More Reverberations on the Troika’s ’Open Network’

There’s been more industry feedback on the “Open Network” for national advertising that Gannett, McClatchy and Tribune (GMT) have proposed to launch for the newspaper industry. The first question is: Who leaked it to reporter Julia Angwin and why? There is some feeling that the leak didn’t come from GMT and in fact probably came from some other party that wanted to sabotage the network before it really got started. (And now, since posting this, I’ve learned from Click Z’s Kate Kaye that it wasn’t a “leak” at all, but some information that was doled at an analyst meeting).

Angwin got a great scoop and wrote a great piece, but I wonder whether her suggestion that Gannett Digital Media head Jack Williams was thinking in terms of illegal antitrust collusion was really warranted. The article states:

“He said the group would welcome other members so long as they agree to conditions about ad pricing and placement.” But then the actual quote from Williams: “If other people are interested in participating, they can join, but only if they are willing to live with the rules.”

I think Angwin probably went too far there. Based on the quote, Williams didn’t suggest collusion. The first thing I learned when I joined the Newspaper Association of America was that you don’t ever speak of collusion because of antitrust concerns.

The article also talked about how divisive the network would be. Newspapers have shrinking audience share and need to aggregate all the eyeballs of their audience. It is already an issue with the existence of the other networks already out there, or soon to be, if the newspaper/Yahoo! national network really kicks in. It quotes Centro‘s Shawn Riegsecker as saying “the two camps need to get together to compete with big portals. ‘If you break this industry apart, you completely devalue the value proposition to the spot advertiser in the national market.’ ”

The divisiveness issue apparently struck a cord  especially by the companies that hope that the Yahoo! network prevails as the single source. In a note to the NAA’s new media federation (that I got permission to cite), MediaNews Group VP Heather Lamm noted that “most of us involved in the Yahoo! deal would certainly agree with the sentiment that one network is better than two. (Hearst’s) Lincoln Millstein’s is cited in the article as hoping that Gannett, Tribune and McClatchy would join us, and that sentiment is echoed here at MediaNews Group.”

Lamm goes on to “clarify that the Yahoo/Newspaper Consortium is by no means an exclusive group of large papers. There are over 200 newspapers now involved in this network and over 50 of those papers have fewer than 20K in circ. We have said from the start that the more participants the better and I know the Yahoo! folks have specifically pitched to several small, independent groups.  Come join us!” (In fact, since Lamm’s letter was published on Tuesday, the Yahoo! HotJobs network has gotten 27 dailies bigger, with the addition of Morris Communications titles, including The Florida Times Union in Jacksonville and The Savannah Morning News. So now it has 228 titles

Impact on Other Networks?

Other noise regarding the Troika Network was about its possible impact on other partner-owned network efforts, including the National Newspaper Network, which is largely owned by Tribune Co. but has 22 other partner papers, as well as a 15 percent stake by the NAA. There is also a potential impact on DotConnect Media, formerly PowerOne Media National Network, which is owned by Lee Enterprises, a Yahoo! partner.

DotConnect Media President David Teitler said his company’s position is largely dependent on small newspapers, which “outperform large papers” on clickthroughs, and is somewhat market agnostic. “We are not competitive with other newspapers,” he emphasized.

Generally speaking, Teitler said the success of national networks for newspapers will depend on changing their mentality. “The industry mentality is not towards a network. They’re so used to saying ‘Dallas is better than Houston.” That needs to change.”

NNN President Jason Klein reminded us that NNN is a consultative sales network for its newspaper partners that focuses on 16 categories generally not tackled by others. “We don’t handle travel, most financial services, or large parts of auto,” he reminded me. Online, it is powered by Centro, having switched over from PowerOne Media. “The industry desperately needs faster placement,” so from that vantage point, the Troika network is a good thing, he said. But otherwise, NNN rides above everything else and probably won’t be directly affected.

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