The Arizona Republic is sprinkling metro Phoenix with a number of new local magazines, some of them catering to just one Zip Code. But Michael Hiatt, publisher of Phoenix Magazine, has a message for executives at the Gannett Co. newspaper: Bring it on. And don’t expect to win.
“The best way to describe them is as pretenders,” says Hiatt, whose city monthly is owned by CitiesWest Publishing. “If they’re failing at what they do best, what makes you believe they’ll succeed at something they don’t know anything about?”
Fighting words are becoming more common between city magazines and daily newspaper companies. The dismal economics of their primary business are prompting more newspaper executives to buy or start up their own city, regional and local niche magazines because they usually sport much more robust audience demographics and appeal to upscale advertisers.
“The city-magazine genre is hot from a revenue perspective, so it makes it attractive for them,” says Jim Dowden, executive director of the City & Regional Magazine Association.
John Morton, dean of newspaper-industry securities analysts, says that, “You’re going to see this spread probably throughout the newspaper business, particularly at large and medium-sized newspapers.”
There was a time when city magazines and metro dailies regarded each other innocuously and, sometimes as partners. During the nineties, a number of newspapers made failed attempts at adding “city magazines” to their Sunday packages. Today, city and regional magazines don’t approach the healthy double-digit profit margins that most newspapers still attain, Dowden says, but they shrink-wrap the upper-crust readers and advertisers that newspapers covet.
Newspapers Blitz Local Market
In Fort Wayne, Indiana, the joint-operating agreement controlled by Knight-Ridder, Fort Wayne Newspapers, began the city’s first metro monthly magazine in late 2003 after studying city books in nearby Indianapolis and Evansville, Indiana.
Tribune Co. has been applying the other two models in Chicago. The publisher of the Chicago Tribune (and of the Los Angeles Times) has gobbled up every major media property in Chicago over the last several years;and even the Chicago Cubs. So when Primedia wanted to shed Chicago and New York magazines in 2002, it wasn’t a big leap for Tribune Co. to pick up its huge hometown monthly.
On the other hand, Satisfaction represents Tribune Co.’s experimentation with a demographic-niche magazine;in this case, a bimonthly aimed at the burgeoning ranks of retirement-age baby boomers. This cohort is at the age, and with the resources, to attract financial-services, real estate, travel, automotive and health advertisers.
Alexandria, Virginia-based Gannett is the newspaper chain that seems to be most active in this arena. It has begun purchasing some existing metro parenting magazines. It publishes a Hispanic-language monthly called TV E Mas with localized ads in several Southwestern U.S. markets.
Reno, Nevada, didn’t have a city magazine until Gannett’s Reno Gazette-Journal started one up three years ago, after succeeding with various tourism-oriented magazines. So far, boasts Fred Hamilton, publisher and president of Reno Newspapers, the magazine has been strong enough to keep the competition;in the form of a potential incursion by Tahoe Quarterly, a monthly published in Lake Tahoe, Nevada, an hour away;at bay.
But Rick Dyess, publisher of Tahoe Quarterly, insists that no rivalry is brewing. “We don’t view Reno magazine as competitive with us,” he says.
In Phoenix, however, there’s no denying the competition. Gannett’s Arizona Republic newspaper has launched four recent startup titles. Three of the controlled-circulation books are aimed at upscale, master-planned suburban communities of about 20,000 people each, including 15255;a Scottsdale zip code. The fourth is called Chandler Life and caters to an entire suburb of about 83,000 people. In January AZ Society, will be delivered metro-wide;but only to the 20,000 most affluent households.
The targeted consumers and advertisers are embracing the intensely narrow focus that the magazines train on them, reports Cheryl Reid, publisher of Republic Magazines & Custom Products. And she insists that there’s little cannibalization of Arizona Republic subscribers;but lots of overlap. “We’re stealing market share from other magazines.”
That may be so, allows Hiatt of Phoenix Magazine. But it’s coming out of the hides of what he calls wobbly “tertiary” titles in the market, not his own. “Advertisers recognize the value of a magazine like ours that does the research, has paid readership, has strong single-copy sales, a subscription department, and independent, credible content,” Hiatt says.
Indeed, the issue of perceived independence already has emerged as a tricky one for operators of the new breed of city magazines. Almost all benefit from sharing payroll, billing, human resources and other back-office operations with their newspaper parents, often in the same building. But they’re divided on strongly identifying themselves with dailies.
Reno, for example, has “worked to brand the magazine as its own entity,” says Cami Kaiser, general manager of Reno Newspapers’ custom publishing group. On the other hand, Satisfaction touts its Tribune ownership because “it brings us instant credibility,” says Mark J. Miller, Satisfaction’s publisher and editorial director.