Print Media Steer Toward Superhighway

About 500 newspapers now offer electronic services, yet most experts doubt printed news is close to extinction

WITH a fervor not seen in a decade, newspapers and magazines are moving onto the merge lane of the information superhighway. That emerging network, publishers say, isn't just for zapping sound and images around the globe.

``Everyone talks about the electronic age as being the death of newspapers,'' says William Allman, senior writer at U.S. News & World Report. ``I think it's going to be, in some ways, the revitalization.''

Mr. Allman is a system operator - or ``sysop'' - for the magazine's new on-line service. Since Nov. 29, subscribers to the popular CompuServe electronic network have been able to view each edition of the newsweekly, print out its cover photo, send letters to the writers, or search for articles in previous editions. Plenty of other magazines and newspapers are doing the same thing.

Time magazine has hooked up with the America On-line electronic network, which also sports The Atlantic Monthly, National Geographic, the Chicago Tribune, and the San Jose Mercury News. Newspapers on-line

Last week, the Vienna, Va., company announced that it will have the New York Times on-line in the first quarter of 1994. The Times will also become available next year on Dow Jones's electronic service, which already provides access to the Wall Street Journal.

The other major on-line company, Prodigy, has signed deals to bring several newspapers on-line, including the Atlanta Journal-Constitution, the Los Angeles Times, and Newsday.

Still others are trailblazing new paths into the electronic ether. The Washington Post expects to have its own on-line service running by next summer.

In all, some 15 newspapers are already on-line and many more deals are in the works, according to the Newspaper Association of America (NAA). This move is part of a much larger push into nontraditional offerings, from audio-text (where subscribers can phone in to find sports scores, for example) to faxed editions. The NAA estimates that newspapers in the United States offer some 500 to 600 such services.

Newspapers are eager to experiment for two reasons:

* First, the growth in advertising revenues has declined sharply from the trend set in the 1980s.

``The last three years were a clarion call to editors and publishers to understand the changing economics of the marketplace,'' says NAA President Cathleen Black. ``That tremendous jolt has encouraged people to expand and explore because the old way of doing business ... is not enough.''

* The second factor is the threat that the print media will see new competitors encroach on their traditional turf, especially classified advertising. ``Untold number of electronic competitors -

from tiny start-ups to on-line services, RBOCS [the Baby Bells] and cable companies - are attempting to cherry-pick newspaperdom's most-lucrative franchise,'' warns a Sanford C. Bernstein & Co. report issued last month. Newspapers are still safe from meaningful competition for at least another two years, the report concludes. Still, their electronic experiments are important, says Mary Dedinsky, associate dean of Northwestern University's Medill Journalism School. ``The newspapers must be there to protect themselves.''

The experiments now under way are a far cry from failed attempts a decade ago to create ``electronic newspapers.''

``The big companies who played in the early '80s were doing it out of legitimate research purposes,'' says Gary Arlen, a Bethesda, Md., analyst specializing in interactive electronic media. ``It was a flop. And they validated it was a flop.''

This time, the experiments are much less costly, he points out, and newspapers should be able to cover their costs with the on-line services. But he is skeptical they will create important new revenues in the next several years.

Other observers are more sanguine. They point out that computers are much more pervasive in homes than 10 years ago. And publishers are no longer merely slapping their printed editions onto a computer screen.

``Nobody wants to read a newspaper on a screen,'' says Randolph Charles, director of marketing and new business development for Newsday. Instead, Newsday and other publishers are looking to provide access to their archives and other offerings. Newsday is already doing this with a telephone service. On this year's anniversary of the Kennedy assassination, it supplemented its newspaper coverage with historical recordings of radio reports made that day. Some 7,000 subscribers called in.

The electronic version of U.S. News & World Report is an experiment, says Kevin Knott, director of product marketing for CompuServe. The newsmagazine has decided to let readers view the current edition without the usual surcharge for CompuServe's on-line magazines.

One of the big challenges will be finding the right mix of electronic services to attract a big audience. Not counting Internet, the world's largest network of computer networks, today's electronic services reach some 4 million homes, Mr. Arlen estimates, which is not yet a mass market. The numbers of on-line subscribers is mushrooming. CompuServe, with 1.5 million users worldwide, has added nearly 500,000 net new users this year. America On-line is also growing rapidly. Future uncertain

No one knows whether these electronic services represent the future of printed news. One problem is that they are slow. It can take two minutes or more to download the cover of U.S. News & World Report, even with a speedy modem.

CompuServe is testing a program that links up its Exeter, N.H., subscribers through much faster cable-television lines operated by Continental Cablevision.

One way or another, the print media are moving to ensure they won't get bypassed when the information superhighway comes through town.

``Every little bit helps to figure out what the electronic newspaper is going to look like,'' Arlen says. But ``this is a long-term evolutionary process.... People are shocked when I say there will be a daily paper - on paper - in 50 years.''

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