Saturday, August 25, 2007

San Francisco inundated with free dailies

Above are a number of newspapers I picked up while visiting San Francisco. They're all free. Which is great for readers but bad for publishers. San Francisco has got to be the nation's most saturated market when it comes to free newspapers, both daily and weekly.

Among the dailies, I count 9 titles: San Francisco Examiner, San Francisco City Star, San Francisco Daily, Palo Alto Daily News, San Mateo Daily Journal, San Mateo Daily News, Burlingame Daily News, East Bay Daily News and Redwood City Daily News.

And if that weren't enough, the region boasts several very readable alt-weeklies: SF Weekly, Bay Guardian, East Bay Express, Metro (San Jose) and The Bohemian. Plus a number of community weeklies too numerous to name even on a Web site.

MONEY IN TOILETS: There is more print media in the Bay Area than one can imagine. Perhaps it's due to the perceived weakness of the perennial paid dailies of the region, the Hearst-owned San Francisco Chronicle, MediaNews Group's San Jose Mercury News and Contra Costa (County) Times, and the New York Times' Santa Rosa Press Democrat. Each of those paid dailies have their strengths, but they're also boring: How do they match headlines in the free press such as "The City may throw millions into toilets" (SF Examiner, Aug. 23). And on that same day, when the Chronicle was writing about high school seniors passing exit exams, the SF Daily's headline was "Seniors having plenty of sex, survey shows," referring to those who graduated from high school many decades ago.

While all of these free papers are fun to read, obviously some aren't making money. Denver oil billionaire Phil Anschutz owns both the San Francisco Examiner and the City Star. It was the first place I headed when I arrived in town. It's right across from the bus station. The guard didn't let me past his podium, however.

EXAMINER CAN'T SURVIVE: But on the phone, an account executive told me the Examiner's circulation was 160,000 a day. I asked her how many pages, and she claimed the average page count was 60, though the three days I was there, it never got above 48. Still, assume it's 60. It would cost at least $9,000 a day to print that big of a paper (assuming newsprint at $610/ton), which comes to $2.9 million a year.

Assume the Examiner's payroll approaches $3 million a year (30 people at $100K including benefits), and the Examiner is at least a $5.9 million operation. With rent and other expenses, maybe $7 million.

So I take a rate card and go through a week of issues. Most of the pages are entirely editorial with no ads, or just house ads. On the 20 or so ads in every issue, assuming that the Examiner got top dollar on every ad, and assuming that every movie ad was paid (Anschutz is the nation's biggest movie theater owner), the Examiner generates perhaps $1.7 million a year in billings (and that's being generous).

I know Anschutz is rich, but how long will he put up with those kinds of losses?

Sadly, when you walk through residential areas, you see doorsteps with Examiners in plastic bags piled up -- unread. Piles of them. That's bad advertising for free papers. It says the paper is unwanted. It makes me think of the lawsuits the Examiner is facing in Washington and Baltimore from angry residents who don't want the free paper.

READER DEMAND: Unwanted is not the term you'd apply to the SF Daily, whose blue newsracks were empty by noon each day and their paper is stuffed with ads. It's no exaggeration to say that 70 percent of their column inches are advertising, and they have many more advertisers than the Examiner, which has been in San Francisco since the Civil War. Clearly the SF Daily is making money.

Publishers Dave Price and Jim Pavelich seem to have the touch when it comes to attracting readers and advertiser. You see people reading it in restaurants, shops and even people stopping by racks to grab a copy — perhaps because they don't have an internet edition.

But getting in touch with them proved to be impossible during my three-day visit. Here's what Amsterdam professor Piet Bakker found when he visited the SF Daily. And here's a local TV story about them.

The SF Daily had its share of hard news stories, but also things that made me laugh out loud like "Bullwinkle blamed for climate change" -- a story about how a moose belch would equal the greenhouse-gas output of a car going 20,800 miles. Or a horoscope that tells Aries readers: "If you drink, don't park. Accidents cause people." (Get it? It took me a minute!)

In the mid-1990s, Price and Pavelich started the Palo Alto Daily News, a paper about 30 miles south of San Francisco in a suburb best known for being the home of Stanford University. In the 10 years that they owned that paper, they started separate editions in San Mateo, Redwood City, Burlingame and Berkeley. They're now owned by MediaNews Group, which also owns a number of other Bay Area papers.

The battle of the free dailies in the Bay Area is just that -- a battle. We didn't even bring up the free weeklies, which were more interesting than alt-weeklies we've seen in other cities. It will be interesting to see who wins this battle of attrition.

Saturday, August 18, 2007

Metro not amused by humor columnist

New York Magazine reports that Metro International has fired humor columnist Elliott Kalan, who is also a segment producer at "The Daily Show," for writing a column headlined “Newspapers: Information’s Horse & Buggy." Kalan wrote:
    “Nobody reads newspapers anymore … As this very copy of Metro shows, the only way to get most people to read a newspaper is to literally force it into their hands.”
The magazine quotes an unnamed Metro staffer as saying Kalan’s column was read by Chris Spalding, the interim CEO of Metro International (which was founded in Stockholm), who was in New York on business.

“Our New York publisher, Daniel Magnus, said that the CEO told him we had to fire Elliott immediately,” says the staffer.

Kalan told the magazine that he doesn't really know why he was canned. "My assumption is that the wrong person saw it and didn’t get the joke. They’re very straightforward people, the Swedes,” said Kalan. Metro didn’t return the magazine's calls for comment.

Monday, August 13, 2007

Web site aims to stop Examiner delivery

Fed up residents in the Baltimore area have created a Web site,, in an attempt to stop the Examiner from being delivered to their homes. We can't tell who is behind the Web site but we were tipped off by a frustrated suburban Baltimore resident who saw an article we posted on the free paper's delivery problems and asked us for more information. Homeowners who are getting the Examiner thrown on their driveways against their wishes are also organizing a boycott of Examiner advertisers.

Here are some of the stories we have run previously on the Examiner's circulation complaints:COMMENTARY: Our position on this is that while we wish the Examiner and other free dailies success, this festering problem will not only damage the Examiner but the entire industry. The Examiner needs to re-examine (pun intended) its business model and determine whether the hostility it is creating is worth it. We would hate to see the communities surrounding Baltimore enact laws prohibiting this type of distribution. Such laws could spread across the country, affecting other free papers, including those that respect the rights of homeowners.

Rival sues new free daily in North Carolina

The publishers and several staffers at paid papers in two North Carolina cities have quit to start their own free daily -- but now they're being sued by the owner of their former papers.

The new free daily is called The Messenger. It started July 9 and operates five days a week, delivering to homes. The Messenger is based in Mount Airy, N.C., a city of about 8,500 people and the birthplace of Andy Griffith. Many believe the charming small town of Mayberry in his 1960s TV show was based on Mount Airy.

Many of the staffers for the new paper come from the Mount Airy News and The Tribune of Elkin, N.C. Elkin is a town of 4,100 in the rolling foothills of the Blue Ridge Mountains about 20 miles south of Mount Airy near I-77. Both cities are in the same county.

In June, a chain of 32-papers, Connecticut-based Heartland Publications, bought the 9,200-circulation dailiy Mount Airy News and tri-weekly, 6,000-circulation Tribune from Mid-South Management Company.

Soon Heartland began cutting staff, and on June 18 Michael Milligan resigned as publisher of the Mount Airy News and Rebel Good resigned as publisher of the Elkin Tribune after 29 years, according to the Winston-Salem Journal.

Milligan is publisher of the new paper and Good is editor. One report said 14 employees of the two Heartland papers came along with them.

A July 4 story in the Winston-Salem paper said:
    Employees at The Mount Airy News say they haven’t paid a lot of attention to what Milligan and Good are up to.

    “Whatever they do doesn’t impact the notion or intention that we’re going to put out a great paper,” said Gary Lawrence, the new publisher of The Mount Airy News, who is also the chief-operating officer of Heartland Publications southern division.
Things changed quickly, however, when Heartland sued Milligan and Good, claiming the pair took key employees and information with them to start The Messenger, a July 7 story in the Winston-Salem paper said. The suit alleged that the two were planning the new paper while working at their old jobs, and that they recruited employees and manipulated the emotions of the remaining workers "so that they would walk out en masse" on June 18 in an attempt to undermine the two paid papers.

Heartland asked the court for an order stopping Milligan and Good from publishing the new paper, as well as hiring former employees of the two Heartland papers. Heartland also wanted to stop the new paper from contracting with its customers.

It appears Heartland didn't get very far in its lawsuit. The new paper has been publishing without interruption and a judge July 16 refused the chain's request to speed up the disclosure of documents in its lawsuit, the Winston-Salem Journal reported. The Messenger's attorney said Heartland's allegations are false and just an attempt to derail the new publication. The next hearing in the case is set for Sept. 10.

It's a nasty case for a town many think of as Mayberry. Where is Sheriff Taylor when we need him?

(Both photos are by Kate Lord of the Winson-Salem Journal.)

Sunday, August 05, 2007

Who saw this coming? Israel to get Metro

Metro is headed to Israel just days after that country got its second free daily. Soon Israel will have three. This Metro will be printed in Hebrew and distributed between 2 and 5 p.m. It's Hebrew name will be Yediot Aharonot. Metro will be owned by Dudi Weissman, who also controls the Blue Square supermarket giant and the Dor Alon energy firm, and Eli Azur, who owns The Jerusalem Post. Content from Post staffers will appear in Metro. Last Monday saw the launch of Yisrael Hayom, a free daily financed by Sheldon Adelson, the American Jewish casino mogul who is close to Likud chairman Binyamin Netanyahu, The Jerusalem Post reported. Another free daily is due soon from Arnon Mozes, publisher of Yediot Aharonot, Israel's largest daily.