By: George Garneau
Eight of 20 largest U.S. newspaper
companies form partnership to build network
of electronic services and then share content sp.
EIGHT OF THE nation’s biggest newspaper companies ? including seven of the top 10 ? are forming a company to create a national network of online local newspapers.
The plan is the boldest sign yet of how aggressively ? and cooperatively ? newspapers are moving to become players in the emerging market of local computer information services for consumers.
The company, New Century Network, is envisioned to jump-start the newspaper industry’s transition to online services, by creating a compatible network that allows affiliate papers coast to coast to share information.
“We have seen the Internet and we get it,” said Peter Winter, the Cox Newspapers’ vice president, who is temporarily heading the venture.
The network envisions acting as a kind of clearinghouse for the transfer of information and money between providers and users.
Initially, plans call for helping newspapers get online as fast as possible with network-compatible services. The network would advise on everything from hardware to marketing to programming.
The theory is that small papers can enhance their online services by offering subscribers access to a vast array of information from some of the nation’s leading news outlets ? for a charge, of course. Offerings would include news, features, sports information, ticket purchasing, home shopping, e-mail and bulletin boards.
The network “signals the evolution of the newspaper industry to a new era of cooperation, enhanced focus and recognition that customers want choices in the way news and information is delivered, including electronically,” said Gannett chairman and CEO John J. Curley.
The joint venture is a union of, in descending order of combined daily circulation, Gannett Co. Inc., Knight Ridder Inc., Advance Publications Inc. (Newhouse Newspapers), Times Mirror Co., Tribune Co., Cox Newspapers, Hearst Corp. and the Washington Post Co.
Together, they own 185 dailies with combined circulation in the neighborhood of 20 million, or one-third of the industry.
Six of the companies already operate online services, with the other two developing them, and all eight companies hope to have all but their smallest papers online in three years.
The network invites all U.S. dailies to join.
Tony Ridder, Knight-Ridder president and CEO, said his company’s experience in developing the Mercury Center service at the San Jose Mercury News “persuaded us that we need strong newspaper partnerships as we move into the electronic information age. New Century Network fulfills that need, providing a user-friendly, local, online communications community while also linking customers directly to other online communities and marketplaces nationally.”
By helping to set technical standards, the network wants to be a “catalyst” to build a network of newspaper services though which subscribers can move seamlessly from one to another, said Winter, acting CEO of the joint venture and regularly a vice president at Cox Newspapers.
A user of the Chicago Tribune’s Chicago Online who is planning to visit San Jose for the weekend, for example, could click on the Merc Center and check the local entertainment scene to make plans in advance.
The network wants to make it easy to get started. Affiliates have to agree to join the network with a local service compatible with the World Wide Web and NCN standards. On a “cost-plus basis,” Winter said, the network will sell newspapers a starter kit, provide technical assistance, advise on programming and marketing, and negotiate deals with hardware and software vendors.
“Once we establish a base, then we hope the network will spawn a rich array of interactive services,” he said, so that newspapers may “take part in the interflow of subscribers and information.”
As possible applications, Winter suggested papers in Vermont or Colorado might develop an interactive ski report that would be of value to skiers everywhere. Or newspapers with major help-wanted or real-estate classified sections might want to market them more widely.
The alliance would be financed by fees for making interconnections and billing, Winter said, but its goal is not to make big money ? it is to help members make money in online services.
Winter said the partners are contributing a “pretty modest” initial investment and “are not entering this like we normally enter a business.
“The point is to maximize profit at the local level,” Winter said. “It’s local-newspaper online services that will enjoy the profit here . . . . NCN itself is not a profit center.
“The local value, as we see it, is it enhances the local service. It increases the richness of content in your market . . . . If you are a smaller newspaper with limited resources, this is a wonderful opportunity to add value to your service.”
A headquarters has not been selected but will probably be located midway between the coasts and will employ eight to 10 people the first year.
?( Peter Winter, Cox Newspapers’ vice president, who is temporarily heading the venture) [Photo & Caption]