JOINING FORCES

January 19, 2000
		MSNBC and the Washington Post/ Newsweek recently minted an alliance to share Web content and reporting resources. Other news organizations are also expected to pair up in the near future. Media correspondent Terence Smith looks at what these deals mean for the media industry and its consumers. The NewsHour Media Unit is funded by a grant from the Pew Charitable Trusts.

Jan. 10, 2000: AOL agrees to buy Time Warner. Jan. 13, 1999: The growth of network news magazines. Nov. 13, 1998: New News Part 2: Cable and broadcast television. Nov. 6, 1998: New News Part 1: Changes in print and Internet journalism Browse the NewsHour's coverage of the media.   MSNBC The Washington Post The New York Times Newsweek ABC NBC CBS TheStreet.com	TERENCE SMITH: More and more news organizations are sharing their products these days. Newspapers are forging alliances with broadcast news divisions, television networks are exchanging video footage, and some of the biggest news operations are cooperating to put their joint efforts on -- where else?-- The Internet. ANNOUNCER: On cable, online. TERENCE SMITH: Why? Because they all envision the dawning of a new news century, with instant access to news 24 hours a day, real-time video, and most important, worldwide reach.
	The dawning of a new news century
	STEVE COLL: All of us in the general interest newspaper business online right now are trying to build audience, trying to create community, trying to establish our publishing presence. TERENCE SMITH: Steve Coll is managing editor of the Washington Post, which recently announced an alliance with MSNBC, which is in itself a joint creation of another alliance, that of software giant Microsoft and the broadcast network NBC. STEVE COLL: They offer a way to a global audience that is rapid and complete and something that we simply could not build ourselves. TERENCE SMITH: The Post, which also owns Newsweek, the nation's second-largest news magazine, has begun sharing stories and reporters with MSNBC Cable and Internet. ROXANNE ROBERTS: And then they're going to blow in hot air, which would make it just like any other White House event. TERENCE SMITH: In return, the Washington Post gains access to MSNBC's video, which the Post management considers vital to the survival of its own Web site. SPOKESPERSON: Hello, Buffalo! TERENCE SMITH: As part of the arrangement, Post stories are featured on msnbc.com, which is by far the most popular news Web site on the Internet, with an average of a million visitors a day. Another new amalgam, newsweek.msnbc.com, will be up and running early this year.
	Establishing an online presence
	TERENCE SMITH: Did you feel under competitive pressure to do this? STEVE COLL: If you ask the question -- do I think that it's essential that the Washington Post's reach online continue to grow and continue to grow rapidly, now and not next year or the year after it; that we are in a very important transition where space is being defined and audiences are being built? Absolutely yes. TERENCE SMITH: For news organizations across the country, the pressure is on to establish an Internet presence before the public's Web news habits are firmly entrenched. Surveys show that younger readers, those most prized by advertisers, are less dependent on newspapers and more comfortable with the Internet. While many news organizations offer Web sites, few are making money. There will inevitably be a fallout. TOM WOLZIEN: Somewhere between here and there we are going to wind up with a huge implosion. TERENCE SMITH: Tom Wolzien is a media analyst for Financial Investors. TOM WOLZIEN: The guys that are left standing are going to be the ones that have quality product, that are aggressive in their marketing, and have formed appropriate alliances to assure their long-term survival. TERENCE SMITH: News online is far more economical than print on paper, saving the costs of paper, printing and delivery. But as newspapers plunge more deeply into cyberspace, they run the risk of competing with themselves. TOM WOLZIEN: Newspapers have a real problem in that their readership is getting older, their classified advertising and potentially display advertising is being cannibalized by the Web. They have a choice: They can either do nothing and ultimately die, or they can take part in it and perhaps cannibalize themselves to a certain extent, but basically come up with a new economic model over the next decade, and survive.
	Sharing the news
	TERENCE SMITH: News sharing is not new. CBS and the New York Times conduct joint polls. CNBC shares news with the Wall Street Journal. The Post has polled jointly with ABC News, and provides reporters for news broadcasts including the "NewsHour." But as media ownership becomes more concentrated, the competitive pressure to join forces increases. Merrill Brown is editor-in-chief of MSNBC on the Internet MERRILL BROWN: These days, it's mandatory that you walk in to a sales call with a national advertiser, and if you can't bring Internet, television, magazine-like components to the table, you are at a disadvantage against larger integrated media companies. TERENCE SMITH: On Wall Street, the young TERC's and their customers have come to expect rapid access to information from a variety of sources. SPOKESPERSON: Where did it close at? TERENCE SMITH: The popularity of instant business news on cable and the Internet -- SPOKESPERSON: We've got active volume here in the early going -- TERENCE SMITH: -- is a harbinger of the role the Internet is expected to play in the future of news. SPOKESPERSON: I'd set out a strong buy, but accounting irregularities -- TERENCE SMITH: The New York Times, which is expected to announced shortly an alliance of its own with ABC and Disney's Go Network, recently acquired a 6 percent interest in Thestreet.com, a 3-year-old financial news Web site. SPOKESMAN: Not related to the one-day boost in price? SPOKESMAN: I don't know. TERENCE SMITH: The venerable Times and the upstart Thestreet.com established a joint financial newsroom late last year. DAVE KANSAS: I think it speaks to the sense of intense fear about the future that they are willing to make an alliance like the one they have made with us, and others are trying to do the same thing. TERENCE SMITH: Dave Kansas is editor-in-chief of TheStreet.com.
	Attracting younger viewers
	DAVE KANSAS: There is a lot of cultural resistance at the large newspapers to the online revolution. And what you are seeing is the leaders of these organizations throwing more grenades into the newsroom, so to speak. TERENCE SMITH: The challenge is to meld stories and styles attractive to both the older, general news audience of the Times and to the younger, technologically savvy readers of Thestreet. JACK LYNCH: Thestreet.com is very sassy and irreverent, and the Times is the Times. TERENCE SMITH: Jack Lynch, an assistant business editor at the Times, now heads the joint newsroom. JACK LYNCH: But we are looking to move aggressively into the Internet, and to be a major player there. That means we have to figure out how we want to treat the news in a way that brings more depth to it than just pure wire stories. DAVE KANSAS: The Internet is a different place, a different medium. They need to learn about that. But we always need to be grounded in the basics of good journalism, and I think that combining the gray lady with the young punk can create some really good journalism, and some excitement online. TERENCE SMITH: Few argue that these alliances don't make sense from an economic standpoint. But what are the effects on journalism itself? Will these alliances mean less coverage and fewer reporters deployed in the field? And can the news-gathering styles of detail-intensive print and picture-oriented television really work together? Merrill Brown: MERRILL BROWN: You can't go shooting pictures at the same time you are, you know, chasing a fire truck and trying to get the story down in words. We understand all that. But there are a lot of settings when using these skills together are to both the journalist's benefit and the end user's benefit. TERENCE SMITH: Last month, three networks -- ABC, CBS, and Fox -- announced yet another kind of alliance in which they'll share video footage for their affiliates. Justifying the arrangement, network executives pointed out that a lot of news video footage is generic. "If it's available to everyone," they argued, "why not join forces and save money in the gathering and distribution of those pictures?" TOM WOLZIEN: Whether they take the money that is saved and turn it in to do a better job to differentiate their product in their investigative reporting, or whether they just pocket the money and improve the bottom line remains to be seen.
	News partnering: A conflict of interest?
	TERENCE SMITH: And as conglomerates cooperate with each other, critics question whether their news operations will be vigorous in covering stories that affect them. MARK CRISPIN MILLER: It seems to me to be elementary that you try to avoid entanglements like these, and yet these kind of entanglements seem to be the norm now. TERENCE SMITH: Mark Crispin Miller is the director of the Project on Media Ownership, and a professor at New York University. MARK CRISPIN MILLER: Here you have the leading newspaper in our nation's capital now formally involved in a joint journalistic venture with a news division that is owned by General Electric, which is among other things a major defense contractor, also deals heavily in nuclear power, and has also been a very controversial corporation because of its own practices worldwide. Now, how likely is it that the Washington Post will pursue stories about GE as aggressively as they would have if there were no connection there? This is not conspiracy theorizing, this is simply realism. TERENCE SMITH: Steve Coll of the Washington Post: STEVE COLL: It is fully our intent to cover NBC and General Electric and Microsoft and every other party to this agreement just as aggressively, fairly and completely as we would have, had we not entered into this agreement. TERENCE SMITH: Merrill Brown says NBC's alliance with Microsoft has not stopped MSNBC from vigorous coverage of its partner. MERRILL BROWN: Look, conflict of interest in media is as historic as media is. Local newspaper editors made decisions for years because they would either hurt or harm the interests of favored local advertisers. And they failed or succeeded in journalism based on their ability to manage those decisions properly.
	Staying competitive
	TERENCE SMITH: Critics complain that alliances involving newspapers and TV inevitably diminish the natural competition between them. MARK CRISPIN MILLER: Is it possible that in a democracy, the news is too important to be left to the whims of huge corporations, to be left to the vagaries of what we call the market? We have to have this debate, because as things are going now, the news is at risk. And when the news is at risk, democracy is at risk. TERENCE SMITH: But proponents of these alliances argue that with the Internet, there is more room for different points of view. STEVE COLL: At the same time that this consolidation is occurring, a countervailing trend, which is technology itself -- technology is opening an infinite number of channels, literally infinite on the Web. It is making possible inexpensive self-publishing and community publishing to a scale and to an effect that America hasn't witnessed since the penny press. So I don't know how to evaluate the final result in reference to the public interest. I think it is a legitimate question, but I do think that the wind is blowing both ways. TERENCE SMITH: What seems certain is that the wind will keep blowing in the direction of more alliances and more consolidation.

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