In a small room midway down a hallway at the University of Western Ontario sits a solitary journalist monitoring Canadian Press wires and writing and rewriting agricultural news. Judith Pratt is compiling Westex, Canada’s first news service adapted for the twoway electronic medium, videotex. Some of Western’s journalism students
spend time in this second-floor newsroom at Middlesex College, but for the most part, Pratt communicates only with her video display terminal. It punches out 20 to 30 stories per day for Grassroots, an agricultural-business videotex service for farmers. Each story is short, 150 words or fewer, but taken together they may signal the beginning of the end for newspapers as we know them.
Today, February 14, Pratt’s top story is on an international trade agreement. Her headline reads “U.S. to accept canola oil.” Three screens of print – electronic pages – tell the rest. The first page has only two sentences: “The efforts of canola growers in Western Canada to lobby the U .S. Food and Drug Administration into permitting importing of canola oil will soon pay off /space/ The U.S. regulatory body is preparing to lift its embargo on the oil, which can be used for cooking or as an ingredient in processed foods, says the U.S. ambassador.”
Page two starts with the subhead “Huge annual revenues,” page three with “Opens world markets.” Pratt is not completely happy with the story, but it’s adequate. It’s short, the lead is positive, there are no flowery words, f the sentences follow a simple subject, verb, object regimen-videotex style.
Most often Pratt rewrites the wire stories, either from CP or one of several on-line wire services available to her instantly through a gateway system called Dialcom. But some copy originates through newsletters, phone calls and information gleaned from one of the data bases to which she has access through her editing terminal. She might do some terrific reporting for a story, but her readers will never see her name. She doesn’t get bylines on Westex. Every day at 4 p.m. a phone call hooks up the university computer, in which an average 67 pages of news are stored daily, to its counterpart at the University of Guelph. From there, the news is relayed to a Winnipeg computer -the central base for all information that goes onto Grassroots.
Westex News grew out of a discussion between Peter Desbarats, dean of Western’s School of Journalism, and representatives of the Canadian videotex industry. The service started in March, 1982, with a mandate to “explore ways” in which the new technology can be used efficiently and effectively to transmit news.” It is also “an experiment to test traditional journalistic values and goals in the new technological context, the computer data base.” An initial grant of $80,000 from Western’s Academic Development Fund has since been supplemented by grants from Canada Manpower and the federal Department of Communications. CP offers its national, international and prairie regional news wires for low research rates and for progress reports on the new techno1ogy. The university donates space in both its college and computer. This year Westex is also being paid $1,250 per month for .four months by Infomart, the Toronto-based owner of Grassroots. Agridata, a data base in Mi.1waukee that receives another news service from Western called Candat, also pays $1,250 per month. The combined fees cover operating costs. Westex couldn’t survive without continued grants and the money from databases it services. In his first annual report last March, its senior editor, Henry Overduin, commented that “one of the major difficulties experienced by Westex is related to advertising.” Quite simply, advertisers aren’t interested. They would have their name and logo displayed on the bottom of pages on ‘which the news might be bad, thereby associating them with something unfavorable. Another reason is the small audience; even now Grassroots has only about 1,800 subscribers. “Given there’s such a small group of users It doesn’t really make much sense to sell ads,” says Overduln.
The Prairie farmers who receive Grassroots in their homes have 176 categories of information to choose from apart from Westex, including data from companies selling chemicals, fertilizers, equipment, real estate, seed, feed, grain and livestock. Weather and commodity exchange prices are constantly updated. The farmer can bank and shop on Grassroots, calculate what his costs on a particular crop in a given year might be, or send messages through the system to neighbors and business partners. Subscribers sign on to Electrohome Telidon terminals an average of 2.5 times per day and pay Manitoba Tele. phone five cents for each minute used.
The farmer who doesn’t want to spend $1,500 to buy a terminal can rent one for $89 a month. If he already has a Commodore 64 or IBM personal compu ter, he will soon be able to buy a decoder for between $99 and $250 that will allow him to communicate on any Telidon system, including Grassroots. The only other thing he needs is a modem, a device; that allows him to send and receive messages through a telephone.
Most of the Grassroots material is paid for by the companies supplying the information. In that sense the other “information providers” are subsidizing Westex. That’s fine with Infomart, because farm news is Grassroots’ fourth most popular category , after commodity sales, farm management programs and marketing analysis. Westex gets “hit” on or looked at about 3,000 times per month; the live feed of the Broadcast News wire service is also popular. Studies of systems in the U.S. and Britain reflect the same preferences.
In the news business now, news and advertising are a partnership. Newspapers appeal to a wide audience, including an identifiable group of consumers who will be influenced by certain advertisements. The Toronto Sun, for instance, is generally read by a different consumer group than The Globe and Mall But, unlike newspapers, where the news delivers a readership that advertisers buy, news on videotex can’t guarantee such an audience. Newspaper readers browse through pages, their eyes catching advertisements that motivate them to go out and buy. In a videotex system advertisements don’t need to be adjacent to the news because their readers choose to see them specifically. For example, if a farmer wants to buy fertilizer, he simply calls up the appropriate electronic page, which has been paid for by a fertilizer company.
It is this different relationship between news and advertising on videotex that will affect newspapers, says Jean Lancee, a management consultant with DMR and Associates in Toronto. In a speech to a videotex conference held in Toronto in January, she asked the question, “Who owns the bottom line?” And she answered, “Not necessarily the news business.” In videotex, Lancee said, advertising plays an informational rather than the traditional motivational role. Eventually the marketplace could be omitted altogether, with videotex shoppers buying directly from the producer. Already, Grassroots subscribers can shop at The Bay, and in the U.S. Compustore in Columbus, Ohio offers direct computer ordering and 50 percent discounts on more than 20,000 items.
As videotex beco~es the channel within which buying and selling takes place, the systems operators will be running the show, not the information providers. If people, begin to turn to computers more often for news, the operators will continue to provide news at their own expense. As traditional newspaper advertisers move to the new medium, especially those who use classified ads, newspapers will suffer from the stiff competition. Lancee believes this will inspire better, though thinner and less frequent papers. “The bottom line will belong to the owners of the new economic distribution channels,” she says. The data base will deliver the audience, changing the traditional partnership between journalism and advertising.
Infomart is the only distribution channel of significant size in Canada, and the joint Southam- Torstar venture has poured nearly $100 million into developing videotex on Telidon since 1975. Despite the investment, Infomart has failed to turn a profit. Videotex, dubbed a solution in search of a problem, is still struggling to find its audience and its niche among the media.
“I think content has to be better structured. The kinds of things a consumer wants to see have to be available easily and conveniently,” says Don Angus, vice president, marketing, at CP “It’s wonderful wizardry. The potential is unlimited. But there are very real drawbacks in how it’s structured and where it’s aimed.”
Grassroots, as North America’s first commercial videotex service, is perhaps closest to finding its niche. Infomart has also had some success with a system called Teleguide, which provides a visitor’s guide to Toronto using public access terminals located throughout the city. Infomart operates a third system for the federal government, called Cantel. Terminals are located across the country and provide government information to the public. However, Grassroots is still the only system to offer a news service.
As the market slowly develops, large newspapers are making sure they have a hand in developing the new technology. In the U.S. the Los Angeles Times and Knight-Ridder Newspapers have large videotex audiences. “If anybody is going to make any money out of this,” says Angus, “the news providers in existence now will be in the forefront battling all the way.” Western’s Desbarats agrees. “I’m sure that the large media corporations will attempt, as they are now attempting, to have as dominant a position in the new medium as they have in the existing one. Right now Westex has to rely on CP, and CP is owned by newspapers across Canada. The newspapers themselves will try to control the development of videotex if they feel it will be a serious competitor. It’s not a very healthy situation when the old medium is controlling a new medium that might become competitive.” In other words, Torstar and Southam can decide who is allowed on their data bases.
Though Desbarats worries that videotex may become “a parasitical medium living off the wire services,” he’s more convinced than ever that videotex journalism will grow. Every micro computer owner with a modem is a potential customer for a service of some kind, he points out. The selectivity and immediacy videotex offers are the strongest arguments for its survival as a news medium. “We produce a specialized farm newspaper for a farming audience every day and we update it constantly. I think that makes it more than competitive with print.” Yet he doesn’t think videotex will replace newspapers. “A farmer won’t look at Westex unless it relates to his livelihood. He’s not looking for funny stories.”
Busy, information-hungry people in a busy, information-filled world may turn more and more to computers for easy access to news. Simple, direct, instant, focussed information is a luxury that may become a necessity. But there is another set of adjectives at work here. As Richard Levine, head of the editorial team that produces the Dow Jones News data base, says: “PeopIe will tire quickly of the razzle-dazzle of technology and it will simply become a quaint, unused gadget if it does not deliver useful, accurate, reliable, needed services.”
It is not yet clear how important journalism and how effective advertising will be on videotex. As that relationship is defined, the fate of newspapers will be decided.”