Analysis: The Continued Strength of Community Newspapers

There isn’t much good news in the U.S. print media industry these days. But continued growth can be seen in the Community Newspaper Sector which is posting circulation growth, increasing revenues and profits and, last but not least, high editorial quality

Community newspapers typically enjoy circulations of less than 50,000. Actually, most of them have circulations of 5,000 to 10,000.

According to research by the Newspaper Association of America, in the six months ending September 30, 2006, of the 413 papers in the small newspaper group, 105 of them, or 25%,  gained in circulation compared to the same period of 2005, faring better than any other circulation group.

Interestingly, many Hispanic publications belong to this circulation category (Small Newspapers) and many of their publishers are meeting this week in Phoenix, Arizona, at the National Association of Hispanic Publications Annual Convention.*

The  Community Newspaper Sector is not restricted to small independent publishers. Several large companies own hundreds of community newspapers, and many are active in the Hispanic market. These companies include Lee Enterprises, Freedom Communications  and American Consolidated Media.

Davenport, Iowa-based Lee Enterprises owns 56 daily papers and more than 300 small weeklies and other publications. Lee is one of the very few newspaper companies whose stock price has tripled over the last 2 decades. Three of its papers have a circulation of more than 100,000 -- including the St. Louis Post-Dispatch -- but the rest of its dailies are much smaller, averaging about 26,000 each.

The small-newspaper division of Freedom Communications, whose Hispanic publications include Orange County’s Hispanic weekly Excelsior and four Spanish-language publications in Rio Grande Valley, generated a 30% profit in 2006, up 5% from 2005. By comparison, a very successful large newspaper typically has a profit margin of  20%.

Macquarie Media Group, an Australian Investment Group, recently acquired American Consolidated Media (ACM) a publisher of 40 local newspapers which serve significant portions of nine regional communities in Texas and Oklahoma. In the Rio Grande Valley, American Consolidated has two relatively large publications (which are total market coverage products). Even though they are written in English, they have a large Hispanic audience. They are The Valley Town Crier (Mc. Allen, Circ. 123,795, free, weekly) and The Bargain Book, a shopper with zoned editions in Brownsville, Los Fresnos, San Benito and Harlingen (combined circ. 132,526). Jeremy Halbreich, American Consolidated Media’s CEO, recently told Portada that his company is interested in acquiring Hispanic community newspapers.

Less competition…

One of the great advantages of community newspapers is that they face less competition from other media outlets and are more insulated from ad slumps that have hammered big papers. They employ smaller staffs of lower-salaried journalists and have a zealous devotion to local news, both in print and online. By providing “niche” or “local” news, they can differentiate themselves from the large media outlets. In addition, there is less competition on the Web for local news. This is particularly the case for Hispanic community newspapers: The Hispanic Internet is not that content rich yet, particularly when it comes to local news.

"There is no question that newspapers under 50,000 have performed much better than large newspapers," chief executive of MediaNews Group William Dean Singleton recently told The Washington Post.

Singleton said smaller papers are less vulnerable to the current declines in national advertising and "In many of our smaller communities, we are the only game in town if you want to reach targeted households," said Freedom chief executive Scott N. Flanders.

For Hispanic publications this assessment is even more positive, as national Hispanic print advertising is growing (opposed to the negative trend in the general market). 

… for dominant local news providers

Gatehouse, a 2006 IPO and publisher of more than 445 community publications, recently bought nine Midwestern community newspapers with a combined circulation of 241,060 from Copley Press Inc. for $380 million. "These newspapers are dominant local news providers in the markets they serve, with a rich tradition of journalistic excellence and local advertising reach, and therefore fit perfectly into the business strategy of GateHouse Media," Chief Executive Michael E. Reed said.

For the Hispanic newspaper industry, local content is essential to drive growth. While all Hispanics have commonalities regarding their content preferences, their different origin and their different experiences, depending on where they live in the U.S., make content selection a very important factor for publishers and editors of Hispanic publications.

*The analysis proffered in the above article was put together using Portada’s proprietary Hispanic publishing and advertising tools, which will be on exhibition at the upcoming NAHP Annual Conference (Booth # 25, April 11-14).


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