craigslist and alt-weeklies

Posted by: Jon Fine on October 24, 2005

A long, long time ago—also known as “the early nineties”—former Village Voice owner Leonard Stern had a brilliant idea. This idea concerned the classifieds section—also known as “the cashbox”—of his weekly newspaper.

The Voice’s classifieds had a lock on a young and mobile market. It also had entire categories that individual parties used, maybe, once a year. So: Why not substantially increase classified rates? People who place one ad a year won’t even notice. People who have to be in the classifieds every week—like real estate brokers touting rentals downtown—don’t have anywhere else to go. After all, who was the competition? The then-nascent New York Press, which had a classifieds section a fraction of the size of the Voice’s? The Times—assuming Times’ real estate section would start acknowledging the existence of people under the age of 40 whose net worth was under $1 million?

Stern’s move works brilliantly (and for a time it did), as long as craigslist doesn’t exist. Unfortunately for the Voice, it does. Daily newspapers are terrified of craigslist, but those fears are thus far theoretical. This is not the case for alt-weeklies. “It’s painful. We’ve lost millions of dollars of revenue to free online classifieds,” Village Voice Media CEO David Schneiderman told the New York Times.

All this backdrops the deal that, essentially, has the New Times chain taking over Village Voice Media. It does so strangely, without buying out the private equity firms that backed Schneiderman’s purchase of the chain from Stern in 2000, although a New Times exec told the New York Times the plan is to buy them out within five years. (The deal is subject to regulatory approval.) This suggests that, right now, the private equity guys aren’t getting enough of a deal multiple to warrant exiting yet.

As for Schneiderman, he goes from running a chain of alternative weeklies to his new job overseeing the chain’s combined ‘Net operations and its macro Web strategy. In other words: he’s still trying to fight Craig. If he figures this out, he’s a genius. But if he thought he was going to figure this out, why would he sell?

[Disclosure: In 1995 I was employed by the Village Voice chain to work on ancillary publications to the Voice and LA Weekly. During this time I had frequent contact with Schneiderman.]

Reader Comments

John Voelcker

October 25, 2005 5:33 PM

I think it may be a lost cause. McKinsey estimates that in "mature" Craig's List markets, private-party classified listings for "other" goods (not cars, jobs, houses/apts) fall 60% to 70%.

If you look at Craig's List in a secondary market (not SF, LA, NY), their listings growth is 10% or more *monthly* and they probably already host more housing ads than the newspapers.

Different kinds of ads? Sure. More rentals, many more shares, fewer pricey homes for sale. But no halfway intelligent newspaper classified manager should be anything less than deeply scared.

Love to see ideas on how local papers can retain some portion of their classifieds business with a mix of online & print. Anyone?

Michael Odza

October 25, 2005 6:30 PM

The Newspaper Association of America's marketing conference will have a session "How to Compete with Free" on this topic in February in Orlando. Don't have all the answers myself, but the speakers may. In the mean time, Bakersfield and Sacramento newspapers, among others, have launched community-focused sites (bakotopia.com, northwestvoices.com respectively) followed by free print tabloids, that feature free classifieds, much reader content, but also reporter-generated hyperlocal content, all professionally edited and designed. These seem to be working. Craigslist has an accidental or random feel to it (the non-classified portion), at least to my newspaper-influenced eye, and while that has obvious appeal to some, structured stuff, edited stuff, and especially designed stuff also has appeal today.

John Voelcker

October 25, 2005 6:53 PM

"... accidental or random feel to it ..."

Hmmmm. Perhaps. But Craigslist is (a) blissfully simple; and (b) utterly searchable. Have you ever tried to do word searches for, say, "Subaru Outback" or "dining table" on a typical newspaper site? Usually very difficult.

With the increased use of search boxes as the leaping-off point for any specific content, CL is full web-appropriate. A lot of newspaper classified sites still seem to force users through a multi-screen decision tree about what they want.

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