Goliath’s TDN Scheme Striking in Honolulu?

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The Honolulu Weekly, the alternative newsweekly in Honolulu, Hawaii, reports that they are facing a similar distribution threat to the one The Clarion-Ledger has inflicted on Mississippi publications of late. In his column, “Pay to Play,” editor Chris Haire describes his former experience at TDN when he was at the newsweekly in Greenville, S.C. He also refers to an odd alliance that Gannett seems to have formed with a national distribution company in Honolulu. He writes:

Here’s how TDN worked: Gannett representatives approached businesses known to distribute free weeklies—shoppers, real estate guides, various niche publications and Metrobeat—and offered them a deal many couldn’t refuse—TDN not only wanted to set up newspaper racks at these locations, but the distribution company would pay these businesses for the privilege of doing it. Many signed on. What some of these business owners didn’t realize was how the arrangement would affect free publications that weren’t part of the Gannett empire. In many cases they didn’t realize that free papers like Metrobeat would have to pony up cash to get a slot on TDN’s racks.

And make no mistake, the price was high. According to an AAN report, the price that Metrobeat would have had to pay to be in every one of the TDN’s 400 distribution spots could have been as much as $100,000 a year. Gannett’s many free publications didn’t have this problem. Metrobeat and many others did.

Of course, many of these publications about to get the boot had been in these locations for years. And many readers had grown accustomed to picking up their favorite reads, let’s say, when they picked up a gallon of milk or a pack of gum.

Gannett, acting as TDN, of course, didn’t care that these consumers had to seek out other, less convenient locations. Some might even say that’s what they intended. They didn’t care what the customers of these stores wanted. They only wanted the sole right to distribute publications at these locations.

But Gannett didn’t stop with Greenville, S.C. They weren’t content with driving Metrobeat out of business. They’ve now taken TDN-style schemes to mid-sized markets in Jackson, Miss., and Acadiana, La.

Some simply dismiss Gannett’s deeds as smart business moves. And admittedly it makes sense. That is if you believe competition is not a thing to encourage but a thing to overcome, if you believe that all competitors should be squashed and ad-buying businesses should bow to the price-gouging whims of a monopolistic power.

[…]

Consider this: It has not been an employee of Trader, but an employee of The Honolulu Advertiser, who urged the Weekly to sign up for a place on the rack inside of Longs. And it was a representative of the Advertiser who quoted us the rates we would have to pay in order to be a part of the Trader service.

Exactly why are Advertiser employees selling another company’s services? Trader isn’t owned by Gannett, so why would these two competitors join forces? What would they have to gain by working together?

The implications are troubling. Is a scheme similar to the one used by Gannett with TDN in the works? Will such measures spread to other businesses, which currently offer free publications? Will the future of the O‘ahu press be shut down by mainland conglomerates that care more about the bottom line than serving the public, by businesses that care more about corporate stockholders than readers? Only time can tell. There’s money to be made here, and those who already have the money are in a better position to make more of it.

In the end, it doesn’t matter how deep your pockets are, and it doesn’t matter how much of the market you dominate, if you have the will to survive and the people on your side, that just might be enough to keep the bullies at bay.

We speak for you, and we hope that you speak for us.

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The Mississippi Free Press produced this story through the MFP Solutions Lab, supported by the Solutions Journalism Network. This series digs into Mississippi’s systemic issues and sheds light on responses to them in other communities. Beyond just reporting on problems, these stories interrogate their causes and inspect potential solutions.