Magazine article Editor & Publisher

Finding the Right Niche: Newspapers Seek Alternative Sources of Revenue but the Profits Are Not Always There Right Away

Magazine article Editor & Publisher

Finding the Right Niche: Newspapers Seek Alternative Sources of Revenue but the Profits Are Not Always There Right Away

Article excerpt

Newspapers seek alternative sources of revenue but the profits are not always there right away

STEVE LOWERY, PUBLISHER of the Bardstown Kentucky Standard (circulation 8,400), vividly remembers the huge tour buses that began showing up at the restaurant next door to his newspaper in 1990.

"The stinky buses belched diesel fuel and took up too much parking space," he recalled. But after talking to the restaurateur and learning how much money he was making from the steady stream of tourists who patronized his business, Lowery began to see the tour buses in a different light.

"I investigated and found that nobody in Kentucky was publishing any kind of promotional literature that publicized the state as a tourist destination," he said. "So we decided to make a run at it."

Using a mailing list compiled by the restaurateur, the Standard produced a 30-page tabloid-size publication, which advertised travel destinations in Kentucky, and sent it to tour group leaders throughout the United States.

From that modest beginning, the newspaper has branched out to produce publications not only for the tour group market but for the entire state, especially for families vacationing there. In four years, gross revenues from its niche publishing operation have jumped from $10,000 to $360,000.

"We've found a niche and a lot of new customers," Lowery said enthusiastically. "The revenue has come mostly from people who don't read our newspaper."

The Standard is just one of many newspapers that have turned to niche publishing -- the production of publications aimed at a particular group -- to revive a declining readership and sagging profits.

"Tough economic times are forcing the newspaper industry to try out new ideas," said Carol Ann Riordan, associate director of the Reston, Va.-based American Press Institute, which was established in 1947 and serves as a training and development arm of the newspaper industry. "That makes sense because newspapers need to carve out new profit areas and attract people who aren't reading newspapers."

This development reflects a strong trend in the publishing industry.

"Publishing is becoming increasingly specialized," Riordan said. "For example, each year, 500 new specialized magazines start up. Many of them die, but the point is that many people who read have specialized interests and want to buy a publication tailored to their interests, and it's not necessarily going to be a newspaper."

The 96,000-circulation Winston-Salem (N.C.) Journal was forced to adapt and specialize in 1989, when it faced tough competition from two local real estate publications: one distributed independently and the other distributed by the Greensboro (N.C.) News & Record, which got the endorsement of the local Board of Realtors.

"We were put on the defensive and forced to fight to hold on to our market share," said Jeff Green, who until recently was advertising director at the Journal and now holds a similar post at the Tampa Tribune.

What Green described as an "18-month protracted zone war" followed before the News & Record withdrew from the market. Realizing the opportunities that existed in niche publishing, the Journal bought the financially troubled Senior Scene soon after the "zone war" and has turned it into a thriving niche publication. Today, Green said, he is amused by media critics who say the newspaper industry lacks competition.

"Sure, not many big metros are going head to head," he said, "but since the advent of desktop publishing, just about any entrepreneur with $10,000 can set themselves up to be a publisher. He can sell advertising, get it printed somewhere, distribute it himself and he is in business. So a lot of little people are nibbling on the newspaper market, making it potentially smaller for everyone."

Niche publishing in the newspaper industry has taken many forms. …

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