Alternative Reality

The Chapter 11 bankruptcy filing this week by alternative-newspaper chain Creative Loafing may portend the future for a few of the more traditional newspaper publishers.

A lot of mainstream daily journalists and executives look upon alternative papers as a different breed, seeing them as somewhat scruffy, hippy-dippy, entertainment-focused rags that seem to spend a lot of ink sniping at the big papers in their markets. But in reality, alt-weeklies are more like the big dailies (or community weeklies) than a lot of people suspect. They've been largely supported by classified advertising and a core of devoted display advertisers, and they have a lot of the same editorial, production, printing and distribution issues as their more establishment counterparts.

Consequently, the alternative papers have a lot of the same problems as the mainstream press to which they're supposed to be the alternative. Facing all sorts of new competition? Check. Classifieds decimated by craigslist, et al? Check. Declining display advertisers without finding replacements? Check. Aging readership? Check. Rising printing and production costs? Check. Failure to move quickly to the Web (despite a younger audience that's naturally Web-savvy)? Check–in fact, when it comes to the Web, a lot of alternative papers make large papers look like denizens of Silicon Valley. 

Sounds familiar, doesn't it? The solutions the alternative papers are trying are similar, too: In the past couple of years, Creative Loafing–which has weekly papers in Atlanta, Chicago, Washington, Florida and elsewhere–has cut staff, aggregated and centralized operations, radically redesigned its papers, grown by acquiring more papers (and increasing the company's debt) and, recently, announced a Web-first strategy (about time!). Just like the dailies. (And just like its alternative-press doppelganger, Village Voice Media, nee New TImes.) Creative Loafing even has its predictable share of disgruntled editorial staffers and alumni chafing against the company's changes.

And now Creative Loafing is in Chapter 11 bankruptcy. "The company owed more money than it can pay back right now," says CEO Ben Eason. Gee, where have we heard that before? Like its overextended and beleaguered daily cousins in Minneapolis, Philadelphia, Newark, San Francisco and other cities, Creative Loafing has fallen victim to the same forces that are buffeting all newspapers, alternative or not–and that are being exacerbated by the current economic and credit crunch.

Creative Loafing, to be sure, operates on a somewhat different scale than the big daily newspaper chains. But its challenges and problems (and strategies) are very much the same. It's more than likely that its bankruptcy filing is a foreshadowing of things to come for many daily newspaper owners. They're likely to have–I can't resist–no alternative.

Comments

[Dan Sinker]

I've been writing about Creative Loafing's hamfisted takeover of the Chicago Reader for the last 18 months. I wish I could say the backruptcy protection filing comes a surprise, but it really doesn't.

My latest weigh-in is here:

http://myeyesglazeover.blogspot.com/2008/09/chicago-reader-deathwatch-part-1000.html

It includes links to a half-dozen other reports about CL and the Chicago Reader.

[Richard Karpel]

Mark, you grossly overstate the similarities between alt-weeklies and big dailies.

First, the big dailies have always been much more reliant on classified advertising than alt-weeklies. The average alt-weekly derived approximately 23 percent of its revenue from classifieds in 2007, which was down from 28 percent in 1998. (Those numbers are taken from our annual financial benchmarking study.)

Second, alt-weeklies do not have "the same editorial, production, printing and distribution issues" as the dailies:

-- Editorial issues are vastly different because alt-weeklies practice a different kind of journalism (point-of-view and mostly narrative vs. "objective" and mostly inverted pyramid) with far fewer resources than the dailies.

-- The differences in distribution issues are like night-and-day because alt-weeklies practice free, controlled circulation and the dailies charge a newsstand or subscription fee.

-- The printing issues are different because the dailies possess their own printing presses and alt-weeklies (aside from the Boston Phoenix) do not.

-- The production issues are different because alt-weeklies have small staffs and a weekly production schedule while dailies have large staffs and a daily production schedule.

Finally, the Creative Loafing situation is unique and is not a proxy for the state of affairs in the rest of alt-weekly industry. It is unique because it is the result of a smaller, leveraged company (Creative Loafing Inc.) that purchased a larger, debt-free company (Chicago Reader Inc.) and took on a massive amount of debt to finance the deal.

Richard Karpel
Executive Director
Association of Alternative Newsweeklies
http://aan.org

[randy campbell]

Richard Karpel makes valid points.

Urban/Alternative weeklies have revenue and distribution models distinct from dailies to be sure. An emphasis on smaller, local advertising and news as our core mandate also should be underscored.

As I'll told our staff and anyone else who would listen for the past 3 years, dailies want to be what we've always been: free, not-daily, local, and responsive to our community. (As our daily colleagues have been trapped by the burden of daily publishing, the zero-sum churn of subscriptions, living or dying by national/regional display ads and classifieds, and covering International, National, and regional news, usually out of habit rather than forethought or passion.)

I think your point about Alt-weeklies as slow to respond to the WWW is spot on, much to the shame of our company and many of my fellow AAN papers.

--Randy Campbell, Publisher
Santa Barbara Independent/
independent.com