Joining the rush of newspapers seeking a new incarnation in the digital age, the Los Angeles Times and Newsday on Wednesday announced the launch of dual interactive services over Prodigy Co.'s on-line network.
The two Times Mirror Co. newspapers are among nearly 100 worldwide--the number has doubled in the last year--hoping to protect their traditional franchise as primary information providers by establishing a foothold in the on-line world, where the barriers to entry are low and new competitors are many.
Both The Times' service, called TimesLink, and Newsday's, called Newsday Direct, will seek to use the near-infinite space of the digital format to create not only an electronic version of what is already available in the daily paper, but also something akin to an interactive community database.
"In print journalism, we're always fighting two formidable foes: time and space," said Richard T. Schlosberg III, executive vice president of Times Mirror and publisher and chief executive of the Los Angeles Times. "This gives us the ability to publish whenever we want without waiting for the next press run."
For example, Southern California subscribers to TimesLink will be able to enter their ZIP codes and call up recent news stories about their neighborhoods, a list of local libraries, real estate information and restaurants. Clicking on another icon will conjure up a portfolio on the O.J. Simpson trial, complete with photographs, profiles of the main characters and the juror questionnaire.
An interactive surf report will also be included, as will regular on-line chat sessions with reporters, which other newspapers have found to be a key attraction in their electronic efforts.
TimesLink and Newsday Direct are among the most ambitious of the on-line newspaper efforts to date. Unlike most of the other services, for example, they allow subscribers to dial in directly to the newspaper service, rather than first passing through the "main menu" of the on-line service itself.
In addition, the Prodigy technology enables the newspapers to offer rich color graphics and on-screen advertising. The downside is that many consumers don't want advertising. And Prodigy, a joint venture of Sears, Roebuck & Co. and International Business Machines Corp., has struggled through years of losses and industry criticism of its sometimes-cumbersome technology.
Newspapers have many reasons for jumping into the on-line world--not the least of which is that a wide range of companies are now using electronic media to distribute news and information that was once the exclusive province of newspapers.
"The thing that always kept competition out of the face of newspapers was it cost a zillion dollars to build a plant and buy equipment and invest in a distribution system before you could play the game," said Tod Jacobs, publishing analyst at Sanford C. Bernstein & Co. "With on-line distribution, the newspaper loses its competitive advantage in a significant way."
By expanding on the newspaper's customary role, the logic goes, the on-line service will appeal as a supplement to regular readers and fend off rival information vendors at the same time. The two newspapers also hope to draw readers from outside their circulation areas. They point to the Atlanta Journal and Constitution, which went on line via Prodigy's service earlier this year and now draws half its electronic subscribers from outside of Georgia.
Media analysts say newspapers face an uphill battle in making a profit on their interactive experiments, in part because advertisers, which provide the bulk of newspaper revenues, have yet to get on board.
"Basically, they don't make money," said Mary Modahl of Forrester Group in Cambridge. "No one's been able to figure out how to get ads to work in the on-line context. So the concept of content driving circulation which in turn drives advertising revenues is broken."
Although TimesLink and Newsday Direct will include some advertising, the newspapers' executives said that given the initial limited reach of the services, advertising revenue will probably be negligible in the short term.
Still, both services say they expect to be profitable on an operating basis within three years. TimesLink hopes to garner about 40,000 subscribers by the end of 1995, while Newsday Direct forecasts about 30,000 to 40,000 subscribers in the first year. Prodigy members can use the two new services for $4.95 a month. Non-members can subscribe for $6.95 a month.
Times Mirror executives emphasized that they do not expect digital distribution to replace newsprint anytime soon.
"We believe newspapers have a great future," said Times Mirror Chairman and Chief Executive Robert F. Erburu. "And an important part of that future depends on using their prodigious information-gathering capabilities in new ways."
Some of the major U.S. newspapers and the on-line computer services they are associated with:
Newspaper On-line service Atlanta Journal and Constitution Prodigy Chicago Tribune America Online Detroit Free Press CompuServe, Internet Los Angeles Times Prodigy New York Times America Online Newsday Prodigy Orange County Register Delphi* St. Louis Post-Dispatch Delphi* San Francisco Chronicle Internet San Jose Mercury News America Online Internet* Washington Post Ziff-Davis Interchange*
* Services announced but not yet operating