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SITES                          Week of October 15 to 21, 1996
Top 10
Hot        [AJR/][NewsLink]                                      Eric K.
sites                                                            Meyer,
Newspapers All the Newspapers That Fit                           managing
Magazines  New numbers show the extent of the trend -- or is     partner
           it a fad?                                             of the
Radio/TV   --------------------------------------------------    NewsLink
           By Eric K. Meyer                                      on-line
Resources  --------------------------------------------------    research
           A S SUMMER turned to fall last year, a contributor    and
ARTICLES   to a popular on-line discussion group noted wryly     consulting
           that the growth of on-line newspapers was bound to    firm,
New AJR    slow. "We're almost out of newspapers that aren't     is one
Digital    on-line," he wrote.                                   of
feed            As spring turns to summer this year, the true    several
Bylines    extent of the stampede from newsprint to hypertext    on-line
Take 2     has become clear. Since September, 864 newspapers     experts
Archives   have gone on-line, many of them within the United     whose
           States.                                               views
INTERACT        A total of 768 commercial newspapers are         will
           on-line todayin the United States. Nine months        appear
Search     ago, there were only 154. In September, 44 U.S.       on this
site       dailies were offering a full range of news and        page
Reader     features on-line. Today the U.S. has 197              weekly.
info       full-service dailies on-line. Also on-line in the
Feedback   U.S. today are 152 full-service weeklies, 23          Slides
           full-service business newspapers, 26 full-service     from
Take       special-interest newspapers, 53 limited-service       Meyer's
survey     newspapers and 317 newspapers with promotional        presentation
           sites that contain no news.                           to the
SPECIAL         Outside the United States, at least 337          Kansas
JobLink    commercial newspapers are on-line. Of them, 169       Press
Directory  are in Europe; 63 are in Canada, Mexico, the          Association
           Caribbean and Central America; 54 are in Asia and     June 7
J-awards   the Middle East; 25 are in South America; 20 are
           in Australia and Oceana; and 6 are in Africa. Add     Views
Trademark  in more than 230 campus newspapers, and the           expressed
           world-wide total for Internet newspapers has          are not
Research   reached 1,335. Last September, the comparable         necessarily
           number was just a third of that -- 471. And by the    those
           time you read this, even these numbers may be out     of
           of date. Upwards of 50 newspapers start publishing    AJR/NewsLink.
           on-line each week.

D ESPITE SUCH RAPID GROWTH in on-line publishing, profitability of on-line newspapers remains as problematic in June 1996 as it was in September 1995. Local advertisers continue to express hesitancy about advertising on-line. Hyped beyond most people's reason, the Internet remains a medium used by no more than 4% of the audience, according to respected off-line polling. This is regarded by many as grossly insufficient to make a general-interest local publication profitable. Moreover, non-newspapers continue staking claims to increasingly large portions of the on-line advertising dollar -- and to readers' loyalties. The top on-line "newspaper" on 1995, as voted by users of NewsLink, was not a newspaper at all. It is Cable News Network's on-line site. No. 2 on the list was a site operated by a cable TV program, "C/Net Central" from USA Networks. Insiders at CNN and the new Microsoft-NBC news combine now confidently predict that within a year or two, CNN and MS-NBC will be carving up the lion's share of the on-line news market.

T HE ADVERTISING MARKET also is in transition. While some publications, following the lead of Wired, have persisted in attempting to charge upwards of $150 per thousand viewers of an advertiser's message, other sites have been forced to cut their rates to as low as $10 per thousand. Many also have been forced to accept insertion orders that base payment not on the number who see the message but rather on the number, usually between 1% and 8% of the total, who "click through" to the advertiser's site. Advertisers currently are paying as low as 50 cents per "click-through," with rates of 75 cents to $1 also being offered. Such deals are reminiscent of the consignment commercials common during off-peak hours in the immature medium of overnight television and narrowcast cable. On-line publishers: Can you say "ginsu knives"? Meanwhile, agencies representing major advertisers have begun placing their ads only on sites that can deliver millions of advertising views (or "impressions") each month. Smaller on-line newspapers cannot compete with search engines, meta-indexes and other non-originating services, which can provide suitably large audiences by virtue of their global reach. And the one organization that could do something to bolster the plight of smaller newspapers, the Newspaper Association of America's New Century Network, seems hopelessly embroiled in attempting to compete with InfiNet as an on-line service provider for publishers.

O VERALL, ON-LINE ECONOMICS have proved so troublesome that at least one early on-line publisher has withdrawn to inactive status. Many others have trimmed staffing by two-thirds or more. Several have continued to flirt with the idea of selling on-line subscriptions, but as many as have tested this path have abandoned it. Those that do charge tend to do so for archival services only -- services that appeal to a very limited market, which probably is already fully represented on-line. Projecting much growth from this small information-seeking niche is merely to invite a tragic repeat of the 1980s' videotext fiasco. Information seekers, who form the bulk of the early adopters of Internet technology, remain seriously different from the mass audience of casual information browsers, who are far more likely to be swayed by traditionally crafted pricing strategies for news. "Microtransactions" -- what amounts to inexpensive pay-per-view system for news -- continue to be a pipe dream of companies like Newshare. Newshare, still without a major client for its pay-to-read services, recently converted its Clickshare product into an advertising auditing tool and persuaded the Christian Science Monitor to give it a try. Auditing tools such as A.C. Nielsen's I/Pro have become expensive but advertiser-required add-ons to many media sites, even though many auditing tools are little more sophisticated and in some cases less reliable than the shareware server logs each site can generate for free.

T HE PROMOTIONAL VALUE of a media web site continues to stir considerable interest. Little research has been done on what on-line reading does to traditional reading, but one recent study in Newspaper Research Journal confirmed what a study done for NewsLink's Tomorrow's News Today found last year: that reading an on-line edition might actually increase the reading of the same publication's traditional print editions. On-line editions have considerable potential to serve as samplers for publications that might be difficult to obtain or, like the Christian Science Monitor, have undue problems with name recognition. Rather than play on a strategy of an ever-expanding horizon of readers -- some sites, particularly glitzy, graphics-laden ones, are running at a 13-to-1 ratio of new users to old -- local newspapers might bewell advised to focus on developing consumer reading habits like those they enjoy in print. Increasingly on-line newsrooms are accepting the original editorial judgments of their newsprint counterparts, eliminatingthe need for costly, duplicative editorial hierarchies. Some derisively label this "shovelware." Others call it being practical.

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