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Discussion Membership
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A 1993 Newspaper OptimistApril 26, 1993
Xxxxx Xxxx Dear Xxxxx: Thank you for sending me a copy of your Seybold presentation. I am sorry I was obliged to be at a different seminar. Pefore your presentation I related to you a tack that might help focus publisher's attentions. Here is a summary of it. Nothing is more likely to focus a newspaper publisher's attention like a shift out, before the end of the decade, of the newspaper of most of its current revenue base:
A month ago things changed. Until then, the delivery of electronic newspapers to the home had seemed so futuristic as to pose an unrealistic and distant threat to printed newspapers. Obstacles included:
The second obstacle, in-home compute power, will disappear as the telephone and cable company compete to woo customers. New cable television controllers will have the compute power built in and be offered, for "free" the same way that cellular telephone companies offer new clients low cost or free cellular phones to subscribe to their monthly service. This transition will be accelerated by the emerging High-Definition TV standard and efforts like the new consortium General Magic addressing home TV/Computer/telephone standards. Knight-Ridder's Roger Fidler overcame the third obstacle -- the videotext-style, regimented menu and TV-style display -- with his interactive newspaper page-loke display that allows easy scanning, "page" turning, and hypertext-linked button to find out more about individual stories. Since earlier this year, only the last obstacle remains. And no such display that can be carried into the toilet with the ease of a newspaper seems to be on the immediate horizon. Still, research on color flat panel displays is plunging ahead. Five hundred electronic channels to the home means that newspaper publishers are likely to face serious leakage of advertising revenue between 1995 and 2000 to interactive "Lands End", "Sears", and other QVC-type catalog shopping channels. If so, the first question is: Can I restructure the newspaper to survive the loss of advertising revenue, if I deliver electronically and can we price delivery so we can survive? Yes, we can restructure, and, yes, we could charge the subscriber an HBO-like monthly fee of around $5 per month. With this income we could restructure to keep the reporters, editors, photo staff, some layout people, a couple of clerks to handle subscriptions, pay for the offices, and have enough left over to pay the publisher and stockholders. It is a natural business for us, if we care to recognize our strength. We provide local news in more breadth and depth than any other player. We do a good job of editing and layout. And we provide a mix of editing of other news that is valued. The $5 per month would be the base charge with additional fees based upon special orders that require immediacy, speed, quantity, or special handling. Two-tier pricing would have a higher-priced, advertising free version and a less expensive version subsidized by mass advertising much the way current newspapers are today. The next questions: What happens to the other departments: Advertising, Layout, Printing, Distribution, Business (computing)? As a cost center and a profit center, each department can stand on its own -- in fact, it will be obliged to.
Recent budgetary pressures have moved the advertising department to assume the services provided by local advertising agencies. As the boundaries between print and electronic blur, the ad department will move outside company-owned newspaper scheduling to handle radio, cable, and other print outlets. The layout department will be obliged to develop multimedia skills to attach audio and video to hypertext-linked buttons [on] each newspaper-like electronic page. These skills and the in-house compute power required for them will translate easily into advertising or program production services salable to TV and radio customers. The demise of the daily newspaper printed on paper is not imminent, but the press room printing department will anticipate the day when it may not be required to print a daily, in-house newspaper. Issues may be published every other day, twice a week, or weekly. Additional publishing to paper will continue in the form of commercial jobs and specialty or "niche" publications. The distribution department will deliver the newspaper and any other niche publications along with product samples as targeted by the newspaper's tailored subscriber/non-subscriber database. Finally, since integrated computing is so essential to all facets of the newspaper company, commercial computing services of database management and printing/publishing imagesetting will be offered to the public at large. The final question is: How do we get ready? In this imminent future, the barriers to entry to competition for newspapers will be a lot lower than previously has been the case. Multi-million dollar presses will no longer be required. Rather than press equipment upgrades, shrewd publishers will invest future capital investment dollars either on:
Regards,
Stephen B. Waters [Macro error: Can't find a sub-table named "commentIt".]
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