Metro Canada 'facing real challenges'

Metro Canada is apparently "reorganizing," laying off employees and facing "real challenges," the publisher of the Metro's Halifax edition is quoted as saying. Greg Lutes made the comments to his competitor, the Halifax Chronicle Herald, in a story about four layoffs at Metro Halifax on Wednesday. Lutes said two reporters, one sales staffer and one marketing person were let go. Lutes said the cuts were apart of the re-organization of Metro Canada, which announced a couple of months ago that its Canadian circulation had reached one million, strengthening its position as the No. 1 free daily in the country.

Lutes said, "Local (advertising) is not the issue ... It's national (advertising) ... We're facing real challenges right now."

Lutes said circulation at his paper had increased 20 percent this fall.

The Metro Halifax edition now has five people working in its newsroom. Lutes said he felt confident that there would not be any additional layoffs at the Halifax edition.

Youth-oriented, 5-day free paper to close

Link, a five-day free daily in Norfolk, Va., that aimed for the 18-to-34 demo, will print its final edition Dec. 19. Its staff of around 15 to 20 will lose their jobs. The paper was shuttered as part of a round of layoffs and buyouts to hit Virginian-Pilot Media Companies.

Link, begun in October 2006, had received positive reviews and met financial projections, which predicted it would turn profitable by 2010, according to the Virginian-Pilot. But Publisher Maurice Jones said "we, as a company, cannot afford to withstand those losses in the next couple of years in this climate."

Jones said it is possible that Link's Web site will be kept alive.

Head-to-head competition claims a free daily

A locally-owned free daily serving Eureka, California will print its last edition on Saturday after battling for five years with the town's chain-owned paid daily, according to The Associated Press.

Eureka, a town of about 27,000, is in far Northern California near the Oregon border. It overlooks the Pacific Ocean coast.

The Eureka Reporter was started by a local developer and banker, Rob Arkley, a conservative who felt the town's longtime paid daily, the Times-Standard, was too liberal.

The Times-Standard is owned by MediaNews Group, a chain of 57 dailies headed by Dean Singleton, who was a big backer of President Bush. Yet Singleton's papers are mostly liberal. Singleton doesn't tell his editors to slant the news.

And, oddly enough, Arkley didn't attempt to tell the journalists who worked for the Reporter how to cover the news either. The only hint of conservatism in the Reporter came on the editorial page.

Arkley's Eureka Reporter scooped up numerous awards. It also has a state-of-the-art press that produced vidid photos and ads.

Probably the smartest thing Arkley did was hire Judi Pollace, a highly respected veteran of the Times-Standard who produced a credible product. I understand that Judy was also an attendee at the 2007 small daily conference in Florida. (She is seen here in a photo that appeared in a 2006 San Francisco Chronicle article about the Eureka newspaper battle. The photo at top, showing a billboard on Highway 101 between Arcata and Eureka, is also from that story. Both were shot by Chris Stewart.)

As the U.S. economy hit tough times this year, Singleton went after the competition with a couple of lawsuits over economic matters. The first concerned legal ads and whether the Eureka Reporter fit the narrow criteria to publish them. A local court agreed with the Reporter, but an appeals court did not — and the Reporter lost all of its revenue from legal ads.

Singleton's second lawsuit alleged that Arkley was selling ads in the Eureka Reporter at a loss in order to take business away from the Times-Standard.

A few weeks ago, Arkley called Singleton and said, "It was time to do something," according to a Times-Standard story. Arkley searched for a new buyer for his paper, Singleton said, but found none.

Singleton said the ad-pricing suit is now moot and he has agreed to allow Arkley to provide editorial pages to the Times-Standard twice a week.

The Times-Standard quoted a local assistant journalism professor, Marcy Burstiner, who said she's never heard of an agreement like the freshly formed one between the two Eureka papers, where one newspaper agrees to run another's editorials. While the agreement will preserve the Reporter's voice, Burstiner said she's not sure it's worth saving.

”It was a crazy editorial voice,” she said. “It was actually a very interesting paper, but their editorials were crazy. Personally I don't think that editorial voice reflected that of the Eureka community.”

The Times-Standard story on the closing of its rival ended with this:

For his part, Singleton said his thoughts are with those at the Reporter who will be losing jobs, and complimented Arkley on igniting a newspaper war the likes of which are growing rarer and rarer.

”Many wealthy people who start a newspaper would open it up for their own purposes -- I didn't see that,” Singleton said. “He assembled a good staff and let them go, and probably lost a lot of money in the process. He loves this community.”

Plug pulled on Washington state free daily

David Black of Sound Publishing has pulled the plug on the 10,600-circulation Kitsap Free Daily serving Kitsap County on Puget Sound, west of Seattle.

“We are temporarily suspending publication of the Free Daily to focus on our core products in Kitsap County,” says Lori Maxim, Vice President of West Sound Newspaper Operations. “The Daily is a fantastic product but we have decided to shift our focus to continued development of our online products and the community newspapers serving the Kitsap region.” Sound Publishing has six weeklies in the Kitsap area.

Here's a link to the announcement.

Black (no relation o Canadian-born British former media mogul Conrad Black) also group of 17 free dailies in British Columbia. The average circulation is 4,818 with the largest being the Victoria and Nanaimo editions at 10,000 each. Here's a profile free-daily.com did of him last month.

RedEye gives McCain a black eye

RedEye, the Chicago Tribune's free daily, ran an ad on page 2 the on Wednesday with a pie chart that used a lot of ink. That pie chart gave John McCain a black eye when the page was held up to the light (right). Certainly the black eye was unintentional, but it might be hard to explain to Republicans after the Tribune's endorsement of Barack Obama a few days earlier. Credit for spotting this item goes to the local Chicago site Gapersblock.com.

It's all about advertising

COMMENTARYOne of the reasons why free daily newspapers have so much potential is that they're free. And if they're distributed widely, they can reach many more people than a paid newspaper.

Readers who are 40 and younger likely didn't grow up in homes that subscribed to newspapers. They're not accustomed to paying for a paper -- particularly if they have been getting news from the Internet and TV. Older readers, when exposed to a free paper carrying a lot of local news, will search for that paper again and again. And free papers have higher pass-along rates, meaning more people read each copy than a paid paper. Free papers capture the interest of the casual reader who long ago stopped reading paid papers (or never started).

Ultimately free makes the advertiser's buck go farther and puts ads in front of people who wouldn't normally pick up a paid newspaper.

Free can be a fantastic business model.

But that's not the opinion of Morris Communications, which has decided to flip its Bluffton (S.C.) Today, a 17,000-circulation free daily near Hilton Head, S.C., from free to paid (25 cents daily, 75 cents on Sunday) beginning Dec. 1. Bluffton Today was started by Morris three years ago as an experiment. Morris, by switching from free to paid, has essentially said the experiment is over.

Publisher Tim Anderson wrote:

The question I’ve been asked most since we launched Bluffton Today was when we would convert to apaid newspaper. My reply has always been the same. We did not build the model with aplan to convert to paid subscriptions.

The model was built to rely solely on advertising revenues to publish daily. Every member of the Bluffton Today team had confidence that we could make the free newspaper model work.

And we did for more than three years. We continued to manage our expenses while experiencing revenue growth through the first of this year. But these are extreme times for most businesses, and newspapers are no exception.

Over the past year we have experienced significant price increases in newsprint and ink. And newsprint price increases are projected into 2009. In addition to expense issues our advertising revenues began to “soften” in the second quarter. Our revenue was not covering the additional expenses. We tried several things to provide an acceptable bottom line. Restructuring departments and eliminating several positions going into this year provided little relief. We adjusted the number of pages in the paper but realized we weren’t providing you with some of the coverage we promised when we launched. So we had to find anew solution.

Anderson says his ad revenues are declining. How much more will those revenues decline when advertisers discover their ads are less effective than before? What will an advertiser who regularly runs a coupon think when he only gets 10 coupons a month compared to 50 when the paper was free?

Signs of improvement at Metro U.S.

COMMENTARYThe Web site MediaLifemagazine.com posted a story Thursday headlined "For Metro, the future looks doubtful."

I can't argue with the headline. Metro's three U.S. papers, in Philadelphia, Boston and New York, are apparently losing money and have been on the block since January with no takers. Of course merger and acquisition activity is at a standstill due to the credit crisis. That's not Metro's fault. And the U.S. is in the midst of a recession.

We also can't quibble with the statement that the three papers need capital to remain open. It's expensive to print papers with daily press runs of (and these figures are about a year old, but the most reliable I have at hand) 300,000 in New York, 187,000 in Boston and 140,000 in Philly. Printing costs for the three combined are likely over $1 million a month. The last I heard, the three papers have a combined head count of 120. I have no guess on payroll.

But we looked at a few recent issues of Metro and were impressed by several things:

• The content is more lively and upbeat than we've ever seen it. Gone are the boring wire stories. They've been replaced by staff-written, edgy, youth-oriented stories like you'd see in RedEye.

• Better layout. In Friday's Philadelphia Metro — which celebrated the Phillies World Series victory — the headlines were big, colorful and conversational: "Metro gives Palin a little career advice," "At least we're better than Boston," "We agree with J-Roll: Skip work" and "Slacker Prodigy."

• Friday's edition was 28 pages not including a four-page wrap. While that page count might seem small to some, it keeps paper costs down and lets editorial pour its talents into fewer pages, resulting in better work.

• A quick statement from the city editor about the news, with his picture. This adds a personal dimension to the paper (so that a reader thinks that real people are putting out the paper, not a faceless corporation).

• The ads in Friday's edition were impressive — Macy's, Citizens Bank, local car dealers, movie theaters, a double-truck from Carnival cruiselines and a wrap (four pages) from the state Department of Transportation. The paper looks healthy from an advertising perspective. It's easier to sell ads when you have ads.

• Metro is now placing a front page ad to the right of its flag, called an "ear," something the free dailies in the San Francisco Bay Area began doing a couple of years ago. Again, this is a smart move that attracts advertisers and adds to the bottom line.

While Metro is having money problems, it is putting out a better product than we've seen before. It is producing a newspaper that should be attracting readers and advertisers — which may help Metro ride out this economic downturn.