Connections 96: New Media Meets Old Under the Desert Sun

By: Steve Outing

The Newspaper Association of America's annual conference marathon is still under way in Las Vegas, with the Nexpo newspaper technology show running through Wednesday. I escaped the furnace-like climate of Vegas over the weekend, but did attend the Connections 96 newspaper new media conference on Friday and Saturday, which preceded Nexpo. Today and on Wednesday, I'll report on some of the more interesting things that I saw and heard.

NAA Digital Edge award winners

NAA presented 9 awards to the best U.S. online newspaper services, and named its first "New Media Pioneer" winner. They are:

* Best online-newspaper site (print circulation over 100,000):
New Jersey Online

* Best online-newspaper site (print circulation under 100,000):
Florida Today's Space Online

* Best public service online (print circulation over 100,000):
Chicago Tribune, "Murder in Chicago"

* Best public service online (print circulation under 100,000):
The (Durham, N.C.) Herald-Sun, "Votebook"

* Best interactive features:
Houston Chronicle, "Virtual Voyager"

* Excellence in news content and community coverage:
Los Angeles Times, LATimes.com

* Excellence in design:
Eclipse, The Gainesville (Florida) Sun

* Interactive newsgathering:
New York Times, "The Downsizing of America"

* Fostering community online:
Arizona Daily Star, StarNet

* New Media Pioneer award:
Frank Daniels III (former president of NandO)

Frank Daniels' wisdom encapsulated

New Media Pioneer award winner Frank Daniels III had to endure a roasting by award presenter Bob Cauthorn of the Arizona Daily Star. Cauthorn summed up the winner's wisdom in 10 Daniels quotes he collected. Said Cauthorn, "I promise you that he's actually said all these things and we can learn from them."

"Anarchy is better than no management style at all." "It's not necessary to force issues, just get a larger hammer." "If you don't change your direction, you might end up where you were heading." "The only difference between a rut and a grave is depth." "To be or not to be, that is the paradigm shift." "The road to success is always under construction." "Tomorrow will be like today, only less so." "Why be vexing when with a little effort you can be absolutely impossible." "A closed mouth gathers no feet." "Actually, there is no 10," said Cauthorn. "That's the important thing to remember about Frank Daniels. He always leaves the last rule blank so he can invent it along the way."

Don't treat this as an experiment

The keynote speaker for Connections was from one of those companies that newspapers should be worrying about -- or at least watching for ideas to borrow. Lon Otremba, executive vice president of c|net (The Computer Network), urged newspapers "not to treat the Internet as a sideline business. You'll never win if you treat this as an experiment," given the competition emerging from non-news companies entering the Internet content marketplace.

Likewise, he urged publishers to work to establish the value of the online medium in the eyes of advertisers. Don't give away Web space as a value-add for print ad placements, he said. And NEVER negotiate on online ad rates; publish a rate card and stick to it. "We never negotiate," Otremba said, a policy which has not hurt c|net but rather enhanced its value in the eyes of advertisers.

Re-assessing the landscape

"Plan on losing money until 1999," said Bill Bass, senior analyst for Forrester Research, at a panel called "Re-assessing the Landscape." Internet publishing will really take off as a profitable enterprise after 1999, Bass predicted, as Internet usage reaches a level where online might be considered a mass medium. In the meantime, he does not expect to see much of a retrenchment by publishers doing business online. "They can't afford to" back off, knowing that they must be prepared to take advantage of the day when enough consumers are online to make this a lucrative commercial medium which will be driven by advertising revenues.

Lincoln Millstein, vice president of new media for The Boston Globe, pointed out that regional newspaper publishers must be patient, because local advertising is taking longer to develop than the national market, where some national Web sites are gaining large audiences and attracting most of the advertisers who currently are buying Web space. Don't worry so much about "when are we going to make money online," Millstein said, but rather focus on strategic planning to position your newspaper to respond to competitive threats to the core business -- such as classifieds, which are extremely vulnerable to developments by non-news companies currently operating on the Internet.

Millstein appeared worried about the future of newspapers in cyberspace. "Our content is really quite thin," he said, when you consider that what fills a printed newspaper often originates from freelancers, third-party content providers (e.g., weather), and wire services. What's left as newspaper-originated content is not enough to populate an online service, he suggested. Serious consideration must be given to alliances, such as those by newspapers like the Los Angeles Times and search engine companies like Excite, if newspapers are to create services deep enough and compelling enough to succeed online, he said.

Newspaper executives think that they have the most important brand in their local market, said Bass, "but I think they're wrong" when it comes to cyberspace. While the New York Times and Wall Street Journal will always have a brand advantage over competitors trying to infringe on their space, most regional newspapers are vulnerable to incursions into their local markets by the likes of Microsoft, America Online and others looking to set up locally based online community services. The newspaper brand name may be less valuable than you think, Bass said.

Classifieds in crisis

At several Connections panels, the threat posed to newspaper classifieds by developments in cyberspace came up as one of the most important issues to be dealt with in the next few years. Newspaper advertising and classifieds managers are starting to wake up to the fact that they have a big problem.

Tony Marsella, vice president of classifieds for the NAA, said classifieds is the component of the newspaper industry that's most vulnerable to cyberspace competitors. Today, classifieds account for 40% of all newspaper revenues, or about $13 billion annually for the U.S. newspaper industry. In the last year, classifieds showed robust growth of over 10%. But, said Marsella, in five years, if online classifieds competition is not dealt with, the industry could lose a substantial chunk of the classifieds business. High classifieds profit margins could drop to 9% if the industry loses 25% of its ads; and fall to only 3% if the industry drops 50% of its business.

Recruitment ads are the most vulnerable area of all, Marsella suggested, with several competitors operating successful employment Web services. The key to protecting the franchise, he said, is to make appropriate alliances to get newspaper classifieds onto the Web -- ideally linked into some sort of national interconnected newspaper network, and taking advantage of the latest technological advances -- in an intelligent and technically savvy way before independent competitors gain too much ground.

"Time is not on our side," Marsella told the Connections audience, urging them to double their efforts to deal with the "classifieds crisis."

Where the grass is not greener ...

On my way out to the airport Saturday evening, I took a quick tour through the cavernous exhibit hall for the Nexpo show. I must admit, it felt strange walking among the printing presses and inserters, which to my mind looked too much like dinosaurs. This is not to suggest that vendors serving the newspaper print industry are in danger of extinction, but I couldn't help feeling a sense of dread for these companies who serve a side of the business that is likely to remain flat or slowly decline over the coming years (despite its enormity). Did they know that what is being discussed in another part of the convention hall -- the Internet -- will have a profound impact on the growth of their businesses in the next decade? I walked out of the hall feeling mighty glad to be working in the most exciting segment of the newspaper industry.

More on Wednesday

I'll follow up this column with more news from Connections in my next column, to be published on Wednesday.

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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