Business-To-Business Internet and New Opportunities for the Traditional Mass Media

Business-to-Business Internet and New Opportunities for the Traditional Mass Media

Dr. Evaldas Drasutis, Sintagma Sistemos UAB, Lithuania, Baltic IT Review 2 '2000

The concept of the virtual newsroom involves Internet-based software technologies which allow consortiums of newspapers to run a joint international business with well-managed mutual operations. This "virtual infrastructure" does not require major investments in premises, other facilities and staff. The goal of these kinds of operations could be to provide a source of regional (e.g., pan-Baltic or pan-Scandinavian) information for newspapers or Internet portals, as well as advertising space for local or, more likely, foreign operations.

<big>Introduction</big>
We often hear people say that information technologies are "the future", while everything else is "the past". This sounds good to the IT professional, but it is obviously not true, because the usefulness of information technologies, as any other technologies, is defined on the basis of how they can be used to deal with the problems of "the past". Given the vast popularity of the Internet, it seems clear that nobody will argue that the Net is not useful to anyone, but the question of us always has to be: "How can we benefit from this, and what benefits do others offer to us?" Here in the Baltic countries we must double or pragmatism if we hope to find our proper niche in this age of great IT challenge.
There’s nothing wrong with selling CD-ROMs over the Internet or putting colorful banners on WWW pages. I feel, however – and I intend to demonstrate this in this article – that the real "E-pragmatics" are hidden behind the scenes. Companies are finding it possible to cut down operational costs and engage in effective business-to-business interactions which, in turn, bring about new product ideas and better service quality to the end customer. This article will focus on the mass media, and in particular on newspaper product, and I will try to formulate a few ideas about this issue. I believe that we can develop a truly pragmatic approach to information technologies, the Internet and E-business.
About three years ago our company, Sintagma Sistemos (it was known under a different name at that time), built its first media or newsroom system. Our first client, as it happened, was a television station, but our focus has always been on newspapers and other text-based media. We developed a software product, NewsNote, which is a groupware system that is suited for automated teamwork in a geographically distributed environment. Later we created a "virtual newsroom" concept that brought together the technical aspects and opportunities of the Internet, the WWW, other communications environments, de facto standards and advanced software that reached considerable heights.

<big>Using the technology: Ideas</big>
Most business-to-business Internet applications connect wholesalers with retailers, or manufacturers with distributors. In the media market, the relationship between a news agency and a newspaper is similar (although not identical) to the relationship between a wholesaler and a retailer. This means that we are able to apply our widely expected practice and experience with business-to-business Internet applications, given that most newswires today are using the Internet to deliver their product to the client. That’s just one example of work in this field, and there are other equally visible applications, too. But is that all? In fact IT-related opportunities for newspapers exist at three different levels:
• Computerization of individual processes such as layout, text processing, editorial management, etc.;
• Integration of all of the processes of newspaper production into a monolithic system and distribution of these elements geographically;
• Enabling of several newspapers, as well as other kinds of media companies such as broadcasters, to collaborate in a virtual environment in the style of E-business, as well as to create regional information products by using modern Internet, communications and software standards.
The first two levels are more or less customary in the modern practice of computer applications, but the third could be described as "business-to-business Internet and new opportunities for the conventional media."

<big>Optimizing processes</big>
When we look at the day-to-day activities of the newsroom of a daily newspaper, we see that they involve a mechanism in which information from a variety of sources is collected, compiled, processed and developed into the final result. The newspaper also handles advertising, classifieds, relationships with subscribers, printers, salespeople, etc. All of these processes must be aimed at one objective – having the right product at the right time. This is true for all of the media, whether it be a television news program or an Internet site.
The most obvious impact of IT development on newsroom processes and on the newspaper business in general is the opportunity to cut down on operational costs while creating a better environment for creativity and the quality of the final product. It is very important that processes can become faster and more manageable, which allows newspapers to expand their deadlines. This is nothing new in the world, and we at Sintagma have found that there can be dramatic improvements to newsroom processes if all of the relevant activities are properly organized within the framework of an integrated software system.

<big>Increasing productivity and new interactive products</big>
The advantages become even more obvious when newspapers go to the Internet do develop their electronic versions. This process always costs something, not least in the sense that the newspaper’s traditional market is often cannibalized – traditional readers find that they no longer have to buy a paper copy of the newspaper. This forces the newspaper to create new reader value by providing different or new content on the Internet site, and this requires greater human resources and expenditures. Clearly, the key to new product ideas is increased productivity at a lower cost, and that’s where technologies come in.
We know that the NewsNote system (Figure 1) makes it possible to transform a three-days-per-week newspaper into a five-days-per-week newspaper without any staff increases. A daily newspaper which wants to put materials on the Internet requires only one journalist to do the editing, handle advertising and do the necessary technical work. We have concrete examples of this. The secret to such efficiency is the full integration and standardization of data flow and software, putting newswires, other information sources and all management functions under the fingertips of every journalist and editor while optimizing the workflow of the process.

Allow me to reemphasize the main point here: Thorough optimization of data and workflow with the help of an integrated software system can significantly cut costs. Our work in this area has not been directly related to the Internet so far, but it does inspire us to draw a few conceptual conclusion sin this area. There are two reasons why the process improves effectiveness – all of the information that is related to the production of the newspaper is in digital data form, and modern technologies enable business communications and exchange of information and knowledge among professionals faster and cheaper, leaving more room for creativity.

<big>Distributing newsroom processes</big>
Now let us imagine that we are placing the LAN of a newsroom onto the Internet:
• Journalists can be located anywhere, as long as they have access to the same informational and other resources;
• Text preparation does not require all of the technical staff (correctors, translators, etc.) to be located in one physical place;
• Editors can assign duties and control all processes even if they are located somewhere else;
• Layout designers can receive the materials and do their work elsewhere, too;
• The Internet editor can be "virtually virtual";
• The newspaper can be printed anywhere.
This is an example of a "virtual company". Of course, it’s not as easy as it may look here. There are technical and human problems which can be complex, indeed. Still, it allows us to take the next step forward.

<big>Regional business and the virtual newsroom</big>
Now let us imagine that several newspapers which are in proximity to one another decide to form a consortium to issue a joint periodical which is based on the materials of the local newspapers but is of regional significance. The local material can be selected and adapted for a hypothetical reader who, for one reason or another, considers several territories to be of interest. The new publications would be targeted to this reader, and the joint project would receive regional-level advertising that possibly was not available before (Figure 2).

This is entirely realistic – the Baltic News Service news agency and the Baltic Times newspaper provide specific evidence of this in the Baltic States, and other "regional ideas" may emerge in the Baltic States, Scandinavia, the pan-Baltic region, Estonia and Finland, the northern reaches of the Scandinavian countries, Eastern Europe, various Euro-regions, etc. We are seeing natural trends toward regionalization today which are becoming even more natural in the context of European integration. What’s more, the model can be applied not only to territories, but also to market segments – consortia can emerge on the basis of subjects such as politics, business, culture, etc.
In talking about regional newspaper consortia, we should not forget the development of Internet brands and portals – why not create a site for readers of a similar profile? I feel that these are ideas which may eventually be of interest not only to businesses, but also, let’s say, to politicians.
New technological opportunities can eliminate or weaken organizational and cost-related barriers, thus triggering new ideas for regional business. The infrastructure for this kind of interaction is an Internet-based system which thoroughly designed business processes. In our case it is a virtual newsroom in the sense that a geographic "neighborhood" of working professionals is no longer necessary. The virtual newsroom involves ordinary business processes, but they are operated by a number of different organizations:
• The primary sources of information in our imagined regional, virtual newsroom are local newspapers – the members of the consortium. They supply materials through a commonly accessed system that is based on the Internet. Consortium members, in fact, are fulfilling the role of a newswire.
• One or more consortium members make the primary selections of materials and plan the edition, putting the results on the system.
• The materials are adapted to the target readership or in other ways – translated into a commonly spoken language, for example, edited for style, etc. In Lithuania it is common to translate materials into English and then send them for style editing in England or the United States.
• A selected member of the consortium is responsible for layout, and this member produces an intermediary and a final version of the issue.
• Consortium members also submit advertising orders to those who are responsible for further processing. Orders can also be submitted by external agencies with acquired rights to access the virtual newsroom system.
• The process is controlled and steered by the system itself to a certain extent, but also by members of the consortium.
• Non-core processes such as planning, marketing, accounting, finance management, etc., are performed by one consortium member or distributed among several.
• The system provides makes precise notations of the contributions of each member into the final product, whether they be related to text, information, advertising or something else.

The system holds all of the resources which are produced by the consortium members, and inputs are all completely traceable.
A virtual newsroom in fact does not differ much from a conventional newsroom, except in the sense that all interaction among the major processes is based on computers and software (Figure 3). This is possible, we believe, if all of the roles, responsibilities and workflow procedures are designed and coded into the system carefully. Ad hoc communications are available through electronic messaging, and Internet teleconferencing is also possible for more advanced needs. The bottom line is very efficient communication among the members of the local newspaper consortium, the aim being to issue a new product. The virtual newsroom, in fact, does not require all participants to be of equal value – freelancers can easily be incorporated into the general scheme.
Obviously there are a great many organizational and technical issues in the development of this kind of virtual newsroom, related to varying languages, business cultures, standards and systems. Still, temptations are large here, even if we take into account the permanently increasing level of competition between the conventional and the interactive media. The latter have no borders. In an age when political and business integration processes are becoming stronger, the Internet is becoming an environment which removes frontiers and enables the virtual merging of territories into a single region. Given these trends, technology vendors are finding it necessary to work hard with their clients in order to generate new ideas and to locate new opportunities. Here we have looked at a very effective way to bring these ideas to life.
What is we do nothing? Someone else will fill the vacuum. The sharks of the new economy are very aggressive, and the new opportunities may very soon become a threat for fully conventional businesses.