Interactive newspaper leaders hear of alliances, competition

SEATTLE -- With almost three full days of sessions, the 1998 edition of the Interactive Newspapers conference covered a wide spectrum of new media issues.

Some were covered well, some were covered poorly; many were covered in an uninspired manner. But the more than 900 people who came here Feb. 4-7 from around the world certainly got their money's worth, both in conference and exposition information as well as opportunities to network with colleagues.

Sponsored by Editor & Publisher magazine, the meeting has shifted dramatically from its roots as a conference about audiotex (how prescient of founder John Kelsey to call it "interactive") to encompass several multimedia venues.

For the first time, conference organizers put the responsibility for session-to-session cohesion on the shoulders of an industry executive. Shelby Coffey III, the former editor and executive vice president of the Los Angeles Times, served as overall conference moderator.

Coffey provided attendees with a good stage presence as well as good questions to the sometimes oblique speakers.

Classified calamity
A dire prediction launched a panel discussion about how on-line activities -- and the economy -- are affecting classified advertising.

"All traditional media will lose revenues, and newspapers will lose the most -- and classifieds will be the first area," said Willard Colston, vice president of new media strategies at Guy Gannett Communications of Portland, Maine.

"I think newspapers will have to forge alliances with partners" to compete in the future, Colston said. "Successful strategies will involve successful alliances," said the longtime newspaper and news syndicate executive.

For a newspaper to succeed on-line, Colston detailed the five components he believes must be present: strong national usage, strong national sales, strong local sales, strong content and strong local marketing. "Newspapers will have to go to someone who has something newspapers need the most," Colston said. "National sales and usages -- national and regional directories."

Competition is the answer, said Tim Landon, a Chicago Tribune executive who is the acting chief executive of Classified Ventures, the on-line classified consortium of Tribune Co., Times Mirror Co. and the Washington Post Co. which is building the cars.com and apartments.com web sites.

"Newspapers spend a lot of time pointing their fingers at Microsoft," Landon said, "and though there's a lot to point out, we need to get out on the street and beat them fair and square."

Saying that he sees a "profound movement" of classified advertising linage out of newspapers, Landon said, "The economy will have a more profound effect on our classifieds over the next two or three years." He predicted a "mild recession, if and when it comes."

Landon agreed with Colston's point regarding alliances. "You can't do everything," he said. "The bottom line is that at Tribune, we feel we have to leverage ourselves with alliances. We don't have enough good people and enough dollars."

Also agreeing about alliances was Joe Willix of GTE New Media of Dallas, who pointed out that "a new media competitor will move faster." GTE, which publishes both on-line and print telephone directories, is considering an alliance with a consumer guide, which would "provide us with content we didn't have," Willix said.

A new media operation has to consider its products. "You already know what you're offering the consumer," Willix said, "so concentrate on what you're offering the advertiser."

The directory executive suggested that "there are times traditional media doesn't promote the new media as much as it should ... this is a huge promotional vehicle."

Responded Owen Youngman, director of new media at the Chicago Tribune: "We're in the newspaper business and we do a horrible job of promotion in general. We spend a lot of our time wringing our hands over a $100,000 media buy for our core product."

On-line ad hype
Revenue models, not advertising, were the focus of comments by Peter Winter, the chief executive of Cox Interactive Media of Atlanta, in a panel about on-line advertising trends.

"The Web has already proven itself as a transactional medium. Clearly what amazon.com and dell.com are doing shows that the Web is living up to its promise," said the former marketing chief of the old Newspaper Advertising Bureau.

People should look at marketing on the Internet "as an evolution or a continuum," he said.

Another evolution has been the "phenomenal growth of direct mail," Winter said. With the movement of advertisers away from mass media, "newspapers are not positioned well to take advantage of the 'Net as a direct medium because that's not their core competence."

If newspapers are still competitors 10 years from now, the Cox executive predicted, their most formidable competitor will be Microsoft. "Very soon nobody will remember what CompuServe was, and it will be a rare person who remembers what Prodigy was," Winter said. "Perhaps AOL won't disappear."

Microsoft is "taking a long time to understand the media marketplace," Winter said, noting that it shouldn't be any surprise that Sidewalk -- Microsoft's network of local entertainment sites -- "would not work. It was purely a Yellow Page directory with a compendium of restaurant reviews."

Continuing the thoughts about on-line transactions, Larry Schwartz, the president and chief executive of Auction Universe -- recently acquired by Times Mirror Co. and managed through its Hartford Courant in Connecticut -- disagreed with Winter about whether newspapers understand the issues of transactions.

"We've been on-line three months," said Schwartz, "and we've spent hundreds of thousands of dollars on banners -- and our click-throughs are average, about two percent."

Auction Universe executives noticed that the site was selling a lot of Beanie Babies -- the stuffed toys whose collectibility is so rampant that there are dozens of web sites devoted to trading in them -- and then identified a "tiny site called Beanie Mom," Schwartz said. Now, "for $200 a month, we have a banner on Beanie Mom -- and it's our second-highest referral site."

Agreeing with Schwartz was Chris Hendricks, president of Nando.net, McClatchy Newspapers Inc.'s new media organization that runs not only the Nando web site, but also sites for the McClatchy properties. A click-through rate of two percent, "is acceptable," Hendricks said, "but is it the right two?"

The key to banner advertising is to "eliminate waste," he said. Once a user has seen the Disney Blast ad for the hundredth time and hasn't acted upon it, then Nando doesn't show that user that ad again, Hendricks said.

That kind of service is what advertisers are seeking, Hendricks said. If there's a problem, he said, it isn't with the site. "Your marketing strategy is what isn't working."

The panelists agreed that the strategy of the nytimes.com site is one they would all like to pursue: registering users.

"The Internet is not a shotgun," said Chris Neimeth, vice president and director of sales and marketing at the New York Times Electronic Media Co. "It's not about click-rates, it's about clickers."

Integrating print and on-line
Real conflict visited only one panel, one where editors discussed their theories about how -- or whether -- to combine the activities of print workers with on-line toilers.

Three of the four panelists came down on the side of integration, though none of them worked for a daily American newspaper.

At Money magazine, said Doug Dundas, the monthly's deputy editor for new media, the concern was "how to practice journalism in a new medium and do it right." Publishing on-line presents not the traditional opportunity to broadcast, but to "have an individual conversation with every member of your audience."

Money is leveraging its investment in technology to provide readers with detailed information that could not be disgorged in the print product. "It doesn't cannibalize the magazine, it doesn't trivialize the process," Dundas said.

Calling much of what Money publishes as "data crunchable," Dundas said features such as the best places to live and the ultimate guide to mutual funds can be placed in an on-line environment, providing users with deeper information than they would get in the physical magazine.

From across the Atlantic came a sprightly presentation featuring music and stills from the recent hit movie, "The Full Monty," the story of laid-off steel workers who regain their confidence by performing a striptease show.

"If you're British," said Ian Eckert, the new media editor of Portsmouth Publishing & Printing of the United Kingdom, "you're either a member of the royal family, you're Cockney or you're an unemployed factory worker who's a stripper."

Eckert's company -- which publishes an 80,000-circulation evening paper and three weeklies with a combined circulation of 121,000 -- has a three-pronged new media strategy: audiotex, teletex and Internet.

In Britain and many European countries, teletex over cable TV continues to be a viable media. Portsmouth Publishing hosts a 3000-page teletex service that includes 6000 classified ads per week on the service.

"The thing that makes us unique," Eckert said, "is local news. We knew that our system would have to cover breaking news seven days a week."

By building content for the teletex service, Portsmouth Publishing has content for its web site. "Unlike teletex, we don't drop stories throughout the day," Eckert said. "But it's the same material, it just looks different."

The full text of the paper is available on the Web at 6 p.m. each day. A "small team" of coordinators -- three initially, now expanded to six -- found and nurtured new media "champions" throughout the 80-person newsroom, Eckert said. It is they who handle the creation of material for the three new media arenas.

Eckert relies heavily upon technology to free his editors to "create compelling content." The paper emphasizes an "input-once-and-publish-many-times approach," so when Portsmouth Publishing launched a new music publication a few weeks ago, "we could fill the listings with a push of the button."

At the Chronicle OF Higher Education, a weekly devoted to colleges and universities, the pendulum has swung, from a new media operation divorced from the newsroom to an integrated operation. (The Cole Group, publisher of this newsletter, is currently providing technology consulting services to the Chronicle.)

"When we started our full-service Web site in 1995," said Phil Semas, associate editor for new media, "there was no cooperation between the site and the Chronicle."

The Chronicle is "a weekly in print," Semas said, but "we're a daily on-line." He told of asking a reporter to file a couple of items on a daily basis. "If I'd wanted to do daily journalism," Semas said the writer told him, "I would have gone to work for a daily."

Nonetheless, Semas said, print reporters have routinely contributed to the web site, including breaking news: When the federal budget came out recently, four reporters stayed late into the night to do stories for the web site. In addition, the on-line writers have all done pieces for the print product, giving them a "rotation" to do longer pieces and features.

Semas suggested that for on-line to work, there needs to be support "from the top" and that sometimes an inducement is necessary. "Make sure there are champions on the staff -- free food is a good enticement," he said.

While the Chronicle's "ultimate goal" is to integrate the on-line and print newsrooms, Semas said, "We're convinced we're no longer in the newspaper business. We're in the information business."

Wrapping up the session was David Zeeck, executive editor of the 128,000-circulation News Tribune in Tacoma, Wash. His position was pretty clear: "If you have full integration of on-line and newspapers, it might be the on-line bug and the newspaper windshield."

Noting that "the two cultures are different," Zeeck cited issues such as reading versus doing (interactivity), daily deadlines versus minute-to-minute deadlines, linear story-telling, and the loss of control.

"Pluck what works out of the newsroom, but let the on-line people run it."

The future
The last session of the conference also seemed to be the most interesting.

"This conference is not about newspapers; it's not about the Internet, either," said panelist Peter Zollman, a consultant with Interactive News Solutions of Altamonte Springs, Fla. "It's not about technology at all. It's about evolution. We're going from being newspaper publishers to becoming information companies. We're reaching consumers in new ways, with new information the way they want it, when they want it, in many different media."

Zollman cautioned that newspapers shouldn't be shy about losing a little money in new media. "Time Warner lost over $200 million in interactive TV," said Zollman, who worked on Time Warner's interactive TV project. "The whole newspaper industry lost $50 million to $75 million last year."

Still, he said, there are on-line operations that do make money. "Fort Worth [the Star-Telegram's Star Text system] has been on-line for 15 years and they've been profitable in all but two or three of them," he said. He also cited sites such as Florida Today's Space Online web site ("little old Melbourne, Fla., paper sells photos and space memorabilia around the world"), the Citrus County Chronicle in Inverness, Fla., and Wsoc-FM in Charlotte, N.C. ("some months they make money in four figures, some months in five figures")

Turning the view toward technology, Jakob Nielsen, a distinguished engineer at Sun Microsystems of Mountain View, Calif., said that predicting the low-end computer of 2003 is easy: "It's the one you just bought."

Coining his own "Nielsen's Law," the Sun scientist said bandwidth will grow by 50 percent per year -- for the high-end user. "The regular audience won't have that kind of growth," Nielsen said. While high-end users will have T1-speed bandwidth (1.536 megabits per second), low-end users will be surfing at 33.3 kilobits per second.

Convergence isn't just a concept at the Orlando Sentinel. Editor John Haile showed the crowd a videotape of his Florida newsroom, where staffers work concurrently on print stories, on-line stories and stories for the 24-hour cable TV news channel, Cfn 13, a 50/50 joint venture of the Sentinel's owner, Chicago-based Tribune Co., and Time Warner Communications (see The Cole Papers, January 1998).

"Convergence is for real," Haile said. "The media are coming together. There's no way to deny that. Our ability to compete in the future is to allow us to do those things."

The Sentinel, Haile said, is getting "away from a once-a-day operation" and toward 24-hour publishing. The paper is now "pre-purposing rather than re-purposing," he said. "When we try to do things at the end of the process, it's too late."

Video is the future of newspapers, Haile said. "Integrate. Don't desert the newspaper. Use the newspaper; with its brand and core resources, you have an advantage."

-- dmc

See also Modem media

From THE COLE PAPERS, March 1998, Copyright © 1998, All Rights Reserved.