Big Profits in Small Packages

Further, in survey after survey, local news and information often tops the list of what readers want.

For instance, Lee's La Crosse (Wis.) Tribune Web site lets hunters post pictures of their prize bucks; hundreds have done so. Fish, too. And Lee's biggest paper, the Post-Dispatch, is learning the block-by-block coverage lessons of community papers: The paper's Web site posted a map that showed neighborhood power outages during a recent storm.

But not all readers want their small newspapers to be all local. In September, Randell Beck -- editor of the Sioux Falls (S.D.) Argus Leader -- dumped most of his national and foreign coverage for local stories. He got so many angry e-mails from readers saying they depended on the Argus-Leader for a view outside their community that he restored some of the nonlocal wire-service coverage he had cut, he said.

Further, small newspapers must deliver the right kind of local news, said Davis Kennedy, owner of the District's four Current Newspapers and the Voice of the Hill, which he said are posting 12 to 15 percent annual ad growth.

In 1979, Kennedy -- a former Baltimore Sun marketing manager -- bought the suburban Washington Gazette papers. The Gazettes covered Montgomery County communities, including Bethesda, Gaithersburg and Damascus, with neighborhood news on their covers and news from the rest of the county inside. The very-local approach of the Gazettes contributed to the demise of Montgomery County's other local paper, the Journal, which covered the entire county.

"The Journal made a tremendous mistake in trying to go countywide," Kennedy said. "People in Chevy Chase have heard of Damascus, Syria, but not Damascus, Maryland."

Kennedy's strategy worked. In 1992, he sold the Gazettes to The Washington Post Co. for an undisclosed sum and a year later bought the Current Newspapers, he said.

In addition to having the economic edge, small papers have another leg up on their bigger brethren. Small staffs can move nimbly to innovate, as they try to keep up with the information demands of 21st century consumers. And, if their experiments don't work, the stakes are lower.

Freedom has made the Shelby (N.C.) Star the chain's laboratory paper, and the 15,000-circulation daily has run with the mandate.

Under editor Skip Foster, the Star last spring began abandoning the paragraph story form for a barebones rundown that simply lists who, what, when, where and why an event happened. The Star's front page on the morning after November's midterm elections, for example, displayed only one succinct headline, "Dems Dominate," and no stories. Instead, the page explained three local races in bite-size info-nuggets.

"For many readers," Foster has said, "the paragraph is a dinosaur."

The paper also began giving away some copies, though that has meant withdrawing from industry audits that tell advertisers how many copies a paper sells. "We're trying to get papers in people's hands," Foster said. For example, Shelby residents get a free Star with their order at the drive-through of the local Chick-fil-A.

Foster, who became the Star's publisher this month, cannot yet quantify whether his paper's radical changes have bolstered circulation or ad revenue, though his Web viewership has grown by 80 percent over the past year, he said.

"These are the things I know," Foster said. "Our product, from a content standpoint, is much more respectful of readers. . . . If we keep readers happy, that's good for our advertisers."