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July 20, 2000

Newsprint without the print
By Louise Rosen
July 20, 2000

Since the birth of the Internet superhighway newspapers have heard that their days as the lords of content are numbered.

They face fierce competition for eyeballs, much of it online. Circulation and penetration numbers continue to drop. And despite strong earnings, thanks to a vibrant economy and those dotcom ads, their stock prices continue to lag.

Now newspapers are looking to wireless -- and the strong demand for local content -- as their new e-ticket in the content world.

According to a recent report published by Forrester Research (FORR), an independent research firm that analyzes the future of technology, non-PC devices, such as Palms or Visors, cell phones and other handhelds, will penetrate 36 percent of U.S. households by 2003 as prices and connection fees decline and the speed of content delivery increases.

And while the superhighway has been lauded for bringing the global community to our desktop, researchers believe that local content will be the content of choice on wireless devices. People on the go who want to find a restaurant quickly, check a sports score or see what hours a museum is open will want to find that on their handheld, whether it's a Palm, Visor or cell phone.

And this is where newspapers still rule; most agree that when it comes to local content no one can beat the breadth and depth of coverage of newspapers, nor the trust that is inherent in their brand. "Newspapers are one of the largest aggregators of local content. Nothing competes with their depth," says Mike Kupinski, vice president and media and entertainment analyst at A.G. Edwards & Sons.

Just this week, the newspaper industry moved a step closer to agreeing on a single standard for formatting electronic content. The International Press and Telecommunications Council, a Geneva-based council whose members include The New York Times Co. (NYT), Kyodo News Agency and Reuters Group Plc (RTRSY), said that in October it planned to approve a new online formatting standard called NewsML, an XML-based language that structures multimedia news so that it can be delivered to a variety of electronic devices, fixed or wireless.

Why it makes sense
From the start of the new media frenzy, newspapers have seen their staff jump ship for dotcom opportunities, and pundits have claimed the immediacy of the Web would wipe out demand for newspaper content.

When their bread-and-butter classified advertising looked to be threatened by startups offering home, auto and job classified ads -- along with a host of services -- "the newspapers went to the Web out of fear," says Sreenath Sreenivasan, professor of new media at Columbia University's Graduate School of Journalism.

Now newspaper companies believe they have a strong future in wireless devices and cells phones and this time they are grabbing the opportunity with both hands.

"We think the opportunity for distribution via any number of devices is huge, and we wanted to be where the big audience was," says Jessica Perry, vice president of business development for Dow Jones Interactive Publishing (DJ), publishers of The Wall Street Journal. Perry is not alone.

The wireless online audience should grow in the U.S. from 2 million in 2001 to 23 million by 2003, according to Forrester's data -- generating a huge demand for content.

P.R. Panigrah, senior vice president and analyst covering Internet infrastructure at Dresdner Kleinwort Benson, says content will be king of the wireless world. With phones offering the ultimate freedom, he believes that their use is going to exceed the PC within the next three years.

Palm Inc., (PALM) based in Santa Clara, Calif., has deals to have content from several newspapers preloaded on the Palm VII . "Our decisions of putting the form in the box had to do with timing, who our targeted customers are and the content those customers want," May Tsoi, product marketing manager for Palm, says. Palm publishes content from The Wall Street Journal, USA Today.com, owned by Gannett (GCI), and RealCities.com, owned by Knight-Ridder Inc.(KRI).

Current technologies
Last year Palm launched its wireless Palm VII, complete with its Web clipping software. Unlike earlier models, in which users had to download content from AvantGo, the Palm VII allows users to connect to the Web by flipping an antenna. "When you launch the application, it takes you to a query form for the publication and the application looks for the URL and allows users to select the sections they want to read," explains Tsoi.

So when a user clicks on the WSJ.com icon, for example, the menu form loads instantly with three main topics: Top Business News, Markets and Technology. You hit the topic you want, wait a few moments and a menu of stories pops up on the display. You then have the choice of reading the whole article or the summary. Depending on the font, a screen can display 13 lines of text. A single story can take many pages and take several moments to download and be a chore to read. The device is surprisingly user-friendly.

The Palm VII is not the only wireless device on the market with newspaper deals. AT&T Wireless (AWE) currently has a deal with USAToday.com. AT&T Wireless uses a browser from Phone.com (PHCM), which uses transmitted packet data networks to deliver content.

The screens are much smaller than those of the Palm, but the immediacy and the information are similar. The fonts are scalable and content appears as text; graphics are not yet available.

Other avenues for delivering content are also being explored. KnightRidder.com is looking at iMode , a technology popular in Japan where reading content on a cell phone is a way of life. iMode is basically a simple version of HTML that makes files smaller and readable on small screens.

At USAToday.com, Phil Abashian, director of technology, is building a system that will allow any content to be placed in a program and formatted automatically to the publishing device.

What the papers are doing
Back at the newspapers, online editors are providing their content and coordinating the different technologies involved with the delivery channels. "From a technology perspective, repurposing of content is an increasing part of what we do, not just for the Web but for other channels, including wireless platforms," USAToday.com's Abashian says.

In the case of USAToday.com, repurposing means taking content from the day's existing digest of stories and breaking up the information into bits, which are then stored on a database from which the top five to seven story briefs are extracted, Abashian explains. The selected extracts are then formatted into packages based on the system from which users will access them.

USAToday.com, says Kinsey Wilson, vice president and editor-in-chief, has its trademark news brief list, which is perfect for repackaging for wireless devices.

Knight Ridder, the country's No. 2 newspaper chain after Gannett, has more than 31 daily papers in 28 markets. It is the exclusive local content provider for the PalmVII and for the past two years, it has been working with AvantGo to make its content available for all Palm users.

"At this point we are taking selections from the Web and making them available for the Palm," says Chris Jennewein, vice president of operations at KnightRidder.com. "We've looked at the way we edit, and the way to edit text is to say things with as few words as possible."

Platform flexibility is fundamental
Many analysts believe that newspaper stocks are currently trading at a discount. And the swift move to deliver content on wireless devices is a sign that the industry is taking branding on the wireless Web seriously -- and maybe help those sagging share prices.

The key to success in the wireless Web future is for content providers to be "content-centric, platform agnostic," says Rudolph Hokanson, executive director equity research at CIBC World Markets. Hokanson, in fact, is skeptical about the recent news regarding NewsML as a publishing standard. "It may become the standard for news sites but what if they want to share their content with non-news organizations who are working on their own platform?" he asks. All the more reason, he believes, that content-centric, platform-agnostic is the only strategy that makes sense.

And trust in content, he emphasizes, is the one attribute newspapers have that they should leverage to the hilt. "Brands are no longer about name recognition but about trust," Hokanson observes, "and people have come to trust what they read in their paper about their community."

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