Cutthroat Competition: Breaking into a Monopoly
Two regional titles show just how vicious local publishing can be.
Every highly competitive magazine market is used to trash talk, undercut rates and the occasional sneaky gambit from rivals (remember the Pub Exec publisher trying to get the lowdown on FOLIO: newsletters by pretending to be a prospective advertiser?)
In the city and regional category, where barriers to entry are fairly low yet the clash for the limited dollars of local advertisers can be a life and death struggle week in and week out, competition can get especially cutthroat, particularly when a newcomer enters a highly concentrated market.
In 2008, Rena Tran founded Erie Life Magazine, located an hour and a half from Pittsburgh, Cleveland and Buffalo. Today, the magazine (which has changed its name to Great Lakes Life) generates between $500,000 and $1 million in ad revenue and is sold on more than 600 newsstands in three states and Canada.
Erie Life/Great Lakes Life faced many of the typical startup challenges (particularly as it launched just as the bottom was falling out of the magazine market). But it also ran up against what some observers have called a near-media monopoly in the local newspaper, Erie-Times News. (In 2006, a media watchdog group called The Media and Democracy Coalition protested the FCC considering loosening limits on media ownership, citing the Erie-Times News as one example of a potential problem.)
Erie Life's first marketing efforts included a billboard teaser campaign that said, "Erie Life Magazine. Now There's a Choice." Shortly after Erie Life announced it's impending launch, Erie-Times News announced it was launching its own magazine, Lake Erie Lifestyle.
During Erie Life's first year, former Erie-Times News publisher Jim Dible took over the Erie Chamber of Commerce (Erie Life subsequently quit the Chamber, and in a follow-up meeting, Erie Life vice president and partner Paul Loncharic says that Dible told him that the Erie-Times News saw Erie Life as its "greatest enemy.")
Loncharic says Erie Life ran up against a number of "exclusive partnerships" with Erie-Times News and local media outlets such as the local public television and radio station. Erie-Times News executives also sat on the boards of large hospitals, universities, and arts organizations, such as the Philharmonic, according to Loncharic.
"Some advertising agencies in Erie were even worse," says Loncharic. "They wouldn't risk their relationship with the Times. One agency had told us that if they placed with us they could lose their discounts for their classifieds."
Loncharic claims the Times resorted to huge rate discounts ($700 for a full page versus Erie Life's $2,500 yield for a full page), as well as old tricks such as hiding copies of Erie Life on the newsstand. Even Erie Life's ability to attract writing talent was threatened, according to Loncharic. "We lost freelancers because of intimidation," he says. "It was tough."
Once, the magazine sought expansion money from the local Economic Development Corporation. "They kept begging us to see our financial statements but wouldn't tell us what government loans or grants we were qualified for," says Loncharic. "Months later I was sitting in a meeting with a local businessman who out of the blue asked me, â€˜So I heard the Economic Development Corporation wanted to see your books.' I said, â€˜How did you know that?' and he said â€˜Because the publisher of the Erie-Times News sits on one of their boards and was dying to know what your books looked like. I confronted the EDC about it later and they claimed she wasn't on that board and they are a pillar of confidentiality."
As of this posting, Erie-Times News hadn't returned repeated requests for comment. However, Joe LaRocca, a journalist and author of the blog Erie CounterNewsMedia (whose mission is to "countercheck the Erie news media for inaccuracy, errors of commission or omission, bias, incompetence, arrogance, chutzpah, excessive hubris, and other sins against ethical and professional journalism") says Erie Life's claims don't surprise him.
"Coincidentally, the inaugural edition of a new magazine put out by Marnie Mead Oberle, an heir of the Mead family which owns the Times Publishing Co., made its first appearance in last Sunday's edition of the Times-News," says LaRocca. "It deals with roughly the same subject matter as Erie Life, except that it has more the feel of an advertising supplement. Undoubtedly the Times is trying to force out Erie Life so that its magazine, which currently has the free circulation advantage of the 77,000 Sunday paper's circulation, may take over the field unchallenged. The Times' failure to respond is typical. As a newspaper monopoly, they answer to no one."
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