AJR  Features
From AJR,   October 1993

The Future is Now   

Newspapers are overcoming their fears of technology and launching a wide array of electronic products.

By Kate McKenna
Kate McKenna is a Washington writer.     

The last time newspapers were this interested in new technology, they were looking for ways to keep the ink from rubbing off on their readers' hands. Now they're exploring how a newspaper can survive, even thrive, without ink – and maybe without paper.

After decades of fearing that new information technology would put them out of business, newspapers are realizing that embracing technology is good business. Voice services, fax supplements and timely electronic news updates are options readers might want – and can increasingly get elsewhere. Although newspapers in their present form will be around for the foreseeable future, news managers now see the new information technology as a way to broaden their reach.

Somewhere between the May 1992 launching of the Tribune Co.'s Chicago Online, which was the first local service available nationwide, and the May 1993 debut of Knight-Ridder's San Jose "Mercury Center," the second nationally available local service, the industry entered a new era. Suddenly newspapers are doing the kinds of things they had always been wary of: investigating new methods and media, spending big money on research and development, and cooperating with the competition.

In the few months since the Mercury News went elec-

tronic – making it the first company to create a truly integrated newspaper and online product – a pack of new converts is lining up:

Last summer 19 news companies, including Gannett, the Globe Newspaper Co., Hearst, Knight-Ridder, Newhouse Newspapers, Times Mirror and the Tribune Co., invested as much as $100,000 each to finance the development of the world's first "personalized" ne6spaper at the Massachusetts Institute of Technology.

Sometime this fall, Cox Newspapers' Atlanta Journal and Constitution and Palm Beach Post will unveil online editions, providing readers with complete versions of the dailies – plus police logs, community sports scores, school menus and other information that can't be squeezed into a normal daily news hole. The Atlanta service will augment Access Atlanta, which was started two years ago and currently has 1,000 subscribers. Cox-owned newspapers in Dayton and Austin may be next.

The Times Mirror Co. is working to create online versions of three of its papers, the Los Angeles Times, Newsday and New York Newsday, not coincidentally located in the nation's two biggest markets.

Gannett Newspapers will launch electronic editions of its suburban New York City papers this fall, adopting its NewsLink online formula, which has worked well at Florida Today, at its Westchester, Rockland and Putnam county papers.

It's not a revolution, but an evolution – an industry-wide growth spurt that has hit newspapers, first one by one, then in groups, now in waves. From the Los Angeles Times to the New York Times, from the mega-chain to the small news group, newspapers are exploring new programs and finding nontraditional ways to give their readers all the news that's fit to print, fax and download.

From Defense to Offense

Since the 1980s, broadcasters have aggressively exploited new technology to hold their audiences and attract new ones. Newspapers, however, have been standing relatively still. In fact, the newspaper industry worked hard in the early 1990s to block one inevitable development, the regional telephone companies' entry into the electronic information market – a battle fought and lost in the courtroom of Judge Harold Greene and the halls of Congress.

But recent shifts within the cable and telephone industries, the surge in popularity of personal computers, and a drawn-out economic recession that has sliced into advertising revenues have combined to force newspapers to look forward.

"For a while there, newspapers were primarily identified with blocking the Baby Bells," says Frank Hawkins, a vice president at Knight-Ridder. "It gradually dawned on newspapers that they couldn't – and shouldn't – depend on Judge Greene to save them from the future. That defensive kind of strategy was ridiculous. We should recognize these changes and just go on."

Much of the new activity within the print industry is fired by the same fuel propelling computer, telephone, cable and entertainment companies: fear. Technology is breaking down the barriers between these once-distinct industries, allowing unforeseen competitors into the new markets. This same technology could render any one of these industries obsolete.

"The potential arrival of interactive TV has opened the eyes and served as a wake up call to newspapers," says Victor A. Perry III, director of new business development at the Los Angeles Times. "The possibility of 500 channels in the home has shaken up the industry. We are at risk of being disenfranchised; they could take our advertising – and all we'd have left is an editorial product with no advertising to support it. So we've really got to insinuate ourselves in[to] these new worlds."

Henry Scott, group director for new business at the New York Times Co., says his paper also has snapped to attention. "There's nothing like adversity and pain to give you focus," he says. The Times is now offering an array of voice and fax services that are proving to be relatively popular, but it has not entered the online service arena as yet.

One of the more enthusiastic high-tech converts, Cox Newspapers President David Easterly, points out another reason for news organizations to embrace this technology: "Greed. Because we're going to make some nice money on this."

One other chief reason, of course, is market protection. "If the other companies find local news to be compelling," says Easterly, "they will find ways to get that information out there to our readers." And newspapers, he adds, generate a lot more information than it can fit in its pages. "The old line is true: Newspapers print about 10 percent of what we do every day," he says. "Why waste the other 90 percent?"

To launch its project, Cox has licensed software from the White Plains, New York-based Prodigy Services Co., a national home computer network owned by IBM and Sears. Consumers will be able to access online versions of the Atlanta papers and the Palm Beach Post through the Prodigy network. Easterly doesn't see the experiment stopping with newspapers, though. "Eventually Prodigy will be able to move this service [of providing Cox newspapers online] on to cable and off we go," he says. "We're not going to wait until cable operators define the world of journalism."

That strategy, the best defense is a good offense, finally is making sense to newspaper managers, especially those in coveted major markets. "I think we're acting now very prudently," says Perry. "To waste much more time would be foolish on our parts. We have to fill that niche before someone else does."

Moreover, younger generations, and a growing number of older people, are more computer literate. More personal computers with modems in homes, more CD-ROM users, greater speed and ease of usage have combined to create a viable market. Suspecting this, the San Jose Mercury News conducted a survey on local computer ownership and found that nearly 17 percent of adults in Santa Clara County own computers with modems – almost twice the national figure.

"We always think the new media is going to replace the old," says Bob Ingle, the Mercury News' executive editor. "Radio had us quaking; television, the same thing. With the possible exception of the telegraph, each new entry modifies the old media." The Mercury News launched Mercury Center, a 24-hour electronic newspaper, providing its Silicon Valley subscribers with the articles du jour, direct communication with editors and reporters, access to newspaper archives and wire copy, downloadable files and continually updated news. It's available for both Macintosh and IBM-compatible computers.

Mercury Center is similar to the Tribune Co.'s Chicago Online. Both are available through America Online, a nationwide computer network based in Vienna, Virginia. The Mercury News project is the first in a series of high-tech steps for the paper, which will soon launch fax and voice services. Many other companies, like Times Mirror and the Washington Post, took the opposite tack by inaugurating fax and voice programs before testing interactive projects.

Riding the Wave

As these and similar experiments continue, the fear that technology will supplant newspapers is receding; in its place stands an industry coming to terms with the inevitable high-tech future.

As Roger Fidler, director of Knight-Ridder's design lab in Boulder, Colorado, works on his "flat panel," a computer tablet that can display a specialized digital newspaper, he sees a significant change in attitudes among readers and news managers: They're getting ready for new news. "People are beginning to expect many changes to take place and I think..[that] will help make it a reality."

Although newspapers view some of these efforts as interim technologies, the in-house expertise they're assembling and the interest they hope to generate among readers is well worth the effort, according to many new media experts. Standing back to see what everyone else does would be a feeble strategy at a time when new technological generations seem to emerge every six months.

"Watching and waiting may not be such a great idea for most newspapers," says former New York Daily News Editor James Willse. "I think they'd wake up one morning and find out a substantial portion of their lunch had been eaten. It would be extremely foolish for people as an industry to not find ways to use this technology."

There is some flexibility for smaller newspapers, however. "If you're a mid-sized market, then you can afford to be casual," says Victor Perry of the Los Angeles Times. "But not if you're in a large market with competition around you, with major players – cable companies, telephone companies – eyeing our revenue streams hungrily."

Almost as tricky as riding the technological wave is figuring out where and when to jump in. Last spring, companies such as Newhouse, Hearst and Globe Newspapers appointed managers to chart this territory and plot their next moves. Willse started scouting the electronic landscape for Newhouse, former Federal Communications Commission Chairman Alfred Sikes came on to head Hearst Corp.'s newly formed New Media and Technology group, and former Boston Globe Editor Jack Driscoll took over his paper's new media office.

Sikes is seeing it all from an entirely new angle. "I find it fascinating – and potentially humbling," he says. "I felt the commission was a place to be at a very significant time in the industry..and I feel the same way about this."

The Videotex Debacle

The last time newspapers embraced the latest cutting-edge technology they got burned. It's been little more than a decade – a lifetime in the information age – since the first pioneering efforts at harnessing "videotex" technology. Times Mirror and Knight-Ridder were first to provide subscribers with online news, entertainment and shopping services via computer with an impressive, multimillion-dollar display. But no one seemed to want it and the projects shriveled.

News managers not directly involved in the videotex debacle seemed to almost take comfort in its failure. At least that proved that newspapers weren't so easily replaceable after all. But for the farsighted few hoping to continue high-tech experiments, the failure of videotex stopped everything.

"That project poisoned the water for all of us," says Gerry Barker, online service marketing director at the Fort Worth Star-Telegram. "All people could see was the red ink. The only thing that could overcome those attitudes are success stories."

So the Star-Telegram created a success story, collaborating in 1982 with Tandy Corp. to found StarText, a low-cost, low-overhead online newspaper. Even after Tandy dropped out a year later, the Star-Telegram kept plugging away, eventually perfecting a system that became profitable in 1986 – the only such venture to make money to date. Now the company is licensing its technology to the St. Louis Post-Dispatch and the Kansas City Star, which had been trying their own online versions independently.

?imilar types of local online systems have sprouted at newspapers in Albuquerque; Atlanta; Beaumont, Texas; Charlotte; Long Island; Middlesex, Massachusetts; Sacramento and Spokane, using what is commonly referred to as "off-the-shelf" systems. These allow papers to make modest equipment and software investments to start learning and applying this evolving technology now.

What Is a Newspaper?

The question today is not simply the future of newspapers, but their essence – raising queries straight out of a communications theory class. What is a newspaper? Ink on paper? Or more? But, for once, there are as many answers as questions. And as many concrete examples of where news is headed as there are nebulous theories.

"It's helpful to think of the newspaper as more than a newspaper, a magazine as more than a magazine," says Newhouse's Willse. "What you have now in a newspaper is people who produce..advertising [and] editorial content, and then it goes on down to the printing plant. But this huge news organization exists to provide more than just a printed thing in the morning.

"The thinking is that this organization could be at the center of spokes of a wheel. The information could be on television, computer, newspaper or Roger Fidler's flat panel. You've got multi-uses of what had been a fairly straightforward process. And in an era where newspaper penetration and readership is down, do we really care if people are getting their information from a newspaper or on a screen?"

The answer, says Willse, is simply, "No, we don't."

Randy Bennett, who assisted on Knight-Ridder's now defunct videotex project and has worked at America Online, agrees. "Newspapers will become news companies, information companies," he says. "And one of the products they will offer is a paper product, as well as CD-ROM, news channels, online services, etc."

The philosophical debate also involves readers, whose needs and inclinations can get lost in the quest for high-tech news gadgets. "There are a lot of possibilities, but what's practical, what's cost-effective, what can be easily used – that's the $64,000 question," says the Boston Globe's Jack Driscoll. "A lot of people talk about exotic things that can be done, but who really wants it?"

The New York Times' Henry Scott believes one can't assume too much about what readers want, especially when it comes to computers, which operate under a different set of rules. "There's a lot of things out there that look interesting," he says. "But the question is, do these [news] applications make sense on computers? Would I ever use it? I always argue that people won't read words off a screen unless they're paid to."

New York University journalism professor Jay Rosen is wary of defining a newspaper's role as an information factory. "It is a serious and sometimes fatal error to say that what journalists do is provide information," he says. "The essential tasks of journalists actually have a lot to do with reducing information." He points out that interpreting the news and separating out the extraneous is pivotal to the profession. Therefore, dumping a load of facts into a bottomless database would do little to aid public discourse, inform the community or attract a new generation of readers.

Willse also sounds a note of caution for journalists who may be worshipping what he calls the "digital god" too enthusiastically. "It's wonderful that we are able to supply our readers with sports scores on demand, and stats going back to 1938," he says. "But the real reason we are protected by the First Amendment – and the Home Shopping Network isn't – is that we have to do good. We shine light in dark places, find out things people don't want us to find out. I would hate to see people get too seduced by the technology and forget that."

Certainly, there's a bit of the "millennium syndrome" afoot, as the approaching turn of the century makes people feel they're on the brink of a new age, with a Task Force 2000 forming in almost every industry. The problem is that no one really knows how newspapers will be read and distributed in the next 10 or 15 years, or even five years. Nobody knows if fax and audio services and online networks will prove successful, much less permanent. But the industry is in hot pursuit of the answer.

In any event, newspapers will continue to have a strong presence in the next century, according to those laboring to turn their visions of the future into their own Newspaper 2000. "The newspaper's future is absolutely vital," says Cox Newspapers President David Easterly. "The only newspaper companies that are going to get murdered on this are the ones that stand back."