Internet Impacting Fortunes Of Regional Papers

Circulation data released earlier this month by the Audit Bureau of Circulations (ABC) showed a big split in the fortunes of small-town newspapers versus big regional dailies, and the Internet is likely a big factor, finds an analysis by research and consulting group Outsell Inc. While regional dailies have taken a big paid circulation hit from the Internet, where news can be had for free, Outsell analyst Ken Doctor is optimistic about small-town papers' prospects. For one thing, he said, "if you look at broadband usage, it's lower in less populated areas. You don't have as many inroads by DSL or cable, and people are spending less time online in general. If they're spending less time online, then print has less competition from the Internet."

Of course, this situation is unlikely to last, given the recent pace of change, Doctor acknowledged: "Over time, some of these differences between large urban areas and small areas will disappear, and some will diminish." But even here, he went on, small-town papers have a distinct advantage--once again, because of their virtual monopoly on local news reporting.

"Again, in these areas there isn't much alternative to the local newspaper for local news, and the news aggregators--Yahoo Local or MSN Local, for example--really need to have a local news partner to have an effective local news offering," Doctor observed. By contrast, he said, "the problem in big areas is that if the big newspapers don't play, they can go to TV or radio stations."

Even better for small-town papers, Doctor added, they're also likely to retain their advertising relationships and their monopoly on classified listings--one of the key areas where Internet services like Craigslist are eating into the revenue of big regional dailies. "It makes sense in advertising, in that there are smaller, stand-alone stores and people who buy locally, and you don't have a Craigslist on the classified side. If you look at Craigslist they might cover the top 200 cities in the country, but everyone else sort of flies under the radar."

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