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The new name of the media game

CNET News.com's Harry Fuller says new media and old media are both missing the boat.

Do the big, pre-1995 media companies know the score? Do they see how the game has changed?

The New York Times says 135,000 people have subscribed to TimesSelect, its online offering which includes access to columnists and other fee-based daily content.

That would mean annual revenue of just under $7 million if each subscriber signed up for the annual rate. The New York Times Co.'s total revenue was over $3.3 billion in 2004, with expenses approaching $2.8 billion. Clearly, TimesSelect is far from a financial game-changer.

Meanwhile, The Wall Street Journal, which has offered subscription-based online service for several years, claimed it had over 700,000 paying customers by the end of 2004. But it already had over a half million by the end of 2000. The recent growth rate of Journal online subscriptions doesn't bode well for TimesSelect growth beyond 2008.

If you assume that most of the Journal Online's subscribers don't get print as well, parent company Dow Jones & Company could see subscription revenues in excess of $60 million. It was Dow Jones that outbid other media companies and paid over a half-billion dollars for CBS Market Watch a year ago.

So Dow Jones is not in the black on its Internet properties just yet. Over the past five years, the company's stock price has looked like the eastern slope of the Rockies, as viewed from the south. Since early 2004, The New York Times has had an equally rough ride on Wall Street.

Major newspaper Web sites report increasing traffic, but will the revenue growth be enough to save the team?

CBS-TV, part of Viacom, made two Internet-related moves last week. It said it will provide news video to AOL.

In addition, CBS and NBC are offering prime time entertainment shows for purchase and downloading online. The shows cost 99 cents per episode, available after . If you want some really old TV, AOL's going to sell shows like "Welcome Back Kotter" from the Time Warner archives. AOL's also going to create six genre channels from recycled material in Time Warner's TV archives. Will scheduled programming compete well with on-demand entertainment?

Most programs offered online are ratings winners, perhaps attractive to younger viewers. Television's key demographic is the 18 to 49 age range. The younger half of that age group is more likely to be online, on an iPod, on a mobile phone and not parked in front of a TV set. It remains to be seen if many viewers will pay for something they could have watched for free on TV if they really cared.

As online subscription services spread their video around and sell downloadable prime time shows, the old media giants have tried to find new revenue to keep up. Now that the rules of the game have changed, old plays don't work as well.

And who wins in this Darwinian struggle (apologies to Kansas) depends on who plays this new media game best.

"Game" is an important analogy. Why will daily printed news shrink to a small puddle in the media swamp? On the Pacific coast, Tuesday's national edition of The New York Times' doesn't have Monday night football results. The paper is put to bed on East Coast time. Duh.

But those scores are posted in real time on myriad Web sites and are even available on your cell phone. End of game, daily paper boys. Maybe print just a Sunday edition from now on? Major newspaper Web sites have reported increasing traffic, but will the revenue growth be enough to save the team?

To understand who?s up and who?s down in American media, follow sports contracts.

In TV, the Fox Network transformed itself from being a target for sniggering rivals to a source of competitive pain when it bought NFL games. And after cable channels began carrying live football, baseball and basketball, the "Big 3" networks no longer dominated national television.

The men who own, run and populate the boards of American corporations are often sports fans. Sports metaphors can dominate business meetings. And the most valuable demographic to advertisers, the upscale male, is hard to get in front of a TV set unless his favorite sporting event is live.

Power and money congregate around major American professional sports. The rest of the world can only marvel at the cost of a thirty-second spot that runs during the Super Bowl (a sport the rest of the world doesn't even try to understand).

Everything the American TV networks and newspapers are doing online is experimental, small scale, and a hedge against future trends. It's a whole new ballgame when Yahoo, Google, MSN or a "newspaper" Web site, or even JohnDoe.us buys exclusive rights to a major sporting event. Some sport institutions, such as the NFL, retain many of their online rights.

So watch the contract fights for the rights to broadcast Major League Baseball, the Orange Bowl, the NCAA basketball playoffs, and the major PGA tournaments. Those are events that media moguls watch and where the most valued viewers gather. Advertising dollars follow. New media or old: think sports rights. That's the name of that game.