Demise
Shortly after Viewtron's launch, Vice President Reid Ashe circulated a memo noting slower than expected sales and infrequent usage patterns. The memo drew the conclusion that people saw the service as a "toy" and weren't integrating Viewtron into their daily news routine. A crossed out statement in the memo discussed the differences between the newspaper business and online information delivery, noting the latter's lower cost of entry, lower profit margins, and likely increased competition. The act of crossing out this statement has been taken as a sign of Knight Ridder's unwillingness to recognize the changes in the news business that new technology was bringing and called into question Knight Ridder's intentions for Viewtron.[20][21]
On March 31, 1985 the group within Knight Ridder responsible for developing Viewtron wrote Knight Ridder's board of directors advocating a new direction, one that pursued business and personal computer applications. The memo recommended lowering the monthly price of the service, discontinuing the AT&T terminal to concentrate on home computer development, and conducting another review in six months. The memo pointed out that this direction was preferable because it would compete with the newspapers less than the existing service.[22]
Viewtron's downfall came when Knight Ridder discovered at the end of 1985 that, despite the bulk of its expenses going toward the service's news feeds, users were spending most of their online time using Viewtron's less-profitable email, message boards, and educational areas.[23]
Instead of effectively becoming an online service provider, Knight Ridder decided to concentrate on its core news business,[24] and Viewtron was discontinued on March 31, 1986.[25] According to Philip Meyer, director of News and Circulation Research for Knight Ridder at the time, "We made the mistake of thinking in newspaper analogies. Thus the central computer was like a printing press in our minds, and telephone wires were the delivery trucks... . As newspaper people, we were looking for a community-based natural monopoly, like a newspaper, but without the variable costs of paper, ink, and transportation."[6]
