PRIVATE AND CONFIDENTIAL
CONSOLIDATED COMMUNICATIONS, INC.
To: Conrad Fink
From: DeShaun Maria Harris
Subj:
Date: Oct. 24, 2007
In my research of the Banner-Herald’s competition, I found that the Atlanta Journal-Constitution, Flagpole Magazine and The Red & Black are its current main concerns. All three of these compete with the publication for readership and ad dollars to some extent.
In the next five years, however, I think that Flagpole Magazine will fall out of the top three most competitive positions. MainStreet Newspapers Inc. seems poised to take its place, as it owns multiple weeklies in the Athens Retail Trading Zone. As the population shifts away from the City Zone and into the surrounding counties, this situation will become more important.
Overall, the Banner-Herald has a large number of competitors in several mediums. In my next report, I will let you know more about the Banner-Herald’s strengths and opportunities it can capitalize on by creating “disruptive innovation” in the market.
Banner-Herald
Competition
Local Market Positioning Map
(Sampling
of mass media entities that operate in the
Affluent Audience Late Family
/Retired Life Stage
[Positioning Map] Data collected from personal observation of provided editorial and
advertising materials
Daily Paid Newspapers (alphabetical
order)
1.
a. Profile
i.
Frequency:
Daily
ii.
Type/Coverage:
Metro/General
iii.
Newsstand
Price/Subscription: $0.50/$134.99/yr
iv.
Owner: Cox
Enterprises Inc.
b. Analysis
The Atlanta Journal-Constitution is by far the Banner-Herald’s number one
direct competitor for reader time. From an editorial standpoint, the
Journal-Constitution offers superior reporting, more in-depth analysis on
national issues, more national news coverage than the Banner-Herald and a daily
business section. The only local coverage it may rival the Banner-Herald in is
its college football (i.e. UGA Bulldogs) section. It competes most heavily with
the hometown newspaper in the core of the City Zone and on the western fringe –
which is the most geographically disconnected area from the other RTZ zip codes
(see Competitive Zip Codes 1.1). In
zip code 30609, south
“Most times I would rather hear
about what’s going on in
Nevertheless, the Journal-Constitution still cannot guarantee the majority of the most affluent readers in the Athens RTZ audience like the Banner-Herald can. The Banner-Herald claims that 81 percent of people who make $75,000 or more in the Athens RTZ are its readers, according to a 2004 Athens Market Study by Wilkerson & Associates.
From an advertising perspective, the two newspapers do not often directly
compete. Most of the Banner-Herald’s advertising revenue is from local businesses
that do not buy space in the Journal-Constitution. Until the
Journal-Constitution can significantly beat the Banner-Herald in household
penetration of the Athens RTZ, this will remain the case. On a national level,
sometimes, is where the two publications contend. Jason Winders, editor of the
Banner-Herald, said in an interview that some national advertisers fail to
comprehend that
c. Circulation/Household Penetration
Approx. Paid Circulation in
Sun – 9,685; Mon-Fri – 7,869
(Approx. Paid Circulation figures, Audit Bureau of
Circulations Sept. 30, 2006 Report)
Approx. Average Household Penetration in
Sun – 30.28 percent; Mon-Fri – 29.54
percent
(Approx. Average Household Penetration, Audit Bureau
of Circulations Sept. 30, 2006 Report)
*Note: These figures are skewed high because of the
six most competitive zip codes unusually high
household penetration rates.
d. Five-Year Outlook
Currently, there are no known plans for the Journal-Constitution to challenge directly the Banner-Herald’s market hold. In fact, the Atlanta newspaper is following the trend of a lot of metro dailies across the country and shrinking its market area back inside the core city – in this case, within the confines of Interstate 285 (see Interstate I-285 Map 1.2).
“There
is increasingly localized coverage across the board. The new plan (after the
recent editorial reorganization) is to only do one state edition in
Despite the current calm, there is a real possibility that the Journal-Constitution could change direction and/or that the Banner-Herald’s most affluent readers who desire strong business coverage and regional news could shift their preference to the Journal-Constitution.
“Urban sprawl” has generated extraordinary population growth over the past 10 years in counties within and near the Athens RTZ (i.e. Jackson, Forsyth, Gwinnett, Hall and Barrow counties). The people moving into these fledgling suburban areas are some of the most affluent and well-educated individuals with professional jobs. They are who the advertisers demand. If the draw of these readers becomes too lucrative for the Journal-Constitution to ignore, based on its track record as an aggressive opponent – late 1980s New York Times Co. battle for Gwinnett County market – it will go after a significant share of the Banner-Herald’s current market and attempt to curtail any potential geographic expansion efforts.
Digitally, the Journal-Constitution is ahead of the Banner-Herald. Its model competition in this area is the Associated Press, Jones said. The Journal-Constitution’s website has a more graphically appealing layout and more multimedia integration (i.e. video, blogs, text messaging, podcasts) – especially since a structural reorganization that put digital production primary to print production. However, I doubt this trend will continue in the future. As familiarity with digital technology advances increase, most media outlets will have the capability to effectively compete on the new media platform. Also, Morris Digital Works – a corporate division of the Banner-Herald’s parent company – has recently implemented a superior company-wide online classified system that is being mirrored by other companies, said Donald W. Bailey, president of The Augusta Chronicle, a Morris Communications Inc. holding, in an interview. This system, along with other research and development creations should level the playing field in less than five years. I will discuss how the Banner-Herald can counteract this in a future report.
2.
a. Profile
i.
Frequency: Daily
(5 days)
ii.
Type/Coverage:
National/General
iii.
Newsstand Price/Subscription:
$0.75/$156/yr
iv.
Owner:
Gannett Company Inc.
b. Analysis
USA
Today is not a major competitor in the Athens RTZ because it covers a wide
array of national topics, content most Athens-area readers are not interested
in on a daily basis. Positioned as a high-end full-color product for business
travelers and generalists, it depends on single-copy sales and third-party
sales (ex. hotel and airport contract agreements) – known as “Blue Chip”
circulation – for the majority of its reader revenue (see
Little of this
has bearing on its performance in the
Readers who are interested in local and hiper-local content do not turn to
USA Today and advertisers who want to reach a large share of the Athens RTZ would be ill-advised to do so, as evidenced by the circulation figures below.
c. Circulation/Household Penetration
Paid Circulation in
Mon-Thu – 1,213; Fri – 1,400
(Approx. Paid Circulation figures, Audit Bureau of
Circulations Dec. 25, 2005 Report)
Average Household Penetration in
Mon-Thu – 0.75 percent; Fri – 0.93 percent
(Approx. Average Household Penetration, Audit Bureau
of Circulations Dec. 25, 2005 Report)
d. Five-Year Outlook
In five years there will probably not be a significant change in USA Today’s editorial or advertising/marketing formulas. The print newspaper has maintained the same basic format since its inception in 1982 and it has proven lucrative thus far.
Weekly Paid Newspapers (alphabetical order)
1.
Commerce News
a. Profile
i.
Frequency:
Weekly
ii.
Type/Coverage:
Community/Town and
iii.
Cover
Price/Subscription: $0.50/$19.75/yr
iv.
Owner:
MainStreet Newspapers Inc.
b. Circulation
Paid Circulation in
Weekly – 3,500
(Paid Circulation in Athens RTZ figure, MainStreet
Newspapers Inc. website)
2.
Jackson Herald
a. Profile
i.
Frequency:
Weekly
ii.
Type/Coverage:
Community/County-Wide News
iii.
Cover
Price/Subscription: $0.50/$19.75/yr
iv.
Owner: MainStreet
Newspapers Inc.
b. Circulation
Paid Circulation in
Weekly – 8,000
(Paid Circulation in Athens RTZ figure, MainStreet
Newspaper Inc. website)
3.
Oconee
a. Profile
i.
Frequency:
Weekly
ii.
Type/Coverage:
Community/General
iii.
Cover
Price/Subscription: $0.50/$19/yr
iv.
Owner: Vinnie
and Maridee Williams
b. Circulation
Paid Circulation in
Weekly – n/a
4.
a. Profile
i.
Frequency:
Weekly
ii.
Type/Coverage:
Community/General
iii.
Cover
Price/Subscription: $0.50/$19.75/yr
iv.
Owner:
MainStreet Newspapers Inc.
b. Circulation
Paid Circulation in
Weekly – 3,500
(Paid Circulation in Athens RTZ figure, MainStreet
Newspaper Inc. website)
None of the weekly newspapers pose a serious threat to the Banner-Herald outside of their individual geographic markets and by themselves. Each newspaper’s coverage is hiper-local; headlines get down to a grocery store intersection traffic light repair. Most of the highlighted topics in these publications are ones that the Banner-Herald would not cover at all.
Though the Banner-Herald reaches a wider audience than any of these newspapers combined, for very small business owners, advertising in their local weekly may be the most efficient ad buy for the consumer they are trying to reach. Rates are cheaper, on average, for more exposure. For example, MainStreet Newspapers Inc. publications offer space on their online Community Pages for $78 a year, according to the parent company’s 2007 Rate Card.
Because of the population shift way from the Athens CZ and
into the surrounding counties that complete the RTZ (see First Report, Market
Analysis), the Banner-Herald still must be mindful of future competition
possibilities – especially since one company, MainStreet Newspapers Inc., owns
three of its competitors in this category. In five years, if the Banner-Herald
has pushed further expansion and deeper household penetration in Jackson and
Free-Circulation Newspapers (alphabetical order)
1.
Mundo Hispánico
a. Profile
i.
Frequency:
Weekly
ii.
Type/Coverage:
Spanish-Language/ Metro and World
iii.
Cover
Price/Subscription: free/ $100/yr
iv.
Owner: The
b. Analysis
Mundo Hispánico does not yet pose a threat to capturing the Banner-Herald’s ideal demographic audience – traditional nuclear family with parents in their late 30s who each earn about $45,000 a year and have elementary school age children, in the stated opinion of Jeff Wilson, publisher of the Banner-Herald – but it does have a stronghold on Latino readers and consumers in zip codes with high multicultural population potential.
Mundo Hispánico distributes 995 copies per week in zip
code 30606, west
c. Circulation
Circulation in
Weekly - 2001
(Circulation figure,
Mundo Hispánico 2007 Media Kit)
d. Five-Year Outlook
As of 2006, financial support for a publication
targeted at this segment solely in the Athens RTZ (Mundo Hispánico is based in
2.
The Red & Black
a. Profile
i.
Frequency:
Daily (5 days) [semester]; Weekly [summer]
ii.
Type/Coverage:
Student/College and Local
iii.
Cover
Price/Subscription: free/ $195/yr
iv.
Owner: The
Red and Black Publishing Company, Inc.
b. Analysis
The Red & Black is the Banner-Herald’s main competitor for the youth market in the Athens RTZ. It is The University of Georgia’s student newspaper and primary source for articles covering college students, their interests and the university. The editorial quality is semi-professional at best. However, the Banner-Herald’s editorial quality is often not superior enough to draw away The Red & Black’s readers. The publication also offers multiple special sections that compete with the Banner-Herald’s special sections aimed at attracting football fans.
The newspaper penetrates its market extremely well; in a study done by Morris Communications Inc., it found that 63 percent of students read the publication and 45 percent of “townies” do the same, according to James E. Smith, vice- president of Research and Development for Morris Communications Inc.
“Forty-two percent of the (Banner-Herald’s) revenue comes from non-newspaper sources. It prints The Red & Black, which generates nice revenue and has little overhead for Morris,” Smith said in an interview. “We’ve discussed advertiser sharing agreements in the past, but Harry Montevideo – the publisher – baulked at the idea.”
c. Circulation
Circulation in
Mon-Fri [semester] – 17,000; Weekly – 8,500 [summer]
(Circulation figures, The Red & Black 2007 Media
Kit)
Market Penetration in
UGA Students – 63 percent;
(Market Penetration figures, Interview with James E.
Smith, vice-president of Research and Development, Morris Communications Inc.)
d. Five-Year Outlook
In five years The Red & Black will have the same market share it has now because of the natural limitations of its target market size, student enrollment at UGA. As it is, UGA students spend over $200 million a year on shopping, food and entertainment, according to The Red & Black 2007-2008 Media Kit.
If the Banner-Herald wants to maintain any significant amount of the youth market it is going to have to increase its effort to attract students editorially and/or create an advertising formula that guarantees this audience. The Banner-Herald’s recent redesign of its Living section was not an effort to accomplish this. Julie Phillips, arts and entertainment editor of the Banner-Herald, said in an interview that the changes were made mainly to accommodate the shrinking size of newsprint that the publication uses.
“The changes to the (printing) press took away a couple inches of print space; therefore, I tell my writers to keep that in mind when they’re reporting now. Stories have to become shorter and more ‘reader friendly’,” Phillips said.
Local Radio (alphabetical order)
(Sampling
of broadcast companies that operate in the
1.
Brown Broadcasting (WBKZ 880 AM)
2.
Bible Broadcasting Network (WYFW 89.5 FM)
3.
CSN International (W201BJ 88.5 FM)
4.
Mecca Communications Inc. (WXAG 1470 AM)
5.
6.
Southern Broadcasting Inc. (WGMG 102.1 FM, WPUP 103.7 FM, etc.)
7.
The
Formats here are mainly religious, country music and top 40 in nature.
In five years, I think local radio broadcast will still be around; however, it will face more competition from internet-based stations.
Local Television
8.
CBS Television Network (WNEG-TV 32)
WNEG-TV
32 is not a major competitor because it is based in
In
five years, I think this station will grow in professionalism and advertising
power because of the aforementioned “urban sprawl” drawing people north of
Online (alphabetical
order)
1.
AccessNorthGa.com
2.
3.
Craigslist
4.
Facebook
5.
MainStreetNews.com
All online sites are significant advertising threats. Craigslist and similar sites has taken away classified advertising revenue over the past few years. Facebook has captured the youth market. However, the Banner-Herald can retain its standing with strong editorial content and reporting that online sources cannot provide.
Other (alphabetical order)
1.
Athena
a. Profile
i.
Frequency:
Bi-Monthly
ii.
Type/Coverage:
Women Lifestyle/Fashion and Entertainment
iii.
Cover
Price/Subscription: free/ $12/yr
iv.
Walsh
Publishing, Inc.
b. Circulation
Circulation in
(Circulation figure, Athena Summer 2008 Rate Card)
2.
a. Profile
i.
Frequency:
Bi-Monthly
ii.
Type/Coverage:
Parent Lifestyle/Education and Hobbies
iii.
Cover
Price/Subscription: free
iv.
Owner: Walsh
Publishing, Inc.
b. Circulation
Circulation in
(Circulation figure, Athens Parent Magazine 2006 Media
Kit)
3.
Direct Marketing
4.
Flagpole Magazine
a. Profile
i.
Frequency:
Weekly
ii.
Type/Coverage:
Alternative/ Music and Entertainment
iii.
Cover
Price/Subscription: free/ $55/yr
iv.
Owner:
Flagpole, Inc.
b. Analysis
Flagpole Magazine is the Banner-Herald’s number one competitor for local music and entertainment coverage. It is an alternative weekly that offers political commentary, drink specials and band information. It attracts about 50 percent students and 50 percent townspeople. Because it is liberal and readers know that they can expect the viewpoint, Flagpole can afford to be “racier” than the Banner-Herald in its coverage and advertising – and it does.
Digitally, the publication is behind the times. The Banner-Herald has a clear advantage over Flagpole in that area. Pete McCommons, publisher editor of Flagpole, said the publication’s technological capabilities and aging staff are what are holding it back.
“In the future, we will probably still be a tabloid-size weekly, but we will also be an up-to-date digital daily. We’re going to have to do it if we want to stay relevant. That’s just it,” McCommons said.
c. Circulation
Circulation in
(Circulation figure, Flagpole Magazine)
d. Five-Year Outlook
Without
serious change, in five years the Flagpole will not be as strong as a
competitor as it is today. Stomp and Stammer, a fairly new publication based in
5.
a. Profile
i.
Frequency:
Monthly
ii.
Type/Coverage:
Retirement Lifestyle
iii.
Cover
Price/Subscription: n/a/ $17/yr
iv.
Owner: Mainstreet
Communications, Inc.
b. Circulation
Circulation in
(Circulation figure, Lake Oconee Living Current Rate Card)
6.
Southern Distinction
a. Profile
i.
Frequency:
Monthly
ii.
Type/Coverage:
Southern Lifestyle
iii.
Cover
Price/Subscription: n/a/ $24.95/yr
iv.
Owner: Southern
Distinction
b. Circulation
Circulation in
(Circulation figure, Southern Distinction website)
7.
Stomp and Stammer
a. Profile
i.
Frequency:
Monthly
ii.
Type/Coverage:
Alternative/ Music and Entertainment
iii.
Cover
Price/Subscription: free
iv.
Owner: Funny
Farm Press, Inc.
b. Circulation
Total Circulation: Monthly – 16,000
(Circulation figure, Stomp and Stammer website)
8.
The Summit Agency (The
9.
Yellow Pages
Although it is difficult to pinpoint the revenue generated by direct marketing and free total market circulation publications, the impact is significant. Advertisers that may have spent money with the Banner-Herald in the past are now turning to alternative sources to satisfy their marketing needs.
Athens Magazine, on the other hand, competes in a totally different market space (see Positioning Map). It seems to be thriving as a product for affluent Athens-area residents, but it has multiple competitors that it must keep in mind as well.
Banner-Herald Top
Competition Outlook
Current
Ø
Ø The Red & Black
Ø Flagpole Magazine
Five years from Now
Ø
Ø The Red & Black
Ø MainStreet Newspapers Inc./MainStreetNews.com