January 11, 2010 2:00 am

Media trend defied by rise of Newsmax

When Katie Couric asked Sarah Palin during the 2008 presidential campaign what she read , the Republican vice-presidential nominee seemed to struggle to name a newspaper or magazine.

Given a second chance by Sean Hannity of Fox News, the former Alaska governor had no hesitation , saying: "I read Newsmax and The Frontiersman and The Wall Street Journal and everything online."

Her choice of Newsmax before her local paper or the US financial daily was no accident, not least because the magazine put her on its cover a few days before John McCain chose the relative unknown as his running-mate.

As household US media brands from CNN to the New York Times were reflecting on a bruising year, the Florida-based publisher ended 2009 expecting to report revenues of $35m, up from $25m in 2008.

Chris Ruddy, its founder, says he started Newsmax in 1998 with a $25,000 investment to give Americans "an alternative to the mainstream news, the liberal media in New York and Washington".

Much like the Reader's Digest in its heyday, "we're a heartland publication," he says, attributing its success to what he says is the tendency to ignore middle America among those in "the liberal media bubble".

"The rule of thumb is we should do very well when there's a Democrat in the White House, but I had 40 per cent growth rates every year in the history of Newsmax before Barack Obama came in," he says, describing Newsmax's stance as "the loyal opposition".

The group, with 110 staff, is not alone in conservative-leaning media brands in bucking the declines seen across much of the news industry.

Fox News presenters such as Glenn Beck , talk radio hosts including Rush Limbaugh and online commentators such as Andrew Breitbart have seen strong gains among audiences opposed to Barack Obama's handling of the healthcare debate, security and the economy.

Mr Beck, Ms Palin and the White House "war" against Fox News have all featured on the Newsmax cover in recent months.

But Newsmax is emerging as one of the strongest conservative voices online, where it says it has beaten the Drudge Report's audience numbers for two years.

As traditional news brands debate whether or not to charge their online readers, Mr Ruddy has taken a different approach.

Newsmax has kept its website free but uses it to promote both the magazine and a growing list of paid-for print and online newsletters catering to the health and personal finance concerns of its audience, who are mostly over 50 years old.

One title alone, The Blaylock Wellness Report, now has 80,000 subscribers.

A $500,000-a-year investment in Newsmax.tv, an online video initiative covering politics, health and money, "isn't paying off in terms of advertising but it is paying off in terms of subscriptions", Mr Ruddy adds.

With 250,000 paid subscribers to the main monthly magazine, equating to a print readership of almost 800,000, Newsmax makes roughly equal amounts from subscriptions and advertisers, who range from gold coin sellers to the manufacturer of a $14,000 exercise bike.

Advertising has held up well through the financial crisis, Mr Ruddy says, because: "We have a demographic that's 50-plus. They're the only demographic with money."

With advisers including Lord Rees-Mogg, the former editor of The Times, Mr Ruddy says he sees an opportunity to take the Newsmax model to other countries. "We're not working on it, but the UK would be the next step."

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