MODELS FOR PRESENTING NEWS ON THE INTERNET The Internet is a new and dynamic media channel that provides numerous opportunities for changing the ways that information is packaged and delivered. Specifically, since information on the Internet never takes a tangible form, it is never set in stone. It can be constantly changing and evolving. For companies that are providing news over the Internet, this means that they can continually update and enhance their Web sites throughout the day.

Although almost all Internet news providers state that they update their news throughout the day, but the reality is that few of them are taking complete advantage of this aspect of the Internet. The companies that are doing the best job of it are the ones associated with television news sources, like MSNBC and CNN Interactive. These TV-based news sites can leverage and build on the news provided by their related 24-hour news channels. Also, pure Internet-based companies, like C|Net, are not tied to any previous model or way of doing business and thus have created themselves in a way to take the best advantage of the features of the Internet.

Newspaper-based sites, however, seem to find it difficult to break away from their old mode of publishing the news once a day. "Most newspapers, including The Washington Post, Los Angeles Times and The New York Times, rely on reports from news agencies to update their sites during the day, while holding back their crown jewels -- what their own journalists have discovered -- until the actual papers are nearly on the street." 1

Part of this is due to their mindset about their business. They still see themselves as a newspaper company and are not yet ready to change their way of doing business, at least not until the revenues from the Internet begin to rival those of print. "To turn ourselves into a continuous news operation is a worthy thing to do if the Internet ever takes off," said Joseph Lelyveld, executive editor of The New York Times. "The problem is that usage is still at a low level that doesn't quite justify it." 2

Much of their hesitancy to change also stems from their concern about scooping themselves and cannibalizing sales of their print versions. If readers can get their breaking news from the Internet, what motivation will they have to go buy the newspaper the next morning? While this argument may hold for the time being, the time will come when someone else will be able to provide the same scoops as the newspapers and will be willing to publish it on the Web. When that happens, newspapers will soon learn that it is better to cannibalize their business themselves than to have somebody else do it for them.

One industry subset that has adapted to the world of the Internet very well is the publishers of computer trade magazines, such as Wired and its online version HotWired. These publishers have readers who are very Internet and computer savvy. They do not have the luxury of assuming that their readers would prefer to wait for the print version for up-to-date information. "Mitchell York, editorial director of CMP, says his company's print publications--most of which are weeklies--are supposed to hew to the analytical high road. That leaves the gathering of transitory scoops, once the bread and butter of the trade magazines, to their online counterparts."3 These sites are so fierce about obtaining a scoop that they rush to get timestamps on their stories that are seconds ahead of their competitors. Of course that haste often results in stories that do not have all of their facts straight, such as a report by C|Net in 1996 about a upcoming merger between Netscape and Novell that was not true.4

Cannibalization Issues

Cannibalization of traditional media is an area of prime concern to publishers of online news. As discussed above, it has definitely influenced their decisions about what news to include in their online sites and made them hesitant about providing updated, late-breaking news. In some specialized cases, concern about cannibalization has also limited the depth of the information provided over the Internet. Bloomberg recently agreed to provide business news for America Online, but Michael Bloomberg feels that this deal will not cannibalize the professional part of his business, because it will not include the analysis and deep financial data that is available to his terminal subscribers.5

There are currently no definitive numbers regarding the impact of the Web on news distribution. Newspaper advertising revenues do not seem to have been affected and have continued to rise in recent years.6 This is in part due to the strength of the current economy and also because Internet numbers are still small. However, news-based Web sites may have a bigger impact as the numbers begin to increase. A recent study by Forrester Research, a consultant in Cambridge, Mass., predicted that by 2001, newspaper will lose up to 14% of their circulation to electronic publications.7

Anecdotal evidence may be the best way for us to currently gauge how this scenario will play out. Neil Budde, the editor of the interactive edition of The Wall Street Journal, said that his intuition is that very few of his 180,000 interactive subscribers had directly switched over to it from the paper version. In fact, as much as 1/3 of them actually still subscribe to the paper. Thomas Baker, the online edition's business editor, feels that the interactive edition is appealing to a different and younger audience than the paper version. A small sample survey by The New York Times, however, paints a different picture. The Times spoke to eight subscribers of the Journal's interactive edition. Six of them stated that they stopped buying the paper version once the online version became available.8

Despite the concerns, real and imagined, about inroads by Web sites into the circulation of traditional news media, the general consensus seems to be that we will not be seeing the end of newspapers any time soon. There are too many benefits to having a fully portable news source. ''The print version is easier to read, more portable, more convenient and less expensive than the online version," says Veronis Suhler & Associates, an investment banker specializing in media. "Other old media heard the same dire predictions when newer media emerged. Yet they're now stronger than ever. TV did not destroy radio, cable did not destroy broadcast television, and the electronic media have not destroyed the print media.''9 Thus, while Internet news sources have created a stir and caused some concern, they are not an immediate threat to traditional news sources and never will completely erase the benefits of the morning paper.
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1 The New York Times, 1/6/97, Section D; Page 1; Column 5, "Don't Stop the Presses! Newspapers Balk at Scooping Themselves on Their Own Web Sites"
2 Ibid.
3 Los Angeles Times, 2/ 24/97; Part D; Page 1; " The Cutting Edge; News Wars; Thirst to be First Makes Online Info Fast--Sometimes Even True."
4 Ibid.
5 The New York Times, 2/26/98, Sec D, page 2, "Bloomberg to Supply AOL With Online Business Data"
6 Investor's Business Daily, 10/27/97, Pg. B14, "Company Snapshot".
7 The New York Times, 1/6/97, Op Cit.
8 The New York Times, 2/10/97, Section D; Page 8; Column 1; "The Wall Street Journal Online: Readers Pay but Profits Remain Elusive"
9 Investor's Business Daily, Op Cit.