There are currently approximately 60 running local newspapers backed up by approximately 300 editorial boards, scattered nationally. In addition, there are some magazines and designated and sector-specific newspaper distributed according to predetermined market segments.
The local newspaper market is somewhat competitive. The market is controlled by a number of large concerns that make it difficult for new local newspapers to enter the market. Competition is reflected in the following aspect:
- Selling advertisement services to businesses- payment for business advertisement compose the largest income parameter in the business.
- Selling classified ads is an additional important parameter in the business’ revenue. Want ads, seeking employment ads, car, and real estate ads comprise most ads although the willingness to pay for these advertisements depends on cost of placing an ad and the promised circulation.
- Raising money for the paper- this parameter is the most difficult one, and therefore in preliminary stages and many local newspapers are distributed for free in order to increase circulation, sometimes even as a permanent business strategy. In small towns, newspapers are distributed to mailboxes in order to reach the exposure promised to advertisers.
Customers: Defining the Target Market and its Size, Market segmenting
Target market definitions are relatively complex for this industry:
- Readers- in order to increase local newspaper circulation, they may be appended to large newspapers (Yedioth Ahronot, Ha’Aretz’ and Ma’ariv) free or for a small amount of money. Additionally, they may be distributed at posts in areas with relatively heavy foot traffic, such as supermarkets, malls, newspaper sales stands, etc, or to mailboxes in neighborhoods and city centers.
- Local businesses- local newspaper owners operate a strong marketing system in order to penetrate this market, which is the highest, most stable income contributor. Local newspapers strive to reach a yearly advertising agreement with business owners.
- Random advertisers- a significant number of pages in the local newspaper is dedicated to classified ads which include the following fields: employment, real estate, vehicle, purchase and sales, etc.
Vendors in the industry serve the following purposes:
- Graphics and paging services
- Printing press services
- Marketing of ads, accepting advertisements and classified ads.
Main investments required in order to establish a new business are:
- Equipment and computers are a relatively high initial investment. Usually at least one windows based computer for general assignments and one Mac system for graphic work.
- Cost of production, manufacture, and distribution of the local newspaper during the initial 6 to 12 month period. This is the time required in order for the local newspaper to become embedded in the market. Only lasting survival will convince advertisers to enter long-term advertising agreements which will promise the business the required stability.
Licenses and Certifications:
The business is required to receive a business license from local authorities.
It is recommended that journalists be members of the Journalist Union.
- The main risk in producing and marketing a local newspaper is the newspaper’s business survival ability. The entrepreneur must plan his steps carefully, prepare a realistic business plan, and ensure cash flow throughout a period of time in which the local newspaper will become part of routine life in the distribution area.
- It is recommended to contact local authority’s spokesperson office, government offices, and regional offices in charge of distribution areas and the newspaper’s influence, although it is best to utilize personal/ friendly relationships with position holders.
- Local council members and political, cultural, and financial dominant figures should be contacted as well. They are central sources for journalist information and advertising accounts.
- Other contacts include representatives of business chains and core businesses in the community. The entrepreneur should offer media coverage in image building articles in exchange for purchasing advertising spaces in the local newspaper.
Employ media photographers who are well entwined in the political, cultural, and social lifestyle. Make sure they are on the guest list for events, visits, and other happenings in the area.
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