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Tuesday, February 27, 2001

Star-Bulletin file photo
Owner David Black says the new Star-Bulletin
will start with 100,000 daily circulation and
130,000 on Sunday.

new owner touts
major inroads
in isle ad market

David Black says the paper has
commitments from Liberty House,
Longs and other big advertisers

By Russ Lynch

With its advertising force fully in place for only a week and with 2 1/2 weeks to go before publication, the new Honolulu Star-Bulletin already has commitments from businesses to buy one-third of the advertising it needs to make its annual budget, says David Black, the newspaper's incoming owner. He told a Hawaii Advertising Federation luncheon yesterday that sales are going very well.

SOLD! Black promised "an exciting new product" with a morning edition added to the afternoon Star-Bulletin and a Sunday paper that will include Parade magazine and, as part of the business coverage, a four-page section produced by the Wall Street Journal that focuses on personal finance.

Black said he believes the new Star-Bulletin has the support it needs to succeed and it will give the Honolulu Advertiser, owned by Va.-based Gannett Co., some serious competition.

He said the Advertiser had hoped for a monopoly after the Star-Bulletin's owner Liberty Newspapers Limited Partnership announced in September 1999 that it would close the afternoon paper.

Since his company, Black Press Ltd. of Canada, announced it would buy the Star-Bulletin, introduce a Sunday paper and a morning edition Monday through Saturday, the Advertiser "seems to pretend that we are not here," Black said.

To show that the Star-Bulletin is alive and well, Black presented a list of achievements since he announced late last year that his company was buying the Star-Bulletin and, later, the 270,000-circulation MidWeek free weekly newspaper. So far, the company's Oahu Publications Inc. subsidiary has:

Bullet Taken a long-term lease for 23,000 square feet of space in Waterfront Plaza to house 250 employees who have been hired, with another 150 based at the MidWeek offices in Kaneohe.

Bullet Bought new computers, telephones and other support equipment for 400 employees.

Bullet Added new press equipment at the MidWeek plant.

Bullet Signed a five-year union contract with newsroom employees and hired many new employees in addition to those coming over from the old Star-Bulletin and MidWeek.

Bullet Obtained 800 coin boxes from which to sell the paper, including 200 new ones, and signed up 600 Star-Bulletin circulation dealers and 600 newspaper carriers.

Bullet Arranged news- and promotion-sharing agreements with KITV-4 and KFVE/KHNL News 8.

A team is out vigorously selling advertising and circulation, he said, and one coup is a deal with the local office of AT&T Corp. which has agreed to buy copies of the Sunday Star-Bulletin to give away.

He said as many as 25,000 Sunday papers will go to AT&T customers.

AT&T said the number isn't firm but it has promised to buy a six-month subscription to the Sunday Star-Bulletin for anyone buying its services in some upcoming promotions.

Major advertisers already committed to the newspaper include Liberty House and Longs Drug Stores, he said.

Black noted that the new Star-Bulletin, which starts with morning and afternoon editions March 15 and will add a Sunday paper April 1, will launch with a 100,000 combined circulation six days a week and 130,000 on Sundays.

MidWeek will grow in size, he said, adding as many as 30 pages of classified advertising because of cross promotions with the Star-Bulletin classified pages. "The page count will be a lot more," he said, due to advertising space gained at MidWeek because of joint promotions between the free weekly and the daily.

The growth will present production problems, Black said, but they should be solved by additional units now being added to the Kaneohe presses that turn out MidWeek and will print the Star-Bulletin.

Black told the meeting at the Hawaii Prince Hotel that both the general public and the advertising community have welcomed the competition. In cities where there is only one newspaper it ends up with a "small news hole and an extraordinary profit margin," he said.

"Advertisers want some say. They don't want terms and costs dictated to them," Black said.

The Advertiser has chosen to keep its advertising space charges unchanged and add an afternoon paper while his plan calls for the combined morning and afternoon Star-Bulletin to have rates half those of the Advertiser's, he said.

To maintain competition and keep rates low, advertisers will buy into the new Star-Bulletin, Black said.

"The big question is what the Advertiser will do if people say "we've only got 50 percent of our (advertising) budget for you,' " Black said.

Mike Fisch, the Advertiser's president and publisher who was at the meeting, later declined to comment on Black's remarks.

One advertising industry executive who was at the meeting said he welcomes the competition but must take a practical approach to spending his client's money and that means something of a wait-and-see attitude.

"The truth is, for sophisticated advertisers, either an agency or an individual advertiser, the main issue that they think about is "what's the most cost-efficient place to spend my money,' " said Darrel Kloninger, president of ADWorks Inc., which counts the Advertiser among its clients.

"I definitely like the idea of two newspapers. Competition is better than a lack of competition," Kloninger said. But he said advertisers are not going to make decisions "on the basis of noneconomic, emotional things" such as a desire to save the Star-Bulletin.

The competition and the publicity surrounding Black's challenge to Gannett will have one important effect, he said. Kloninger said he believes that total newspaper circulation and readership in the islands will rise 10-to-15 percent.

Another advertising agency head who was at the meeting, Buck Laird of Laird Christianson Advertising Inc., said he is "absolutely delighted" that Black is willing to invest about $25 million and hire 400 people to keep competition alive in Honolulu.

"We intend to support him, within the bounds of good advertising philosophy," Laird said.

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