Newspapers and strategic alliances

By: M.L. Stein

THE BUZZWORD AT a recent San Francisco interactive media conference was "strategic alliances," which some speakers regarded as the best thing to come along for newspapers since the offset press.
Jan Calvert, director of Voice Services for Chronicle Publishing Co. (CPC) in San Francisco, said it successfully hooked up with business owners in the resort town of Idyllwild in the Southern California mountains to install a voice system for tourist information at a weekly newspaper the company owns.
As a sweetener, the CPC agreed to use a percentage of generated revenues to advertise the service out of the area to attract more tourists. More than three-fourths of the 20-some inns and resorts signed up for the service, Calvert said.
CPC also has entered into a multi-member alliance with other daily newspapers, which have free-to-caller services in California, added the panelist.
She spoke at the fourth Annual Newspaper & Telecommunications Opportunities: Voice, Fax and Online Services conference March 15-17. The event, which drew about 300 newspaper representatives, vendors and various other specialists, was co-sponsored by the Kelsey Group and Editor & Publisher.
According to Calvert, the objectives of the newspaper alliance are to "share success and failure stories, and be able to sell advertising into each other's voice systems."
In the last six months of 1992, she related, Chronicle CityLine sold $37,000 worth of ads into seven systems besides its own.
Another of CPC's partners is Great Western Directories, publishers of independent phone books whose Bay area directories list all CityLine topics.
"Our benefits are increased awareness, increased usage and increased market share," Calvert said.
A strategic alliance, she continued, must provide benefits for both parties and, above all, must be profitable by increasing market share ahead of the competition.
Calvert further stressed the need to promote the alliance, preferably with a daily house ad.
A second panelist, Fresno (Calif.) Bee marketing director Karen Baker, reported that her paper joined hands with the traditional enemy ? the yellow pages.
Valley Yellow Pages (VYP) she said, approached the Bee about plugging its BeeLine audiotex system.
"They wanted us to pay them for providing exposure for BeeLine in their pages but we thought that was unreasonable," Baker said.
What the two eventually worked out, she went on, was a co-promotion deal for each other's product.
For BeeLine this meant its logo on the spine and cover of the book, its list of services on the first five pages and inside filler ads, and the audiotex phone number at the top of alternate pages.
In turn, the Bee gave Valley guaranteed promotional space, BeeLine ads, and a puff message on the system to every fourth caller, Baker noted.
However, the Bee terminated its arrangement with VYP after one year, even though the alliance was "very positive," she disclosed.
The partnership, Baker explained, gave BeeLine a brief boost in call volume that was not sustained.
"We found that putting more frequent ads in our paper was more valuable than constant presence in the directory and easier to update," she said. "In other words, we'd rather do it ourselves."
However, a phone company spokesman on the panel said newspapers need the telecommunications industry.
"There is no company in this country, or indeed in the world, that can be successful in information services without forming strategic alliances," asserted Hal Logan, general manager of Pacific Bell Information Services.
Logan said Pacific Bell Information Services (PBIS) wants to work with newspaper companies in connection with its Message Center, a voice mail product for residential customers.
The idea, said Logan, is to make the center a place for both personal phone messages and key information services such as stock quotes, sports scores, and late-breaking and world news.
PBIS has the technical know-how to feed such information to its 500,000 customers but needs "strategic alliances to bring our vision alive," Logan said.
"We employ no journalists," he observed. "We can't write world news reports, follow stocks or prepare the 49ers report . . . . We will rely on our strategic partners for these key inputs into our service."
PBIS already is testing the concept in California and has created a relationship with the Dow Jones Information Network through which national, business and sports news are being made available to about 5,000 Message Center subscribers, Logan said.
He commented that "Just as we seek opportunities to obtain leverage from the infrastructure we have built . . . newspapers need opportunities to generate additional revenue from the news and other information they gather and report. For all the differences that separate our industries, one thing we share is the need to find new leverage for our core products."
Logan said his company's research indicates that people will pay for such information and like the convenience of getting both their personal and content messages from a single source.
Newspapers also can enhance their classified advertising through a telephone application, said the founder of SureFind, a Seattle-based firm that provides classified real estate, rental and automotive ads via a telephone database.
SureFind president Jim LaLonde, who describes himself as a "newspaperman at heart," is intent on becoming a multimedia partner for newspapers and other information companies, he said.
SureFind, LaLonde said, can publish pictures with its faxes, even while the consumer is listening to the ads on the phone. The system also can send along coupons or display ads on the fax cover sheet, he added.