+ Page 12 + --------------------------------------------------------------------------- ####### ######## ######## ########### ### ### ## ### ## # ### # Interpersonal Computing and ### ### ## ### ## ### Technology: ### ### ## ### ### An Electronic Journal for ### ######## ### ### the 21st Century ### ### ### ### ### ### ### ## ### ISSN: 1064-4326 ### ### ### ## ### July, 1995 ####### ### ######## ### Volume 3, Number 3, pp. 12-31 --------------------------------------------------------------------------- Published by the Center for Teaching and Technology, Academic Computer Center, Georgetown University, Washington, DC 20057 Additional support provided by the Center for Academic Computing, The Pennsylvania State University, University Park, PA 16802 This article is archived as BONDAROO IPCTV3N3 on LISTSERV@GUVM (LISTSERV@GUVM.GEORGETOWN.EDU) --------------------------------------------------------------------------- THE SEATTLE TIMES EXTRA: AN INVESTMENT IN CONTENT, NOT TECHNOLOGY Nina Bondarook, Manager, Online Services Business Development, Medio Multimedia Inc., Redmond, WA. From the days of the first printing press to today's computerized online services, newspapers have often taken advantage of emerging technologies to expand their reach. So, it was no surprise when The Seattle Times decided in 1993 that it would develop an online service. What was a surprise was the fact the company chose to use a local bulletin board service as its entry into the online market, rather than to partner with a more technically sophisticated national commercial online service provider. + Page 13 + Seattle Times Company officials had discussed the possibilities of going on line for several years. They viewed it as a natural extension of the success the company had found through its profitable 100+-line InfoLine audiotex service. InfoLine is operated by a wholly owned electronic subsidiary called Times Information Services, which is housed in a high- rise building several blocks away from the newspaper's location. Because of union issues and the paper's desire to cross-utilize InfoLine and newspaper content on line, TIS was selected to develop, market and operate what eventually became The Seattle Times Extra, away from the newsroom. Before I joined the staff as editor in June, TIS had already purchased an off-the-shelf bulletin board service software package called The Major BBS by Galacticomm as its "low-cost" entry into the online arena. One employee, a technical administrator had been hired to customize the software to meet our unique online needs. It was my job to direct the development of the service, to select and secure content, to write the business, marketing and operational plans, and to hire and train staff as they were justified by progress, and to handle all other aspects of the service. Eighteen months, several hundred thousand dollars later, and with tremendous amounts of in-kind service from newspaper staff managers and TIS' other employees, The Seattle Times Extra was launched. It was a subscription-based community online service operating with 24 incoming and four outgoing lines on a bulletin board platform. Three months after launch, it had just under 200 paying subscribers toward its first-year goal of 1,200. And as many as 4,500 people had sampled the service through free week-long limited access demonstration accounts, including some 200 who participated in a 30-day beta test. The following pages describe the strategies used in developing Extra and outline some of the challenges the introduction of this two-way computerized medium brought to the company and the newspaper. The service, as described, was planned to derive about 80 percent of its first-year revenue from subscriber fees, and was not expect to show a profit until its fifth year of operation. Because the company wanted to keep development costs low, funds were not allocated for original market research. Instead, we scoured + Page 14 + trade publications, subscribed to industry-specific newsletters, joined online discussion groups on the Internet and cannibalized market research that had been conducted by US West, the local Regional Bell Operating Company for its failed attempt to launch a Seattle Community Link online service. In formulating our plans, we also relied heavily on information that was provided to us by other newspapers already dabbling with online products, and with information we received from national commercial online services that were courting us as potential content providers. But when it really came right down to it, we made most of our decisions based on gut instinct and educated guesses. By the end of 1994, the online segment of the information industry--services that are primarily delivered via modem and computer--was growing faster than the information industry as a whole. According to a variety of online related magazines, newsletters and analysts, it was generating an estimated $10.1 billion worldwide and was experiencing phenomenal growth--an average of 22,000 new users each week. At that time there were reportedly more than 5.2 million paying online users and the five major online services accounted for a large chunk of the customer base: * CompuServe had 2 million subscribers * Prodigy followed with 1.3 million * America Online, a newcomer, more than a million subscribers * Delphi had 120,000 * GEnie had 100,000. Several research studies showed that, as consumers became more aware of the availability of information on line, the more they demanded it and that they were willing to pay for access to it. The trick was making it available to them when, where and how they wanted it at a price they believed provided good value. + Page 15 + The greater Seattle area is served both by US West and GTE. We determined that the most likely users of our service initially would be people within the local free telephone calling area, as had been the case with InfoLine, which today generates some half million requests for information each month. So we based our initial forecasts on these potential local access customers. According to a 1994 Scarborough study for the newspaper, of 857,425 households in the Seattle Metropolitan Statistical Area, approximately 135,473 households owned modem-equipped personal computers that could access our service. An estimated 21,000 of these households had already had tried or were currently using some type of local or national online service. But, according to US West, only an estimated 40,000 of these modem quipped households were within free calling distance of our offices. There was no way to compute how many of those 21,000 households already familiar with online services were within our free calling area. What we did know is that people already familiar with online services were most likely to sample our new service. But the local competition for online dollars was keen, not only from the national online networks that were targeting our affluent, well-educated populace but also from at least nine other local online information efforts underway. Those competitors included: * Public Access Network The City of Seattle began testing a Galacticomm online system in early July of 1994 and planned to introduce it publicly in October 1994. It was running off a DEC Alpha computer with 16 modem lines during beta testing, but was to have 64 at launch. The city was concurrently developing a World Wide Web site. Eight people were assigned to the project and the city's hope was that it could be used to disseminate electronic versions of the city's budget, charter and other information that was expensive to produce yet routinely requested by residents. The city also hoped to use it as an inexpensive way to communicate with residents via e-mail, and were working with other municipalities to bring them on line as part of the site. Eventually, the city planned to compete with businesses for advertising/sponsorships of content areas as a way to defray operation costs. * Seattle Public Library The library, thanks to a $27,000 grant from the Robert Bunn Fund, established an Internet hookup for the library's local online system. Through it, library patrons had access to eight Library of Congress catalogues, a number of different dictionaries and thesauruses, weather data, White House news releases, local community events and organizations. The public could also could access information through 200 computer terminals in the main library and its 22 branches. But the library's 25-line UNIX system was operating at 95 percent capacity and busying out during peak usage (some 19,000 calls per day). So very few dial-in users were finding the Internet access adequate. * Computer Professionals for Social Responsibility The group was developing a free Seattle Community Network on the city library's system. It also planned to include community-based content which could compete with Extra's online content. But it was to be staffed entirely by volunteers and was to serve as a communications hub for advocacy and citizen activism. When it came on line in March 1994, it served more as an electronic town hall and tried to model itself after the successful Cleveland Free Net service. + Page 16 + * NCAA Seattle Visitors Information System Also at the time, a consortium of local advertising/PR representatives and businesses were trying to develop a permanent Seattle Visitors Information System and interactive free-standing kiosks that was targeted for the 1995 NCAA Final Four. However it never received enough financial backing to be truly successful. * US West Community Link US West's online plans were formally scrapped at the beginning of 1994. Originally slated to debut in 1993, Community Link relied on the French Minitel terminal which met much market resistance here and in two other sites: Omaha and Milwaukee. The US West service was to focus on health care, financial, education and electronic mail components based on its extensive research of potential uses and needs in the local marketplace. * Tacoma News Tribune After numerous delays and a change in platforms, the McClatchy-owned paper launched TribNet June 6, 1994 using a Galacticomm system. It featured online classified ads, shopping, stock quote portfolio analysis, an online library of newspaper archives and limited daily newspaper content and was undergoing constant refinement. Eventually, the service launched a Seattle number that threatened to eat away at Extra's potential local calling area subscriber base. When the service was launched, it had eight incoming lines. + Page 17 + * Info/isle Mercer Island's 2 1/2-year-old interactive electronic kiosk service was in operation at the city's government offices and public library but ad no modem link to home computers. The city was actively seeking to recoup its $32,000-development investment by selling the system to other communities and by supplying the community information it contained to the King County Library System's online service. * Puget Sound Bulletin Board Services Our online staff surveyed more than 200 area bulletin board services in July 1993 and found that message boards outranked file and entertainment services by 10 to 1. Although most local BBSes were nominally "free" to callers, they were usually required to make "donations" ranging from $2 to $25 per year before system operators would grant them full access to all areas of the boards. Some subscriptions ran as high as $150 per year for technical content. And typical time limits permitted only one call per day and between 30 and 90 minutes of online time per call. * Seattle U.S.A. In March of 1994, several area residents banded together to form a company called Seagopher Inc. and launched a site on the Internet called Seattle U.S.A., which they described as an online "information cafe." For $30 a month, businesses and organizations could purchase two pages of text advertising on the system, or for $100 a month, customers got to store up to 20 pages of text or a couple of digitized full-color images promoting products. Seattle U.S.A. were also working with area convention and visitors bureau, chambers of commerce and trade associations to get other local content online that Extra also planned to use. + Page 18 + Since our strategy, endorsed by the newspaper's Interactive Services Oversight Committee, was to concentrate on the needs of the local community before considering partnering with a national online service or moving onto the Internet, we definitely felt our competitors' presence. And our analyses of the top potential partnering candidates at the time--America Online, Prodigy, CompuServe, Delphi, GEnie, Imagination Network, Ziff Davis' Interchange, and the upcoming eWorld, Starwave online services and Microsoft's Marvel--indicated they fell far short of meeting our immediate strategic needs and traditional publisher's goals. Launching independently, therefore, afforded us the greatest potential local credibility, allowed us to maintain the branding of our product, and to control its development, growth, marketing and subscriber database. More importantly, we determined that going it alone would allow us to test our company-wide capabilities in anticipation of someday moving onto more sophisticated platforms and services using Internet-based technologies. Our ultimate strategy was to spend more money and effort on providing relevant editorial content to the marketplace than on fancy technology. We wanted to be more than just an electronic version of the daily Seattle Times. But we also wanted our system to grow slowly and carefully because we realized both technology and the consumer expectations were changing so rapidly that it would be impossible financially to try to keep up with them. We decided to dip our toes in the online waters by concentrating on content, to learn from the experience and then, after the industry had somewhat stabilized, plunge in with deeper investments in technology. + Page 19 + We wanted our service's structure to be user friendly and comfortable, especially for those Seattle Times subscribers who were new to online services. We decided to model our core content areas after traditional newspaper-styles of sections. It also had to be designed in a logical fashion that would make it easy for online editors to quickly add such content into "buckets" or content areas that subscribers could intuitively turn to for non-newspaper content. As a result, we created the following content areas, which included menus for easier access to more specific geographic and informational content: News & Weather, Business & Technology, Sports & Outdoors, Arts & Entertainment, Food & Dining, Lifestyles & Travel, Health & Education, Kids/Teens/Games, The Resource Center, News Plus, The Front Page, and the Marketplace. The Seattle Times' daily content was to be the foundation for those areas and additional content would be layered on to make the amount of information deeper and broader. That content was to include material from the company's other community and specialty newspapers, from online staff-generated content, from outside information vendors and services, and from online subscribers themselves. We wanted our online service to augment the newspaper, enhance its image, extend its market reach and to provide added value to existing newspaper subscribers. We even named the service "The Seattle Times Extra" to take advantage of the name recognition of the newspaper and its perceived level of quality as well as to indicate it provided more or "extra" content. + Page 20 + More specifically, we believed developing and testing such a community BBS would provide the Seattle Times Company with: * Learning The experience we would gain in repackaging our newspaper content for this first effort would prepare us technically, editorially and operationally for whatever new technologies and business opportunities would emerge. * Positioning Simply announcing our intention to enter the online arena, we believed, would put us in a position of market strength in terms of deflecting competitors, and put us in the driver's seat in negotiations with potential online partners. * Revenue Growth We hoped an online service would generate a new revenue stream from subscriptions. It eventually could generate sizable income from paid advertising and content area sponsorships and through online transactions such as shopping, classified placements and creating a vehicle for online subscriptions to our newspaper products. * Market Expansion Delivering content via electronic means would potentially allow us to reach people who weren't current newspaper subscribers or advertisers and provided venues through which to reach special interest groups. * Added Value By cross-promoting online content in the newspaper and putting up content that was not available in the paper, we believed we would be adding value to the traditional newspaper product. * Customer Service An online service that includes e-mail addresses to editorial, circulation and advertising departments would provide positive perceptions of increased accessibility and improved customer relations. + Page 21 + We planned to continually analyze content and our market's needs while slowly revising and refining the service and making incremental investments in hardware, software and staff. Eventually, Extra was to become a regional information service that could solicit participation from other independent newspapers. As our work progressed and we upgraded the computer on which the service would operate from a 386 to a 486, we learned more about Galacticomm's abilities and limitations, and about Microsoft's planned online system. We even joined an "advisory" council of content providers who provided ideas for the Microsoft service, code-named Marvel, and its Blackbird authoring tools. The tools were to make it easy for newspapers to design content areas on the Microsoft service and easy to upload content and information for posting onto the system. A little over a year after we had started our online development, we had signed a letter of intent either to put parts of the yet unlaunched Extra, or to roll it over in its entirety onto the Microsoft system when it launched in 1995. Our belief was that by then, we would have worked out the bugs in our internal processes for collecting, compiling, editing and reformatting newspaper and added-value content using our BBS, and that by then we would have a well-trained online editorial staff in place to make the transition easily. + Page 22 + Although Microsoft only was in the development stages of the system, Seattle Times Company management believed strongly that the service was the right eventual move for us because of nine factors: * Microsoft already had proved itself technically through other products. * It is strong financially. * The company has a global focus. * Its "Blackbird" suite of authoring and development tools at the time seemed far superior to other available products. * The demo service included unique advertising and billing environments. * The service was to eventually be cross-platform compatible. * Microsoft was involved in local, regional and Canadian interactive cable experiments. * It presented the best revenue-sharing model we had seen from any partner at the time. * Because Microsoft was a local company, its management would be most accessible to us if and when needed. The Marvel online service was to use a client-server architecture with a Window's 95 front-end or client, and a Windows NT back end, or server. Its advanced features were to include customizable searchers, user configurable options, improved multimedia capabilities such as a patented progressive rendering system for still images, and ease of navigation beyond those of existing national services. The authoring + Page 23 + environment was to integrate with existing desktop publishing and newspaper publishing systems using Standard Graphical Markup Language, and its content was to focus initially on communications such as email, bulletin boards, chat areas, download libraries and Internet access. Then it was to fold in content from a variety of print and broadcast sources--all of which would instantly be accessible to the more than 10 million members of Microsoft's existing customer base who were expected to snap it off the shelves. So as we developed our community bulletin board service, we always did so with an eye to what it might eventually evolve into using the developing Microsoft system. When we first began developing the service in 1993, we called it the Seattle Times Access Northwest, or STAN, for short. A member of our staff drew a stick figure of a cartoon character with freckles, a bow tie and whimsical wisps of hair. Our phone number was to end in STAN--7826, so that it would be easy to remember. And we played with the three-number prefixes that were available to ensure we had a winning combination. STAN was to be a user-friendly mascot who would appeal to youngsters--the future subscribers of our printed newspapers, as well as the online service--and we thought of a variety of special promotions, ad campaigns and advertising specialty items we could use to promote the service. STAN was to be our local version of the book 2001's HAL, the computer, but with more personality, and friendlier. We were sold on the concept. + Page 24 + However, after months of seeing other online and non-related businesses and services spring up using Access in their names, we began to have our doubts. Not only was it a mouthful, but if people shortened it to Access or Access Northwest, we thought it would sound too much like a telephone company or like a software program. A short time later, Galacticomm began selling an add-on BBS module featuring a cartoon character called STAN who sometimes had a nasty personality and appeared on users' computer screens to deny them access to areas and functions. Suddenly it was obvious that our warm and fuzzy mascot idea would not work. And we were not only racing to complete the technical and editorial specifications for the system, but also to find a new name. And, this midcourse correction was just one of the constant changes we had to make because of the technical and other problems we stumbled upon as we developed the system. There were so many ongoing changes and each time one was executed it caused a domino effect on various areas of the system's functionality and user navigation, se we often felt as though the system would never go up. Initially, we intended to launch Extra as a text-based service only, one that any brand of computer and even lower-speed modems could use. But as online use mushroomed, and users became more experienced and sophisticated in their expectations, we decided to add a mouse-driven Windows-style interface using Ripterm software that could be downloaded from the system and immediately installed onto users' computers. Unfortunately, this added development time and delayed the + Page 25 + system launch several times. And, it was not a feature available to Macintosh users. It also required special handling in promotional, marketing and customer service areas under development. But still we forged ahead. Given our analysis of the online industry and local interest, we set a goal of 1,212 paid users at the end of our first complete year of operation. That represented .9 percent of the total number of modem- equipped PC households in the area and 3 percent of the number of household in the free calling area that could access Extra. Our plan was to charge a flat monthly rate of less than $10 and users who prepaid longer-term access and the newspaper subscribers received steep discounts. And payment was to be made on line using credit cards only. Our initial subscriber acquisition efforts were to encompass in paper advertising and cross-promotions augmented by limited direct mail campaigns. As a subsidiary of the newspaper company, we received discounted rates for advertising in The Times papers Monday through Saturday. But because the newspaper was involved in a joint operating agreement with Hearst's Post-Intelligencer, the city's morning paper, we quickly learned that we would have to forgo advertising in the combined Sunday Time/P-I newspaper because we couldn't get discounted ad rates and we didn't have enough in our marketing budget to afford such a luxury. So instead we began to build alliances with the newsroom staff to develop other in-paper promotions and marketing measures that would balance out the absence of Sunday ads. Among those tools were an anchored area on page A-2 explaining what Extra is and how readers could access it, incolumn bugs or logos signifying that newspaper readers could obtain longer versions of stories or additional related content in the News Plus area of the online service, and occasional coverage of Extra in the newspaper's Sunday Personal Technology section, which debuted in April 1994. + Page 26 + We also created a variety of other online cross-promotional opportunities for the Seattle Times Company and its subsidiaries, ranging from e-mail and fax communications capabilities with customers, to future online newspaper subscribing and classified advertising order placements. Seattle Times company employees and newsroom staff were to access Extra through software that made it possible for up to 16 simultaneous users to access it across the local area computer network rather than dialing in via modem and tying up public access lines. But with two-way communications capabilities came never-before seen responsibilities and other challenges. Since newsroom staff members were part of the Newspaper Guild, a union, we spent months working with newsroom managers to decide little things that could affect the bargaining unit. For example, we couldn't assume that every reporter and editor in the newsroom would want or should have e-mail access because it implied they would have to read and respond to that email and that could be outside the scope of their defined duties as per the Guild contract. We weren't prepared to have to pay newsroom staff members overtime to use the system. So every aspect of the service--from who was to get access to Extra, when they could log into the system and what their responsibilities on line were to be, and even whether we had the rights to a writer or columnist's work for online use--was carefully negotiated between TIS and the newsroom. In general, TIS agreed that it would provide: * The hardware, software and customer service components of the online service. + Page 27 + * The menuing, repackaging and posting of all online content. * Forums and online conferences. * Electronic mail addresses for newsroom use. * Promotion for the online service. * Online advertising and subscription capabilities for the newspaper. * Access to the newspaper staff of all TIS-generate content for publication within the newspaper. The Seattle Times Company was to provide TIS with: * Timely access and rights to the daily content of the paper. * Materials that didn't appear in print that added breadth and depth to the online service and which were to be selected by the Times newsroom staff. * Assistance in negotiating usage rights. * Full access and rights to the newspaper's library for online use. * All classified advertising content. * In-paper references to the service and designated content on the service. * Assistance with integrated marketing programs involving circulation and newspaper advertising departments. + Page 28 + More than once, we were admonished that, even though we were a subsidiary, we were no different than other competing news operations-even though our service used the newspaper's content as its foundation. Often, when we wanted access to staff meetings or wanted to sit in on workshops to forge relationships with newspaper staff or to learn more about internal newsroom workings online staffers were refused and told, "Would we allow KIRO [TV] to do that?" The e-mail, teleconferencing, chat and similar interactive capabilities of the system, along with the advent of newsroom access to the Internet apart from Extra, eventually forced the newsroom management to draft internal usage policies and to direct how staff would interact with the public while using newspaper company resources. As a result, the newsroom appointed one of its wire editors as an online editor and liaison to the TIS online staff so that he could coordinate some of the paper's content offerings and the placement of daily in-paper references to the online service. Our online staffing plan, on the other hand, was to direct incremental increases that corresponded to various stages of the system's development, the posting of content to the prototype system, and growth in our subscriber base. Six months after joining TIS, I had hired my first editorial assistant from a nearby daily community newspaper, and we had begun developing online writing and style guidelines and posting daily newspaper content only to our development system. Three months later, we added a second editorial assistant who gave us the ability to operate seven days per week and develop original content while I concentrated on securing contracts with outside information providers and working with the technical staff and newsroom liaisons to further develop the service. Just prior to launch, we hired our third editorial assistant to focus on the development of neighborhood-by-neighborhood content and serve as a backup for the two daily news content editors. Then we were off and running. During the first year of online operation, we determined we could get by with just one more editorial person, a sports editor, who would concentrate on prep sports and recreational information. We shared technical resources, three customer service representatives who handled all TIS electronic information product calls, and a marketing coordinator: Not a large staff. + Page 29 + Based on pre-launch testing, we were able to make the day's first Seattle Times Company-generated news available on line by 11 a.m. daily, after the close of the newspaper's first edition. Afternoon updates were posted between 2:30 and 4 p.m. weekdays, with no afternoon updates on weekends. The Sunday combined Sunday Times and Post-Intelligencer early edition was available on line by noon Saturday, giving the public access to searchable classifieds. But shortly after testing began, we returned to the newsroom negotiating table to see whether we could move our deadlines up and begin offering content on line much earlier. By the time we launched the service, we were featuring searchable databases of restaurant reviews, movie schedules, travel destinations, recipes, lesson plans, non-profit organizations, social service agencies, ferry and other transportation schedules, lists of various categories of local businesses and industries and an online restaurant guide of more than 2,700 area eateries that were indexed by neighborhood, name, or cuisine. Census reports show that some 43 percent of the households in King County, where Seattle is located, include individuals between the ages of 25 and 54, that they are well-educated and have higher than average household incomes. Although online industry research shows that most online services are used by males in the 18 to 35 age range, we wanted to be sure our content was of wider appeal. + Page 30 + CONCLUSION When this project began we had no way to determine the specific needs of The Seattle Times Extra users, short of doing expensive local research or launching the system and observing user behavior, which we opted to do. We did depend on a 1992 US West survey to develop the BBS to be as fully functionally as possible, and to prepare for future Microsoft and Internet based services that would allow us to provide other online aspects that the initial BBS did not. According to that survey, consumers in our market area said they would be interested in a services that provided: * Transaction services such as banking, reservations and ticket sales for local activities * Restaurant menus, prices and reservations * School, government and community-related information * Children's activities * Online shopping for cars and merchandise * A variety of self-help and information categories, and * The ability to communicate electronically with others The Seattle Times Extra in its BBS form provided a good start in meeting some, but not all, of those expectations. As the number of online choices and services we can provide continue to proliferate, we maybe be able to meet all of those expectations. But the real question will be "How much will Seattleites be willing to pay to access the Seattle Times Extra?" Only time will tell. -------------------------------------------------------------------- BIOGRAPHICAL NOTE: Nina Bondarook successfully completed the development of The Seattle Times Extra in January and joined the staff of Medio Multimedia Inc. of Redmond, WA as Online Services Business Development Manager. In that capacity she assists newspapers throughout the region with the development of online services. Bondarook has more than 10 years of journalism experience in newspapers, television and cable in Arizona and Colorado and also has worked in public relations. She also teaches part time at the University of Washington. Email: ninab@medio.com + Page 31 + -------------------------------------------------------------------------- 5. Copyright Statement ----------------------------------------------------------------------- Interpersonal Computing and Technology: An Electronic Journal for the 21st Century Copyright 1995 Georgetown University. Copyright of individual articles in this publication is retained by the individual authors. Copyright of the compilation as a whole is held by Georgetown University. It is asked that any republication of this article state that the article was first published in IPCT-J. Contributions to IPCT-J can be submitted by electronic mail in APA style to: Susan Barnes, Editor IPCT-J, SBB3007@IS2.NYU.EDU