Dean's Digital World - Sources
The New Internet: Mergers and Acquisitions
By Dean Tudor
"Today in North America, newspapers and televisions and
Web sites and magazines are dispensable spokes in the great wheel
of the entertainment conglomerates, which measure their merits by
the single criterion of share price in the financial markets...The
stakes are the number of eyeballs attracted, which is all that matters
to advertisers." --- Todd Gitlin, speech at Ryerson Polytechnic
University, March 8, 2000, adapted in the Globe and Mail, March
CONVERGENCE -- is the newest buzz word in computerland... Well,
only new for those who haven't been around a while...Ryerson Polytechnic
University's School of Radio and Television Arts has had a Converging
Communications Centre since 1994, promoting studies into why it
was happening and how we can all get prepared for it.
Convergence used to be known as "computer-mediated communications",
where the idea expressed was to communicate -- in whatever form
-- by computer. Other related terms included "multimedia"
(this has been around since 1960) and "new media" (still
being used after thirty years, but it's now old hat).
Simply put, convergence is the term of choice for Web sites that
combine all the features of newspapers, magazines, radio and television-video:
text, graphics, motion, sound, characterized by a quick dissemination
of news. And in order to do this, these Web sites must be vertically-integrated:
the firm must have its own access routes such as ISPs, its own distribution
networks, its own broadbanded dedicated lines for transmission higher
than 56K baud, its own content, its own employees, its own Web construction
-- a full-service firm... It's all about "branding".
There were very few naturally-occurring freestanding convergence
companies. Salon is probably the most well-known. Some people characterize
Salon <http://www.salon.com> as a magazine, but that's only
for its print content. The main components of its business (and
this serves as a model for any convergence firm) is:
* Print Content, with more emphasis on "alternative"
writings and "breaking news" and "scoops" in
the style of Matt Drudge;
* Broadbanding, with Salon TV and Salon Radio, best viewed via
cable and the Internet (although a television show will also be
on the US Bravo cable network);
* E-commerce -- the selling of "Salon" as a branded item,
along with other goodies compatible to the Salon lifestyle (wake
up and smell the latte!!);
* Media Sales, with advertisements for other ventures;
* Technical Projects such as Web site design and network expertise.
Salon, then, goes up against Fox/CNN/MSNBC/CTVNewsNet, and other
similar news and magazine services. By the time you read this article,
I would not be surprised to see Salon merged or allied with another
firm that would fit like a glove. Perhaps a cable firm or network
access company, for that would give Salon a natural entry into the
broadband stream and give the other company some content and Web
And that, of course, is the current wave: mergers and alliances.
It would appear to be impossible to start up a vertically-integrated
company from scratch. It's much easier to change by merger and alliance.
Old and new media larger companies are poised to carve up the Internet
for themselves, hogging all the positions. Need some examples? Try
1) America Online and Netscape merged eons ago (or what seemed
like eons ago in cyberspace time), giving America Online the premier
software tool to access the Internet...
2) America Online and Time Warner, merging the content of the latter
with the source of customers and readers of the former...
3) BCE Inc.'s control of Sympatico (from Bell Canada) and alliance
with Lycos search engine and portal (Lycos owns 29% of Sympatico),
soon to have an IPO...
4) BCE Inc. (customers, access) buying CTV Inc. (content and cable
networks)... Other major Canadian players include both Quebecor
and Rogers Communications pursuing Groupe Videotron; Rogers Communications
has a multi-faceted alliance with Shaw Communications; Rogers AT&T
and Excite Canada (jointly owned by Rogers Media and Excite@Home,
a US firm) will jointly offer Internet content services over digital
phones and other wireless devices.
5) Yahoo! Inc. in an alliance with News Corp. The former gets News
Corp.'s content (Fox, newspapers) while News Corp. provides access
to Yahoo's Web sites via its satellite networks... Other American
alliances include MSNBC cable news channel (NBC plus Microsoft);
New York Times plus ABC News are producing daily joint Webcasts;
Associated Press joins with online news site CNET to provide news;
the Wall Street Journal and CNBC (NBC's business channel) are in
an alliance; Washington Post and MSNBC are also sharing news.
6) The Chicago Tribune bought Los Angeles Times, and the new company
has a strong regional holding of media outlets in Los Angeles, New
York and Chicago. The company is experimenting with turning newspaper
reporters into "multimedia journalists" and merging all
the media outlets into one newsgathering source. Reporters may write
for the Chicago Tribune, be heard on WGN radio and appear on WGN-TV
or its 24-hour cable news channel. The reporters are referred to
as "content providers" for the parent company, and with
the Times Mirror holdings, the providers will go national. The company
is actively teaching reporters how to contribute to the various
outlets, with no walls between the papers, television, radio and
the Internet. The Tribune company now has huge content creation
assets in the top three USA cities; they'll be able to lock in the
market. Also, about two-thirds of newsrooms (mostly regional and
local papers) support both hard copy and Internet copy services,
possibly at little or no extra pay for the reporters.
7) KnightRidder.com is a reality. The Internet operations of the
second largest USA newspaper group will be a force to reckon with.
For reporters, this Internet company offers stock options, just
like the dot coms, and for this reason they will continue to attract
competent and useful reporters.
8) The post-PC era is here: information appliances (simple devices
for accessing Internet services) are multiplying like rabbits. Low
cost smart mobile phones, NetTVs, Web terminals, E-mail terminals,
and PDAs will allow the mass media to communicate in different but
shorter ways with clients or users. "Chunk journalism"
has indeed arrived.
In the New York Times Magazine, February 20, 2000, Henry Blodget,
a Merrill Lynch analyst, said: "Small Internet media companies
that produce magazine-style content will have trouble over the long
run, because that isn't what people do online. What people do online
is look for information, communicate by E-mail or in chat rooms
and interact with a wide variety of content, such as news, games,
shopping, pornography or travel."
No government in North America appears to have a policy about convergence:
convergence is simply happening. Yet the EU is acting on a report
tabled in March, 1999, ("The Convergence of the Telecommunications,
Media, and Information Technology Sectors") which examined
the economic and social implications of the convergence phenomenon.
The report felt that vertically-integrated companies might abuse
their market power, and control access to one or more elements of
the chain, in order to close convergence to other firms. It further
recommended strong copyright protection (do I hear you writers cheer?)
and content regulation. This and other studies and comments are
at <http://www2.echo.lu/legal/en/converge/converge.html> Who
will bell the cat in Europe? In North America?
Just about every media outlet has a Web site: they are forced into
it, in order to be a presence, to have a brand. Many sites are clunkers.
Some are more converged than others. Television, radio and magazines
appear to be relatively happy with putting up content with is mostly
entertainment, along with advertisements, and are really just an
Internet version of the original firm's work. But it's all happening
at the newspaper and the news channels...
Newspapers should be particularly aggressive in setting up Web
sites: they are prime candidates for vertical-integration and convergence,
and hence, mergers and alliances or even takeovers. An Editor and
Publisher survey showed that only 24% of newspaper sites were making
any kind of a profit from online services, and 75% of the papers
felt they were losing classified advertising to online competitors.
Something has to happen, and soon. A study by the Diebold Deutschland
looked at the online presence of 150 newspaper publishers in Europe
and the United States; it concluded that they were ill-prepared
for a future on the Internet, despite a ready reservoir of online
content. Diebold warned that the there is a threat to newspapers
from well-funded (via IPOs) search engines and online services which
regularly regionalize their content. And: younger readers prefer
to get their information from the Internet rather than from a newspaper.
Some suggestions at a recent Interactive Newspaper Conference sponsored
by E & P included partnering with local businesses, providing
a way for them to do online business and for papers to get a cut.
Several Canadian newspaper Web sites are being refashioned and relaunched.
TorStar is being re-launched as the main site for everything you
ever wanted to know about Toronto. Canoe.ca is being spun off with
an IPO, to raise money and be independent of Quebecor, which bought
it only as part of the SunMedia deal. Thomson is dumping all of
its newspapers save the national Globe and Mail, and using the money
to relaunch its Internet brand of "Globe" services. Indeed,
the newspaper Web sites should be turning into every news junkie's
Of all the media, newspapers have made the most of the Internet.
Doing research for this article, I found that efforts by magazines
and broadcast have been puny, and they have been relying on whatever
newspapers come up with. The Web has made more dramatic changes
in the newspaper world than in any other form of media. Here's some
of these changes:
* to survive as a print entity (now often called the "dead-tree
version"), newspapers must have a presence on the Internet,
a brand for the community: if newspapers don't do it, some other
* deadlines are now continuous, not just once a day (yet remember
that papers used to come out several times a day, some with "extras").
Every minute there will be changes and updates for the Web site.
This makes E-mail extremely important, especially if papers can
sell an E-mail news delivery service to cell phones and pagers and
other information appliances. Unfortunately, speed of delivery can
often kill news quality: there is still a need to check and verify
* there is the rising importance of the Web that has been spun
for 150 years by the "wire services", vitally needed to
keep Web sites updated. At the same time, many newspapers are using
material from the Internet, such as articles from Salon, APBNews.com
(crime), TheStreet.com, Microsoft's "Slate" and other
ezines. These items are appearing officially "in print"
for the first time, in the normal syndicated way (some are from
the syndication company Universal New Media);
* there is more local news and readers are eating this up. Local
news is unique. Nobody else has it for a region: it draws readers
from afar who want to know about "news from home". Papers
need to give people a reason to come to their site. Newspapers need
to build powerful local and regional online sites serving communities
of interest with news, information, entertainment, e-commerce and
other consumer and retail services (such as listing a movie, reviewing
it, and doing a pay-per-view download -- all with a series of clicks;
* packaging is different: scoops and exclusives, deep background
research sidebars, links to related stories, links to other off-media
sources, investigative computer-assisted reporting with its masses
of databases, archives, corrections and yanking of stories, video
and audio, more documents and reports posted in their entirety,
interaction with readers through chat rooms and solicited opinions,
E-mail addresses of reporters/commentators. At the same time, hard
copy newspapers and magazines are beginning to look a little like
computer screens in their design packages (USA Today led the way
with its "TV news in print" style, now twenty years old);
* hiring of writers and editors and researchers for online content
exclusively such as at TorStar and Canoe. Many of these will come
from journalism schools which are teaching online journalism, although
some graduates will prefer to move on to "Dot Com" firms
with stock options. Such Dot Coms are already hiring experienced
journalists and professional librarian graduates, to do websiting
and research work. Indeed, these in-house people can help newspapers
with ads, classifieds, building community online, much like Salon's
vertical integration. Newspapers already refer to this as the "dot
com brain drain".
* BUT: of course, Web sites are susceptible to hacking and sabotage.
Vulnerability is a key issue here. Media hoaxes of the past may
be peanuts next to common parlour tricks and deliberate maliciousness
of the near future. Security flaws are quite common, and can do
Refocussing is becoming more common now. Newspapers are being sold,
television chains are being sold, spinoffs of digital activities
into standalone companies such as Canoe.ca, Reuters, and KnightRidder.com
are becoming regular events. The one-size-fits-all mentality of
the mass media is changing toward an emphasis on personalization
and customization, to one-on-one loyalty marketing. To survive,
media must be known as multichannel publishers (Web, E-mail, CD-ROM,
fax, data broadcast, audiotext).
Maybe McLuhan did say it best: "The medium is the message",
and we are all converging.
To keep up-to-date in this emerging area, read/participate in the
There is a hard copy academic journal called (naturally) CONVERGENCE,
and some of it is available also online at <http://www.luton.ac.uk/Convergence/>
It is billed as the "journal of research into new media technologies".
Typical articles deal with globalization, refashioning old media
in terms of new media, and the odd "scholastic" paper
such as "Stereoscopy and Pre-Raphaelitism; the Pre-Raphaelites
and John Ruskin in the New Media Age". The mission of the refereed
journal (from the School of Media Arts, University of Luton, UK)
is "to develop critical frameworks and methodologies which
enable the reception, consumption and impact of new technologies
to be evaluated in their domestic, public and educational contexts".
You can subscribe to a CONVERGENCE discussion group (led by Silicon
Alley Reporter and its Digital Coast Reporter) at <http://www.siliconalleyreporter.com/convergence/>
and even get it in digest form. - To post to the list E-mail: CONVERGENCE@um1.unitymail.com
- To post a job, press release, or event listing to CONVERGENCE
contact Linda Miller at mailto: email@example.com
Archives are at <http://um1.unitymail.net/Unity/ctrlpanel/0/6/161>
Affiliated with CONVERGENCE mailing list is indieWIRE <http://www.indiewire.com>
the Digital Coast Weekly <http://www.digitalcoastweekly.com>
and RESFest <http://www.resfest.com>. Most of the discussions
are technical, but this is an easy way to make contacts. Emphasis
appears to be on those people coming from a broadcasting background.
For those with a newspaper or print background, there is the ONLINE-NEWS
discussion list, which uses Lyris mailing list software. <http://www.lyris.com>.
The archive and list settings are at <http://www.planetarynews.com/online-news>.
This list is sponsored by Content Exchange <http://www.content-exchange.com>
This digital marketplace for online content creators and publishers
also has a free electronic newsletter (began in Fall, 1999) concentrating
on "writing for the Web" online content. It grew out of
a section of Editor & Publisher magazine. Most discussion is
about news content. Some recent articles include writers' clip files
on the web, and tips on succeeding as an E-mail publisher. Full
details are at <http://www.content-exchange.com/cx/html/newsletter/>
And Content Exchange co-founders Steve Outing and Amy Gahran have
launched the E-Media Tidbits Weblog. Check it out daily for the
latest news, links, and other stuff in the online content world.
For another weekly electronic newsletter, do try NEWS-ON-NEWS/The
Ifra Trend Report, which began in July, 1999. This is a summary
of global trends, strategies and innovations influencing the future
of news, newsrooms and news publishing. (Ifra has 1,700 member publishers
and technology vendors worldwide). Upcoming seminars, conferences,
workshops, etc. are noted, with themes outlined and contact persons
indicated. Subscriptions are free, through <www.ifra.com>.
Dean Tudor is Sources Informatics Consultant and a professor
of Journalism and Information Science at Ryerson University. He
can be reached at firstname.lastname@example.org.
Published in Sources,
Number 45, Summer 2000.
Dean's Digital World Articles
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