2005 Annual Report - Alternative Media Outlook

After years of essentially owning the weekly news and arts market and seeing rising readership and revenue, the nation's alternative-weekly publishers are finding a different world in the beginning of the 21st century. Competition has come to the field from a variety of sources. Daily newspapers in major cities have launched free commuter tabloids that are available at mass-transit stops. Big chains like Gannett have launched free weeklies that compete directly with the smaller alternatives. Online services like Craigslist, serve as everything from classified-ad pages to community news centers, are drawing away classified advertising dollars.

Those changes have all hit the alternative weeklies where they are most vulnerable: in advertising revenue, where the weeklies get all their money for operation. Yet the new competition, while potentially threatening, has not yet dented in any real way the bottom line of the alternative weeklies. After two or three soft years, industry revenues have begun to climb again, albeit not at the torrid pace of the 90's. The question is whether the weeklies are simply more resilient than other media that have suffered against new competition - like newspapers that have suffered with the Internet's growth - or whether these alternative weeklies challengers are still relatively immature.

The weeklies' new competitors for revenue bring some distinct advantages to the table. The commuter dailies and chain-owned free weeklies have more extensive distribution networks in place. They can sell ads at special rates for both the daily paper and the free paper. Their local marketing muscle can overwhelm smaller competitors. And the fact that they are affiliated with or owned by the local daily newspapers means they often have the advantage of lower printing costs. Where classifieds are concerned, Internet services can offer search engines that make the task easier for those seeking goods and services, along with the ability to update with new listings regularly. Most alternative weeklies have their own Web classifieds, and many of them have been quite successful in generating revenues. But services like Craigslist are free, and that is hard for any pay-for-ads Web site to compete with.

Despite the new competition in advertising, the content of alternative weeklies is still distinct. Their mission, to provide a pugnacious counterpoint in news and arts coverage, is not matched by their competitors, which are chasing the revenue model more than the content model. The question is whether their specialized content will override the advantages of newer outlets and convince enough advertisers to stick where they are.

Alternative weeklies are still relatively strong, especially considering the troubles many print outlets have had in recent years, but the competition has grown.