AT&T Interchange Snags a Third Newspaper Company

By: Steve Outing

So many notices of newspapers announcing services on the World Wide Web cross my desk, it comes as a surprise these days when a publisher announces that it will be going online with one of the major online services. But AT&T Interchange, the online service that hosts the Washington Post's Digital Ink service and Star Tribune Online (Minneapolis, Minnesota), has found another newspaper affiliate: the Journal-Register Co. of Trenton, New Jersey, and its New Haven (Connecticut) Register.

The service, to be called Register Online, went into early beta this week, with about 20 Register employees testing it. Public beta testing is expected to begin October 20, with a public launch in mid-November. Pricing for the service, which requires Interchange client software (available for Windows only), will be $9.95 for 5 hours, then $2.95 per hour additional connect time.

According to Register Online editor Sara Glines, the service will put its emphasis on local news and sports, and be heavy with staff-reader interaction through discussion forums. Other features will include local restaurant reviews and listings, entertainment reviews and calendar, information about local community services and organizations, the New Haven Register archive dating back to 1986 (for an extra fee), searchable classified ads, Internet email and access to the Internet and World Wide Web.

Register Online will be a modest operation, with a staff of 5 budgeted through the first year. The majority of content of the service will come from the newspaper staff, with Online staff re-adapting newsroom material for use online. The Online staff also will be responsible for running the discussion forums, with help from selected reporters and editors. Much of the static content of the online service, such as community listings, is being generated and collected by the Online staff.

Register Online is the first of what is hoped will be other online projects at Journal Register Co.'s 17 daily and 98 non-daily print newspapers. Corporate communications director Diane Pardee says the company will watch the success of the New Haven project before setting a timetable for other online ventures using AT&T Interchange. New Haven is the chain's largest paper, with a circulation of about 100,000. Other papers potentially ripe for creating affiliated online services include the Trentonian in New Jersey, circulation 73,000, and Suburban Newspapers of Greater St. Louis Inc., which is the largest weekly newspaper group in North America with a combined circulation of 1.7 million.

The expectation, says Glines, is that as more Journal-Register papers create their own online services, content will be shared. Classified ads on Register Online will soon include liners from other papers, and local news is likely to be shared to provide deeper statewide coverage than the New Haven Register could offer alone, Glines says.

What about the Web?

As with Digital Ink and Star Tribune Online, Register Online will be available only to paying subscribers of the local service; and they will have to use the Windows operating system on their PCs. In effect, Register Online is offering Internet access accounts (more expensive than computer users can get from many Internet providers but about the same as Prodigy or America Online) and throwing in some online newspaper features and access to a central Interchange area.

AT&T Interchange just this week announced that its new client software allows users to access the World Wide Web. (The software is expected to be released within a week or two.) Glines says all of Register Online's content will be produced for the Interchange platform, but Register Online will sometimes link to resources that are on the Web. (The Interchange client software will automatically launch Netscape as a "helper" application whenever an Interchange user clicks on a Web document.)

What about the rest of the online world?

The Journal-Register announcement is interesting because it flies against the conventional wisdom in the online newspaper services business. Most of the newspaper affiliations with the major online services have not borne profits and there is still much red ink to be absorbed. Already, we are seeing a turn away from such alliances, as evidenced by the Los Angeles Times' announcement last week that it will abandon the proprietary serviceit has created on the Prodigy network in favor of a robust Web service -- trimming its online staff by half in the process. So far, none of the newspapers that have created full-fledged online newspaper services with Prodigy or AT&T Interchange have reported breaking even. Meanwhile, most newspapers that operate on the online services have set up complementary Web services in the last year.

As I suggested in a column last week about the Los Angeles Times/Prodigy developments, charging a monthly fee for an online newspaper service is unlikely to generate enough subscribers to attract very many advertisers. I see this as Register Online's biggest roadblock to being financially successful. If the only people to see your online product are paying subscribers and you block out users of the greater Internet, advertising is not likely to become a major revenue source. That's unfortunate, because the lessons of the last year would seem to indicate that advertising will pay most of the bills for successful online services, as subscription models lose favor under the weight of all the free content available to computer users on the Web.

What the Register strategy will require is that a large number of people in its market are new computer users who are not yet online. Through house ads in the newspaper and other promotions, Register Online may be able to find a market of newcomers to the online world and convince them to "get on the info highway" via a locally branded service. The problem is likely to be that many local computer users already access the Internet via a provider like Netcom or use one of the major online services like America Online, CompuServe or Prodigy. It will be a very tough sell to get them to switch to Register Online/Interchange, or add a second online service to their monthly bill.

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This column is written by Steve Outing and underwritten by Editor & Publisher magazine. Tips, letters and feedback can be sent to Steve at steve@planetarynews.com