THE DIGITAL FUTURE OF NEWSPAPERS IS UPON US

By: Paul Colford New Technologies Deliver Information, Generate Ad Dollars



Gaze into the digital future of newspapers. It's easy, for the future
is taking shape already, as more and more papers have advanced beyond
conventional Internet sites to start distributing their content on Web-

enabled phones, pagers, via e-mail, Palm Pilots and kindred devices
such as the Handspring Visor, as well as in audible editions that go
along on the morning commute to work. The wireless field has become so
hot in recent months, with the intro-duction of ever more services and
gadgets, including Microsoft's new Pocket PC, that the Newspaper
Association of America is pressing its members to address the
challenges and opportunities that come with the proliferation of gizmos
offering instant access to news and information.



To cite one striking number, Palm Inc., which shipped three million
Palm Pilots in 1999, recently had first-quarter sales that more than
doubled its rate in the same period last year. Even as more and more
people follow the early adopters in taking up new devices such as the
Palm Pilot, futuristic permutations of the newspaper as we know it
today are being tested and developed, hastening the day when electronic
editions on portable readers will be as familiar as the papers now
delivered to front porches and newsstands.



'It's all moving very quickly, and we're paddling quickly just to catch
up with what's happening,' says Melinda Gipson, the NAA's director of
new media business development. 'If we're going to coordinate our
efforts, we have to be in a position to spoon-feed the carriers that
want wireless accounts, giving them local scores and events, calendar
material, updates on local companies. We're working as hard as we can
to convince publishers that they need to think about this, given the
ubiquity of the devices and the competition in the digital space, and
given the opportunities that present themselves when more and more
people have one of these things in their pocket.'



AvantGo Inc., one of the better-known middlemen distributing stock
quotes, flight schedules and all kinds of Internet content to cellular
phones and so-called personal digital assistants such as the Palm,
counts among its early newspaper partners The New York Times, USA
Today, The Wall Street Journal, The Financial Times and The
Knoxville (Tenn.) News-Sentinel, which also supplies the
GoVols.com channel for those fanatical supporters of the Tennessee
Volunteers.



Stories from The New York Times and USA Today also are
flying through the air to all SkyTel word-messaging subscribers who
look to their pagers while on the go.



Meanwhile, those who should be looking only at the road in front of
them have been able to listen to certain newspapers as they drive or
shave. The Journal and then The New York Times were the
first papers, more than a year ago, to partner with Audible Inc. At
rates that start at $6.95 a month, the company makes available daily
audio digests of the papers; stories through its Audible.com Web site,
from which files also can be downloaded on such carry-along players as
the Diamond Rio 500.



San Jose Mercury News, valued for its inside coverage of Silicon
Alley, has since become available through Audible, which also plans its
first foray into more locally focused audio when it makes available a
Southern California edition of the Los Angeles Times (along with
an edition of the paper focusing on the entertainment industry and a
third on national and international news) by the end of this year.



'We chose these first four papers to give our customers a breadth of
coverage,' says Brian Fielding, Audible's vice president for business
and legal affairs, saying that the company anticipates adding one or
two others to serve the global audience of the Internet. 'The edition
for the Los Angeles local market is an experiment, quite frankly, like
everything else in this [audio] space. He said that Audible Inc., based
in Wayne, N.J., has nearly 18,000 customers who have paid for content
in the past three months.



But the tech-savvy Mercury News and powerhouses such as The
New York Times aren't the only papers equipped and sought-after to
go audio. More will follow.



In the sleepier environs of Schuykill County, Pa., the 30,000-

circulation Pottsville Republican & Evening Herald records audio
files of its local obituaries and high school baseball scores and
offers them for playback through the paper's Pottsville.com Web site.
This audio dimension was added last year by the jointly owned New
Horizons Team, whose voice-to-Web technology also is being used by
dozens of other small and medium-sized papers intent on enriching their
online presentations.



KnightRidder.com, a separate business unit that the nation's second-

largest newspaper chain created last fall to operate and develop its
interactive assets, is a good example of how a giant of print is
preparing for the digital future of the industry by placing bets on all
emerging media platforms. In 1998, Real Cities, KnightRidder.com's
network of regional hubs covering the chain's own markets and others,
is linked to the network by partner company Macromedia, parent company
of The Record, entered into a joint arrangement with AvantGo to
put regional news, sports and movie schedules on the service. 'We're
now getting 7 million page views a month on handheld channels,' says
Lem Lloyd, KnightRidder.com's director of strategic alliances. 'The big
winner is movie show times.'



In addition, with an eye toward the growing availability of broadband
access to the Internet, and the greater audio and video capabilities
that it allows, KnightRidder.com recently sealed a deal that makes its
Tallahassee.com destination, whose partners include the Tallahassee
Democrat, a local content provider for Sprint FastConnect, a new
high-speed DSL service available in the area.


'From the manufacturers, we're going to have handheld devices, cell
phones...the car may get involved somehow, and there probably will be
some sort of home gateway,' Lloyd adds. 'We need to work hard to get
our relationships in place early, so that whatever winning ticket comes
up, in terms of a dominant platform, we're going to have it.'



One winning ticket for newspapers may be a relationship like the one
The New York Times has with Vindigo. This free downloadable
software, introduced recently by an entrepreneurial company of the same
name based in New York's Silicon Alley, can be updated daily through
so-called hot synching. It enriches the Palm with a wealth of survival-

guide information, local restaurant listings, movie times, directions
and such. Moreover, Vindigo can adapt its content to a user's specific
location, without a wireless connection, so that he or she barely has
to break stride while calling up an address or a club description.



The first version of Vindigo is for New York City only and draws
content from NYToday.com, the city-site service of New York Times
Digital. Vindigo versions for the San Francisco Bay area, Boston,
Washington and Chicago will be available over the next two months.



The flat-panel reader



One device that also may be a part of newspapers' future is what has
been generically described as the flat-panel reader. It looks vaguely
like the evergreen Etch-a-Sketch plaything and recently won a great
vote of viability because users were able to utilize it to download
Stephen King's enormously popular e-book, Riding the Bullet. One
such brand, the Rocket eBook, made by NuvoMedia Inc., enables a user to
read and annotate a newspaper, though only two publications, The New
York Times and The Wall Street Journal, can be put on the
device, at rates of $20 for six months for each of their daily
editions. A sister brand, Softbook Press Inc.'s Softbook Reader,
accommodates The Times and The Journal, as well as The
Christian Science Monitor and The Washington Post.



On the distribution front, more than 2,000 Softbook Readers recently
went into use at The Arizona Republic, which downloads
circulation-route information on them each night for the paper's
drivers. 'I don't think it's such a stretch from that point to imagine
downloading an entire newspaper onto them,' the NAA's Gipson says. 'But
they're still pretty heavy and they're going to have to fix that.'



Roger Fidler is among those trying to do just that. The visionary
former director of new media with Knight Ridder describes something
called the 'cholesteric liquid crystal display technology,' developed
by the Liquid Crystal Institute at Kent State University, where he is
coordinator of the Information Design Laboratory. It's a paper-like
electronic display technology that may go into the next generation of
portable devices such as the 'tablet,' as he prefers to call the flat-

panel readers of today, giving them a larger screen and lighter weight
than today's Softbook and also higher-resolution display.



Fidler's own research focuses on formats for electronic editions of
newspapers, magazines and textbook. As he explains: 'My concept for
electronic publishing is based on a blend of traditional, page-based,
portrait-oriented print formats with Web-based technologies and
interactivity. We are anticipating the adoption of more advanced, yet
simpler portable display devices about the size of a standard magazine
and weighing less than two pounds, that can be used for accessing and
reading all types of electronic documents - books, newspapers,
magazines, catalogs, business and personal documents.'



Fidler points to a heady initiative at Kent State, the Adobe-Crain's
Research Project, named after its two benefactors, Adobe Systems and
Crain's Cleveland Business. A page-based model, with
advertisements juxtaposed as they are now, this working prototype, when
first viewed for study purposes on a PC screen, looks like a tabloid
newspaper. However, this particular medium, in Fidler's words,
'anticipates touch so one touches it to turn pages and sees what other
material lies behind the headlines and summaries.'



'The tablet is no longer a fantasy,' Fidler says. 'The debate now is
whether, 20 years from now, newspapers will be on paper.'



In this debate, Fidler argues that economics in the years ahead will
drive newspapers to go all-electronic, shedding what he calls 'the last
vestiges of industrial-age publishing, printing presses and delivery
trucks.' In his view of the future, lightweight devices with, say, 8.5-

by-11-inch screens, will be loaded with the day's newspaper by
inserting a thin unit shaped like a credit card that previously
captured the content from a satellite or perhaps a cable modem.


'There will be wireless connections, but I don't think, 20 years from
now, all will be wireless,' Fidler says. 'There will be kiosks in
hotels, train stations, wherever you might buy books, at which you will
load what is not a PC, but a consumer electronic device.'



Whether out of state or in Tokyo, readers of The New York Times
or the Pottsville Republican & Evening Herald, could avoid ever
missing an edition.



Where does advertising fit



No view of newspapers' digital horizon would be complete without a
glimpse of the advertising prospects that go with all these new
platforms. In brief, one has to imagine the growing, almost frightening
ability to target ads at moments of immediate impact.


Checking a movie timetable on your wireless device? Press 1 while
you're at it if you want 10 percent off your tab at a nearby
restaurant; press 2 if you want to reserve a table right now.


Checking a closing stock quote or two while heading home from the
office? Press 1 to get a dollar off a bucket of chicken on the way;
press 2 to place the order so it will be ready when you arrive.


'Newspapers thought the Web was a competitive threat, but wireless
media, on an order of magnitude, is more of a threat because
advertising on it is aimed at a local market,' says Mark A. Plakias, a
vice president of The Kelsey Group, a strategic-research firm that
specializes in local advertising and wireless technology. The total ad
market, both national and local now being generated by wireless media
is believed to be around $100 million annually. However, Kelsey
estimates that by 2005 wireless media will generate $6.8 billion in
local advertising and transaction-related revenue.