Media companies seek revenue, branding at airports

NEW YORK - The Detroit airport terminal that opened Wednesday has the first USA Today retail stores - with the same boldly colored banners that mark each of the newspaper's sections - plus a Sports Illustrated store offering magazines and sports accessories.

As media companies look beyond their core properties for new revenue streams in a lackluster advertising market, airport locations seem ideal for promoting their brands.

"Airport travelers are a unique customer set, with an unusually high demographic of age and income," said Laura Samuels, spokeswoman for retailer Hudson Group, which runs airport stores for CNN and will build a few more next year at Chicago's O'Hare International Airport. "These are people who thrive on information."

USA Today plans to open three Travel Zone stores at other U.S. airports by year's end, besides the three shops in Detroit's new North Terminal.

CNBC is looking at seven and the New York Times three beyond the shops they already have at airports. Fox News Channel also is expanding beyond its six stores at four airports, though it isn't disclosing details.

"We look for unique opportunities to expand the brand and expand our awareness and also reap some additional revenue," said John Malkin, Fox's vice president for affiliate marketing. "You get thousands and thousands of people who pass through airports every day. They get a chance to stop in and sample the network."

Details vary by location, but most Fox News Channel stores have monitors carrying the cable network and news tickers showcasing headlines.

CNBC stores have computers for checking stock quotes (preferably at CNBC.com, though Internet access isn't restricted). Sports Illustrated's Detroit store - its first - has computer kiosks for visiting the magazine's Web site, and the speaker system will carry a radio show hosted by one of its writers, Dan Patrick.

At the two existing Times stores, the only newspaper available is the Times, while the Sports Illustrated store will sell only its own magazines - Sports Illustrated and Golf. Even other publications from SI's parent company, Time Warner Inc., are excluded.

Meanwhile, USA Today and Fox News Channel are leaving stocking decisions largely to their partners, HDS Retail North America and HMSHost Corp., respectively. USA Today says it will sell rival newspapers at its stores, and Fox News Channel, a network popular among conservatives, says decisions on what to carry will be free of ideological considerations.

That doesn't mean Fox won't promote books by its own personalities, such as host Bill O'Reilly, just as the Times' bookshelves are well stocked with titles on its own best-seller lists or featured in its Sunday Book Review section.

Most of the USA Today stores will be divided like the newspaper. The red Sports section will carry magazines about golf and baseball, for instance, while the green Money section will have books on investment and finances. The stores will also have refreshments and merchandise like USA Today-branded reading glasses.

Media experts aren't too worried that news organizations will dilute their brands or compromise their credibility if they move from their core news properties.

"It's not new for newspapers to be involved with commercial enterprises of various kinds," said Todd Gitlin, a professor at Columbia's Journalism School. "They sell T-shirts, put their names on festivals, sponsor (Little League) teams."

Rick Edmonds, media business analyst with the journalism think tank Poynter Institute, said airport stores are smart ventures as long as they don't divert resources from news coverage - something media companies are trying to avoid by turning operations to retail partners who pay licensing fees or share revenue.

"It's like an ad," he said. "You have a whole lot of people wandering by."

At USA Today, promoting brand awareness is as important as generating revenue. The newspaper acknowledges that revenue from the stores won't offset rapid declines in advertising - which was down nearly 17 percent in the second quarter at Gannett Co. compared with the same period last year and continued low in June, July and August.

"It's a wonderful way to build additional audiences," said Christy Hartsell, director of brand licensing at Gannett's flagship newspaper.

CNBC, a unit of General Electric Co.'s NBC Universal, opened its first store in Kansas City in 2002 and now has about 75. The first store from News Corp.'s Fox News Channel opened in Dulles, Va., in 2004, followed by The New York Times Co. in 2005 and Time Warner Inc.'s CNN last year.

Expansion is limited primarily by the retail space available at airports.

Bobbi Passavanti, a spokeswoman with The Paradies Shops, said the CNBC and Times stores her company runs under contract are profitable and thriving, in part because of longer passenger waiting times engendered by post-Sept. 11 security measures.

"You have a captive audience," she said. "People want to get through security as fast as they can and they want to get as close to the gate as they can. Then they tend to relax, ... come up for air and decide on something to eat and read."

Some of the airport stores media companies are opening as they seek revenue and branding opportunities:

USA TODAY - First three USA Today Travel Zone stores opened Wednesday at Detroit's new North Terminal, including one with a coffee bar. Fourth to open at New York's LaGuardia Airport in October, two more at new Indianapolis airport opening in November. At most, books, magazines and accessories will be in branded areas aligned with the newspaper's sections - blue for news-related items, green for money, red for sports and purple for lifestyle. News monitors and kiosks are in development. Partnership with HDS Retail North America.

SPORTS ILLUSTRATED - First store opens Wednesday in Detroit, to sell branded books, calendars and Sports Illustrated and Golf magazines and merchandise featuring local professional and college teams. Kiosks will offer access to Web site, archives; store to carry radio show hosted by SI writer Dan Patrick. Partnership with Delaware North Companies.

CNN - First CNN Newsstand airport store opened in Pittsburgh in 2007 through partnership with Hudson Group. About 10 now exist, with a few more planned next year at Chicago's O'Hare. Monitors carry news from CNN networks.

NEW YORK TIMES - First New York Times Bookstore at Blue Grass Airport in Lexington, Ky., in 2005 and second at New York's LaGuardia. The Paradies Shops, which operates the stores, plans more shops by year's end at Jacksonville and West Palm Beach, Fla., and Providence, R.I., airports. Only newspaper available is the Times.

FOX NEWS CHANNEL - First store in Dulles, Va., in 2004. Since then, stores opened in Houston and two each at Minneapolis and Dallas airports. Plans to expand, in partnership with HMSHost Corp., though no details disclosed. Stores typically have monitors carrying the cable network and news tickers displaying headlines.

CNBC - First store at Kansas City airport in 2002. Now has about 75 airport stores. Its partner, The Paradies Shops, plans to open additional CNBC stores this year at same three airports with new Times stores, plus Indianapolis, Orange County, Calif., New York's Kennedy and Newark, N.J. Many stores have computers to check CNBC.com and other sites.