Sunday, May 13, 2001

Star-Bulletin closing after 117 years

News tussle is
bringing out the
best and worst

Demand for profits, readers
fuels fierce competition
between Hawaii's top 2 dailies


By Erika Engle
Star-Bulletin staff

For two months, the Honolulu newspaper war has raged in the morning and afternoon, on the printed page and on virtual pages in online editions, between reporters, advertising executives, circulation departments and newspaper carriers.

Readers, advertisers, media observers and others in the community have noticed changes in both papers, on the business side as well as editorially.

Beverly Keever, a journalism professor at the University of Hawaii at Manoa, said, "We're happy the Star-Bulletin is still around, and the Advertiser has become a better paper because of the fact that you have competition."

"It seems to be more like true competition," she added.

"The Star-Bulletin looks better," Keever said. "The color is good, and the paper quality is much better, but I don't feel as though it's proportionately giving you much more local news."

She said that while the Advertiser's expanded editorial staff may include experienced reporters, they are inexperienced in reporting about Hawaii.

The Advertiser is "getting a lot of advertisers," Keever said, "but you're not seeing quite the quality of news product for what they're getting in and putting out. A lot of this has to do with there's still just a lot of wire and syndicated copy."

She also takes issue with the amount of syndicated and wire copy in the Star-Bulletin.

Helen Chapin, author of the 1996 book, "Shaping History: The role of newspapers in Hawaii," said she believes both newspapers have improved since the March 14 dissolution of the joint operating agreement, in which non-editorial functions were shared.

The next day, the Star-Bulletin, which had been a six-day-a-week afternoon paper, added a morning and Sunday edition, while the morning Advertiser added an afternoon edition.

Save Our Star-Bulletin, formed after the Star-Bulletin's former owner announced plans in September 1999 to close the paper, is monitoring the situation. Richard Port, spokesperson for the group, known as SOS, said, "We continue to meet to ensure that the two papers continue to publish."

Even with prize-winning journalism, however, a newspaper would fold without advertising revenue. Daily newspapers sell advertising primarily on the strength of paid circulation numbers.

Despite not having numbers to reflect the new Star-Bulletin as an advertising venue, some companies such as Liberty House are devoting part of their advertising budget to the paper.

BARBARA TUNNO, vice president of sales promotion at Liberty House, said the company wanted to continue to reach subscribers of both papers. She said Liberty House will review the circulation numbers closely. The company doesn't necessarily run the same ads in both papers, and it is "doing some testing of readership ourselves with different ads.

"Because we do offer some coupons, which I'm convinced increases circulation for both papers," she said, "we are able to code them differently and track the results."

She declined to disclose any findings.

Louise Saffery, president of Inter-media, a media planning/ buying and consulting company, said, "I see in both (papers) they're more aggressive in their pricing, in added value to clients, and they're more aggressive in creating positions they can sell."

"I particularly like the idea that both newspapers are coming up with different kinds of promotional ideas to help clients, particularly retail, in coming up with packages."

The papers also are engaged in an aggressive battle for circulation.

Don Kendall, president of Oahu Publications, which owns the Star-Bulletin, MidWeek, and several military newspapers, said he believes the bulk of the Star-Bulletin's initial circulation problems have been resolved.

The overarching difficulty, Kendall said, was the perception "that we were taking over the Star-Bulletin. (The public) didn't know we were basically in start-up mode. We inherited 77 people from the editorial department. Everything else we had to start up from scratch -- accounting, sales, circulation."

He understands subscribers' frustration that for years they would receive their Star-Bulletin at 3:30 p.m., and that as of March 15, "we were having trouble getting it to them at 3:30 p.m."

He said, "They felt they were being dragged into the newspaper battle, and they didn't want to be.

"Gannett (owner of the Advertiser) did everything it could to keep us from succeeding."

Kendall said the Star-Bulletin was not given a list of newspaper carriers until three weeks before the takeover.

"Before we had access to the list of carriers for the subscribers, the Advertiser had hired the bulk of the carriers -- within the city core from Hawaii Kai to Salt Lake," he said.

Kendall said the Advertiser refused to turn over keys for deliveries to an estimated 700 apartment buildings. Getting replacements was "not as simple as calling 700 managers," he said.

IN MANY CASES, such access must be approved by building associations or boards, which meet only monthly.

Advertiser executives have said in the past that they complied with details spelled out in the sales agreement approved by the court.

"The targeting of the afternoon (Advertiser) to the Star-Bulletin subscriber" was another challenge, Kendall said, adding that the Advertiser had access to the Star-Bulletin subscriber list.

"SOS has done some research, and it's pretty clear that p.m. Advertiser recipients are Star-Bulletin subscribers," he said. Port declined to comment on any specifics of the competition between the two papers.

Kendall said that while the Star-Bulletin offered free Sunday Star-Bulletins for one year with paid Monday-through-Saturday subscriptions, "If you were a Sunday (Advertiser) subscriber, they're giving you afternoons Monday through Saturday. ... That's very predatory."

He said the practice inflates circulation numbers.

FOR THE MARCH 15-31 period, Advertiser circulation was 139,467 Monday through Saturday and 172,820 Sunday, according to a statement provided by its publisher to the Audit Bureau of Circulation. That compared with 101,628 Monday through Friday and 173,405 Sunday for the six months ended March 15.

The Star-Bulletin, which had a circulation of 58,401 for the six months prior to March 15, showed a gain to about 66,000 during the final two weeks of March.

Dennis Francis, general manager of the Advertiser said, "We adhere to the long-standing industry standard of paid circulation of the Audit Bureau of Circulation." He said the Star-Bulletin and Advertiser "might be coming from two different perspectives to market themselves."

Said Kendall: "I guess the difference is in the philosophy of the two companies. We think there's room for two independent voices. We want a reasonable market share, and to provide a strong newspaper for Hawaii. Clearly their goal, and the victory for them, is to run us off the island."

"We certainly don't agree with that," Francis said. "That's not our goal."HPU's Chapin would like to see both papers survive.

"There's lots of alternative and ethnic press on Oahu, but what we want is two major dailies, and I think Honolulu can support that," she said.

Contributing to Chapin's concern is the escalating pressure on profits put on any local newspaper by its parent company.

"It used to be a newspaper was happy -- this is 20 and 30 years ago -- with a 12 percent return, but now Gannett is talking 28 to 30 percent. That's a killer," Chapin said.

Keever said "the business community here has to look at the long term because they know the trend if you have a monopoly. And sure, both papers have to be profitable. But they don't have to be extraordinarily profitable like we know the Advertiser had been."

Mark Lewis, Star-Bulletin circulation director, believes that along the road to building those profits there are die-hard Star-Bulletin readers who will never subscribe to the Advertiser and vice versa. There are also people who, no matter the enticement, will not subscribe to either newspaper.

The real battle is for the eyeballs of all the others.

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