Magazine article Editor & Publisher

Energy Aplenty: HOUSTON HAS POWER TO SURVIVE SHOCKS

Magazine article Editor & Publisher

Energy Aplenty: HOUSTON HAS POWER TO SURVIVE SHOCKS

Article excerpt

Hearst's 'Chronicle' is one big paper, even by Texas standards

It's not as if Houston is profiting from misfortune exactly, but the biggest city in Texas has certainly been on a strange lucky streak lately.

The energy price spikes that jolted the Midwest and Northeast last winter -- and announced the first hints of an economic slowdown -- were good news for Houston's oil and energy businesses, led by such giants as Enron Corp., Reliant Energy Inc., and the El Paso Corp. In June, Tropical Storm

Allison wreaked havoc on Houston, dumping an astounding 28 inches of water, costing the market an estimated $4.88 billion in damage, and killing 22 people. Yet in many ways the storm fueled the local economy, setting off a construction boom and retail surge as residents were forced to replace their ruined homes, furnishings, and belongings.

The Sept. 11 terrorist attacks, however, present Houston with its biggest economic challenge so far this year. Soon after the attacks, Continental Airlines -- Houston's second-largest employer with some 16,000 workers -- joined other airlines in announcing huge layoffs. And Hewlett-Packard Co.'s announced acquisition of Compaq Computer Corp. -- the market's third-biggest employer, with about 11,000 staffers -- almost certainly will result in bruising job cuts.

Despite these blows, and the new consumer jitters they have brought, local media players expect Houston will continue to prevail. "I think we're going to stem the tide here," said Leo DeLeon, president of Boone DeLeon Communications Inc. "Houston has been able to diversify to the point where a lot of media is flourishing. It is a consistent market, and I'd rather see that consistency than any of those high peaks or valleys experienced in other markets."

DeLeon's agency work reflects that diversity, with clients ranging from petrochemical industries to non-profit institutions. It has a growing Spanish- language component, which includes the Spanish-language marketing for the Houston Astros baseball team.

One fact of life in the market, DeLeon noted, is the dominance of the Hearst Corp.'s Houston Chronicle, the largest paper in Texas and the city's only English-language daily.

"Let's put it this way, you can't buy around it," DeLeon said. Houston is what he calls a "well-valued" market -- "not cheap and not expensive" -- and the Chronicle reflects that pricing. More than a half decade ago, when William Dean Singleton pulled the plug on the rival Houston Post, the Chronicle hiked its rates as much as 40%. Since then, DeLeon said, "Their rates are well-placed, definitely. They're more expensive, but then again, they deliver."

In general, though, media buyers do not consider Houston a particularly strong market for newspapers. Only 42% of the population reads a daily paper, well below the average of 53% in the top 50 markets. Total newspaper ad spending in the market declined almost 12% last year, to $389.2 million, according to Nielsen Monitor-Plus.

For the six months ended last March, the Chronicle's daily circulation averaged 545,066, a 1.5% decline from the same period a year earlier. Sunday circulation averaged 737,626, a 1.4% drop. Despite the Chronicle's large circulation, the paper has a relatively low market penetration of just under 31% on its home turf in Harris County, according to the Audit Bureau of Circulations.

The Chronicle has made several changes in recent months, primarily in response to a readership study. The paper now includes at least one staff- written local obituary per day, usually focusing on people who were not public figures. There are more Page One enterprise stories on health, fitness, medicine, lifestyle, and education topics.

In July, the Chronicle invited Hispanic community leaders over to discuss the paper's coverage of issues important to Hispanic readers. Chronicle Managing Editor Tommy Miller said the discussion generated "eight to 10 good story ideas" and a stepped-up effort to hire a regular columnist to cover the Hispanic community. …

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