Newspapers At The Crossroads p.11

By: George Garneau Newspaper Association of America outgoing chairman says
the industry has taken its lumps and now it's time to begin
the revitalization, offers five-point plan aimed at success sp.

LIKENING THE EMERGING information superhighway to the Yellow Brick Road in The Wizard of Oz, Newspaper Association of America outgoing chairman Donald Newhouse reaffirmed the strengths of newspapers and issued a call to change this week.
Newhouse, president of Advance Publications Inc. and head of Newhouse Newspapers, also rallied conventioneers to support the NAA and its collective action to further the industry's interests.
Both the industry and its largest association have taken their lumps: the NAA from a wrenching merger two years ago and an exodus of small newspapers and the industry from a humbling recession, long-term readership declines and fears of being stuck on Main Street when the information superhighway roars through town.
But Newhouse, in his keynote address to a packed house at the NAA convention in San Francisco, sought to bolster the industry's underpinnings and chart a course of revitalization into the future.
For the moment, optimism is growing as newspaper ad revenues and profits generally rebound from a three-year slump, newspaper executives, including Newhouse, said. One positive sign was a 5% increase in convention attendance to 1,476.
Long term, however, newspapers are at a crossroads, Newhouse said.
One road is painted yellow and leads to complacency, confusion and deterioration. The other "leads to economic strength and the ability to continue our critical service to the readers whose information needs we must meet and to the advertisers who want to talk to those readers. It is paved with gold," he said. "Let's go for the gold."
To get the gold, the outgoing NAA chairman said, newspapers need not search, as the characters traveling through Oz did, for a heart, brains and courage. Newspapers already have them.
"No one surpasses our ability to give our readers information, advice and opinion about their communities in an organized, accessible format, easy to use for those who are interested in a specific area and yet full of surprises ? the quirky, the unexpected, the poign-ant, the sentimental, the significant, the useful ? for those who require a snapshot of their world each day," Newhouse said.
Newspapers serve 115 million readers daily, or 61.7% of adults, and 128 million, or 69% of adults, Sundays.
In comparison, he pointed out, the three television network evening news shows draw a combined audience of 41 million viewers.
"Let us never forget our reach and not let others underestimate it either," Newhouse intoned.
And for the other customers who provide more than three-quarters of newspaper revenues ? advertisers ? newspapers get results, he said.
That's why newspapers, despite a long decline, remain the largest ad medium in the nation, with $32 billion in revenue, 23% of all U.S. advertising, he added.
"We are the premier mall in the United States," Newhouse said, offering everything under the sun for sale and news too. "Ours is a mall whose shoppers have been taught to use it and to trust it.
"But the world is achanging and we must be achanging too," he cautioned, outlining a five-point plan.
First, newspapers have to adapt to the nation's shifting ethnic composition and lifestyles. As newspapers prospered by chronicling the lives of European immigrants 100 years ago, so today they must cover the swelling ranks of minorities: Hispanics, blacks, Asians, Indians. Likewise women. And newspapers must remake their staffs in the image of their increasingly diverse readers.
"All this we must do to keep our universality," Newhouse observed.
Second, newspapers have to remain efficient for advertisers. That means producing tailored and targeted audiences for special-interest sections while remaining a general-interest mass medium.
"We must be able to target a household," he declared, as direct mailers already do and cable television is planning to and as newspapers already have learned to do using ZIP codes and postal carrier routes.
Third, newspapers must respond to advertisers' demands for more efficiency and effectiveness.
"We must remove the barriers that make it difficult for national advertisers and national regional retailers to buy advertising," Newhouse said.
He called for every newspaper to adopt the standard advertising invoice and for creation of a standard form of advertising rate card and standard ad order form.
He urged newspapers to adopt electronic data interchange, the process of computerized ordering between businesses, and to support the NAA's efforts to allow advertisers to buy and be billed for ads in newspapers throughout the country through a single transaction with Publicitas.
To eliminate the final obstacle in the path of national advertisers, the plan anticipates that the Associated Press will deliver ads in digital form by satellite to multiple newspapers (See p. 14). That would save advertisers from having to ship ad mechanicals and separations by hand to every newspaper in which they advertise.
Fourth, newspapers must lobby lawmakers, who have the power to raise business costs through regulation and tip the competitive balance to other industries.
"We must become educators or we will find ourselves as Dorothy and her cohorts . . . enchained by adversaries with no handy tub of water to melt the witch," Newhouse said.
Fifth, harness technology to enhance value for customers and through it develop new revenue streams for the information that newspapers generate.
The only way to achieve these goals, Newhouse said, is through collective action and the vehicle for collective action ? the ruby red slippers ? is the NAA.
He recounted the association's progress in selling national ads worth millions of dollars, lobbying for safeguards from deregulated phone companies, and creating the National Newspaper Network and one order/one bill system through Publicitas.
"Collective action and the Newspaper Association of America: They are our future strength," Newhouse said. "They are the dynamics which this everchanging media world require. They are our everyday, real, nonmagical, sweat-and-hard-work keys to future growth."
In her address, NAA president and CEO Cathleen Black said news events that captured the headlines ? from the Clintons' investments in Whitewater Development Co. to Lorena Bobbitt's mutilation of her husband to the clubbing of skater Nancy Kerrigan ? prove the "central role of newspapers in keeping the public informed."
But market changes, new technology and national communications policy "are fundamentally changing how we think about our newspapers and our future," Black said.
"The truth is, our old world views simply don't work any more."
The ad slump of the late 1980s plus the advent of computer information services and interactive television forever changed the comfortable world of newspapers, she said.
"That's tough news for us, but it's good news too because this new world offers us substantial opportunities for growth, renewal and long life as long as we find new energy and new vision to seize those opportunities and shape our future . . . .
"We're discovering that while it's a whole new world out there, the value of news in print and the value of a strong industry organization ? NAA ? are needed as much as ever. Maybe even more."
?(We are the premier mall in the United States. Ours is a mall whose shoppers have been taught to use it and to trust it." ) [Caption]
?(-Donald Newhouse, outgoing chairman, Newspaper Association of America) [Photo]