2005 Annual Report - Alternative Media Outlook

While final numbers weren't available when this report was finished, estimates for 2004 revenues among the weeklies put the total at $550 million. That would be a record for the weeklies and a substantial increase - $21 million or almost 4% - over 2003 figures.¹²

Revenue of Alternative Weeklies

1992 - 2004

Design Your Own Chart

Source: Association of Alternative Newsweeklies unpublished data

* Based on AAN member figures

AAN internal surveys and anecdotal evidence suggest that the growth came primarily in three areas: Local retail, real estate classifieds and national advertising.

National advertising is still a relatively small part of alternative weekly business, about 6% to 7% industry-wide. Small-market papers get no national advertising, and the largest papers top out at approximately 15% of total revenue. Still, the early national ad numbers for 2004 look good. The Alternative Weekly Network, which coordinates national ad sales for 100 papers, had not posted final 2004 data at the time of this report, but a preliminary accounting showed an increase of 20%, to $14 million, for national ads.¹³ That's dramatic, particularly since the 2003 ad dollar figures were up roughly 7% from the previous year.¹⁴ As the economy recovers it is often those big advertisers who are looking to spend money first. National ad sales for the weeklies historically involved tobacco or alcohol products, according to Alternative Weekly Network. National sales on the whole have been growing in recent years, though tobacco ad dollars have been declining and replaced primarily by financial, automotive, high-tech, and telecommunications ads. Some of the changes undoubtedly reflect the graying and greening - growing wealth - of alternative-weekly audiences. National dollars may have presaged the larger overall ad-dollar increase the weeklies apparently experienced in 2004, as smaller local advertisers also began to advertise more.

The alternative weeklies are arguably the most sensitive to economic problems. The vast majority rely solely on advertising, and don't get any boost from subscription dollars. The revenue boost in 2004, following an increase of less than 1% in 2003 and small declines in 2002 and 2001, may be a sign that the economy has turned a corner. It also suggests that so far anyway, the weeklies have not lost advertisers to the new competition in any large measure.¹⁵

But there may be problems lying in wait for these publications. First, the struggles of small local retailers, which are increasingly being challenged by superstore "category killers," hurt weeklies as well, since many local ad dollars come from those small stores. Second, the continued rise of Internet and Web-based classified advertising (see Online Economics) will probably divert more money from the revenue stream. We'll discuss those changes more fully in the next section. Suffice it to say the revenue numbers for the alternative weeklies, while good, don't necessarily point to a bonanza ahead.