Washington Post 2005 Annual Report Download - page 33

95% of the newsprint used by The Daily Herald Company and 75% of the newsprint used by Post-Newsweek Media, Inc.
includes recycled content. The domestic edition of Newsweek consumed about 29,000 tons of paper in 2005, the bulk of
which was purchased from six major suppliers. The current cost of body paper (the principal paper component of the
magazine) is approximately $995 per ton.
Over 90% of the aggregate domestic circulation of both Newsweek and Budget Travel is delivered by periodical
(formerly second-class) mail; most subscriptions for such publications are solicited by either first-class or standard A
(formerly third-class) mail; and all PostNewsweek Tech Media publications are delivered by periodical mail. Thus,
substantial increases in postal rates for these classes of mail could have a significant negative impact on the operating
income of these business units. Rate increases of approximately 5.4% for both periodical and first-class mail and 5.3% for
standard A mail went into effect on January 8, 2006. These actions will have the effect of increasing annual postage costs
by about $2.0 million at Newsweek and by nominal amounts at PostNewsweek Tech Media. On the other hand, since
advertising distributed by standard A mail competes to some degree with newspaper advertising, the Company believes
increases in standard A rates could have a positive impact on the advertising revenues of The Washington Post and the
other newspapers published by the Company's subsidiaries, although the Company is unable to quantify the amount of
such impact.
Competition
The Washington Post competes in the Washington, D.C. metropolitan area with The Washington Times, a newspaper
which has published weekday editions since 1982 and Saturday and Sunday editions since 1991. The Post also
encounters competition in varying degrees from newspapers published in suburban and outlying areas; other nationally
circulated newspapers; and from television, radio, magazines and other advertising media, including direct mail
advertising. Express similarly competes with various other advertising media in its service area, including both daily and
weekly free-distribution newspapers.
The websites produced by Washingtonpost.Newsweek Interactive face competition from many other Internet services
(particularly in the case of washingtonpost.com from services that feature national and international news), as well as
from alternative methods of delivering news and information. In addition, other Internet-based services, including search
engines, are carrying increasing amounts of advertising, and such services could also adversely affect the Company's print
publications and television broadcasting operations, all of which rely on advertising for the majority of their revenues.
National online classified advertising is becoming a particularly crowded field, with competitors such as Yahoo! and eBay
aggregating large volumes of content into national classified or direct-shopping databases covering a broad range of
product lines. Some nationally managed sites, such as Fandango and Weather.com also offer local information and
services (in the case of those sites, movie information and tickets and local weather). In addition, major national search
engines have entered local markets. For example, Google and Yahoo have launched local services which offer directory
information for local markets with enhanced functionality such as mapping and links to reviews and other information. At the
same time, other competitors are focusing on vertical niches in specific content areas. For example, AutoTrader.com and
Autobytel.com aggregate national car listings; Realtor.com aggregates national real estate listings; while Monster.com,
Yahoo! Hotjobs (which is owned by Yahoo!) and CareerBuilder.com (which is jointly owned by Gannett, Knight-Ridder
and Tribune Co.) aggregate employment listings. All of these vertical-niche sites can be searched for local listings,
typically by using zip codes. Finally, several new services have been launched in the past several years that have
challenged established business models. Many of these are free classified sites, one of which is craigslist.com. In addition,
the role of the free classified board as a center for community information has been expanded by ""hyper local''
neighborhood sites such as dcurbanmom.com (which provides community information to mothers in the DC Metro area)
and backfence.com (which offers community information about McLean and Reston, Virginia as well as Bethesda,
Maryland). Some free classified sites, such as Oodle and Indeed, feature databases populated with listings indexed from
other publishers' classified sites. Google Base is taking a somewhat different approach and is accepting free uploads of
any type of structured data, from classified listings to an individual's favorite recipes. For its part, Slate competes for
readers with many other political and lifestyle publications, both online and in print, and competes for advertising revenue
with those publications as well as with a wide variety of other print publications and online services, as well as with other
forms of advertising.
The Herald circulates principally in Snohomish County, Washington; its chief competitors are the Seattle Times and the
Seattle Post-Intelligencer, which are daily and Sunday newspapers published in Seattle and whose Snohomish County
circulation is principally in the southwest portion of the county. Since 1983 the two Seattle newspapers have consolidated
their business and production operations and combined their Sunday editions pursuant to a joint operating agreement,
although they continue to publish separate daily newspapers. The Enterprise Newspapers are distributed in south
Snohomish and north King Counties where their principal competitors are the Seattle Times and The Journal Newspapers, a
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