Magazine article Editor & Publisher

'Where Are the Cowboys?' Arizona Daily Star Tech Exec Says Newspapers Need to Take Risks to Ensure Their Online Future

Magazine article Editor & Publisher

'Where Are the Cowboys?' Arizona Daily Star Tech Exec Says Newspapers Need to Take Risks to Ensure Their Online Future

Article excerpt

NEWSPAPERS have the opportunity to dominate the online information distribution market if they would just get more aggressive, according to Bob Cauthorn, director of new technology at the Arizona Daily Star.

But instead, Cauthorn laments, many are sitting around allowing Microsoft and America Online to enter into dominant partnerships that will eventually spell doom for newspapers.

"We're at the beginning of a brand new industry folks," Cauthorn told attendees at Interactive Newspapers '97 in Houston. "These are the best times to be involved in newspapers since World War II, when every day was a good news day So where are our Hearsts? Where are our doe Pulitzers? Where are the cowboys of our industry?"

Cauthorn said most newspapers are too timid, have a fear of investment, fear competition and are bound to one-way delivery.

"This is an industry that anguished over the addition of color to newspapers," he said, chiding the newspaper execs who debated for years whether USA Today, which debuted with daily color throughout its pages in the early '80s, would succeed.

"The dairy industry spends more on R&D [research and development] than the newspaper industry does," he said. "We want an ROI [return on investment] on everything. We are bound to these incredibly fat profit margins.

"Companies are investing risk capital to do business with. us and we are investing almost nothing in risk capital. We need to change that as an industry"

Cauthorn said newspapers have been "so fat and slow," that they don't know how to compete anymore.

"We're like an RBOC [regional Bell operating company] in that respect. With very few exceptions, newspapers ignore TV . . . and with very few exceptions, none of us are doing business in intense, competitive markets.

"I yearn for the newspaper wars of yesteryear. Take me there. I want to be there. That was fun. And it was good newspapering. If other industries were to look at us, they would laugh. I mean grocery stores are fighting over a 1% profit margin. That creates a seeming inability to create, so then we want partnership, partnership, partnership."


Partnerships, he said, are not bad, but newspapers should enter partnerships as the dominant partner, not as the subservient partner.

Why? "The reality of it is, and some people may dispute this, the folks at America Online and Microsoft are nice people and they are doing smart business, but they mean us ill," Cauthorn said. "There are two kinds of people out there. There's a competitor -- and that's OK. You can compete. And then there's an enemy. And the enemy is the kind who wants to be your friend and then destroy you.

"They [AOL and Microsoft] mean to destroy us," Cauthorn said. "They mean to reduce us to the importance of a wire bureau serving them. You all know this. You know it in your hearts. I don't know how some people are starting relationships with them."


Cauthorn said the Star, beginning April 1, will start going after new business in Tucson.

On April 1, the company is planning to launch StarNet ISDN, which will enable residents to buy ISDN lines from the newspaper as an alternative to US West.

On April 15, StarNet is scheduled to launch two megabit wireless bandwidth services to the home. And on April 30, StarNet will launch what Cauthorn believes to be the first ADSL on the market. …

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