Magazine article Editor & Publisher

When the Earth Is Moving, There Are No Safe Bets

Magazine article Editor & Publisher

When the Earth Is Moving, There Are No Safe Bets

Article excerpt

So.... The Mouse has roared. The CBS eye has blinked. The Internet is so hot, the president of Netscape, a tiny, unprofitable venture that makes World Wide Web navigators, was $244 million dollars richer by the time the market closed on his company's initial public offering.

And all this happened before Bill Gates rolled out the Rolling Stones to help hawk Windows 95. We agree with Al Sikes, the former FCC chairman and current head of Hearst's new media group, who looked out at the changing communications landscape and pronounced: "The earth has moved."

Indeed. Regardless of how small or remote your newspaper is, unless it's on another planet, you'll feel the reverberations of this summer's rumblings for years to come. Here are some of the issues we see for newspapers.

Question No. 1: What's the value of a local franchise in a global market? Rupert Murdoch had the idea first. Michael Eisner made it a reality. With the Disney-ABC deal, the first truly global communications colossus is about to start throwing its weight around. These companies are pushing for scale, vertical integration, access to foreign markets and with them a chance to grab the most valuable commodity of all: growth, a prize that has eluded many traditional media companies of late.

By going global, Disney-ABC could generate millions of dollars in new revenue that it can use to bet on the future -- the new media of interactive television, CD-ROMs, online services, deals with phone companies. And it can do that without jeopardizing the financial health of its core business: old-fashioned mass media that are seeking, as always, the widest possible audience.

Most newspapers can't go global. And yet they share the twin challenges facing Disney-ABC: achieving growth and funding some level of investment in new media. Mining the local niche may be a newspaper's best strategy -- its ace, to mix metaphors, in an increasingly high stakes poker game.

But "going local" is no panacea, either. Readers and advertisers are vulnerable to competition, especially from category killers -- companies such as ESPN's online sports service, ESPNET SportsZone, which makes money by organizing information for communities based on interest, not geography. The success of category killers in both old and new media suggests two, related questions. …

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