New Media Profit? Patience, Patience, Patience p.7

By: Stacey Jones

A NEW MEDIUM demands a new language, so when talk at last month's Newspaper Values & Finance conference in New York City shifted to digital publishing, the panel got creative.
Interspersed between the brainstorming of Martin Nisenholtz, president of digital services at New York Times Co., and Infinet president and CEO Dave Richards on how to make the superhighway profitable for newspapers, and how long it will take, they came up with such terms as "psychographic" (as opposed to demographic), "repositioning" and "distribution attributes."
It was impressive, linguistically, but in the end, the consensus was that digital publishing, the Internet, that whole high-tech ball of wax, won't be profitable for at least another decade ? and experts still aren't sure what type of audience it will take.
"There's a tendency to overdo the spectacular when a new technology emerges," explained Paul Kagan, whose company organized the conference at the Park Lane Hotel.
Since newspapers are proceeding without a map, it's difficult to know which path is the right one.
One can't look at the habits of newspaper readers, since about 80% of online users are not print subscribers, said Nisenholtz.
Another barrier attached to marketing the nascent medium, according to Richards, is that the growth in the number of sites is outstripping the pace of new online users.
That means users have too many choices, reducing the dominance of any single site and stagnating each site's efforts to develop a customer base.
"It's fragmentation worse than radio," said Richards.
Add to that the high cost of integration and setup ? and growing higher, Richards predicted ? and it's clear that the odds are not in the industry's favor.
The solution to cracking this online Rubik's Cube seems to be in the hands of market researchers and techies. Nisenholtz suggested tracking user behavior instead of demographics to get a more precise reading of possible customers.
Realizing the hurdles the industry faces, Kagan described the transition as "akin to MTV attempting the same thing in a different medium. It would be unthinkable, but that's what newspapers are trying to do."