Old Media Takes Charge
Sydney Morning Herald
Friday June 2, 2000
``New media" is becoming ``mew media" in the US as old economy newspapers take charge of the online world while punching ahead with their traditional offline offerings.
The latest figures show that not only are the media dot coms' once high-flying share prices shot to ribbons, people are turning away in droves from the Internet sites once thought to be the cat's whisker in favour of newspapers.com.
America's newspaper Web sites had another strong month in the latest media metrics with 18 of the 31 sites tracked reporting unique visitor gains.
Gannett's usatoday.com, New York Times Co's nytimes.com and the Washington Post's washingtonpost.com led the pack on a single site basis while E.W. Scripps and Knight Ridder still held the number one and two spots on a consolidated basis with Times Mirror rounding out the top three.
On the local newspaper front the results also are encouraging for the ``old media" with Media Metrix first-quarter data showing that it was an even stronger quarter than the previous quarter for newspapers.
In 16 of the 38 designated market areas covered by the data, the top local newspaper site had a higher local market reach than the top national news site which typically has been MSNBC.com.
``This marks a three-market improvement over fourth-quarter results," said institutional broker Donaldson, Lufkin & Jenrette's media analyst, Mr William Drewry.
``Another encouraging data point is that 30 of the 38 newspaper sites posted local market reaches that were in the double-digits, a marked improvement over the 20 sites tracked in the fourth-quarter," he said.
Local search engines such as DigitalCity and CitySearch were also tracked to see how the newspapers matched up and, said the DLJ analyst, ``first-quarter results show us that the local newspaper sites dramatically outperformed these local guides".
``All in all, the newspaper sites are attracting larger audiences, further penetrating relatively untapped local markets and holding off their national competitors with significant market reach," said Mr Drewry who believes that the outcome supports his firm's long-held view that newspapers continue to gain traction on the Web and are developing meaningful online presences, especially within their respective local markets, when compared to both national news sites and local search engines.
Morgan Stanley says that the price for newspapers' tighter grip on the Web is that stepped-up Internet spending is hurting reported results.
``One catalyst that several months ago was seen as a major positive Internet spin-offs has clearly been temporarily derailed as the Internet sector is experiencing a prolonged correction," said Morgan Stanley.
Research and consultancy group Forrester Research meanwhile has come up with a few suggestions for print companies to beat off the dot com challenge even more comprehensively after a review of European newspapers' tactics revealed they were not faring as well because they treat the Net as an extension of their newspaper.
``Firms must offer deeper, richer content for the Web and move to real-time production to generate revenues through e-commerce," said Forrester analyst Ms Carsten Schmidt.
``Traditional publishing firms in Europe encounter new competition and rules on the Internet but they just rehash content from print editions and newswires although a few European companies have managed the transition from old to new media by using their known brand to attract new readers."
After talking with 49 European print companies to find out how they have adapted to the new environment, Forrester's analysts found that Europe's old media focuses on print skills with content creation that has not yet changed from the offline world.
``Newspapers still operate in days and magazines in weeks or months rather than in real time," said Ms Schmidt. ``Firms also change little in content presentation. Even revamped print publications have an identical online and offline index the Financial Times German site uses the same lay-out as the print publication."
They also recycle print online, create little unique online content and do not change their revenue models.
Forrester found that Net winners leverage their print readers online and some players succeed in increasing online audiences by expanding across borders or becoming strong in a niche.
But Net pacesetters expand their reach online although only a few European print companies have a well-established brand and push themselves hard enough to do so well. The Financial Times reports 22 million page views per month and 2 million registered users with a print circulation of only 600,000.
Forrester predicts that ``freelancers will rule" as newspaper sites seek to distinguish themselves just as soccer clubs increase their brand value through big stars like Ronaldo and that big brand will move down to a local level after building global communities around their online sites.
``As Yahoo! and eBay have shown, local sites strengthen the global one," said Forrester.
© 2000 Sydney Morning Herald