From...

by James Ledbetter

(IDG) -- Name this communications medium: It's free (usually). It seeks to provide diverse, sometimes quirky voices that are unavailable elsewhere. Its audience is mainly young and educated, and thinks of itself as hip.

The Net, right? Wrong. It's the alternative weekly newspaper.

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Throughout this decade, the Internet explosion has paralleled a boom in the alternative weekly newspaper business. If a series of bold online experiments succeed, the two will join forces, and the Net will create significant new revenue streams for the weeklies.

In New York, the Village Voice is about to start charging for e-mail delivery of classified ads – even though most copies of the paper are now given away free. In Chicago, a publisher is using the Web to unite four-dozen weekly papers across the country, creating an "alternative portal" that he hopes will attract national advertisers who find the individual papers too small to trifle with.

These are major developments for a medium that generally has been slow to take full advantage of the Net, despite its other successes. Together, the nation's 220 or so alternative newspapers do more than $400 million worth of business a year, according to the Association of Alternative Newsweeklies. Circulation of these weeklies is now about 7 million, a 55 percent increase since 1992, according to New York brokerage firm Veronis, Suhler & Associates. That growth is especially striking, since it occurred during a period when traditional newspapers saw circulation numbers stay flat or decline.

Like Web sites, almost all alternative weeklies are distributed for free. They try to compensate for a lack of circulation revenue by building a readership large enough to attract advertising. The strongest advertising base for such papers is usually local: job, apartment and personal classified ads, and display ads for area merchants and entertainment venues. But because many national advertisers want to see an audience of 1 million or more before making major print commitments, big-time ads have long been elusive.

That's been one force in the acquisition of independent newspapers and the subsequent rise of multipaper chains. The two largest chains – Stern Publishing (which owns the Village Voice, L.A. Weekly and five other papers) and New Times (which has papers in Phoenix, Miami, Dallas and seven other cities) – have each spent tens of millions of dollars to build a nationwide advertising audience.

But Chicago-based NewcityNet hopes to use the Web to sidestep the acquisition process. NewcityNet aggregates almost 40 alternative papers from Eugene, Ore., to Burlington, Vt. The site features a "weekly wire" that republishes material from participating papers. It also plans to add a search engine.

NewcityNet's president, Brian Hieggelke, says his goals are "to build a national alternative content site and find a way to make money on it." Primarily, Hieggelke seeks to sell banner space on each of the member sites based on their total Web readership, and to take a cut on each sale.

To date, the national advertisers that Newcity has been able to attract are Web-specific, such as Netscape and CDnow. The site, which is still in the building stage, claims to attract 3.5 million impressions a month, a number Hieggelke says he plans to increase by more than tenfold by year's end.

One major hurdle Hieggelke faces is that papers in most of the nation's largest markets – including New York, Los Angeles and Chicago – belong to chains that have shown little interest in joining NewcityNet.

David Schneiderman, president of Stern Publishing and a longtime executive at the Village Voice, says that Hieggelke approached him, but that he declined to let the Voice or other Stern publications join the network. "We've got names that are too valuable to be subsumed in [a network like NewcityNet], Schneiderman says. "I don't think his model is where things are going." By contrast, Schneiderman says his goal is to strengthen the Web sites of individual Stern publications.

In keeping with that strategy, Schneiderman says the Voice will soon begin selling classified apartment ads via e-mail to participating Web site readers. He says he expects that "a few thousand, maybe more" of the Voice's 225,000 readers will sign up for the service, which is to be administered in conjunction with New York-based Internet advertising agency Real Media. Although Schneiderman did not disclose a price, he says the fee would be charged on a monthly basis.

Hieggelke admits that so far the big chains won't join NewcityNet, but he's still hoping to eventually convince them of his idea. "Sometimes it takes the big companies a bit more time," he says. "We're OK with that."