THE DEATH OF NCN HAS MANY LESSONS FOR THE BUSINESS

Bowing to nine masters proves to be a fatal flaw in pioneering plan

New Century Network is dead. Long live New Century Network.

The question is, what will the newspaper business learn from the shuttering of New Century Network (NCN) last week? The on-line partnership, initially designed to get papers onto the World-Wide Web, always suffered from too many bright people trying to assert their will on too many other bright people.

Though in our hearts we knew that NCN was an iffy proposition, everyone in the industry rooted for its survival.

Inside, I detail the short but lively history of New Century Network. Neither an alliance nor a consortium, NCN was a business partnership that included eight of the top 10 newspaper companies (the ninth partner, Washington Post Co., has an influence that outweighs its size). At the time of its start in 1995, it was widely reported that the members each ponied up $1 million to start the venture. Of late, we've been hearing that the charge to stay aboard was $1 million a year.

So, for many of the NCN partners, the cost of participating had been $3 million, with no profit in sight – and the execs running the company were coming, hat-in-hand, to fund a couple of new strategies. Apparently, the cost of NCN had just gotten too high for some of the partners.

That NCN died does not say anything about alliances or consortia. "See? It's just like PAFET," one newspaper business analyst said to me the day NCN shut down. No, it's not like Partners Affiliated for Exploring Technology.

PAFET, a technology consortium that includes Belo, Central Newspapers, Cowles Media, Freedom, McClatchy and Pulitzer, has recently reorganized itself in such a manner that it no longer has a full-time staff or headquarters. But that doesn't mean PAFET hasn't continued in its main function – sharing information.

The PAFET experience has not been easy, either. "It's taken a tremendous amount of work," said Howard Finberg, Central Newspapers' participant on the PAFET operations committee. "You have to give up a little to get a lot, and that's hard for the industry as a whole."

Both NCN and PAFET suffered through what one person called a "genetic strain of independence" that exists in U.S. newspapers. Think about how hard it is to get a project started and running smoothly at your newspaper.

Now, multiply that by nine – and throw in some top-notch outsiders. You will begin to see what confronted NCN.

After the board of directors put a bullet through the head of the crippled NCN racehorse, it wasn't long before the finger-pointing started. I have, on the record, quotes from some of the participants in NCN about who was specifically at fault. Interestingly, the opposing sides agree on many of the reasons they disagreed.

I'm not going to print those quotes; it doesn't help the business, and what good would it serve? No, the key question is not who was at fault. The key question is: What did the newspaper business learn?

First, it appears that more tightly focused collaborations can work. One example is careerpath.com (which, interestingly, is owned by seven of the nine NCN owners), which focuses on employment classified ads. Another is Classified Ventures (a partnership of three of the NCN owners), which will focus on auto and real estate classifieds.

Second, though it sounds like a good idea, don't aggregate editorial content. Newspaper new media editors are too proprietary about their work to be able to build a good cross-section of local content.

Third, newspaper web sites do need an entity to handle industry-wide buys of banner advertising. NCN could have provided that service; Real Media, a unit of the Swiss company PubliGroupe, may now get back into that business. The Newspaper Association of America, through its National Newspaper Network, might extend itself to on-line.

Last, know your limits. As Central Newspapers' Finberg said, "Nine companies trying to manage something on behalf of 1500 papers, it was something of a Herculean task. I'm surprised we even got into the stables, no less clean them out."

– David M. Cole

Inside ...

• The demise of New Century Network saddens and chastens
• Newsprint companies' merger wins favor
• Paxtons of Paducah: long-haul publishers
• Web-based j-review to surf with critical eye
• Bay Area papers, CBS affiliate to share multimedia content
• An era on Times Mirror board to end
• New(s) Media bakes a batch of cookies
• Persons

From NEWSINC., March 16, 1998, Copyright © 1998, The Cole Group. All Rights Reserved.