Small papers mostly avoid industry woes

By MICHAEL LIEDTKE
The Associated Press
Monday, August 10, 2009

Newspapers are hurting all over the United States, but the pain is less severe at small publications such as The Blackshear Times in Georgia.

The weekly newspaper fills an information vacuum in a county of 17,000 people who live about 75 miles from the closest metropolitan market, in Jacksonville, Fla. That has made it easier for The Times to hold on to its 3,500 subscribers and keep its revenue stable in a recession that’s ravaging much of the newspaper industry.

“CNN is not coming to my town to cover the news, and there aren’t a whole lot of bloggers here, either,” said Robert Williams, The Times’ editor and publisher. “Community newspapers are still a great investment because we provide something you can’t get anywhere else.”

The scarcity of other media in small- and medium-sized cities has helped shield hundreds of newspapers from the upheaval that’s causing dailies in big cities to shrink in size and scope as their print circulations and advertising sales decline.

Less competition means the print editions and Web sites of smaller newspapers remain the focal points for finding out what’s happening in their coverage areas.

In contrast, large newspapers carry more national news, as well as local, and have many competitors, including Web sites and television and radio stations. They report much of the news the day before printed newspapers reach homes and newsstands. Large newspapers’ Web sites also provide the news for free a day ahead of print editions.

Perhaps even more important, newspapers in smaller markets still haven’t lost a big chunk of their revenue to Craigslist and other online classified advertising alternatives that have become the bane of large newspapers.

Print ads for everything from jobs to jalopies were a gold mine for newspapers until Craigslist began expanding an online service for free classified ads in 1999. Today, Craigslist blankets most major metropolitan markets while publishing about 40 million classified ads each month.

In 2000, classified advertising accounted for nearly $20 billion, or about 40 percent, of the U.S. newspaper industry’s revenue. In 2008, classified ads in U.S. newspapers had dwindled to less than $10 billion, or about one-quarter of the industry’s revenue. Subscription and single-copy sales traditionally contribute just 20 to 30 percent of newspapers’ revenue.

Now it appears the highly profitable classified ads in the print editions of large newspapers could dwindle to virtually nothing within the next few years, said media analyst Mike Simonton of Fitch Ratings. “There is still more pain,” he predicted.

Smaller newspapers have been defying the ominous trend, based on a recent study of the finances at 125 U.S. newspapers of different sizes by the Inland Press Association, a trade group. The classified ad revenue among daily newspapers with circulations of less than 15,000 actually rose by an average of 23 percent in the five years ending in 2008, the study found.

Overall ad revenue for daily newspapers with less than 15,000 in circulation rose by an average of 2.5 percent in the same time frame. Meanwhile, ad revenue dropped 25 percent at daily newspapers with circulations greater than 80,000, according to Inland Press. “The bigger they are, the harder they are falling,” said Ray Carlsen, Inland Press’ executive director. Smaller newspapers also have largely avoided the deep staff cuts made by the rest of the newspaper industry, which has eliminated more than 100,000 jobs since 2005.

The Inland Press study found daily newspapers with circulations of less than 50,000 were spending more on their newsrooms in 2008 than they were in 2004.

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