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Growing local papers doing Bay Area battle

The Associated Press
Monday September 11, 2000

SAN MATEO — When a suspected natural gas leak forced 1,000 office workers out onto the streets here last month, it became big news in two local upstart papers. 

Meanwhile, the region’s well-established newspapers devoted a short blurb to the harmless incident or didn’t report it at all, choosing to devote their space to more regional, national and international stories. 

Providing readers with a complete package of high-impact news, business, sports and entertainment coverage that appeals to a wide group of readers and advertisers has long been the newspaper industry’s lifeblood, but a new niche is emerging. 

A growing number of entrepreneurs – like those who launched two newspapers in San Mateo last month – believe there’s a market for a more parochial approach.  

What’s more, they believe they can make money by giving away their community papers for free. 

The concept is facing one of its toughest tests in San Mateo, a vintage San Francisco suburb best known for a heavily trafficked bridge that bears its name. 

The placid city with a population of about 94,000 now is home to an old-fashioned newspaper war in an era when the medium is supposed to be dying. 

Six daily newspapers are now duking it out for readers and advertisers in a city located about 10 miles south of San Francisco. 

The new San Mateo papers, the Daily News and the Daily Journal, are trying to fill a growing niche market for free publications that offer low advertising rates and cover local minutiae that readers can’t find in other media. 

The cheap ad rates appeal to small businesses that can’t afford big-paper prices, and the community news fills a gap for people interested in learning more about what’s happening in their own back yards. 

“This is a trend that we have been seeing for some time now. It tells me that there is still a market for intensely local newspaper coverage,” said James Bettinger, director of the Knight Fellowship for Professional Journalists in Palo Alto. 

The two latest entrants in San Mateo are joining with the city’s 111-year-old hometown paper, the San Mateo County Times, which charges for its copies. 

Together, these papers are butting heads with the San Francisco Bay area’s largest dailies, the San Francisco Chronicle and San Jose Mercury News, which are owned by media giants Hearst Corp. and Knight Ridder Inc. 

The San Francisco Examiner also circulates in San Mateo, but that may change later this year after San Francisco entrepreneur Ted Fang takes over the paper from Hearst, which sold it to buy the Chronicle earlier this year. 

Fang, who already delivers a twice-weekly free paper to San Mateo, has said he will limit the Examiner’s news coverage and circulation almost exclusively to San Francisco. 

San Mateo’s crowded newspaper market will make it tough for both of the city’s two new dailies to survive, predicted industry analyst John Morton. 

“It would be a difficult market for just one free paper to break into,” he said. “Having two free papers there will make it doubly difficult.” 

Free daily papers remain an anomaly – there are only a dozen or so across the nation. The largest free daily is the Metro, which distributes its paper to more than 150,000 Philadelphia commuters.  

The Swedish-owned Metro hopes to establish similar free, commuter-focused papers in San Francisco, Boston and Chicago. 

The New York Daily News, the nation’s sixth largest daily paper, is even getting into the act. In late August, the paper announced plans to distribute a free afternoon commuter paper called “Express.” 

The recent spurt in free dailies follows the success of free weekly papers, which range from advertising-only vehicles aimed at shoppers to gritty alternative publications. 

Circulation at free weekly papers nationwide totals about 122 million, up by about 17 percent from four years ago, according to Editor & Publisher, a trade publication. 

Meanwhile, the paid circulation at daily papers has been eroding for decades. Paid daily newspaper circulation nationwide totaled 56 million in 1999, down 3 million, or 5 percent, from 1995, according to the Newspaper Association of America. 

San Mateo’s new daily papers represent expansions for their owners. 

The Daily Journal is run by entrepreneurs who started a free daily paper in Berkeley last year, The Berkeley Daily Planet started in April of last year with eight pages and a circulation of about 3,000 and now produces a six-day-a-week paper of 24 to 40 pages, with a circulation of over 11,000 copies each day,  

The Daily News is controlled by the same backers of a free daily paper in Palo Alto that started with eight pages in 1995 and now produces more than 70 pages in some editions today. 

Arnold Lee, CEO and president of Bigfoot Media, which owns the Daily Journal and the Daily Planet, said both tiny San Mateo papers will be filling a huge news void in the city by covering government meetings, neighborhood issues and local trouble spots like the recent natural gas leak. 

“The more time we spent in San Mateo, the more we realized that there was a lot going on here that wasn’t getting reported,” Lee said. 

San Mateo County is attractive to newspaper publishers because it is California’s third most affluent county behind Marin and San Francisco and is home to a high concentration of families and older people – households that tend to be loyal newspaper readers. 

San Mateo’s demographics are shifting, though, as the San Francisco Bay area’s technology boom ushers in younger, more eclectic residents who cashed in on the e-commerce craze. 

While these changes make it more difficult to define the community’s increasingly diverse interests, Daily News Co-publisher Dave Price believes most San Mateo residents share at least one common bond.  

“All the people here are starving for a newspaper that they can call their own.”