Magazine article Editor & Publisher

New Alliance Raises Industry Concerns; New Century Network to Cost $8 Million; Aims to Put a Total of 75 Newspapers Online in Three Years

Magazine article Editor & Publisher

New Alliance Raises Industry Concerns; New Century Network to Cost $8 Million; Aims to Put a Total of 75 Newspapers Online in Three Years

Article excerpt

WHAT HAPPENS WHEN you link 185 dailies and 20,000 journalists in an electronic news-sharing network on the Internet?

The answer: Nobody knows - yet.

Nobody knows if the alliance, the recently announced New Century Network (E&P, April 22, p. 15), will succeed.

What is known is that the venture - formed by seven of the nation's 10 biggest newspaper companies and the Washington Post Co. - stirred a lot of interest at the Newspaper Association of America convention this week in New Orleans.

At least 300 publishers attended a standing-room-only gathering to hear NCN's pitch.

At the meeting, Tribune Co. chairman and CEO Charles Brumback disclosed that the founding companies had committed $8 million to NCN. Brumback, in response to a question, said the eight partners had committed $1 million each.

NCN will make capital calls, as needed, on the founding companies, Brumback said, and spending more than the allotted $8 million will require a three-fourths' vote.

NCN has proposed, first, to create a network of online newspapers, and, second, to link them together in an affiliation incorporating information-sharing and advertising.

Elaborating on the announcement of its formation just days earlier, NCN said it plans to help put a minimum of 75 newspapers online in two to three years. There are already 75 papers online, more than half of them on the Internet's World Wide Web.

Gannett Co. chairman John Curley said NCN heralds "a new era of cooperation" as newspapers test-drive the information highway.

But when eight giant corporations - Gannett, Knight-Ridder Inc., Advance Publications Inc., Times Mirror Co., Tribune Co., Cox Newspapers, Hearst Corp. and Washington Post Co. - spearhead a venture relying on an unprecedented level of industry cooperation, there is bound to be skepticism, especially when details are so few and the implications so overarching.

For starters, there were suspicions about the motives of NCN's founders - despite their declarations that the network is designed to profit affiliate newspapers, not NCN owners.

While NCN is organized as a forprofit company, its goal is to be an "enabling company" and to "evangelize the online concept"' not to be a profit center for its founders, said Peter Winter, acting CEO and a Cox executive.

NCN partners say the alliance is aimed at building newspaper online services, thus bolstering the industry's defenses against attack from new competitors.

The establishment of NCN will also have ramifications for the wire services that wholesale news to newspapers.

What is their role, if they are distributed retail directly to news consumers?

What if a tiny Idaho newspaper can offer online subscribers access to news generated by 20,000 reporters working for NCN affiliate newspapers?

What happens when online services that compete with newspapers want to buy news from the Associated Press, which is owned by newspapers?

Such questions may not be as far-fetched as they sound.

One NCN partner said, "There is considerable anxiety as to what this means to the wire services. By bringing the issues of online distribution of news to the forefront, we hope that, perhaps, the newspaper industry will now make some fundamental decisions on how it wants to meet the news and advertising marketplace for the next century. …

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