NEWSPAPER INDUSTRY DISCOVERS HOW TO GO ALONG TO GET A LOT

Cooperation gains as competitors unite to save – or make – money

"With the Seattle story and Times-LANG alliance coming on the heels of the AdOne consortium, it appears publishers have a new tool at their disposal: cooperation in the midst of competition," wrote Senior Editor Pete Wetmore in an e-mail to me last week.

As you'll see inside, "the Seattle story" is this: The publishers of that city's two papers have elected to restructure their joint operating agreement to allow the Seattle Times to move into the morning field, while the Post-Intelligencer continues to cater to the coffee-and-comics crowd. (According to the participants, it took 10 years of talks to work it all out.)

Also inside, Wetmore writes that the Los Angeles Times and one of its main competitors, MediaNews Group's Los Angeles Newspaper Group (LANG), have announced they have expanded their pre-print distribution system further with the acquisition of California Independent Postal System Marketing Group Inc. (LANG publishes the Daily News as well as the Long Beach Press-Telegram and four other papers, and soon will have additions with last month's agreement with Donrey Media Group to manage that company's California properties.)

And, as Wetmore wrote, you read last issue about a consortium of newspaper companies – which include MediaNews and its archrival in the Denver newspaper market, Scripps – has acquired AdOne, the classified advertising aggregation service (see NewsInc., Feb. 1, 1999).

When you take into account breaking news that happened as we were going to press – a coalition of the Newspaper Association of America, American Society of Newspaper Editors, Newspaper Management Center of Northwestern University and McCormick Tribune Foundation banding together to promote readership (more on that next time) – you have a lot of what those in the new media world call "co-opetition."

Ugh. What a horrible word. It was coined by two Ivy League biz school professors in a best-selling book of the same name three years ago to describe a trend that they saw in business: the merging of the best aspects of competition and cooperation into what they called "win-win" situations.

So, for once, the newspaper industry is only three years behind the general business curve.

As I said in last issue's essay, the newspaper business is becoming less a business of geography and more a business of niche customer segments. Now, that's not to say that geographic competition is dead, dying or even down with the flu.

But as our country has evolved from metropolitan cities that once had a dozen papers, to the same cities that now have only one or two (and suburban areas that never had a newspaper), to having head-to-head competition? The entire nature of newspaper "competition" has changed.

And there are external influences as well. We're all aware of the impact that direct mail, radio, broadcast television and cable television have had on our business; the Internet is still a wild card waiting to be dealt.

It is now more likely that a newspaper's competitor for advertising business will be a direct mail firm or a local radio station rather than another newspaper. Its competitor for readership and circulation is not even print or TV or Internet – it's "time." Time after time, readers tell us they don't have enough time for us.

So it's probably not an entirely bad idea to see a little more co-opetition in markets like Los Angeles and Seattle (though it does make me uncomfortable as hell). I guess if a portion of the extra revenue that these new arrangements make goes to making better newspapers, it will be worth it. If there's an extra reporter on the street or a major investigative piece that's been essentially funded by this co-opetition, then I can stomach these alliances.

But if the extra revenues go straight to the bottom line, then there may be a question of who is being co-opted here – the competitors or the readers.

– David M. Cole

Inside ...

• Seattle prepares to enter unmapped JOA territory – competing morning papers
• Earnings reports continue to show bountiful results
• Analysts see threats to track in 1999
• Age and maturity invade alternative newsweeklies
• Papers' weekend delivery alliance to blanket L.A. market
• Now, here's a crummy web site
• Persons

From NEWSINC., Feb. 15, 1999, Copyright © 1999, The Cole Group. All Rights Reserved.