Newspapers Seek New Business Plan

by Mark Hengel  on Monday, Nov. 24, 2008 12:00 am  

Tom Larimer, executive director of the Arkansas Press Association, says community newspapers can create new revenue by publishing a wider variety of products.

(To see the list of the largest daily newspapers in Arkansas, click here. The list of the largest weekly newspapers in the state can be viewed by clicking here.)

(Spreadsheets of the largest dailies and the largest weeklies are also available.) 

The ancient business plan of newspapers – in which advertising revenue and subscriber fees easily cover the cost of gathering, printing and delivering news on a regular schedule – isn't the recipe for double-digit profit margins it once was.

Some newspapers are simply reducing the number of issues they produce. But Tom Larimer, executive director of the Arkansas Press Association, says the real key to long-term success will be adding new sources of revenue "outside the traditional newspaper."

The name of the game is targeted audiences. The most obvious new source of revenue would be Web sites, since the Internet is where huge numbers of former newspaper readers have gone. But making a profit on the Web has frustrated most – but not all – news organizations, while the most successful new sources of revenue have been narrowly focused "niche" publications.

The state's dominant daily newspaper, the Arkansas Democrat-Gazette, is broadening the number of publications it offers, and its publisher, Walter Hussman Jr., admits that he's been late to the party.

A free weekly tabloid called Sync targets a younger audience than the Democrat-Gazette, and Hussman admits he and his Wehco Media Inc. underestimated the market for "slick publications."

Wehco recently began publishing Arkansas Life, a glossy monthly magazine distributed free to the upscale audience cultivated by titles like Inviting Arkansas, At Home in Arkansas, AY and SoirÉe, a sister publication to Arkansas Business.

Despite the late start and competing against established niche publishers like Arkansas Business Publishing Group and Arkansas Times LP, Hussman remains confident.

"We probably were a little bit late to the game ... but we think we can still do really well," Hussman said.

The added revenue streams will help offset poor earnings at Wehco newspapers, which Hussman blames on current economic conditions. The Democrat-Gazette and other Wehco papers have avoided losing circulation en masse as other large newspapers have; a list of the state's largest newspapers, on Page 17, shows the D-G's daily circulation was off by only 0.2 percent this year, according to is annual statement of ownership filed with the U.S. Postal Service. But the company has imposed a hiring and wage freeze at its newspapers, Hussman said.

So far, Sync is breaking even, said Paul Smith, the Democrat-Gazette's general manager, while Arkansas Life's first issue – published in September – turned a profit.



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