Presswatch: Print Discovers Web
Robinson, Tracy
by Tracy Robinson Print Discovers Web And in doing so, it's finding new ways to lose money. I t's hard to believe, but the Internet as it is known today--splashy M-hour news, entertainment, and...
...More alarming is the evidence suggesting that former print readers who've moved to the Web are a key constituency that newspapers can scarcely afford to lose...
...Small-market papers generally post a TRACY ROBINSON is deputy editor of The American Spectator...
...I think the long-term prospects for papers are pretty weak because people aren't going to spend a lot of money for news online when they can get so much stufffor free...
...wrote another...
...Accepting that the Internet may threaten market share more than radio, television, and cable TV could take time...
...Jay Harris, chairman and publisher of the San Jose Mercury News, is confident also...
...Less than half of these are daily newspapers...
...limited number of stories supplemented with automatically updated wire-service reports...
...They don't...
...Additional content requires more staff--programmers, news "producers," ad salespeople, and the like...
...More than 20 percent of newspapers routinely allow their Websites to scoop their print editions, according to a study by the communications firm Middleberg & Associates...
...Before proposing to buy the parent company of the Los Angeles Times earlier this year, Tribune Co...
...I can read great papers around the country without leaving my house, and it costs me nothing...
...It wasn't that the number [writing about having canceled] was so large-it was that these were people who really love to read newspapers," Greene says of the e-mail he received...
...Chicago Tribune columnist Bob Greene experienced this phenomenon first-hand eadier this year when he asked readers of his column on Tribune.com to e-mail him...
...And in early March, Knight Ridder, owner of 31 daily papers, consolidated its interactive properHow can the companies providing so much free information make money...
...And the oldest content providers out there--newspapers-have been hit especially hard...
...For most online content providers, the short answer is: They don't...
...So it's kind of a lose-lose model...
...Now there's so much online that it's almost overwhelming: news from around the globe, up-to-theminute sports scores, travel information, stock tips, and on and on...
...For 2000, the company projects losses up to $6o million...
...I don't think that anybody that I know of has particularly figured out the ultimate answer," he says...
...One of the most expensive sites, WashingtonPost.com, holds online contests and offers live chats with its reporters and celebrities...
...The most successful business model for a large-circulation paper appears to be that of the Wall Street Journal, which charges site visitors an annual access fee of $29 or $59, depending on whether they subscribe to the print edition...
...Another threat to newspapers' bottom lines is Internet classified ads...
...With little interactivity and no original breaking news, these sites don't require large staffs or budgets to keep going...
...The latest trend is for newspapers to consider holding IPOs for their Internet properties...
...Unless you subscribed to a proprietary service like AOL, CompuServe, or Prodigy, there wasn't much generalinterest material available...
...The biggest problem facing newspapers' Internet ventures is that of the bottom line...
...NYTimes.com and WashingtonPost.corn are read by around 2 million a month and USAToday.com is closing in on 3 million...
...Even with subscription revenue, the site isn't profitable...
...The newspaper industry is confused about its future, unsure whether broadsheets and tabloids will exist for years to come alongside Internet publishing, or if paper's days are numbered...
...No one seems to have really figured out the revenue model here...
...Of course, it's his job to believe that...
...If they don't work, you've basically spent a lot of money...
...Last year, Post Managing Editor Steve Coll even said that reporters would soon have to start doing what's called multimedia reporting: collecting video and audio clips to augment stories on the site...
...I t's hard to believe, but the Internet as it is known today--splashy M-hour news, entertainment, and information on the World Wide Web--didn't exist six short years ago...
...The trend will only worsen as newspaper sites acid content and improve presentation...
...He is quick to note, however, that newspapers are not the only Internet companies showing huge losses...
...A 1999 Middleberg & Associates survey revealed that just 6 percent of newspaper and magazine editors believe their companies will stop publishing a print edition and go completely online someday...
...predieted its online losses for 2ooo would be between $4 ~ million and $45 million on revenues of $3o million...
...In late March, he reassured colleagues gathered at an industry function that the Intemet is no threat to business as usual: "I believe I will be selling many tens of thousands more newspapers ten years from now than I am today...
...Those "who are canceling their subscriptions are not doing it because they don't like our papers-they're doing it because they like newspapers very much, and are taking us up on our offer to read us for flee...
...Clearly some of the hightech jobs are now only being advertised online--they're not even using newspapers...
...The Post's site features "PM Extra," an afternoon online edition, which necessitates reporters writing original articles for the Web on top of covering their usual print beats...
...The American Spectator _9 May 2oo o 59...
...admits John Kimball, chief marketing officer for the Newspaper Association of America, which represents more than z,ooo papers...
...are online...
...More than I million unique users visit LATimes.com monthly, according to Media Metrix, an Internet market research firm...
...The Wall Street Journal reported in February that the Washington Post Co.'s various Internet ventures lost roughly $65 million last year...
...I don't happen to be one who sees 20 years from now that there won't be any newspapers," says the NAA's Kimball...
...In early 1999, Forrester Research reported that "surveys show...ten percent of online consumers have canceled a print subscription because they can get the information for free online...
...k• oney spent on Internet development has paid offin one way-_9 y I i interest in online papers is booming...
...Other news sites that have attempted to charge for access-the San Jose Mercury News and New York Times (for overseas readers) being the most prominent-had to abandon the idea before long as readers bailed out in droves...
...And like everything else [on the Web], there probably isn't a single answer...
...Some enjoy accessing their hometown papers on the Web so much that they've canceled their print subscriptions...
...Online ad revenue is growing, too, but not nearly fast enough to fill the Web development money pit...
...While delighted with what's on the Net, many wonder how so much information can be available free of charge...
...Forrester Research describes the Internet as merely"the most recent Shock" in a long line of challenges to the industry this century...
...It was on course for profitability in 1999, and was actually profitable for the month of September, when we made the decision to ramp up investment in order to grow subscriptions and market share," Tofel says...
...Larger papers, however, have made enormous investments in the Intemet, and are requiring more from their employees in return...
...Portals like Yahoo and targeted-subject sites like Monster.com for help-wanted ads have classifieds that can be searched at the touch of a button, so why should people continue to place or read classifieds in papers...
...Other than WSJ.com, which provides detailed information aimed at a specific market, it is unlikely that the fee-for-access model will be revived anytime soon...
...The Newspaper Guild put a stop to that idea, at least for now...
...Newspapers "don't get" that constantly updated news is all over the Web, Katz says...
...Those on the front lines seem to agree...
...Media critic Jon Katz, a former writer for Wired magazine and now a frequent contributor to the technology site Slashdot.org, notes that even requiring readers to register per58 May 2 o o o " The American Spectator sonal information--let alone charging a fee--in exchange for access to news drives potential readers away...
...He notes, however, that thus far print classified and display advertising revenues have not been hurt, partly because dotcom companies are buying ads in old mediums to introduce the public to their new Web addresses...
...All these sites have seen increased traffic over the past year, with NYT.com up 2 7 percent...
...Sites like NYT.com (New York Times), LATimes.com (Los Angeles Times), and Boston.com (Boston Globe) are extensive, interactive powerhouses that offer more features and content than their printed versions...
...That keeps newspaper publishers up at night," says Kimball...
...Holding an IPO has several benefits: It rids the parent company of a perpetual money-losing division, and can even reward worker-shareholders by transforming them into wealthy (on paper, at least) members of the dot-com elite...
...Having seen circulations decline for decades, the decision for newspapers to venture online in the mid-199o's must have been easy...
...Why should I pay for a paper every morning when I can read just what I want for flee," one reader wrote...
...There is more than anecdotal evidence to confirm this trend...
...The sites of major metropolitan dailies have racked up millions in losses...
...Young people seem to like computers, many reasoned, so we'll attract them to our products by putting up Websites...
...I have no idea why newspapers are doing this-but I love it...
...In x999, the New York Times Co.'s online unit had an operating loss of nearly $22 million on revenues of just over $30 million...
...Media critic Katz also recognizes the bind newspapers have gotten themselves into: "The danger that papers face right now is if they in fact put out Websites that are timely, useful, and commercially successful, then they can only do that by commiffing suicide...
...Expected to raise up to $1oo million, the deal is awaiting approval from the Securities and Exchange Commission...
...If the Websites ultimately work, then the newspaper has to go...
...ties under the name KnightRidder.com, a move which industry analysts see as a prelude to an IPO...
...Since the Web is always "on," papers with large enough budgets to support extra reporters and editors can be freed from the confines of evening deadlines...
...The cost of putting up a site varies depending on how much is posted each day...
...the majority are community newspapers that come out less frequently and are targeted at small audiences...
...Founded in 1996, WSJ.com now has 375,ooo paying subscribers, about one-third of whom subscribe in print, according to Richard Tofel of Dow Jones & Co., the parent company of WSJ.eom...
...It seems to me that people are not going to want to simply sit in front of a screen and gather all of their information that way...
...Earlier this year, the New York Times Co., which runs NYT.com, Boston.com, and several magazine sites, announced a plan to spin offits Web properties into a tracking stock...
...Presuming Intemet newspaper IPOs follow the trend of recent Net stock launches, huge amounts of capital can be raised to fund expansion plans, even though the businesses have no near-term projections of profitability...
...With the highly visited (and expensive) LATimes.com added to the mix, the losses will only increase...
...The downside...
...Today, more than 2,ooo papers in the U.S...
...Tofel of Dow Jones says his company is now "exploring the possibility" of issuing a tracking stock for its Internet ventures, with a decision to be made in "coming months...
...How can the companies providing it make money...
Vol. 33 • May 2000 • No. 4
