Chapter I

Introduction

Relevance and Need for the Study

The transformation from mechanical printing presses and pulp paper to digital print media, offers numerous opportunities for newspaper publishers to create and profit from a wealth of new products and services. However, competing with an array of nontraditional information providers on the World Wide Web, while simultaneously defending the newspaper franchise and reeducating staff, will present enormous challenges (Fidler, 1997).

The World Wide Web has seen "dramatic growth" (Dean Witter, 1995, p.1) during the last two years, and the ability for anyone to become an information provider is easy with "low barriers to entry" (O'Reilly, 1996, p.79). Phillips (1998) pointed out, that in just over three years (1995 - 1998), more than 8,000 Web sites have been built which are operated by print, radio, television, and non-traditional news organizations. Seybold (1995) believed this is a critical time for newspapers, but it is not clear what role newspapers will play as the future world of on-line communications is being shaped around them. Unfortunately, according to Seybold, there are few strategies for newspapers to follow when entering the World Wide Web. He contended that publishing on the Web presents a series of new challenges. Making a poor choice could prove costly (Seybold, 1995, #25-1, p.8).

Rogers (1996) maintained that many publications are rapidly setting up Web sites without considering the consequences. Moreover, he argued that this rationale is a "reflex action," (Rogers,1996, p.25) and one that is not conducive to newspapers' survival into the next century. Pogash (1996) stated that millions of dollars are being spent on newspaper Web sites, yet no one knows how to make it profitable. Pogash pointed out that even with huge amounts of money being spent on newspaper sites, most are offering the news free, and, few have been able to sell subscriptions to the on-line version. Furthermore, it is unclear what effect on-line newspapers will have on circulation figures at their print parents.

Though many newspapers are providing a home page, or Web site, in an effort to keep existing advertisers, there are varying degrees to which this is being done, none of which are cutting a clear path in the market place. There is no doubt that the movement toward interactive newspapers "is growing like gangbusters" (Seybold, 1995, p.3). The real question is whether or not this is the direction all newspapers should be taking, and are they investing in this new product (the Web), wisely?

Conniff (1994) pointed out, newspapers have spent more time and money than any other medium in trying to figure out the future. Fidler (1997) contended that with the announcement of practically every major discovery, or breakthrough in the past two centuries, there has followed a deluge of wild speculation proclaiming the birth of a new era, or a revolution in the making. For newspaper and magazine publishers, Fidler believed the transformation from mechanical printing presses and pulp paper to digital print media, offers numerous opportunities to create and profit from a wealth of new products and services, and at the same time, presents enormous challenges. As a result, there is great relevance and significance in producing a research paper that will provide newspaper executives with a clear picture of past, present, and future direction possibilities for electronic publishing.

"Many motivations drive publishers to distribute news publications via the Internet" (Somogyi, 1995, p.23). However, the electronic edition tries to attract more readers as opposed to taking them from the existing paper readership. Traditional newspapers have always had some sort of borders; streets, rivers, lakes, and neighboring competition that effectively created invisible borders for their circulation area. Since the "Net knows no borders," news from a World Wide Web server halfway around the world is as close as news that originates from just around the corner. With the lack of "boundaries," special problems arise as publishers try to defend their markets. Where publishers were once in competition only locally, they now face competition from neighboring cities, states and countries. On the other hand, most of the monies that contribute to the prosperity of the local Web site, come from local advertisers (Somogyi, 1995, p.23).

Somogyi (1995) also pointed out that any enterprising ad agency with an account for a world-wide brand could find a Web site that sees traffic from all over the world and advertise there. Agency advertising is quite profitable for any newspaper, and loss of this revenue could be devastating. Publishers should be aware of this fact when explaining the value of Web sites to potential advertisers. The bottom line is that publishers are being forced to compete in a new and difficult market.

In addition to new competition from the Web, there are other significant issues forcing newspapers to go digital. The NAA found, through their statistical research, that newsprint costs have risen dramatically, from $176 per metric ton in 1970 to $632 per metric ton in 1996. And, as publishers raise advertising rates and circulation prices to offset these costs, advertisers and consumers go elsewhere. With these environmental and competitive pressures, newspapers are in a state of rapid change that will last into the 21st century (Outing, 1996c).

Another significant issue is in the presence of the newspaper on the Web. Just getting a site up on the Web may not be enough. Cochran (1995) stated that too many products are "shovelware," where the printed material from the newspaper is simply made available in an electronic version on the Web. As Cochran pointed out, reading screen after screen of a 50-inch story can be a painful experience. Maniscalco (1997) agreed that just being a newspaper Web site is insufficient. As executive director of Boston.com, Maniscalco contended that newspaper Web sites must have a lot of content, and she believed that end users are looking for more interactive, user friendly sites. End users are searching for more community information, and if they cannot find it through the electronic newspaper, they will go elsewhere (Mansicalco, 1997). Fidler (1997) concurred, explaining that newspapers need to become the focal points on the Web for people who have an interest in their community.

With 30 million people using the Internet (according to a 1996 Internet survey) in North America (United States and Canada) at the end of 1996, the battles for audiences and advertising dollars are certain to be waged. Fidler (1997) stated that all media companies now see themselves struggling not just against each other, but also against potentially formidable competitors, and a public that seems to increasingly distrust and disregard mass media. A similar problem presented itself in the early 1980s as Videotex (an early electronic newspaper) was being launched.

Mantooth (1982) studied problems associated with digital media, examining the development of electronic newspapers in the United States, specifically those experimenting with the Videotex project. Ultimately, Mantooth discovered that newspapers had been unimaginative and subsequently unsuccessful in trying to create new products. She also discovered an important characteristic of new information dissemination technologies, such as Videotex, eroded traditional geographic barriers. In her findings, she concluded that competition could now come from neighboring communities statewide, from within the United States or from anywhere around the world. According to Mantooth, newspapers would be "vulnerable to a host of other [electronic] information providers" (Mantooth, 1982, p.iii).

At the time of her writing, Mantooth (1982) could not have known that Videotex would become "one of the biggest busts of all time"(Conniff, 1994, p.3), having failed after newspaper companies poured hundreds of millions of dollars into the development of Videotex. However, Mantooth's speculations may prove to be precedent in the age of the Internet and the World Wide Web. For instance, Mantooth noted that "The touch of a computerized button will allow the reception on home television screens, in color" (Mantooth, 1982, p.2), information from news and feature stories, detailed weather reports and sports scores, stock listings, price and product information, restaurant menus, airline and bus schedules, TV and radio program listings, as well as Real Estate and classified listings.

Mantooth (1982) predicted two major changes in American newspapers as a result of the technological advancements: first, a reshaping of the newspaper, both as a daily product and as an organization; and second, a stronger need for newspapers to provide better dissemination of the news. Mantooth believed better dissemination was necessary because, with the vast amounts of information available, newspapers would need to structure, organize, analyze, and synthesize this information into something meaningful for the average American.

Mantooth (1982) concluded that an electronic publication was not economically feasible at many newspapers (in 1982), and would not be, until such a time when "a great many more people in the United States" (Mantooth, 1982, p.151) have home computers. With the explosion of the World Wide Web, the increasing ownership of personal computers, and WebTV, now commercially available, Mantooth's prediction may become tangible fact. Therefore, there is great relevance and importance in reviewing, not only the history of these services, but also more recent successes and failures of on-line services.

Problem Definition

Newspapers today are faced with increased competition, declining circulation and decreasing advertising revenues, according to the Newspaper Association of America (NAA) statistics from 1996 (NAA, 1996). The NAA also reported that newsprint costs have increased dramatically, rising 225% per ton from 1973-1996, with a 67% increase per ton from 1992-1996. O'Mara (1996) claimed that the decline of newspaper readership is a widely known fact. The NAA substantiated this with statistics showing that newspaper circulation has been in a steady decline since 1988 (NAA, 1996). O’Mara also found that as circulations continue to go down and layoffs, buyouts and down-sizing become the norm, newspapers are finding it more and more difficult to operate at a profit. Circulation, which drives advertising rates (the greater the circulation, the more that can be charged for an advertisement), is declining for a variety of reasons, such as changing reader preferences (people's tastes change), their living arrangements change, or their work patterns changes.

As an example, O'Mara (1996) cited the fact that society has become a service industry, with people moving out of the factory and into offices. These people now start work later, return home later, and are usually too busy in the office to read a newspaper, and too tired when they get home at night to bother with it. O'Mara pointed out that as a result of this social change, there is now more demand for early morning newspapers and very little demand for evening newspapers. O'Mara found that more than 500 evening newspapers have closed or switched to a morning edition over the past 35 years. Other factors such as radio and television have also contributed to newspaper’s declining circulation.

A major contributing factor to newspaper advertising revenue decline over the years has been "niche publications." Competition from "Auto Trader ", "Boat Trader ", and locally produced real-estate magazines for example, has had a severe impact on newspaper revenue (Maniscalco, 1997). Today, however, there is a new threat to newspapers that could radically change newspapers as we know them. At a newspaper industry sponsored seminar in January, 1997, Maniscalco stated that "the World Wide Web can kill us" from both a circulation and advertising point of view.

O'Mara (1996) contended that the World Wide Web, is viewed by many newspaper executives, as having the biggest potential to further erode newspaper circulation figures. Paterno (1996) agreed that the potential threat of the Web, with increasing competition from electronic publishers, has "left the newspaper industry in turmoil" (Paterno, 1996, p.16). Although Kelsey

(1995) did not believe that the print newspaper business would disappear in the near future, he does point out that interactive, electronic distribution vehicles will "continue to eat away at both the circulation and advertiser foundations" (Kelsey, 1995, p.17TC).

Another concern for newspapers, classified advertising, represents, on average, 37% of newspapers' revenue (Reina, 1996, p.24). Reina pointed out that new Web publishing competitors, such as Autobytel (an automobile finding service), Match.com (personals), and on-line real-estate listings, are taking an increasing portion of the classified revenue. New electronic publishers are going on-line, causing a potential for the serious decline in newspaper classified revenues (Reina, 1996). Resnick (1997) substantiated this in her findings, which show that overall newspaper operating profits could fall from the 1996 level of 14%, to just 3% in the next five years, if newspapers fail to address Web competition.

Levitan (1996) concurred and stated, there is no worse competition than on the Internet. As an example, Levitan explained that realtors are now setting up their own Web sites for the purpose of publishing their listings. This, he felt, would ultimately reduce, if not eliminate the advertisements realtors currently place with newspapers. Additionally, Criner (1996) stated that many cable companies are positioning themselves to provide Internet access for their customers. In doing so, cable companies will be able to offer their own services, including classified advertising , bringing them into direct competition with newspapers (Criner, 38).

Maniscalco (1997) explained that the Web is extremely conducive to searching classified advertising, and, anyone with a computer can compete against newspapers. Maniscalco pointed out that there are 22 year old kids with a server in their garage, "stealing our [newspapers] classified ads and competing against us" (Maniscalco, 1997). Forrester Research, an Internet research firm (as reported by Albers, 1997), predicted that by the year 2001, newspaper classifieds will have lost 40% of their real-estate advertising, 30% help wanted and 20% of their automotive advertising to Web competition. As a result, the Web is viewed by many newspaper executives, as having the biggest potential to further erode newspaper circulation and classified figures (O'Mara, 1996).

An April 1996 issue of the Seybold Report on Publishing Systems stated, "The future world of on-line communications is being shaped around us, and it is not clear what role the newspaper will play." The report elaborated that newspapers are being challenged locally, nationally and internationally, as a source for information, news, and advertising. Furthermore, Equity Research, a Dean Witter publication, reported in their November 1995 issue, that paid advertising on the Web is easily expected to exceed $2 billion by the year 2000. The report suggests that this will have a profound effect on newspaper companies.

Dean Witter (1995) also stated that advertisers will continue to restrict their commitment to advertising in newspapers. As a result, Peterson (1996) explained that the attitude of many newspaper publishers is that they have to defend their market by offering some form of on-line services. Many newspaper publishers view the Web as being their greatest threat, and, at the same time, their greatest resource to expand their revenue, and most importantly, to protect their current market. Operating in "near panic mode" (Stoltman, 1997), these newspapers went on-line to protect their share of the local market. This is evidenced by the more than 2,500 newspapers that have placed their publications on the Web since 1995. Specifically, Outing (1996c) found that at the beginning of 1995 there were approximately 100 newspapers offering on-line services. This included bulletin board services (BBS), proprietary services such as Compuserve , America Online , Prodigy , and about 40 Web sites (exact count of each is not available). Editor & Publisher magazine (http://www.mediainfo.com) reported that as of July 1997, there were 1786 newspapers on-line, 1708 of which are on the Web.

Outing (1996c) indicated that he expected the number of newspapers offering on-line services to increase in number to over 2000 by the end of this century. As of February 1998, however, Editor & Publisher was reporting 2,544 newspapers on the Web. With the rapid growth of competition on the Web, as well as the unprecedented expansion of the newspaper industry on the Web, other media companies, such as magazines, television, and radio, have felt their market share threatened as well, and have responded by producing Web sites in rapid fashion. Phillips (1998) found that Web sites offered by other media companies at the end of 1997, included magazines (2,577), television (918), and radio (1386) sites.

With the rapid growth of the Web, newspapers are facing competition from an unprecedented number of other information providers. Due to a variety of factors, including advertisers expanding into Web markets, newspaper owners perceive this new competition to be not only the most immediate, but also the most serious, systemic, long-term threat to traditional newspaper publishing to date (Stoltman, 1997). The Web is viewed as having, potentially, the most marked, future impact in the continual rapid loss of advertising dollars for the newspaper industry. As a result, the newspaper industry views the competition of the Web to be a very serious problem.

Goal

The goal of this dissertation was to study the development of electronic newspapers, to ascertain how newspapers are currently using the World Wide Web, to suggest how new technologies, such as the Web, might be used by newspaper companies in the future to keep their share of the information dissemination marketplace, and to draw conclusions as to the importance of the Web to newspapers, now, and in the future. Through a review of current literature, attending various industry related conferences, and by conducting a survey of electronic publishers, including newspapers, magazines, radio and television stations that are operating Web sites, information was compiled and analyzed to compare and contrast the various practices used in the production of their electronic editions, and to reveal any industry trends that were taking shape.

A survey of Web publishers was implemented as a part of this dissertation, and was a major part of the goal of this dissertation. The purpose of the survey was to:

1. to gain a better understanding of the driving force behind Web publishing activities.

2. to measure the level of interest in the Internet among the four media groups, newspapers, magazines, radio, and television.

3. to understand who survey participants consider to be their major competitors.

4. to report how survey participants measure consumer activity within their Web site.

5. to understand if Web products are helping or competing against core products.

6. to report the staffing sizes of various media, and to identify any trends with regard to staffing size.

7. to ascertain if Web publishing is profitable.

8. to provide a comprehensive analysis of the survey data.

Barriers and Issues

Outing (1996c) found that many publishers seem to think the Internet is a fad that will die out, and that it is not a true technological revolution like telephony. As a result, these same publishers are showing little concern towards the potential threat of the Web. Fidler (1997) pointed out that newspapers were faced with a competitive situation in the early 1920s with broadcast radio.

Much like the Web today, the development of relatively low-cost, home radios and broadcasting stations, created a great deal of anxiety in many newspaper publishers. Some pundits argued that printed newspapers would be replaced by this new broadcasting media. As a result of this threat, a number of newspaper publishers started their own radio stations. Once the novelty wore off, however, publishers became discouraged, and in just a few years, many had sold their stations, or abandoned their sponsorships (Fidler, 1997, p.70).

During the 1950s, television rapidly displaced radio, as well as many general circulation magazines, such as Life, Look, and The Saturday Evening Post. Once again, pundits predicted the death of print media. By the end of the 1960s, many publishers feared they might be right (Fidler, 1997, p.70). However, the death of the newspaper industry, as a result of radio and television competition, never came about. Undeniably, readership of newspapers dropped as a result, yet it had little effect on the overall health of the industry (Fidler, 1997).

Fidler (1997) contended that the past experience of early radio and television threats, and the resulting non-effect on the industry, are the most likely reasons why some publishers are not concerned about the Web. Outing (1996b) stated, at a time when companies like Microsoft, America Online and the telephone companies are sinking hundreds of millions of dollars into Internet content (much of it aimed at local newspaper markets), ignoring the Web and the competition it brings, appears to be a dangerous viewpoint.

Fidler (1997) explained that another, more recent failed threat to newspapers, Videotex, has contributed to feelings of dj vu in a number of media pioneers, who, in the early 1980s poured hundreds of millions of dollars into various Videotex projects. Again, in 1979, pundits were predicting the death of mass media, which would come about from the growth of this on-line service. Videotex was a simplistic version of today's Web, and Knight-Ridder as well as the Times Mirror admittedly spent tens of millions of dollars in an effort to take defensive action in their market

Using a proprietary box connected to a television set, users of the service connected to the newspaper's database via modem. Unlike the Web, which allows world-wide access, Videotex users were limited to information on the local newspaper's database. As head of the Videotex project for Knight-Ridder, Fidler (1997) witnessed much excitement, but not a lot of market penetration. Fidler explained that no matter what they did, customers followed the same predictable pattern -- they played with the system for awhile and then quit. These same traits are beginning to show up on the Web. As an example, CyberAtlas (1996) reported that the average number of hours users spend on-line, declined from 16 hours per month in 1995, to 12 hours per month in 1996. The report is based on 707 telephone interviews with on-line users conducted May 7 through June 2, 1996, with a margin of error plus or minus 4%. This 25% drop in usage suggests that once the newness wears off, consumers tend to use the Web less.

Fidler (1997) discussed the similarities between Videotex and the Web. For example, Videotex services were viewed as logical extensions of traditional printed newspaper, much like the thought behind newspapers on the Web today. Fidler stated that the perceived benefits of these services were their ability to provide news and information that was more timely, more thorough, and more personal. Videotex personnel found that with the exception of major breaking news, such as an approaching hurricane, subscribers spent a remarkably small portion of their time retrieving news.

Fidler (1997) believed that the lesson learned is that most subscribers view on-line news services as information faucets, to be turned on only when there is a need not being satisfied by other readily available sources. Rather than becoming a family information center, as many people involved in Videotex had hoped, it was used much more as a reference library (Fidler, 1997, p.148-153). Interestingly, the reference library trend is beginning to appear in Web usage today.

Another problem that Fidler (1997) discovered was wait-time. Subscribers had little patience for delays. Waiting two or three seconds for a page to display was not good enough. What customers wanted was nothing less than nearly instantaneous response times. And, unlike a newspaper, Videotex lacked an obvious structure that could be easily browsed. Although the Videotex design staff put a great deal of effort into visually enhancing the Videotex pages, the medium could not compete with the compelling moving images of television or the ease of reading newspapers and magazines. Instead, subscribers were confronted with a seemingly endless labyrinth of information.

Fidler (1997) contended that one of the critical lessons the Videotex experiment brought forth, was to treat market research for emerging media technologies with caution. In the real world people do not always want what they say they want, nor do what they say they will do, said Fidler. Fidler also stated that companies who launched the first U.S. Videotex services were misled into believing that a new media technology alone would be enough to instantly create a strong market demand. The issue at hand is whether or not the newspaper industry is seeing another Videotex in the Web, and, is this simply a new technology looking for a new market.

Kelsey (1995) believed that the real challenge for newspapers is to prepare for the future by finding ways to provide useful information faster and better than any of their competition. At the same time, newspapers need to deliver it in a manner that the consumer will be willing to use. Paul (1996) felt that the Internet, or more specifically, the Web, may become the delivery method for newspapers. Today, however, 35% of U.S. households have a personal computer, yet only 10% to 15% use the Web (Lorek, 1997). Because of this low market penetration, a variety of companies are looking for ways to attract new users.

Dean Witter (1995) pointed out that 97.7% of the U.S. households have a television set, 61% have cable television, and as much as 93% of all U.S. households have the opportunity to connect to cable television. A number of companies, such as Sony, Phillips, and WebTV Networks have realized the large market penetration of cable television and the new audience of novice users it can bring to the Internet. As a result, these companies, and others, have begun partnering with cable companies, offering a new service, commonly called WebTV, a $300 component that turns a TV set into an Internet accessing computer terminal (Levins, 1997).

A 1996 study of non-Internet users, by Yankelovich Partners (as reported by Outing, 1996e), found that 52% would prefer to surf the Web on a television set as opposed to a personal computer. Although sales of WebTV devices were less than expected by the end of 1996, Jupiter Communications (an Internet research firm) predicted that the number of U.S. households accessing the Web will increase to 36 million by the year 2000, using some combination of personal computers and WebTV (Emigh, 1997). These figures, however, indicated that U.S. Web access will only be in 25% range by the year 2000.

Fidler (1997) explained, a great majority of consumers are likely to remain content with the array of media and telecommunication technologies currently available to them (newspapers, magazines, radio, television), until they perceive clear and compelling reasons to adopt to new forms of cybermedia. In other words, just putting content on-line is not going to attract consumers. Ease of use, low cost, and a variety of ways to get information (via personal computer, Web TV, personal digital assistants) will be required to attract new users to the market (Stoltman, 1997).

Another issue facing newspapers, is in generating new revenue while decreasing costs and increasing circulation/readership. Today, more than one half of a typical publisher's overall costs for the print product are associated with manufacturing and distributing. Shaw (1995) explained that because the cost of newsprint continues to rise, new methods for delivering the newspaper need to be found. As an example, Shaw described the Sunday Atlanta Journal Constitution which prints 700,000 copies. If just 350,000 copies could be delivered electronically, newsprint costs would be dramatically reduced.

Although the presence of newspapers publishing on the Web has increased dramatically, from less than 100 at the beginning of 1995, to 2,544 today, Levins (1997) found that over 90% of these Web sites lost money in 1996. A number of newspapers have tried to charge for subscriptions to their Web site, however, most have found consumers unwilling to pay, generally because they can find what they are looking for elsewhere. Only a few niche publications, such as The Wall Street Journal have been relatively successful in charging subscriptions to on-line editions (Stoltman, 1997).

Compounding the issue of Web site profitability, Levins (1997) found that many American newspapers are operating on business plans calling for their Web sites to become profitable within two years after start up. Levins explained that this may be un-realistic for many newspaper publishers because it is inconsistent with the Internet advertising market. Levins pointed out that turning a profit on a new publishing product in two years is pretty remarkable. As an example, Levins cited the magazine industry which normally takes five to six years for a new product to become profitable. The underlying issue is whether or not newspaper publishers will continue to fund non-profitable Web sites, and will they be able to find ways to generate new revenues to make these sites profitable.

As digital print media expands into the general consumer market, publishers who own their own printing facilities will need to protect their huge investments in presses, distribution equipment, and facilities. At the same time, these publishers will be competing with a new generation of digital competitors who can afford to sell content and space at a substantially reduced cost to both consumers and advertisers. Until the digital print media market becomes large enough, publishers will be forced to support dual production and distribution operations. Thus, the challenge for print publishers will be to keep the demand for mechanically printed editions from falling too quickly, thereby turning their presses into expensive albatrosses.

The recent and rapid expansion of the industry partially explains why the goal of this dissertation has not previously been met, and, although it could have proved to be a barrier in the analysis proposed later in this report, it did not. Expansion of the Internet and the Web has resulted in numerous pundits providing newspaper industry related articles, in newspapers, magazines and trade journals. However, few scholarly pieces have been written about the newspaper industry and the problems they currently face. This potential problem is more fully discussed in the approach section of this dissertation.

Research questions to be investigated

 

Although the survey instrument asked over 60 different questions with specific content, the following nine questions capture the essence of what the research is trying to uncover and better understand.

    1. Where do newspaper Web sites stand compared to their competitors in terms of archival information, page views, staffing requirements, content, and profit?
    2. Does the size of the content on the Web site impact audiences, both in terms of size and number of page views? How does this influence banner prices and ultimately revenue?
    3. What are the trends in staffing and integration of the Web staff to the core product newsroom among the four media groups?
    4. Are alliances being formed among the four media groups? Are alliances being forming with any other business ventures? If they are being formed, what types of alliances are being formed?
    5. What trends in technology can be seen among the four media groups?
    6. (i.e., common Web authoring tools, push technologies, outside measurement, and standardization of banner ads)

    7. How wide-spread is the use of "shovelware" among the four media groups, and does this impact any other areas? (i.e., page views, standardization of banner ads, banner pricing, outside measurement, promotion budget, and staffing levels)
    8. Where do newspapers stand compared to their competition in offering Web classified ads? Does having classified advertising impact the number of page views?
    9. What trends in spending for promotion, staff, and equipment can be seen among the four media groups? Are any of these trends related to profit and loss issues?
    10. Who do the each of the four media groups perceive to be their biggest competitors? How strong is this competition?

 

Definition of terms

The terms and definitions listed below are relevant to this proposed thesis, and unless otherwise noted, were retrieved from the techweb on-line encyclopedia at: http://www.techweb.com/encyclopedia

ActiveX - Independent program modules that work together at runtime in a Windows environment. Based on the Component Object Model (COM), ActiveX is Microsoft's third-generation component architecture (VBX and OCX were the first two). ActiveX objects may reside in stand-alone machines, on a LAN or intranet or on the Internet. Specialized for the Internet, ActiveX objects are automatically downloaded if the object is not in the user's machine.

Advertorial – an advertisement that imitates editorial format (Webster’s Dictionary)

Agent - A software routine that waits in the background and performs an action when a specified event occurs. For example, agents could transmit a summary file on the first day of the month or monitor incoming data and alert the user when a certain transaction has arrived. Agents are also called intelligent agents. When used with PDAs (Personal Digital Assistants), they are often called personal agents.

ASCII - (American Standard Code for Information Interchange) Pronounced "ask-ee." A binary code for text as well as communications and printer control. It is used for most communications and is in the built-in character code in most minicomputers and all personal computers. ASCII is a 7-bit code providing 128 character combinations, the first 32 of which are control characters. Since the common storage unit is an 8-bit byte (256 combinations) and ASCII uses only 7 bits, the extra bit is used differently depending on the computer.

Bandwidth - The transmission capacity of an electronic line such as a communications network, computer bus or computer channel. It is expressed in bits per second, bytes per second or in Hertz (cycles per second). When expressed in Hertz, the frequency may be a greater number than the actual bits per second, because the bandwidth is the difference between the lowest and highest frequencies transmitted.

Baud - (1) The signalling rate of a line. It's the switching speed, or number of transitions (voltage or frequency changes) that are made per second. Only at low speeds are bauds equal to bits per second; for example, 300 baud is equal to 300 bps. However, one baud can be made to represent more than one bit per second. For example, the V.22bis modem generates 1200 bps at 600 baud.

BBS - (Bulletin Board System) A computer system used as an information source and message system for a particular interest group. Users dial into the BBS, review and leave messages for other users as well as communicate to other users on the system at the same time. BBSs are often used to distribute shareware. Software vendors use BBSs to obtain customer feedback and distribute updates and program fixes. A BBS may provide access to running an application via a technique known as a door.

BBSs had their heyday before the World Wide Web became popular. However, they still exist and many organizations maintain their support BBSs as an alternate to their Web sites. A BBS may often be a faster source for downloading popular software.

Broadband - (1) High-speed transmission. The term is commonly used to refer to communications lines or services at T1 rates (1.544 Mbps) and above. (2) A technique for transmitting data, voice and video using the same frequency division multiplexing (FDM) technique as cable TV. Modems are required for this method, because the digital data has to be modulated onto the line.

Browser - The program that serves as your front end to the World Wide Web on the Internet. In order to view a site, you type its address (URL) into the browser's Location field; for example, www.computerlanguage.com, and the home page of that site is downloaded to you. The home page is an index to other pages on that site that you can jump to by clicking a "click here" message or an icon. Links on that site may take you to other related sites.

CD-ROM - (Compact Disc Read Only Memory) A compact disc format used to hold text, graphic’s and hi-fi stereo sound. It's like an audio CD, but uses a different track format for data. The audio CD player cannot play CD-ROMs, but CD-ROM players usually play audio CDs and have output jacks for a headphone or amplified speakers. CD-ROMs hold 650MB of data, which is equivalent to about 250,000 pages of text or 20,000 medium-resolution images. Sometimes 680MB is used as the capacity. It depends on whether the total number of bytes (681,984,000) is divided by 1,000,000 or 1,048,576, which is million on the binary scale.

Classified ads, in-column versus display ad. In-column classified ads are generally considered "word" ads in the newspaper business in that they consist mostly of words, in a single column format (i.e. personals, autos for sale). On the other hand, classified display ads generally have borders around them, larger text, often have pictures or line art, and typically span multiple classified columns.

Click through - On the Web, the act of linking to a third party. Click-through rates are used to measure the effectiveness of one site persuading a user to go to another site. On "click-through advertising," royalties may be paid on this number.

Co-branding - a deal made between the newspaper organization and a Web site that offers some type of specialized content (niche) that the newspaper does not have. The newspaper gets a ready-made niche service to add to its overall Web site. The business model is a sharing of revenue between the newspaper and the niche publishing partner. Typically the publisher gets 5% to 20% of subscriber revenues from subscriptions generated by the co-branded site; the exact amount depends on the particular deal. Advertising revenues also are split, with the selling party keeping the majority share. Other factors in a co-branding deal can include an exchange of promotion and advertising between the two parties. (Note: from Editor & Publisher archives, http://www.mediainfo.com)

Communications - The electronic transfer of information from one location to another. Data communications refers to digital transmission, and telecommunications refers to analog and digital transmission, including voice and video.

Communications satellite - A radio relay station in orbit above the earth that receives, amplifies and redirects analog and digital signals contained within a carrier frequency. There are two kinds. Geosynchronous (GEO) satellites are 22,300 miles above the earth and rotate with the earth, thus appearing stationary. The downlink from GEO satellites back to earth can be localized into small areas or cover as much as a third of the earth's surface. Low-earth orbit (LEO) satellites reside no more than 500 miles above the earth and revolve around the globe every couple of hours. They cover small areas, and multiple LEOs are required to maintain constant coverage in one area.

Cookie - Data created by a Web server that is stored on a user's computer. It provides a way for the Web site to keep track of a user's patterns and preferences and, with the cooperation of the Web browser, to store them on the user's own hard disk.

The cookies contain a range of URLs (addresses) for which they are valid. When the browser encounters those URLs again, it sends those specific cookies to the Web server. For example, if a user's ID were stored as a cookie, it would save that person from typing in the same information all over again when accessing that service for the second and subsequent time.

Cyberspace - Coined by William Gibson in his novel "Neuromancer," it is a futuristic computer network that people use by plugging their minds into it! The term is now used to refer to the Internet or to the on-line or digital world in general. See Internet and virtual reality.

Database - A set of related files that is created and managed by a database management system (DBMS). Today, DBMSs can manage any form of data including text, images, sound and video. Database and file structures are always determined by the software.

Electronic publishing - Providing information in electronic form to internal users or to subscribers via the Internet or an on-line service. The term also includes the publication of databases on floppy disk and CD-ROM.

E-mail - The transmission of memos and messages over a network. Users can send mail to a single recipient or broadcast it to multiple users. Sophisticated systems prompt recipients for a reply if they haven't responded within a certain time frame. With multitasking workstations, mail can be delivered and announced while the user is working in an application. Otherwise, mail is sent to a simulated mailbox in the network server or host computer, which must be interrogated.

FTP - (File Transfer Protocol/File Transfer Program) In a TCP/IP network (Internet, UNIX, etc.), a set of commands used to log onto the network, list directories and copy files. It can also convert between the ASCII and EBCDIC character codes. FTP programs are designed to handle all types of files. Unlike e-mail programs where graphics and program files have to be "attached," FTP is designed to handle binary files.

GUI (Graphical User Interface) a graphics-based user interface that incorporates icons, pull-down menus and a mouse. The GUI has become the standard way users interact with a computer. The three major GUIs are Windows, Macintosh and Motif. In a client/server environment, the GUI resides in the user's client machine.

Hits - The number of times a program or item of data has been accessed or matches some condition. For example, each time you download a home page on the Web, that is considered one hit to that Web site. If a search yields 100 items that match the searching criteria, those 100 items could be called 100 hits.

Home page - The first page retrieved when accessing a Web site. It serves as a table of contents to the rest of the pages on the site or to other Web sites. See World Wide Web and URL.

Host - A computer that acts as a source of information or signals. The term can refer to almost any kind of computer, from a centralized computer that is a host to its terminals, to a server that is host to its clients, to a desktop PC that is host to its peripherals. In network architectures, a client station (user's machine) is also considered a host, because it is a source of information to the network in contrast to a device such as a router or switch that directs traffic.

HTML - (HyperText Markup Language) The document format used on the World Wide Web. Web pages are built with HTML tags, or codes, embedded in the text. A subset of SGML (Standard Generalized Markup Language), HTML defines the page layout, fonts and graphic elements as well as the hypertext links to other documents on the Web. Each link contains the URL, or address, of a Web page residing on the same server or any server worldwide, hence the "Worldwide" Web.

HTTP - (HyperText Transport Protocol) The communications protocol used to connect to servers on the World Wide Web. Its primary function is to establish a connection with a server and transmit HTML pages to the client browser. Addresses of Web sites begin with an http:// prefix; however, Web browsers typically default to the HTTP protocol. For example, typing www.yahoo.com is the same as typing http://www.yahoo.com.

Hypergraphic - A linkage between related information by means of a graphic image. It is the graphics counterpart of hypertext. Instead of clicking on a word, you click on an icon to jump to the related section, document or file.

Hyperlink - A predefined linkage between one object and another. The link is displayed either as text or as an icon. On World Wide Web pages, a text hyperlink displays as underlined text typically in blue, while a graphical hyperlink is a small graphics image. See hypertext and hypergraphic.

Hypertext - A linkage between related text. For example, by selecting a word in a sentence, information about that word is retrieved if it exists, or the next occurrence of the word is found. Hypertext is the foundation of the World Wide Web. Links embedded within Web pages are addresses to other Web pages either stored locally or in a Web server anywhere in the world. Links can be text only, in which case they are underlined, or they can be represented as an icon of any size or shape. The hypertext concept was originally coined by Ted Nelson as a method for making the computer respond to the way humans think and require information.

Interactive - Back-and-forth dialog between the user and a computer.

Internet - A large network made up of a number of smaller networks. The Internet is made up of more than 100,000 interconnected networks in over 100 countries, comprised of commercial, academic and government networks. Originally developed for the military, the Internet became widely used for academic and commercial research. Users had access to unpublished data and journals on a huge variety of subjects. Today, the Internet has become commercialized into a worldwide information highway, providing information on every subject known to humankind.

Internet TV - An Internet service for home TV use. It uses a set-top box that connects to the service via modem and telephone line and to the TV set for display. The service provides a user interface and signalling that has been specialized for display on a TV set rather than a computer monitor. WebTV was the first Internet TV service to obtain widespread distribution, initially licensing Sony and Magnavox to make set-top boxes.

Internet Service Provider (ISP). An organization that provides access to the Internet. Small Internet service providers (ISPs) provide service via modem and ISDN while the larger ones also offer private line hookups (T1, fractional T1, etc.). Customers are generally billed a fixed rate per month, but other charges may apply. For a fee, a Web site can be created and maintained on the ISP's server, allowing the smaller organization to have a presence on the Web with its own domain name. The major on-line services, such as America Online and CompuServe, provide Internet access but are still known as "on-line services," not ISPs. They generally offer the databases, forums and services that they originated over the years in addition to Internet access. While they may host a customer's home page, they typically do not host Web sites with unique domain names.

Intranet - An in-house Web site that serves the employees of the enterprise. Although intranet pages may link to the Internet, an intranet is not a site accessed by the general public.

Java - A programming language for Internet (World Wide Web) and intranet applications from the JavaSoft division of Sun. Java was modeled after C++, and Java programs can be called from within HTML documents or launched stand alone. The first Web browsers to run Java applications were Sun's HotJava and Netscape's Navigator 2.0. Java was designed to run in small amounts of memory and provides its own memory management.

Killer app - An application that is exceptionally useful or exciting. When new operating systems are on the horizon, people wish for one or two killer apps that run under the new system in order to justify the migration effort and expense. Otherwise known as rationale.

LCD - (Liquid Crystal Display) A display technology that uses rod-shaped molecules (liquid crystals) that flow like liquid and bend light. Unenergized, the crystals direct light through two polarizing filters, allowing a natural background color to show. When energized, they redirect the light to be absorbed in one of the polarizers, causing the dark appearance of crossed polarizers to show. The more the molecules are twisted, the better the contrast and viewing angle. Because it takes less power to move molecules than to energize a light-emitting device, LCDs replaced LEDs (see light emitting diodes) in digital watches years ago. The LCD was developed in 1963 at RCA's Sarnoff Research Center in Princeton, NJ.

LED (Light Emitting Diode) is a display technology that uses a semiconductor diode that emits light when charged. It usually gives off a red glow, although other colors can be generated. It is used in readouts and on/off lights in myriads of electronic appliances. It was the first digital watch display, but was superseded by LCD, which uses less power.

LEXIS-NEXIS - A service that provides on-line legal and business information. LEXIS was the first full-text information service for the legal profession. NEXIS provides the archives of The New York Times as well as Wall Street industry analysis, public records, tax information, political analysis, SEC filings and more.

Micropayment/microcommerce - Low-value transactions in electronic commerce. The ability to charge pennies for a transaction enables the selling of single articles from a newspaper or individual lookups from a dictionary or encyclopedia.

Mosaic - A Web browser created by the University of Illinois National Center for Supercomputing Applications (NCSA) and released on the Internet in early 1993. Mosaic was "the killer app" that caused interest in the World Wide Web to explode. Originally developed for UNIX, it was soon ported to Windows.

Motion video - Refers to moving video images, but does not imply a frame rate. Full-motion video refers to fluid, TV-like images displayed at a rate of 24 to 30 frames per second.

Multimedia - Disseminating information in more than one form. It includes the use of text, audio, graphics, animated graphics and full-motion video. Multimedia programs are typically games, encyclopedias and training courses on CD-ROM. However, any application with sound and/or video can be called a multimedia program.

On-line services/industry - The collection of service organizations that provide dial-up access to databases, shopping, news, weather, sports, e-mail, etc.

Outside measurement – Use of an independent self-regulatory auditing organization, responsible to advertisers, advertising agencies and the media they use, for the verification and dissemination of members' circulation data and other information for the benefit of the advertising marketplace (Lindoo, 1998)

PDA - (Personal Digital Assistant) A handheld computer that serves as an organizer for personal information. It generally includes at least a name and address database, to-do list and note taker. PDAs are pen based and use a stylus to tap selections on menus and to enter printed characters. The unit may also include a small on-screen keyboard which is tapped with the pen. Data is synchronized between the PDA and desktop computer via cable or wireless transmission.

PointCast - An Internet news system from PointCast, Inc., Cupertino, CA, (www.pointcast.com). It is a free service that transmits selected news and stock quotes from the Internet to your computer. Supported by ad revenues, it displays the information as a screen saver. Users permanently connected to the Net can request downloads at regular intervals. Dial-up users can download on demand. The PointCast software can be download from their Web site.

Push model - A data distribution model in which selected data is automatically delivered into the user's computer at prescribed intervals or based on some event that occurs. Contrast with the pull model, in which the user specifically asks for something by performing a search or requesting an existing report, video or other data type.

Browsing the Web is an example of the pull model, while PointCast and Castanet are push models. PointCast was the first Internet service to become extremely popular due to pushing selected news and stock quotes into a user's machine at prescribed intervals. Marimba's Castanet provides a push model delivery system for updating applications as well as distributing publishing content.

RealAudio - The most popular streaming audio technology for the Internet and intranets from Progressive Networks Inc., Seattle, WA, (www.realaudio.com). A browser equipped with a RealAudio plug-in enables news, sports and other programs transmitted from RealAudio servers to be heard on the user's computer.

Scoop (Scooping) – A slang term used in the news business which describes the act of being first to release the news in a particular product. As an example, Dallas Morning News chose to publish the alleged confession by Oklahoma City bombing suspect Timothy McVeigh on its Web site (www.dallasnews.com) rather than waiting for Saturday morning's paper.

Search engines - See Web search sites.

Shockwave - A browser plug-in that lets output from Macromedia's Director, Authorware and Freehand software be viewed on the Web. Shockwave is a popular plug-in for viewing animated sequences.

Shovelware - A term used to describe the method of copying the content from a print product and re-distributing it on the Web, with no modifications. (Lindoo, 1997).

Spamming - To send copies of the same message to large numbers of newsgroups or users on the Internet. People spam the Internet to advertise products as well as to broadcast some political or social commentary

SPSS - A statistical package from SPSS, Inc., Chicago, (www.spss.com), that runs on PCs, most mainframes and minis and is used extensively in marketing research. It provides over 50 statistical processes, including regression analysis, correlation and analysis of variance. Originally named Statistical Package for the Social Sciences, it was written by Norman Nie, a professor at Stanford. In 1976, he formed SPSS, Inc.

Supercomputer - The fastest computer available. It is typically used for simulations in petroleum exploration and production, structural analysis, computational fluid dynamics, physics and chemistry, electronic design, nuclear energy research and meteorology. It is also used for realtime animated graphics.

Telecommunications - Communicating information, including data, text, pictures, voice and video over long distance. See communications.

Teletex - A broadcasting service that transmits text to a TV set that has a teletext decoder. It uses the vertical blanking interval of the TV signal (black line between frames when vertical hold is not adjusted) to transmit about a hundred frames. See Videotex.

Telnet - A terminal emulation protocol commonly used on the Internet. It allows a user to log onto and run a program from a remote terminal or computer. Telnet was originally developed for ARPAnet and is part of the TCP/IP communications protocol.

URL - (Uniform Resource Locator) The Internet addressing scheme that defines the route to a file or program. For example, a home page on the World Wide Web is accessed via its URL. URLs are used as the initial address to a resource, and they are embedded within World Wide Web (HTML) documents to provide a hypertext link to another document, local or remote.

The URL defines the protocol used, the name of the server (domain name), the port address, which is often a default and the path to the particular file. For example, the following URL is the address for the ordering page on The Computer Language Company's Web site, the publisher of the software you're using. The page is ORDER.HTML, which is stored in the public directory at the domain WWW.COMPUTERLANGUAGE.COM. The following URL is embedded within an icon on the home page. When that icon is clicked, the ORDER.HTML page is downloaded. http://www.computerlanguage.com/order.html

User friendly - A system that is easy to learn and easy to use. This term has been so abused that many vendors are reluctant to use it.

Videotex - An interactive information technology for home shopping, banking, news, weather and e-mail. It is delivered by telephone line to a subscriber's TV through a decoder box and attached keyboard. Information is broadcast and stored in the decoder as predefined frames that are retrieved by menu. Videotex delivers simple graphics and limited animation. Videotex is currently used in several countries worldwide. It was tried in the U.S. during the mid 1980s, but failed after several companies invested hundreds of millions of dollars.

Viewtron – Knight-Ridder’s version of Videotex.

Virtual reality - An artificial reality that projects the user into a 3-D space generated by the computer. Virtual reality, or VR, can be used to create any illusion of reality or imagined reality and is used both for entertainment and training. Virtual reality has been around for some time now. For example, flight simulators, used to train airplane pilots and astronauts, have provided a very realistic simulation of the environment, albeit extremely expensive.

Web search sites - There are various Web sites that maintain directory databases of other Web sites. Yahoo! was the first to gain worldwide attention. Some sites search other sites. Most sites are free and are paid for by advertising, while others charge for the service.

Web server - (1) A Web site, which includes the hardware, operating system, Web software and all other software and data contents. (2) The software that manages the Web networking functions in a Web server. It accepts requests from Web browsers to transmit HTML pages and other stored files.

Web site - A server that contains Web pages and other files which is on-line to the Internet 24 hours a day. See World Wide Web, intranet and HTTP.

WebTV - The first Internet TV service that obtained widespread distribution of its set-top boxes to the retail channel. See Internet TV.

World Wide Web - An Internet function that links documents locally and remotely. The Web document is called a Web page, and links in the page let users jump from page to page (hypertext) whether the pages are stored on the same server or on servers around the world. The pages are accessed and read via a Web browser such as Netscape Navigator or Internet Explorer.

Summary

In the 1980s, many large daily newspapers considered Videotex a "can't-miss" technology, one that would boost an industry that was suffering from stagnate circulation and rising newsprint costs. Videotex, however, was a technology trying to drive the consumer market, and failed due primarily to lack of interest. Today, newspaper publishers are again looking at a similar technology, substituting the Internet and World Wide Web for failed Videotex experiments like Knight-Ridder's Viewtron and Times Mirror's Interactive TV.

Fidler (1997) argued that the news industry's focus on on-line interactivity is misguided. He contended that the need for real-time interconnectivity is a must for academics and business professionals, but that it will not attract the average family. Even-so, a lot of money will be spent developing all sorts of Web and interactive television services that people neither want, nor are willing to pay for, says Fidler. Ultimately, the possibility of newspapers investing heavily in the Web, with little return, may prove to be a harsh reality.

The idea that everyone is a publisher, that everyone can create a wonderful and exciting Web site, while being nice in theory, defies the laws of common sense. "Everyone is not a publisher, no more than everyone is capable of climbing Mount Everest" (It's the Future, 1996, p.2). Newspaper publishers should realize that not everyone will be their competition, that their newspaper has a strong presence in the market, and that the Web is nothing more than another niche publication that the newspaper needs to compete with at some level.

Next Chapter

Return to main menu