Ultra Local and the Newspaper Business Model

Mr. Jim Jenks of MLB.com brought up the idea of having all newspapers be free for distribution but charging for online subscriptions. I think that, for some papers at least, this can work, and might even work if everything was free and the newspaper relied solely on advertisements. The problem is, however, that this paper must fill this ultra-local niche that Mr. Jenks talked about.

If subscriptions -- both online and print -- gone for any given newspaper, this paper is left with only one revenue stream: advertisements. The catch is, most major newspapers in the country cannot corner a specific advertising market. It doesn't make sense for USA TODAY to advertise a dentist in Orlando when its paper reaches to San Francisco, and it makes even less sense for this dentist to advertise in a country-wide paper. That being said, if a county or city paper becomes ultra local and corners an advertising market within a given area, it can become very successful through sheer advertising revenue alone.

I used to work for the Falls Church News-Press in my hometown. It was completely free, both online and in print. Here was a weekly newspaper that regularly printed 40 pages per week in color, and it was wildly profitable, because the News-Press was the only print newspaper in Falls Church. As a result, all potential advertisers wanting to reach out to readers of the paper went to the News-Press. Want to sell a car in Falls Church? Take out a classified. Opening a new pizza place? Buy an ad. And it was through this model that the News-Press was able to be successful.

I definitely believe that Mr. Jenks was on to something when he spoke of this ultra-local model and the idea that, in order to maintain circulation and profitability, newspapers have to go very local and corner that specific advertising market that only a small paper can successfully serve.