Why 1998 Was The Turning Point For Newspapers

The three most significant years for the newspaper industry were 1609, 1812, and 1998.

During 1609 in the city of Strasbourg, Johann Carolus began publishing Relation, the world’s first newspaper. A close rival for that historical honor was Avisa Relation oder Zeitung, founded in that same year by Heinrich Julius, the duke of Brunswick-Wolfenbuttel. Thus, the newspaper industry began.

But during the industry’s first two centuries, newspapers had small circulations. This wasn’t because demand was small, but because the flatbed press technologies used to produced newspapers couldn’t keep up with the demand. In these presses, moveable type was locked within a flat frame and then inked by printers’ apprentices who used large round pads of leather stuffed with wool and saturated in ink. (This inking was hard work stained the apprentices’ hands and faces with ink, who became known as “printers’ ‘devils” due to that.) Cut sheets of paper were then placed atop the inked type and a wooden platten pressed the paper into the inked type, creating the printed impression. (The technology for pressing the platten was taken from cheese presses or wine presses, thereby giving the name ‘press’ to newspapers and journalism.). The main problem with this flatbed press technology were that even the most skilled printers couldn’t press more than 250 pages per hour, a constraint that limited daily circulation.

That constraint remained until 1812, when William Cowper of London conceived the idea of taking a metal cast of the moveable type and then bending thos cast into a cylinder. However, before Cowper could build such a press, Frederick Koenig, a German who a decade earlier had invented a steam-powered flat press that eliminated manual pressing but didn’t speed up impressions, borrowed Cowper’s idea and built a steam-powered cylinderical press for the Times newspaper of London. Koenigs rotary press could print 800 multi-page editions per hour, speeds that in subsequent years other engineers greatly increased. The era of mass-circulation newspapers began.

So, what was significant about 1998? Unless the path of history changes for the newspaper industry, 1998 was the year that the newspaper industry lost the future. It was the pivotal year in the newspaper industry’s attempts to utilize electronic media.

During the first 150 or so years after the invention of the rotary press in 1812, newspapers’ circulation, readership, and influence had skyrocketed. Yet, during the subsequent quarter century prior to 1998, those skyrockets began falling falling earthward. This was particular true in North America. Faced with that plunge, most newspaper industry technologists, futurists, and analysts during the ten years prior to 1998 hoped that publishing newspapers online might change those trajectories. The American newspaper industry began coordinating its efforts towards that goal. But during 1998 the newspaper industry chose the wrong path towards that goal, a losing path on which it today continues.

During the years immediately before 1998, the newspaper industry was poised to take any path it could to utilize the new-media. One of its notable efforts in America was the coordination of its major publishing companies into a solid front, a consortium known as the New Century Network. Founded in 1995, NCN was owned by Advance Publications, the New York Times Company, Tribune Company, Washington Post Company, Times-Mirror Company, Cox Newspapers Inc., Knight Ridder Inc., Hearst Corp. and Gannett Company. Those nine companies owned more than 85 percent of 1,450 daily newspaper in America and published more than 90 percent of the daily newspaper circulation in that country. [Disclaimer: I was retained as one of two new-media consultants to NCN.] Among NCN’s goals were creations of a common search engine that would index the daily news from almost all American daily newspapers; an online banner advertising and classified advertising network that would unite all those newspapers, and a common registration scheme among all those newspapers. Though infighting among the nine newspaper publishing companies led to NCN not having a chief executive during its first 18 months, the consortium was beginning to show some progress on those projects by 1997, a year of pathfinding for the industry.

The choice of paths was best illustrated during the 1997 ‘Interactive Newspapers’ conference held in Houston by Editor & Publisher magazine. As Toronto Star technology columnist K. K. Campbell reported from it:

    I kept waiting for someone to stand up and shout at people to wake up: There were foxes in the hen house. But no one did.

    Until the last hour of the conference…

    Probably the conference’s strongest indictment of the status quo was what I call the New York-Arizona axis. The difference in the operational mentality of the New York Times (www.nytimes.com) versus the Arizona Daily Star (www.azstarnet.com).

    When the New York Times’ veep Len Forman spoke, it was a “key note speech.” Forman was introduced as a “visionary” of the industry.

    When the Arizona Daily Star’s director of new technology, Bob Cauthorn, spoke, it was in a little tucked away room, in the last hour of the event.

    The Arizona Star is only familiar to me because of the Net. Without having much opinion on the Arizona Star’s editorial product, I’ve always been impressed with how early and how aggressively it fought its way online — it’s “take no prisoners,” “damn the torpedoes” attitude. The Arizona Star so fully embraced the medium, it now challenges the telcos for information delivery dominance in the entire state.

    Cauthorn pinpoints an age-ism to newspapers that is antithetical to the swift adoption of and adaptation to the Net. He says it stems from the lack of serious competition. Dailies haven’t had to compete in decades. The capital barriers of running a daily paper are humongous, allowing papers to be functionally inert.

    Cauthorn is the real visionary, ignored though he may be. He’s the great hope for newspapers in the coming convergence of all media — of which the Internet is but the precursor, the prophet. While Forman read marketing stats from research studies, Cauthorn talked about real life war. Because he is living it.

I too was there and remember Forman’s and Cauthorn’s speeches.

Forman was the New York Times Company’s senior vice president of corporate development, new ventures and electronic businesses. His speech was a corporate public relations concoction that amounted to ‘What, us worry? The newspaper industry has been important for centuries, so it always will be that way in whatever new technology is invented. Let’s just continue doing what we’ve always done, but now do it online.’

In contrast, Cauthorn’s speech was fiery, pointed and goading. He started by saying:

    “Most of you here are from companies named Gannett, Knight Ridder, Cox, Pulitzer, McClatchy, Hearst, Dow Jones, etc. Companies named after people who tried new things, who had new ideas, and who took real risks. So, what have you lately done like that in their name?”

You could almost hear the cautious corporate executives falling off their seats. Cauthorn soon noted that:

    Each year, the milk industry, which is smaller than the newspaper industry, spends more — both as a percentage of revenues and in real dollars — on research & development than does the newspaper industry. And the milk industry isn’t facing declining usage or challenges from technology-based new competitors, unlike the way the newspaper industry is.

Finally, Cauthorn challenged the newspaper industry to take a different path, one other than just complacently defending itself:

    “Microsoft, AOL, Yahoo!, and other companies want to steal your lunch. It’s natural for you to defend against that. But why aren’t you trying to steal theirs and other companies lunches when it comes to information services?

    Why are you fighting just defensive battles?

    Why aren’t you using new-media technologies to create new opportunities for yourselves, opportunities that didn’t exist in print. That’s what Frank Gannett, Charles Landon Knight, Herbert Ridder, James Cox, Joe Pulitzer, James McClatchy, William Randolph Hearst, or Charles Dow and Edward Jones would have done. They would have used these new technologies to go on the attack; to create entirely new business, new opportunities, and a new media.

But of course Cauthorn’s speech was the 28th of 28 during that conference. He took the stage at 10:30 on a Saturday morning, 18 hours after most of the senior corporate executives who should have heard his speech had left.

A year later, which path did the newspaper industry take? The defensive and complacent one. Rather than using new-media technologies to create entirely new business and new opportunities that weren’t possible just with print, to go on attacing into other business realms, almost all of the American newspaper industry focused on using online technologies to defending its existing but already shrinking tradition businesses and sources of revenues. Mainly, it tried to defend its classified franchise. It of course should have defended that, but it shouldn’t have just done defense. And the industry wasn’t even able to keep a consistent front. During 1998, the industry’s New Century Network consortium spun apart.

Ever since, the American newspaper industry has pursued only a defensive stategy. That’s too bad. As the 5th Century B.C. brilliant military strategist Sun Tzu revealed, “Attack is the secret of defense.”

Earlier this year, Forman was promoted to executive vice president of the New York Times Company. Cauthorn, who in the late 1990s became vice president of electronic media for the San Francisco Chronicle, quit the newspaper industry this April, reportedly frustrated at not getting that industry to change.