. Readers spend far more time with the paper than RedEye because of its different focus, he contends.

Middle-Age Spread
It's been roughly 40 years since alternative newspapers spread beyond New York City with publications that were not as screamingly political as the "underground" papers, but that successfully built a lasting audience with edgy reporting and writing, and tons of listings from concerts to apartments for rent. At a time when it was heresy to suggest that anything besides paid circulation was valuable to advertisers and readers, free-distribution alternatives coined money without collecting coins.

But in middle age, alternatives are beginning to resemble their mainstream daily rivals in striking ways. Each is struggling with the Internet's sway over its target audience. Both worry that their readers are aging. And most recently, both are finding that the bigger the market, the more difficult the competitive environment. These days, in the alternative world and in the mainstream, big papers are the ones facing the most difficulty.

You don't see that level of competition in secondary markets, says the AAN's Karpel: "The difference is in the markets. If you go beyond top 10 or top 20 markets, our papers are doing well."

Consider the statistics from AAN's most recent Financial Standards survey of members, which showed that overall alt-paper revenue in 2006 was up 3.6% over 2005 -- a time when, according to the Newspaper Association of America (NAA), overall daily newspaper revenue was down 0.3%.

But the medium-sized alternatives grew the most, while big-city alt-papers mirrored the performances of their mainstream rivals. Papers with revenues between $2 and $5 million shot up 7.1% last year, while the largest alt-weeklies (with annual revenues over $5 million) fell 0.38%.

At a time when metro dailies continue to pare down their newsrooms, alternatives actually added a bit to their far-smaller staffs. The AAN says average alternative newsroom employment rose to eight full-time employees and one part-timer, from seven full-time and two part-timers. Overall employment also rose by one full-time equivalent, to 32 from 31.

"The alternative press is very healthy in this county, and that is good news for the media and for the community," declares Stephen M. Mindich, founder and chairman of Phoenix Media/ Communications Group, which publishes Phoenix weeklies in Boston, Portland, Maine, and Providence, R.I. "Newspapers are not dead. Fortunately for me anyway, what we do still seems to be desired by our constituency."

Tampa, Boston heat up>
But that constituency is also desired by mainstream dailies. The Phoenix in Boston is confronted by two free products: Metro, a partnership between the global publisher of commuter papers Metro International and The Boston Globe, and BostonNOW, published by free paper pioneer Russel Pergament backed by the Icelandic company Dagsbrun.

The free dailies, Mindich said, are clearly after at least part of the Boston Phoenix's audience. And yet, he adds: "It's sort of like People magazine and The New Yorker are competitive, but they are not the same. That is what I feel about the free dailies." Pergament's paper, launched in mid-April, makes life more difficult for Metro and the Herald than for the Phoenix or its alternative rivals, such as the Weekly Dig.

Alternative newspapers contend that they are still distinct from the youth- oriented dailies and weeklies published by mainstream daily papers. And while the local mainstream daily may bristle at the notion that it has created a "faux alternative," to use a favorite term of the alt-papers, the fact is that mainstream publishers agree their free papers are, in reality, different.

A perfect example is playing out now in Tampa/St. Petersburg. The market was already highly competitive with two mainstream dailies and a clutch of niche publications contending for dollars and eyeballs. Since 1988, the city's undisputed alternative was Creative Loafing's Weekly Planet, which last fall renamed itself Creative Loafing.

Then, in March of 2006, the St. Petersburg Times relaunched its weekly tbt* as a daily. A jazzy tab loaded with listings that promotes itself with "Ultimate Bartender" contests and by sponsoring events such as the Hooters Swimsuit Pageant, tbt* has the look and attitude of an alt-paper. Its publisher, Joe DeLuca, is listed with other business managers on the masthead under the heading "Suits."

DeLuca, whose formal title is Tampa publisher for the St. Petersburg Times, says tbt* is a different kind of paper that is certainly going after some of the audience that reads Creative Loafing -- but that's not targeting the Loaf, as many locals call it.

"We really don't sell against Creative Loafing," DeLuca says. For one thing, he claims, tbt* is going after a younger audience than the Loaf, whose adult readership, according to The Media Audit, averages about 46 years old. And tbt* isn't a classic alternative. DeLuca describes it as "sort of an intersection between hard news and popular culture," as opposed to the greater focus on entertainment in alternatives.

The Times says it took tbt* daily not to strike out at Creative Loafing, but to reach and deliver to advertisers young people who were not reading the broadsheet. And tbt* helps the Times provide an additional audience for traditional advertisers such as department stores or car dealerships, DeLuca says. (Tbt* distributes 66,000 copies Monday through Thursday, and drops 95,000 copies of its weekend edition on Fridays.)

Creative Loafing President and CEO Ben Eason says the Tampa weekly isn't feeling any competitive pressure from tbt*: "They are going after a different demo, and they are going at it in a completely different way. You look at the product, it's a 20-minute read. An alternative is all about a non-daily perspective on your community and where to go play."

Eason is almost dismissive of tbt*, which he says has a "crazy business model." After a quick read of the tab, people toss it in the waste basket, while alternatives such as his get an average pass-along of two to three people, he says. "It's the same audience -- but they are going after them with a completely different result."

Creative Loafing distributes 85,627 copies on average when it drops on Wednesdays. Citing Media Audit figures, Eason says its readership is roughly triple that of tbt*. "It just doesn't have any penetration in the market," he declares.

And tbt* is not hurting Creative Loafing's advertising base, either, Eason contends. "They are not really equipped to sell to the little mom-and-pops," he says, referring to the small, independent businesses that are the traditional mainstay of alternative advertisers. "What they are doing is bringing car dealers and department store advertising into segmented print products."

Eason argues that tbt* is mostly cannibalizing the St. Pete Times in Tampa. Not at all, says tbt* publisher DeLuca. Times single-copy sales in Tampa have been "about flat," he says. He notes that home delivery continues to grow.

And DeLuca believes tbt* readers can be converted to daily ones -- just as he himself migrated from the Loaf. "I read Creative Loafing, we all grew up with it," he says. "And I think the same thing will happen with free dailies. They'll develop a loyal audience, but they will get to a point when that's not enough." As the tbt* reader establishes a family and buys a home, he argues, they'll want something more. It might be just the Saturday and Sunday paid daily, he suggests.

While the publishers of both tbt* and Creative Loafing envision no fight to the death between their papers, there was a casualty in Tampa's war for young readers. In September of 2006, about six months after tbt* went daily, the Times' chief rival, The Tampa Tribune, launched Orange Magazine, a weekly distributed mainly in bars and restaurants that centered on nightclubs and the city's alternative arts scene. In January, the Tribune squashed the Orange, saying it never found a place in the competitive market. "We determined it was not going to be a long-term investment for us," Rusty Coats, vice president and general manager for TBO.com, said at the time.

The Difference in D.C.
Washington City Paper Publisher Amy Austin concedes the paper is feeling the competition more now, but she points out there are differences in the print products. For one thing, she says, "The Examiner is much more suburban than we are." Express, the Washington Post's youth tab, "is more of a competitor to our circulation than to our advertisers. We do share some ad categories, but no one is not advertising in the City Paper because they are advertising in Express."

At an average age of 40, readers of the City Paper spend a lot of time with the publication. It recently hired Mediamark Research Inc. (MRI) to survey its readers and found that the average time spent with the paper is 79 minutes. Express, on the other hand, is just that: an express read.

Executives with Express don't dispute that characterization. Christopher Ma, vice president of the Washington Post Co. and Express' publisher, doesn't really think much about alt-weeklies. Express, he says, is a targeted and yet a mass product. Currently, 184,000 copies are distributed daily. "While we attract a lot of young readers, we are by no means limited" to them, he says. "We view Express as a quick-read product for those hard to reach in traditional paid newspapers."

The target might be somewhat different, but judging by the types of accounts that Ma rattles off, the advertisers sound as if they could also be at home in alt-weeklies. The top category for Express is local entertainment and then education, with a number of local universities. It also counts medical trial, computer repair stores, health clubs, and movie studios as advertisers. Ma acknowledges there are only so many local ad dollars to go around: "I would say the competition is much less specifically alt weeklies rather than other non-print types of media."

Just to underscore the point of how Express is not really after alt-weekly territory, the Washington Post also handles the circulation and local ad sales for the Onion, which in April launched a print version in the D.C. market. Ma says the satire tab directly goes head-to-head with City Pages, not Express: "We would not have done the Onion partnership if Express was a direct competitor with the alt-weekly."

Feeling the 'Beat' in Cincinnati
In late October 2003, dozens of brand-new newsracks turned up on Cincinnati's streets. Wherever possible, the new boxes for something called CiN Weekly were placed right next to the boxes for Cincinnati CityBeat. On Wednesdays -- the same day CityBeat drops -- the boxes filled up. Nine years after its founding, Cincinnati's alt- paper, it appeared, had competition.

And not just from another alternative upstart -- but from Gannett.

"I'm not whining, because competition is competition and that's the way the world is," says CityBeat Co-publisher/Editor John Fox. But for crying out loud, he adds, Gannett already runs the joint operating agreement (JOA) for the city's two daily papers, and its Cincinnati Enquirer will be the dominant daily when the partnership with The Cincinnati Post expires at the end of the year. Gannett owns virtually all the weeklies in the market, and has aggressively pursued niche non-daily publications.

With annual revenues of about $3 million, CityBeat's initial reaction to the Gannett free paper was "Why me?" Fox says. "I mean, it's not like we're sitting on a pot of gold" that would significantly move the Enquirer's revenue needle, he adds.

Nearly four years later, though, Fox says that "when all is said and done, there's room for both of us." They're pursuing somewhat different audiences, and CiN's readership is not as heavy on the 25- to 34-year-olds it initially looked to own (see page 80). "The latest Media Audit actually shows that we have a younger average reader than they do," he asserts.

CiN gets advertisers such as the market's big department store chain Dillard's, but those kind of accounts haven't added CityBeat to their media buy.

Like Creative Loafing's Eason in Tampa, CityBeat's Fox questions the way the mainstream daily is operating its free paper. He argues it isn't reaching its demographic target, and can't possibly be making money.

But Gannett is pretty happy with CiN Weekly, says Mike Perry, managing editor for non-daily publications and new initiatives in the Cincinnati market. Last year, CiN was No. 1 in revenue among the 10 Gannett Young Readers Publications, and first as well in reader satisfaction. It also had the most readers per copy at 1.57.

CiN was created not to go after CityBeat, but to meet the Enquirer's needs, Perry contends: "As an organization, you kind of look at your readership and see who's reading and who's not reading. If this demographic is not picking up the daily newspaper, then what else can we provide for them?" Another payoff for the Enquirer -- which, like most mainstream dailies, strives to get more female readers -- is that CiN skews female, Perry says.

He agrees there's room for both papers. "We're not trying to be CityBeat, and CityBeat isn't trying to be us," Perry says. He even gently suggests that the Gannett paper is the underdog. "They had quite a head start in the branding department," he says, alluding to CityBeat's founding in 1994.

CityBeat's Fox says the 47,000-circulation paper has actually grown since the launch of CiN, which drops 63,000 copies every Wednesday. "When people ask me about CiN, my answer tends to be, 'We wish they weren't around,'" Fox says. "We think that it's probably hurt our growth, but it hasn't really cut into our core business. It hasn't cut into our advertisers, and they haven't hired away any of our staff. If they weren't there, would we have grown more? It's hard to know for sure."

Not So 'Infinitesimal'
While CityBeat laments never getting the department stores and the auto dealerships, the chairman and CEO of the industry's largest alternative chain argues that's one advantage alt-papers enjoy. Village Voice Media Chairman/CEO Jim Larkin says the dailies that soared on increases in agate classified and on lush full-page ads from department stores and car lots are now struggling as those sectors consolidate or wither.

"We are still locally based, dealing with local advertisers," Larkin says. Alt-papers began by taking "infinitesimal chunks" of advertising from dailies. "The dailies were so fat and happy, they raised their rates. We had to compete from day one."

While Larkin is focused on local advertising, the national category is a big part of his company's growth strategy, since it owns the alternative national ad rep firm, the Ruxton Group

Like Gannett's CiN, national ad dollars have come pretty easy for the free BostonNOW, says founder Russel Pergament. The target audience is 20 to 40-year-old adults, white collar and college-educated. Pergament contends that ads placed in quick-read papers have a bigger impact because they don't get lost in the "bowels of big rambling newspapers." And he can turn the savings he gets from the low cost of production into lower rates for advertisers.

There's plenty of competition -- especially in Boston -- but his free daily, which launched in mid-April, has managed to snag big retail accounts like Macy's, Bloomingdales, and H&M. He's not worried about going after the small fries. "Usually, when you start a paper, you get a bunch of small ads, and then you get some big accounts," Pergament says. "With this one, we got the big ones.

"I don't expect to compete with the alternatives with clubs," he adds. "I'm not looking to dominate that category. It's rough business -- you've got to pick up checks at night."

This past June, Gansevoort Media hosted the country's first free daily conference --and Topic A on the agenda was the alt-weekly press. Henry E. Scott, managing director of Gansevoort Media in New York and the former group publisher of Metro U.S., says as the free dailies get their legs, they are starting to go after national ad dollars. "When we talked about national advertising, the answer we heard over and over is they are going to come after the alt-weeklies," Scott recalls. "The free dailies are pretty competitive and they offer five days a week, so you have some choices."

It's something of which the AAN's Karpel is all too aware.

"We used to be the gnats biting at the ankles of the big papers," he says. "Now we have thousand of gnats around trying to take our piece of cheese."


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