CNN's New Wire Will Shake Up the Newspaper Business

 |  Includes: GCI, GHC, MNI, NYT, SSP
by: Ken Doctor

It's been a busy season -- cratering newspaper business, bottoming economy, election of a lifetime. So CNN's letter to editors that it is creating a new wire hasn't gotten the attention it deserves.

This is a move that's been in the works for awhile. We can go back to September of 2007, seemingly a news eternity away, and be reminded that CNN terminated its multi-million contract with Reuters. That was a key signal: it would stop receiving one of the world's major wire services and embark on the road to becoming one.

Since then, it has invested in staff and technology, moved around a number of its pieces and now is positioning itself to more greatly leverage that investment. So in addition to cablecasting, webcasting and mobilecasting (its big three destination plays), it figures it can make some money offering the same content to other news outlets. Call it syndication, call it distribution or call it, in the old parlance it has chosen, the CNN Wire.

We'll know more about the new wire as editors make the trek to Atlanta for a Dec. 1 two-and-a-half day event entitled the "CNN Newspaper Summit."

If you're curious, the agenda for the session is pasted below. I'm disappointed to report that neither Larry King nor Anderson Cooper nor Campbell Brown is on the schedule. Instead, CNN execs will make the case why their news organization should become newspaper companies' new best friend.

Sessions on "Documentaries & Investigations", "Money" (or "CNN's Issue #1"), iReport (its user-gen initiative) and "Technology Show and Tell" are featured. On the summit's second day, "Session VII: CNN Wires" is the payoff, in which, impressed newspaper editors are pitched the new service.

Within that one-hour session (seems short for a closing pitch) is "CNN Newsource Sales Potential Producer: Ed Stephen." And therein the story should get more interesting, because CNN Newsource is the company's existing local play, aggregating local broadcast clips from stations across the country.

Richard Griffiths is the CNN Editorial Director, and he'll lead that session. "He lives and breathes the news," one associate who knows him well told me.  A veteran journalist close to CNN, she puts the wire initiative in perspective: "CNN is positioned really well. They want to do good journalism....They're positioned globally. They have the TV world wrapped up and are now getting into the newspaper world."

I'd like to flesh out CNN Wires' intent with some actual on-the-record interviews, but the company isn't giving any at this point, a sign that always makes me queasy in dealing with companies whose business is news. 

So let me offer nine questions about CNN's big move, for the moment. But first, the one I've been wondering about since the election night: On stage at the Summit, will surprise guest Wolf Blitzer use his new hologram technology to call up images of AP head Tom Curley and Thomson Reuters head Tom Glocer .... and vaporize them with his lightsaber?

And now to the nine:

  1. While in the works for awhile, doesn't the end-of-the-year schedule take dead aim at the Associated Press, which is battling an insurrection of its newspaper owner/customers and aiming toward a big January board meeting to rejigger its business terms? The relationship between those newspapers and AP has never been more tenuous -- the perfect time for an interloper to move in. 
  2. Will CNN maintain the license fee business model used by wires? Sources tell me that's the plan at the moment, though the business model apparently is still under discussion, as is how much to offer as one all-you-can-eat service or a la carte. With ad revenue shares all the rage on the web, I'd be surprised to see CNN not offer that model, at least in part.
  3. How much of a clue does CNN have about becoming a vendor, a much-demanding business that has far different rules of the road than cablecasting or publishing? Is it really prepared to move from being a news medium to becoming a vendor, with all the to-be-built-out infrastructure and ongoing customer service that requires? (The current CNN Wire seems more blog-like.) Lastly, can it execute as fast as AP, being first with key stories?
  4. What hath Politico wrought? Just a few months ago, Politico -- the cable-fed, politics-energized upstart -- began reaching out to US dailies with its own syndication packages and own ad network. That's not a new concept (think Newstex, Mochila, Voxant and Critical Media), but it is an updated one, and it began opening editors' eyes that there's more than one or a couple of ways to present national/global news, as they focus their staffs on local. As Susan Goldberg, editor of the Cleveland Plain Dealer, told me recently, "It occurred to me that readers are shopping around for content, and we are too."
  5. Will newspapers page Dr. Sanjay Gupta? Seriously, they'll be tempted when they think about the kinds of health -- and other niche (think technology, business, entertainment, travel+) web content they can get from CNN, if the terms are right. Talk to web managers across the country, and they don't tell you they want more national and international news. What they want is "back of the book" features content, the kind of content that advertisers want to advertise against and for which they will pay higher rates. Newspapers produce a dearth of it; CNN produces more. Not surprisingly, both AP and Reuters have made a point of creating more niche features content in the past couple of years for the same reason. 
  6. So how will the "supplemental wires" respond? Newspaper editors have lived in a world of must-haves --AP-- and like-to-haves, the New York Times (NYSE:NYT), L.A. Times-Washington Post (WPO), McClatchy Tribune (NYSE:MNI), Scripps-Howard (NYSE:SSP) and other like wires. All have been struggling as newsholes have been cut. Many have tried to figure out some new web formulas, without getting a lot of traction. Now, along comes CNN, which we can assume will smartly offer widgetized news/feature products (some with ad units). That, I think, will spark a new rationalization of the supplemental wire game. Look for the New York Times, at least, to adopt a more comprehensive syndication widget product. Why isn't the Times already offering to become local and regional dailies' national/global news supplier on an ad rev share basis? 
  7. Aren't the local newspaper and local broadcast worlds being pushed harder into the new world of Local Media? Readers don't want text or video -- they want news. NBC Local, the new business unit running NBC's 10 owned-and-operated big-city station websites, recently relaunched its sites, looking very local newspaper site-like. Au courant newspaper websites are putting local video production at the top of their 2009 agendas and more prominently on their websites. CNN's Newsource brings lots of local news video into one place and could make its syndicatable to newspaper sites, if local broadcasters will agree, not an unfamiliar (echoes of AP controversy) knotty national/local issue in the making. It all adds up to a faster reshuffling of the Local Media deck, with all eyes on using content to sell local advertising. What is Newsource? Here's the boilerplate:

    CNN Newsource, comprised of approximately 800 affiliates including TV stations and local/regional cable news channels throughout North America, is the most widely distributed syndicated news service. Through continuous digital media distribution and five digital satellite channels, CNN Newsource provides partners with the news content necessary to produce competitive newscasts. This includes: CNN Worldwide's global newsgathering resources; the collective coverage power of CNN Newsource affiliates; customized live coverage of breaking news from CNN correspondents and localized "Money Matters" reports live from the floor of the NYSE. Additionally, CNN Newsource stations benefit from CNN Newsbeam, which provides satellite time and fiber connectivity from CNN's vast global resources at lower than market rates. CNN Newsource also helps prepare tomorrow's journalists by providing service at no charge to colleges and universities through its Newsource in the Classroom program.  

  8. Aren't we seeing that Big counts? This is how CNN describes itself: 

    With a worldwide staff of 3,800 people, 22 international bureaus, soon to be 15 domestic bureaus (including Seattle), 900 North American TV broadcast affiliates, a Web site, and a radio network, we are able to maintain a strong flow of up-to-the-minute stories. We now believe we have the base to offer this service to other news organizations.

    Stack that up against AP (3000 journalists, 4100 staff in total) and Reuters (2400 journalists), and you can see how size matters as news companies transform themselves, girding for the multi-platform battle ahead. Compare that to newspaper companies, most of which are in continuous loops of cutting jobs, and have staffs in the hundreds.

  9. How comfortable will newspapers be building up a competitor? Given CNN's broad ambitions in media, will newspapers find ease in a role as a junior partner, distribution outlets really? Newspapers may be uncomfortable with their 150-year-old uncle, AP, but as they depart Atlanta on Dec. 3, they'll be thinking a lot about their comfort with their new suitor, a potential big brother.

The memo:
CNN Newspaper Summit

Proposed Agenda 

Monday, December 1

Before 6:00 pm   Attendees arrive at Omni Hotel  
7:00 pm    Cocktail Reception 
7:10 pm    Welcome Address 
    Jim Walton, President, CNN Worldwide 
7:20 pm    Opening Remarks 
    Susan Grant, Executive Vice President, CNN News Services

7:30 pm    Dinner

9:30 pm    Evening concludes 

Tuesday, December 2

8:30 am    Continental breakfast begins

9:00 am    Sessions begin at Omni Hotel  
    Session I:  CNN Worldwide Overview 
    Ken Jautz, Executive Vice President, CNN Worldwide 
    Tony Maddox, Executive Vice President & Managing

              Director, CNN International 
         Potential Session Producer: Scot Safon

10:00 am   Session II:  CNN Presents Documentaries & Investigations 
    Jon Klein, President, CNN/US  
    and/or Mark Nelson, Vice President & Senior Executive 
    Producer, CNN Productions 
    Potential Producer:  TBD

11:00 am   15-Minute Break 
11:15 am   Session III:  CNN’s Issue #1  
    Chris Peacock, Editor, CNN Money 
    Ali Velshi, Senior Business Correspondent & Host of Your $$$$

    Potential Producer:  TBD

12:00 pm   Lunch 
12:30 pm    Session IV:  Political Report Card Panel

                   Panelists:  TBD 
       Potential Producer:  Sam Feist

1:30 pm    Session V:  Technology Show & Tell 
    Frank Barnett, Vice President, CNN Satellites & Transmissions 
    Arnie Christianson, Operations Manager, 
    CNN Satellites & Transmissions 
    John Courtney, Vice President, CNN News Media Group 
    Potential Producer:  Aaron Cooper Your browser may not support display of this image.

Tuesday, December 2 (con’t)

2:30 pm    Session VI: & iReport 
    KC Estenson, Senior Vice President/General Manager, 
    Lila King, Senior Producer, 
    Potential Producer:  TBD

3:30 pm    Session VII:  CNN Wires 
    Richard Griffiths, Editorial Director, CNN 
    Ed Stephen, Senior Vice President/General Manager, 
    CNN Newsource Sales 
    Potential Producer: Ed Stephen 
4:30 pm    Seminar concludes

7:00 pm    Cocktail Reception

7:30 pm    Dinner

9:30 pm    Evening concludes 

Wednesday, December 3

9:00 am    CNN Studio Tour & Tour (optional) 
Before 12:00 pm   Attendees depart

Stock position: None.