Newspapers To Migrate Online

http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=42005&Nid=19676&p=307939
by Erik Sass, Monday, Apr 10, 2006 6:00 AM EST

NEWSPAPERS WILL BECOME PRIMARILY ONLINE products at varying paces over the next decade, according to Ken Doctor, a lead analyst with Outsell Inc., a research and advisory firm that provides market analytics to the information industry. Doctor made this prediction during his discussion of the findings of a survey of major newspaper publishers by Outsell Inc., as well as an earlier survey of 2,800 news consumers, and a report containing Outsell's recommendations for the future.

"It's moving in that direction at different rates for different publishers," Doctor said, confirming that "the basic trend is unmistakable. We've seen in our own survey that the average age of a daily reader is 55 years old, and the group with the strongest preference is 50-plus, while the strongest preference for online editions, as well as online news aggregators, is 25-34."

"If you look at declining rates of circulation, of course, the rate at which this will happen for individual papers is impossible to predict," Doctor cautioned, at the same time explaining that print will never disappear entirely, instead becoming a useful adjunct for targeting niche markets: "I think with print you can see those tables turning for some kinds of publications already, where at some point in the future, online will be the dominant means of transmission, and paper will work for certain kinds of transmission, to certain audiences, at certain times."

Doctor went on: "I think the best way to think about it--and we certainly see some publishers starting to think about it this way, though it's very hard to move these huge steamships--is content companies need to be able to 'publish once and distribute many,' meaning you take the content and distribute it to specific targeted sub-audiences, sometimes through print, sometimes through desktop or laptop, sometimes through mobile."

Although newspapers and content providers generally have already achieved some diversity in distribution methods--for example, adopting both Web site-based and e-mail electronic distribution, while integrating print with electronic products--Doctor said true multi-platform distribution will require an unprecedented level of flexibility in the next five years. For one thing, newspapers will have to radically revise cost structures--those that don't will perish.

One of Outsell's specific recommendations for revising cost structures concerns "production of content," according to Doctor. "Reporters now put content into these very expensive editing and production systems that are oriented largely toward print publishing. What's clearly needed on the cost side is a significant capital investment to replace assets that have not yet depreciated with systems that allow not just on-the-fly, dynamic publishing 24-7, but also photos, audio, and video, handling it very quickly--and getting it distributed to different sets of users."

On this latter topic, Doctor noted, newspapers shouldn't make the mistake of considering readers to be their only "users": "Some of those users may be subscribers--but Google is a user too, since you're feeding different types of content into the Google base"--and newspapers must be able to provide information to Google in an easily sorted format.

The transition will continue to be characterized by an overall revenue squeeze, Doctor said, and the issue of how to monetize content will become all-important: "Does some content get monetized through license fees--does some content get monetized through paid search?" As far as securing stable advertising revenue, Doctor described one promising model in which "publishers can license the content and have an ad that will ride along with it wherever it goes--basically saying, you can do whatever you want with this, but this ad has to be there too."

Of course, as with any major industry shakeout, there will be winners and losers in this game, Doctor said: "This a classic business disruption, and not everyone is going to make it. Again, we feel this is going to start happening over the next three to five years--but we're already starting to see winners and losers."

On this subject: "There are some publishers who spoke very dramatically of a transformation in the business, and they're trying to move their companies in new directions fairly quickly--but there are others who see the changes and believe they're going to be slower and more incremental," Doctor said. This sense of urgency may prove a telling indicator as to who will succeed and who will fail; for example, the latter group might be slower to embrace expensive revisions of cost structures of the kind described by Outsell--a delay that could prove fatal, given the rapid pace of change.

Doctor noted there will likely "also be new companies. Look at Google, which didn't even exist until 1998. Now in terms of newspapers--one thing we're seeing is--people want community content. They want community content--they want travel content--so it's easy to imagine you start up a new company, hire a few people who know this stuff really well, hire some database people; you hire your own advertising staff--or better yet, use the networks that are out there already--and you start over again."

Health problems of the geek lifestyle

Wired, April 10, 2006 4:00 AM PDT

Carpal tunnel controversies aside, few would probably argue that computer use is conducive to good physical health. This post on Carotids.com takes the subject a step further, identifying some specific health problems " related to the geek lifestyle." Among them: sleep hygiene, headaches, back pain and poor attention span. (Count us among the afflicted.)

As Magazine Readers Increasingly Turn to the Web, So Does Condé Nast

By KATHARINE Q. SEELYE
New York Times
http://www.theledger.com/apps/pbcs.dll/article?AID=/20060403/ZNYT01/604030372/1001/BUSINESS

Getting married and wondering how you would look in a mermaid-style sheath? Brides.com, a new Web site, takes you to a virtual fitting room, lets you pick from one of four body types and examine how each would look in six different styles of gowns.

Brides.com, an upgraded bridal site combining content from three different magazines, comes from Condé Nast, which, like many magazine publishers, is trying to build its Web presence to keep up with a generation of readers who automatically turn to the Internet instead of the printed page.

In addition to brides.com, Condé Nast is preparing another new site, still unnamed, for teenage girls. And its new business magazine, which is to begin publishing next year, will have a large Internet component with original content.

These investments mark a new level of commitment to the Web by Condé Nast, the nation's second-biggest magazine publisher after the Time Inc. division of Time Warner, and reflect the new reality in the magazine industry: The Internet is an indispensable companion to print.

"You gain a broader audience and more loyalty from your subscribers if you extend the experience into the Web," said Steven Newhouse, chairman of Advance.net, which oversees the local Web sites of the Newhouse newspapers and the Web sites of Condé Nast, all of which are owned by Advance Publications.

While newspapers, their cousins in print, have been forced to confront the shifting appetite for news online and have watched their advertisers migrate to cyberspace, magazines have felt less of a need to reorient themselves. For one thing, the drops in circulation for magazines have been less drastic than for newspapers. For another, magazines have always had a more relaxed, if not intimate, relationship with their readers, who tend to set aside precious leisure time to read them.

"They still think in terms of pages and ink," Mike Neiss, a senior vice president of Universal McCann, the advertising and marketing firm in New York, said of magazine editors. "They look at it the way you'd look at Nixon doing standup you can't really stretch the brand as far as you think you can."

But having seen the newspaper business staggered by a defection to the Internet, and with their own circulation figures flat, magazine companies are making new investments in the Web. The undertaking appears significant at Condé Nast, which is freer than most with its spending. (The company is private and its finances closely held.)

Condé Nast's new bridal site is instructive. The company watched the circulation of its bridal magazines be drained away by a Web site called theknot.com, a wedding resource that began online in 1996. At stake: millions of young, love-struck eyeballs desperate for tips and ideas in what has become a $160-billion-a-year wedding industry.

Condé Nast has now hired two dozen people to manage brides.com. It is also hiring Web editors for all of its 29 consumer magazines, about half of which have such editors now.

"The sense of urgency, the sense of moment, has arrived," said David Remnick, editor in chief of The New Yorker, and among those at Condé Nast searching for a Web editor.

Thomas J. Wallace, Condé Nast's editorial director, said his mantra to editors was to "enrich" the Web experience, and the company was prepared to foot the bill. "Tell us the cost and benefit, and if the return on investment is great enough, you get the money," he said.

He added that the sites, which are all free to users, were works in progress. "We're in the process of figuring it out and will be in the process of figuring it out for the rest of my working life," he said. "Our spending may have to be ahead of our ability to make money."

Six months ago, for the first time, the company started giving its advertising sales force incentives to sell space simultaneously online and in print, said Sarah Chubb, president of CondéNet, the company's online division. In December, she said, the company created an Internet specialist team to handle large corporate ad accounts.

Condé Nast jumped into the Web a decade ago with a decision to build a "destination" site, epicurious.com. It used some content from two of its magazines, Gourmet and Bon Appétit, but without using those brand names. It has subsequently built other destination sites, such as style.com, with content from Vogue and W; and concierge.com, from Condé Nast Traveler.

Ms. Chubb said that not using the magazine names allowed the company to cast a wider net for readers beyond those already buying the magazines. She said the decision proved right: epicurious.com and style.com are both profitable.

Moreover, having sites unattached to a magazine brand allowed the sites to be more playful. "The brands are so strong, they require living within their identity," she said. "We felt that to be a really good Web property, we needed to be flexible."

Still, the Condé Nast sites draw relatively little traffic compared with the most popular mass-market magazine sites, according to comScore Networks, which measures Web traffic. The three most popular magazine sites, as of February, were those for Entrepreneur, Forbes and Sports Illustrated. Entrepreneur.com drew more than 6 million unique visitors that month, according to comScore; epicurious.com, Condé Nast's most popular site, drew 1.6 million.

But even epicurious.com drew nearly five times the traffic of Condé Nast's most popular single magazine site, which in February was vanityfair.com, with 346,000 visitors (more about them later).

The destination sites are the models for brides.com, which combines material from the company's three bridal magazines, Bride's, Modern Bride and Elegant Bride, and adds original online features. Many top managers at brides.com came from epicurious.com and concierge.com.

The company's bridal magazines and their old Web sites had lost considerable ground to theknot.com over the last few years. Theknot.com draws 2.1 million unique visitors a month, or about 14 percent of all bridal site traffic, according to Hitwise, an Internet research firm. The old sites for Bride's and Modern Bride drew a little more than 1 percent of that traffic each, and their combined print circulation as of December was less than 700,000.

"One hundred percent of the people who are getting married for the first time are people who grew up on the Internet," said Marshal Cohen, who is chief analyst for the NPD Group, a market research firm.

"A magazine can spark an idea but the Internet will provide the real vehicle for deep research, the purchase of products and the referral system to friends. So you can say, 'I saw this great dress, you should see it, you've got to go online.' "

For magazines that are not absorbed into a larger destination site, the model, if not the inspiration, at Condé Nast is Self magazine. Its Web site, self.com, which features a popular fitness challenge, generated more than 100,000 subscriptions last year, according to Mr. Wallace. The print circulation was 1.4 million last year.

"What happened at Self is very important for Condé Nast," Mr. Wallace said, adding that while self.com had drawn only a fraction of the traffic of style.com, it had generated more than twice the subscriptions.

Lucy S. Danziger, editor in chief of Self, said that the keys to the site's success were its interactivity ("Find your ideal weight and more! Crunch your numbers with our cool tools.") and the forums for like-minded readers, who are, say, training for a marathon or trying to lose weight after having a baby. "We've generated new types of content that lend itself to this medium," she said.

The company is encouraging its other magazines to do the same.

At Jane, for example, Brandon Holley, the new editor in chief, uses extensive video on her site, which was redesigned last month. Film students regularly visit the magazine's offices and take short videos of the staff at work. "Our beauty editor will show people how to cover up a zit on a fellow staffer," she said. Every editor is supposed to post blogs two or three times a week.

For monthly magazines, it is a challenge to keep a Web site feeling fresh. Vanity Fair, for one, provides links to various celebrity-oriented and party sites, which keep things current, and it gives readers sneak peeks of the upcoming issue.

Vanity Fair is also using more video, showing outtakes from its cover photo shoots. While the site normally draws about 6,000 viewers a day, Mr. Wallace said, a recent video of a much-discussed cover shoot of Tom Ford, the fashion designer, and two naked actresses, Scarlett Johansson and Keira Knightley (and nice product placement for Poland Spring water), drew nearly 350,000 people in one day.

"Think of that," Mr. Wallace exclaimed. "How do we do it again?" he asked, then quickly added, "And is this the direction we want to go?"

As Prices Rise, Loyalty Follows the Lowest Fare

By JOE SHARKEY
Published: March 28, 2006
http://www.nytimes.com/2006/03/28/business/28road.html?ex=1301202000&en=7c5d61bebd6de77c&ei=5088&partner=rssnyt&emc=rss

In the domestic airline business, less bad news is good news these days.

Business Travel Minute

Memo Pad (March 28, 2006)

So some industry people are congratulating each other over new estimates that airlines in North America will collectively lose only about $5.4 billion this year, compared with $10.8 billion in 2005.

That projection, by the International Air Transport Association, is based on an assumption that oil prices will average $57 a barrel this year. Incidentally, oil prices rose to $64.16 a barrel yesterday. Still, Giovanni Bisignani, the director general of the International Air Transport Association, was a font of cautious optimism last week in a speech and a subsequent interview in New York.

For world airlines in general, "cost-cutting and the economic recovery have been so strong that we cut our 2006 loss projections in half, to $2.2 billion," he said. Actually, carriers in Europe, the Asia-Pacific and other world markets are projected to post profits totaling about $3.2 billion this year, but those gains will be offset by the $5.4 billion in projected losses in North America.

But even in North America, Mr. Bisignani said, higher fares, reductions in domestic capacity and continued cost-cutting are leading to "higher yields" and improved financial conditions.

Higher yields, by the way, is another way of saying higher fares.

On domestic airlines, yields were up 10.1 percent in the first two months of this year compared with the same period last year, according to the Air Transport Association. At the same time, the number of passenger miles flown rose 1 percent, while the number of available seats fell 4.6 percent.

Here's what I think that all portends.

One, domestic fares will rise more than some industry analysts have been predicting. Given high oil prices, airlines still cannot make money at current fare levels.

Two, projections for steadily growing demand for domestic air travel may be overly optimistic. That is because a certain percentage of demand, mostly leisure travel, has been driven in recent years by rock-bottom fares. That bottom-rung leisure niche — its size is unknown because so many business travelers jump into it when it is convenient — is extremely price-sensitive. If air fares increase significantly, and they have been edging up week by week, leisure demand may start eroding.

Three, if and when that happens, major airlines are going to be looking for more support from their most loyal and lucrative customers, frequent business fliers, who have to continue flying. But, as noted here last week, airlines have lost the loyalty of a good number of those customers, especially the ones who maintain elite status levels.

That is because elite status benefits like upgrades and first chance at choice coach cabin assignments like exit rows and aisle seats have been sharply reduced. Last year, airlines cut first-class fares to the point where flying in first class now often costs little more than flying full-fare coach — meaning fewer first-class seats were available as free upgrades. And airplanes are now flying full, and choice seats are booked well in advance on many flights, without regard to status.

There was a lot of reaction to last week's column about what many business travelers, myself included, see as the deterioration of elite status programs. A good number of readers said that they, like me, were so unhappy with the decline in benefits for maintaining loyalty that they had simply given up on working to hit the annual mileage mark for elite status.

A small number of mileage geeks, devout believers in the sanctity of frequent-flier programs, were hostile toward my suggestion that the elite status game was not worth the effort.

But a significant number of other readers also pointed out something that anyone who understands simple industry economics readily concedes. "You have been flying on unbelievably cheap fares long enough," one fellow wrote. "The airlines and their employees have subsidized you and all travelers. It is time for you to start paying a fair price for your safe air travel and stop the whining."

I believe he is correct about fares. But elite status members who feel alienated despite their loyalty certainly are not whining when they say they are now looking at air travel as a commodity. They are simply making rational buying decisions without regard to brand loyalty anymore.

Mr. Bisignani acknowledged that the days of fares sold below costs were waning. Fares "have been quite low for some time," he said, adding, "They will increase."

On the Road appears each Tuesday. E-mail: jsharkey@nytimes.com.

Verizon SuperPages.com joins Google AdWords

SAN JOSE, Calif.--Google and Verizon SuperPages.com have signed a deal under which the classified ad provider will help its tens of thousands of marketers get ads onto Google search result pages, the companies said Monday.

"We're pleased Verizon is an authorized AdWords reseller and helping local small businesses take advantage of the opportunities of search advertising," Google said in a statement.

Verizon SuperPages.com sends sales representatives out to businesses to sell them advertising that will appear in print and online, something Google and other big Internet companies don't have the resources to do, Eric Chandler, president of the Internet division at Verizon SuperPages.com, said here in a keynote at The Kelsey Group Drilling Down on Local conference.

The new arrangement "marries our sales channel opportunities with Google's vast advertising network," he said in an interview after the session. "We play a key role in this whole ecosystem. We are the enablers to get this group (small merchants) online."

SuperPages.com already provides business profiles to Google so that some search results include links to more information about particular businesses on SuperPages.com, Chandler said.

Deals like this "are critical to move the local search market forward because these businesses would not go on their own to Google or Yahoo," said Greg Sterling, managing editor at The Kelsey Group.

"There is a lot of inertia in the small-business market, which relies on sales representatives to call them or visit," Sterling said.

Verizon SuperPages.com powers MSN's yellow pages and provides advertisers for MSN Local and MSN Virtual Earth, Chandler said. "As Microsoft's AdCenter launches this summer, there will be opportunities for us to work with them on a deeper level," he said.

The Google deal also gives Verizon SuperPages.com advertisers access to search results pages on America Online and Ask.com through their deals with Google, he said.

Online travel stocks stranded

Not long ago, investors had high hopes for the likes of Expedia, Travelocity and Orbitz. These Internet upstarts were going to simplify the travel business by drawing traffic from travel agents and reservation phone lines. Profits were going to soar both for the sites and for their airline and hotel industry partners.

But it hasn't worked out that way.

Increasing competition from players ranging from Google to the big airlines themselves are slowing growth at outfits like the Travelocity unit of Sabre Holdings and Orbitz parent Cendant.

"People are overall fairly negative on the whole sector," says Aaron Kessler, an analyst with Piper Jaffray who rates Expedia market-perform and Priceline outperform. "They are most positive on the international side of the market. Domestic is going to remain a challenge."

Like other Web-based services, online travel is no longer a novelty. Competition is intensifying as airlines and hotels expand their efforts to get travelers to buy on their sites. Plus, there's the added problem of specialized search engines, including Kayack and Sidestep. These operations help people find the best deal by comparing prices over multiple sites.

Get the full story at The Street.com

User-generated content: Everybody's doing it... but who's sorting it?

There was no single catchphrase at PhoCusWright's TRAVDEX conference in Berlin, Germany, 9-10 March. No one technology garnered the lion's share of buzz. And that's only fitting for an event that brought together a diverse group of the world's leading travel technologists within the halls of the world's largest travel conference.

In its first year as part of ITB Berlin, TRAVDEX brought together IT professionals from around the world to map out the evolving landscape of Travel 2.0. That terrain is a technologically diverse and rapidly expanding realm rich with opportunity. But as all true technologists know, any revolution worth its weight in widgets is certain to be rife with challenges.

Among the findings of this unique gathering were the following nuances of well-documented travel technology trends:

Search is alive and well… and there's a good chance it's still stressing your infrastructure.

Search has long been a sport amongst online travel buyers, and with metasearch now making inroads into the European and Asia Pacific markets, it's a subject that will continue to drive the industry for the foreseeable future. Notably, as conversion ratios continue to rise and technologies like metasearch become more popular, suppliers are still struggling to scale.

User-generated content: Everybody's doing it… but who's sorting it?

The meteoric rise of social networks and user-generated content has certainly caught the attention of the travel industry's technorati, and online travel agencies, suppliers, portals and metasearch companies alike reported that they have already started incorporating user-generated content into their Web sites or they plan to. With this new flood of content, though, travel companies will need to have a strategy for helping users identify the information that will be most useful to them. When asked how they intend to sort and rank user-generated content, several speakers indicated their strategies are still under development. Let the games begin!

Media is getting richer.

Rich media has the potential to counter commoditization, sell location and dramatically enrich travel planning overall. The technical challenges of making it searchable, accurate and up-to-date remain. Steps are being taken to standardize rich media coding, but as with all standardization efforts, it takes time for standards to become pervasive. And despite a clear vision of the future potential of mobile rich media — there are still a number of infrastructure and content challenges to be addressed — challenges that many argue will take years, not months, to overcome.

Personalization is a priority (What did you say your name was again?)...

Personalization is on the tip of everyone's tongue, but not yet on the edge of their enterprise. In fact, many are still struggling with traditional customer relationship management (CRM) applications and system integration challenges. However, efforts to create personalized experiences — both online and off — and to develop the capacity to offer personalized rates are under way. Developers working on personalization projects should take care not to lose sight of the actual customers their efforts are aimed at — their desire for interactivity and transparency should be figured into the equation.

GNE v. GDS enters a reality check phase

The GDS new entrant (GNE) — global distribution system (GDS) debate rages on: GNEs insist that they are bringing much-needed technology solutions to the marketplace, and GDSs tout gleaming new platforms and are declaring that what is needed is a business solution, not a technology solution. Impromptu show of hands indicated that TRAVDEX attendees believe that the GNE challenge to the distribution status quo is what has brought about GDS booking fee reductions, not appreciative GDSs passing on operational savings to loyal clients. While the current effect of the GNE advent on distribution economics is clear, it remains to be seen how strong the challenge to GDS distribution technology will ultimately be.

Related Link: PhoCusWright, Inc.