Alert: State may create 'Do Not Deliver' list

A Maryland legislator wants her state to create a "Do Not Deliver" list for unsolicited free newspapers, similar to the national "Do Not Call" list for telemarketers, according to the Associated Press.

The reason? People can't stop the Examiner and other newspapers from throwing papers on their driveways.

A bill by Republican Tanya Shewell (pictured) would give newspaper publishers seven days to comply with a request to stop an unsolicited home delivery. If the deliveries continue, publishers could be fined $100 a day. House Bill 357 would also require free newspapers to print a toll-free phone number in a conspicuous location for people who would want delivery stopped. (Here is a link to the bill.)

Examiner representatives didn't return the AP's calls for comment. But Examiner executive Michael Phelps said in a story in the Baltimore Examiner that a "Do Not Deliver" registry isn't necessary. He said stopping unwanted deliveries "is among my highest priorities."

Residents within the Examiner's circulation areas have been complaining this problem for more than a year:

• Homeowners put up signs attempting to stop Examiner delivery

• Judge asked to stop Examiner delivery

• Former Examiner circulation employee speaks out

• Fed up residents start website to stop unwanted Examiner deliveries; ad boycott starts

Metro gives New York publisher the boot

The New York Post is reporting that Daniel Magnus, Metro New York publisher for the past two years, was shown the door yesterday. A day earlier, Stuart Lane exited as publisher of Metro Boston, though he disputes the claim that he was fired. Also, Metro is laying off workers at its employees as the investment banking firm Lazard Freres shops Metro's three U.S. papers around to potential buyers. The cuts could be an attempt to clean up the balance sheets of the papers to make them more attractive to buyers.

Meanwhile, the media blog fishbowlNY is asking its readers how they would "salvage the troubled" Metro chain.

Fishbowl also quotes Will Bunch of the Philadelphia Daily News as saying the people in his newsroom don't even bother reading Metro's Philadelphia edition.

"... That shows the extent to which we never saw it as a journalistic competitor, just a business competitor. That said, the fact they make money elsewhere but not in Philadelphia (or New York or Boston) surprises me; we have a working-class audience and a fair amount of mass transit ridership. Perhaps the market is too divided -- there are two good free weeklies here and the Daily News does a pretty good job retaining people willing to lay out 60 cents. I'm surprised Philip Anschutz isn't interested, since he seemed like a natural. I think Brian Tierney and Philadelphia Media Holdings is too focused on upgradhing the Inquirer and Daily News to fool with this, so I don't know...I think they will find it very difficult to find a Philadelphia buyer, especially when they couldn't make it work with a formula that's been successful elsewhere."

Metro Philly hits stride as niche daily

Metro Philadelphia, which is celebrating its eighth birthday this month, began as a paper designed to reach the working classes who used commuter trains. But Philadelphia Weekly reports that over the past two years the 139,000-circulation Metro has "quietly reinvented itself as a daily niche publication attempting to reach young Philadelphians through stories about indie bands, the future of the city, pseudo-mayoral candidates with mohawks and the anticasino movement."

Metro Philly has reduced the wire stories it carries. Instead Editor Ron Varrial directed his newsroom of 11 people to focus on issues and trends. "He told his staff to quit writing about who's going to win American Idol and instead write about the acts that were going to appear at Johnny Brenda's," the Philadelphia Weekly article says. "The newsroom has the energized atmosphere of a college newspaper."

Metro Philly isn't making money and sales were reported to be flat last year. As reported below, Metro has put its three U.S. papers up for sale and "now the newsroom that finally gelled over the last two years is sweating," Philadelphia Weekly reports.

Metro to cut staff, Boston publisher exits

Metro International is reducing the staff of its money-losing U.S. editions and the publisher of Metro Boston has left the company, according to the Boston Globe. Other cuts and leadership changes are expected at the Metro newspapers in Philadelphia and New York. All three papers are up for sale.

Rob Patterson, chief of Metro's U.S. papers, met in Boston on Monday with the publishers of the three papers, the Globe says. Metro Boston publisher Stuart Layne said that he resigned Monday night.

"The Globe and the Metro were taking a different direction than what I was brought in for. I was brought in to grow the business. It didn't grow was fast as the joint venture had hoped," Layne told the Globe.

No replacement for Layne has been named.

In Boston, Metro plans to eliminate its Gameday Sox section, a sports editor, the T-Time editor, and about eight sales positions, said the employees.

Santa Barbara paper loses co-publisher

As splits go in the newspaper business, this one was amicable. Charles Swegles has stepped down as co-publisher of the 8,500-circulation Santa Barbara (California) Daily Sound, according to the Santa Barbara weekly Independent. Swegles was the paper's first salesman and says he leaves to start other businesses, but still has an affinity for the Daily Sound.

The Sound started in March 1996 by Jeramy Gordon, an alumni of the Palo Alto (California) Daily News, a pioneer free daily.

The Independent article points out that Gordon's paper, which he started from scratch, is growing: It employs eight full time and three part-time employees as well as several columnists, freelancers and other associates. Gordon plans to hire a full-time administrative assistant as well as a full-time copy editor in the coming weeks. The paper is at the break even point, according to Gordon, “not at the profit we’re looking for, but we’re not losing money."

The Sound has been helped along by the self-destruction of Santa Barbara's long-time paid paper, the News-Press. Publisher Wendy McCaw has been at war with her former newsroom staffers. She lost a significant legal battle when a court ordered her to rehire eight former employees who were fired for engaging in union activities and give them back pay.

A refugee from the News-Press debacle, John Leonard, has joined Gordon as the Daily Sound's general manager, handling the business aspects of the growing free daily.

Free vs paid -- going different directions

The question of whether newspapers ought to be free or paid is far from settled. In London, The Independent is considering a free edition in a bid to boost circulation and shore up ad revenues, according to the Guardian. The Guardian quotes one expert, Dan Pimm of Universal McCann, as saying, "If they start building up circulation through free, there's a good chance they'll be able to put the rates up. Advertisers are prepared to pay for the free model."

In Manchester, England, the Evening News is reportedly having success by distributing its paper free within central Manchester but charging for it in outlying areas of the city.

On the other side of the pond, the company that owns Philadelphia's Inquirer and Daily News is raising single-copy prices due to rising costs, particularly newsprint. Both papers will cost 75 cent a copy starting Feb. 4. The Inquirer (a traditional broadsheet) now sells for 50 cents and the Daily News (an urban oriented tabloid) for 60 cents. The Sunday Inquirer will cost $1.75, up from $1.50 now. The Daily News doesn't publish on Sundays.

Brian Tierney, the advertising-agency guru who heads the local investor group that bought both papers from Knight Ridder in 2006, is betting that people won't be concerned about the price increase. The free Philadelphia Metro has never made a dent in the circulation or sales of the Inquirer or Daily News.

And BusinessWeek's Jon Fine is encouraging publishers of paid papers to charge more, adding: "Don't worry if your circulation volume drops so long as the circulation revenue, and profits, are rising."

COMMENTARY: The higher the price of paid papers, the more room free papers have to grow.

Sending the wrong message to advertisers

COMMENTARY
When free papers fail to provide the news readers desire, an unfortunate and ugly problem develops — waste. At subway and train stations, readers literally drop free papers on the ground. For publishers that force-feed their papers by throwing them on the driveways of non-subscribers, residents revolt and sometimes sue.

Discarded papers send an undesirable message to advertisers. The best course, obviously, is to limit distribution so that demand meets or exceeds supply. But that skill seems to be out of reach of many free dailies. And when waste exceeds the tolerance of the public, the government is only too happy to step in.

Under pressure, the publishers of the rival London afternoon freesheets have installed 70 recycling bins in central London to honor a deal struck with the London borough of Westminster, the Guardian reports. Associated Newspapers, publisher of London Lite, and Rupert Murdoch's London Paper, have each installed 35 bins at a cost of £500 each ($975 U.S.).

Says the London Guardian, "The mountain of discarded newspapers in the capital has been a big issue since the freesheets launched in September 2006, with councils in central London and London Underground complaining about the increased clean-up bill."

That's the kind of publicity that scares off advertisers. And considering how easy it is to avoid, it's a wonder free newspapers ever put themselves in a situation where they can be criticized for waste.

Metro? Anschutz: no; Dagsbrun: perhaps

Billionaire oilman Philip Anschutz (left) will not bid for Metro International's three U.S. papers, a spokesman says. But a unit of Iceland's phone company, which started a free daily in Boston last year, is giving the Metro papers a serious look, a source tells Free-Daily.com.

Dagsbrun, a Reykjavik-based TV-phone-publishing conglomerate, made it clear when it launched BostonNOW that it wanted papers in major markets across the country. Dagsbrun has two reasons to buy the three Metros:

1. One of the Metros is in Boston. Dagsbrun could eliminate a free daily competitor to its BostonNOW.

2. It could rebrand the New York and Philly Metros as "NOW" papers and get started on its nationwide rollout. The Metro format, imported from Sweden, hasn't caught on in the United States. A re-design and a re-branding could help.

Meanwhile, we continue to hear unconfirmed rumors that The New York Times Co. is interested in the Metros as well. The Times owns 49 percent of Boston Metro and it has a classified-sharing deal with New York Metro. The thinking is that if the Times views Metro as a good way to extend the reach of its classifieds, then the paper is worth owning.

As for Anschutz, his spokesman, Jim Monaghan, was crystal clear when he told the Denver Business Journal that his boss was not interested in buying the three Metros. Monaghan shot down a report that originally appeared in The Phoenix, a Boston alt-weekly, and then the Boston Globe which claimed Anschutz wanted to add the Metros to his Examiner chain. Funny thing, though — the Globe's parent is the NYT. The Gray Lady might know something about the situation since it owns 49 percent of Boston Metro.

Why the Examiner wants Metro

Here's some analysis of yesterday's report that the Examiner chain is in talks to buy Metro's three U.S. papers (see below). By the way, the report today was confirmed by a second newspaper, the Boston Globe.

It's obvious why the Examiner chain is interested in Metro. The Examiner has never succeeded at attracting local advertising, so its executives have focused on national ads, though they have been hard to come by as well. What national ad buyer would just want Baltimore, Washington and San Francisco? By acquiring Metro, the Examiner could add New York, Philadelphia and Boston to the list. Sure, the chain still wouldn't have L.A. and Chicago. And it would lack growth markets like Miami, Atlanta, Dallas and Phoenix. But it's hard to imagine a national account being too concerned about Baltimore.

Adding New York, and to a lesser degree Boston, adds some prestige to the Examiner chain. It says that the Examiner is the Big Leagues.

But such an acquisition raises some questions:

• Will the three papers retain the "Metro" names and formats? Or will they be re-done to look like the Examiners, which all follow the same format?

• Will the acquisition get the LA Times moving on starting a RedEye-like free daily in the Southland to head off an Examiner there? The Examiner's owner, Phil Anschutz, has significant real estate holdings in L.A. as well as a hockey and soccer team. His soccer team's star is phenom David Beckham, who Anschutz is paying $250 million.

• Will the Tribune Co., owner of the Baltimore Sun, start a free daily there to make life difficult for the Baltimore Examiner and keep the Anschutz chain in the red?

• The Examiners have had trouble getting people to pick them up out of racks and instead have resorted to home delivery where they are thrown, unsolicited, on driveways in upscale neighborhoods (a practice which has drawn considerable opposition from residents). Will the Metros switch to a force-fed distribution model, too?

• The Examiners have a right-wing slant with national "news" writers who moonlight as Fox News commentators. The Examiners carry ads for the conservative Heritage Foundation and owner Phil Anschutz's "Pass It On" campaign that pushed for the Iraq war. This Republican tilt one reason why the Examiner has had a tough time catching on in liberal San Francisco. Will a right-wing format work in New York, especially where the right side of the spectrum is well represented by the N.Y. Post and Sun?

Right-wing or left-wing, it's unlikely that many national advertisers would be interested in the Examiner because it seems to be designed for the over-50 crowd. For instance, we recently saw a story in the San Francisco Examiner about the opera followed on the next page by an ad for an assisted living facility.

The Examiners might be better off if they copied RedEye or Tampa Bay's *tbt, both of which reach a younger crowd coveted by advertisers. Unlike the Examiners or Metro, RedEye and *tbt exude energy and life. True, they focus on entertainment, music, clubs, contests and the like, but they also carry real news. Both RedEye and *tbt are attracting readers who would never pick up their paid parent papers.

Whether or not the Examiner chain buys the three Metro papers, the leading company for commuter free dailies is Tribune, with its RedEye and amNewYork free dailies both making money. After four years in business, the Examiner chain still hasn't figured out how to do that. And the Examiner chain's profitability problems will only grow if it acquires three money-losing papers and doesn't have a better plan than one it has today.

Metro to sell U.S. papers; Examiner may bid

Metro International is putting its three U.S. papers on the market, and among the interested suitors is the Examiner chain, according to The Phoenix, a Boston alt-weekly. The Examiner has free dailies in San Francisco, Washington and Baltimore.

Metro's decision to sell isn't a surprise. Since taking over as Metro's chief executive, Per Mikael Jensen (pictured) has been closing or selling the company's money-losing editions to get Metro back in the black.

Though it is publicly held, Metro does not break out financial information for individual papers. However a report in Crains New York quoted "insiders" as saying Metro New York has annual revenue of $14 million and losses of up to $500,000 a month. In October, Metro disclosed that sales in the third quarter were off 12 percent in Boston and 5 percent in Philadelphia compared to the same period in the previous year. New York was the only bright spot with a 18 percent jump. The fourth-quarter report is due February 8.

All of the Examiner papers are believed to be losing money too, though it probably is not a concern to owner Phil Anschutz, who is listed by Forbes Magazine as the nation's 41st richest person with a net worth estimated at $7.6 billion. His wealth comes from oil, real estate, railroads, movie theaters and a phone company.

The New York Times Co. owns a 49 percent stake in Boston Metro, and it is unknown at this point whether the Times, which has been liquidating its assets, would sell that non-controlling interest to a new buyer.

Correction -- 3 days a week isn't daily

We erroneously listed The Politico as a daily in a Dec. 23 posting. The Washington newspaper actually publishes three times a week. We've corrected the original posting. (Our thanks to Piet Bakker for pointing out the error.)

New York's free dailies see revenues rise

While the business media frequently reports that newspapers are dying, the growth of free dailies is seldom mention. In fact we over looked this report last month in Crains New York, a business publication, that says free dailies are defying the trends in the newspaper industry.

Crains quotes "industry insiders" as saying Tribune's amNewYork does $18 million to $20 million a year in sales, and is making a profit. However, amNewYork gets a lot of help from Tribune's Newsday on Long Island. It piggybacks on Newsday's ad deals, carries some Newsday stories and uses the same printing plant.

Metro New York has had a tougher time in the Big Apple, partially because "its parent company's one-size-fits-all approach, which emphasizes a uniform design and wire service coverage," Crains says. "That didn't work in New York."

But Metro is beefing up its local coverage and the paper was projected to post revenue gains above 20 percent last year, its second year of double-digit growth, according to Publisher Daniel Magnus. Crains again quotes "insiders" as saying Metro's annual revenue is around $14 million and that it is losing as much as $500,000 a month.

"Magnus says that savings on paper and production have cut losses and that the paper is now 'flirting' with being profitable," Crains says.

Despite Metro's problems, Crains says free is here to stay. It quotes Colby Atwood, president of media consulting firm Borrell Associates, as saying: "Free is such an attractive price point ... I expect to see more free papers, not fewer."

Freesheets stabilize newspapers in Italy

Advertisers in Italy are discovering that free dailies are delivering a new, "very tempting market" of people who previously didn't read newspapers, according to the International Herald Tribune. Instead of diluting the market for paid papers — a fear many U.S. publishers of paid papers have — free dailies in Italy have created their own market and are contributing to the stability of the newspaper industry "because they reach an audience that wasn't reached before," said Bocconi University media and economics professor Fabrizio Perretti. Above, in an AP photo, a distributor hands out the Corriere della Sera Anteprima in Milan.

Reborn Florida daily to go entirely free

For years the Boca Raton (Fla.) News had been sputtering as it was handed off from one owner to the next. It has had five owners in 10 years and lost money most of that time.

But now the Boca News is profitable after it improved the quality of its Sunday paper and began delivering for free to homes selected by advertisers. The paper currently costs 25 cents in racks on weekdays and 75 cents on Sundays, but owner Craig Swill says he expects to go entirely free at some point this year. It is already free at most retail locations, he says. The News also has about 10,000 online subscribers who get PDFs of the paper daily.

The improved Sunday edition averages 80 broadsheet pages and is loaded with local news. It also has society pages, a healthy real estate section and around 15 inserts from regional and national advertisers.

"I am pleased to report that the Boca Raton News has made a tremendous turnaround and is profitable and is growing with this part paid and part free model," Swill tells Free-Daily.com.

Today the Boca Raton News has a circulation of nearly 25,000 on Sundays, which is about the same as when it was owned by the now defunct Knight Ridder chain a decade ago. Weekdays, the circulation is about 10,000, roughly half of when it was part of KR.

The backstory

In the late 1980s and early 1990s, KR invested $3 million in an ambitious project at the Boca News paper called "25/43," which was designed to lure readers in that age group.

The paper was redesigned to appeal to people too busy to read a newspaper. Shorter stories. More color. No jumps. More maps and graphs. Editorial judgments shaped by focus group research. In other words, it was Knight Ridder's response to Gannett's USA Today.

Here's a link to a 1998 American Journalism Review story on the 25/43 project and another story from the New York Times printed in 1991.

The experiment didn't increase revenue or circulation. In fact the Boca News lost ground to the Tribune Company's Sun-Sentinel to the south and Cox Newspapers' Palm Beach Post to the north. KR sold the paper to Community Newspaper Holdings Inc. in 1997. CNHI then sold it to a local businessman who sold it to another local. Finally, Swill acquired it 2-1/2 years ago.

Swill already had free weeklies in Coral Springs and Parkland, Fla., and was adding products such as coupon books, when the opportunity to buy the Boca News came along.

He sold the Boca News's presses and outsourced the printing to two companies. He moved the paper from its 30,000-square-foot space to a 6,000-square-foot location. He also pulled the plug on AP, the TV listings, pre-printed comics and most syndicated content.

And while a handful of newspapers have converted from broadsheet to tabloid, the Boca News has gone the opposite direction.

"We switched from tabloid to broadsheet as our focus groups kept on stating the same thing, 'I remember the old Boca News when it was a real newspaper, big and with many sections.' So, we took all of our special sections and put them into Sunday's paper, made it broadsheet and switched to a top tier commercial printer," Swill tells Free-Daily.com.

The News began publishing only local, community news. And now it is making money.