Kelsey Survey: Online Knocks Audiotex From Top Spot

By: Steve Outing

I'm attending the Interactive Newspapers conference this week in San Francisco. Today is the first day of the formal program, and I'll be reporting tomorrow on some of the conference presentations -- continuing my coverage of the event (which runs through Saturday) next week.

The conference organizers, The Kelsey Group in collaboration with Editor & Publisher, this week released their annual Interactive Services survey of North American newspapers, and its findings confirm that online services are the most important component of most newspapers' interactive services strategy. For the first time since Kelsey began taking these surveys, online outpaced voice (or audiotex) as the interactive service garnering the most interest among newspaper executives.

Of the 395 newspapers responding to the survey (190 dailies and 205 weeklies), 45% already operate a World Wide Web site; of those that do not, a strong majority say they plan to have one within a year. Kelsey's findings support my prediction, which I am sticking to, that about 2,000 newspapers will be operating online services by the end of 1996.

Here are some of the key findings from the Kelsey survey:

* 72 percent of daily newspapers and 66 percent of weekly papers say they are placing more emphasis on interactive services this year than last.

* 78 percent of dailies and 74 percent of weeklies have full- or part-time ersonnel devoted directly to interactive services. This is an increase from 57 ercent one year ago.

* Dailies show slightly more interest in online services than weeklies. On a scale of 1 to 10, dailies consider online today to be an 8.2, while weeklies ranked online as 7.1. Asked to predict their interest in online one year from now, dailies ranked it as a 9.0 and weeklies 8.5.

* Voice services (audiotex) came in second in terms of publisher interest -- 6.8 for dailies and 5.0 for weeklies. One year from now, dailies expect voice to be of equal interest (6.8), while weeklies rated it just slightly higher (5.3). In last year's survey, audiotex ranked as a 7.9 on the interest scale for dailies. While the audiotex business has matured and many newspapers are making decent profits with voice services, online has clearly taken its place at the top of the heap.

* CD-ROM publishing ranked just below voice in terms of publisher interest: 5.9 for dailies and 4.5 for weeklies. Oddly, one year from now both daily and weekly newspaper publishers expect to have slightly more interest in CD-ROM. I find this to be slightly perplexing, since online services over the long term will chip away at the CD-ROM business as online bandwidth to the home expands.

* Fax-response services came in last in interest; dailies rated it as 5.8 today, and weeklies 4.9.

* What's driving daily newspapers' activity in online services is foremost the "Desire to participate in the future," followed by the "Desire to offer complete service to advertisers/readers." Coming in third is the "Opportunity to make money." This might indicate that publishers continue to be realistic about the profit-making potential of online services in the short term.

* By contrast, weekly newspapers rated "Opportunity to make money" as their stop motivation for operating online -- which came in as a tie with "Desire to offer complete services for advertisers/readers." Coming in third was the "Desire to participate in the future."

* 44 percent of dailies and 51 percent of weeklies already operate a Web site. Of those that do not currently have a Web site, 81 percent of dailies and 46 percent of weeklies say they expect to create one soon. Of those planning to do so, 85 percent of dailies and 100 percent of weeklies say they will have a Web site operational within one year.

* Of those papers with online services currently, 52 percent of dailies say they have developed special content for online and 93 percent say they plan to in the future. Fourty-nine percent of weeklies have developed online content, and 64 percent plan to in the future. The days of newspaper online services being pure "shovelware" are coming to a close.

* For all interactive services, newspapers' motivation for participating remains as it was last year: "To remain the No. 1 information source" in their communities. This was followed by a 2-way tie between "Create new/additional advertising opportunities" and "Generate new revenue/profit sources." Results in last year's survey were nearly identical.

* Dailies consider telephone companies to be their primary competition in offering interactive services, followed by other newspapers, national Internet services, local Internet services and consumer online services. On a scale of 1 to 10, all of these competitors ranked closely -- between 7.0 and 6.2. This indicates publishers recognize that in the interactive services business, competition comes from many quarters.

* Weeklies, by contrast, said that other newspapers were their primary competition in interactive services -- rated as 8.5 on a scale of 1 to 10. All the other competitors ranked lower in their eyes (from 5.4 for telephone companies and local Internet services to 3.0 for national Internet services).

* The survey found that 21 percent of those daily newspapers operating online charge a fee for access to their online sites, while only 5 percent of weeklies charge for online. Both groups of newspapers include many who plan in the future to charge: 56 percent of dailies and 26 percent of weeklies.

* Classified ads are online at 70 percent of dailies' online services and 81 percent of weeklies'.

* Seventy-one percent of dailies' online services carry display advertising, and 78 percent of weeklies' online sites have display ads.

Interactive Newspapers speeches via RealAudio

If all goes smoothly, those of you not able to attend the Interactive Newspapers conference will be able to listen to some of the key presentations over the World Wide Web. Editor & Publisher and The Kelsey Group have arranged to put sound files (in RealAudio format) on the E&P Web site. You will need to have a copy of the RealAudio client application on your local computer, which can be downloaded freely. Please visit the E&P site at http://www.mediainfo.com/ for links to the conference speeches and RealAudio software.

Online Newspaper Services Competition feedback

Sheldon Carpenter of The Record in Stockton, California, sent this note following my columns last week about results of the 1996 Best Online Newspaper Services Competition, a contest being sponsored by Editor & Publisher and The Kelsey Group:

"While I thought the tips in your column interesting, I found it suffered quite a bit by not making use of the technology at hand: You needed links to the sites that were being critiqued. Come on, I've never known E&P to pull their punches, and while Web communications is still in its infancy, it's no excuse for hiding the origins of the judges' comments. We need to see for *ourselves* what's good and what's bad."

In summarizing the judges' critiques of online newspaper services, I purposefully kept out remarks about specific newspapers for a simple reason: The results of the contest will be announced at the Interactive Newspapers conference in San Francisco this Saturday, and I didn't want to give any hints as to who won or didn't win. At a later date, I hope to make available judges' comments about specific sites. But please be patient, as that will take a little while to compile.

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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