Description
the business models of online newspapers and its impact on the print newspaper. It also presents the case study of Taloussanomat, Europe’s first online-only newspaper
Online Newspapers Project Report | Group 9|OM-1 (C)
Business Models Of Online Newspapers and their Impact on Print Newspapers
Acknowledgement
Page | 1
Online Newspapers Project Report | Group 9|OM-1 (C)
We would like to thank Prof. Sanjay Kumar for giving us the opportunity to work on this project and providing the guidance and feedback required at various stages of the project. The project has beena great learning experience for us. We also take this opportunity to thank Management Development Institute for facilitating us in getting the required resources and providing all the required facilities.
Page | 2
Online Newspapers Project Report | Group 9|OM-1 (C)
Table of contents
1. Introduction 1.1 1.2 1.3 2.1 2.2 2.3 2.4 2.5 2.6 History of Online Newspapers Online Newspapers of today Value Chain Of Online Newspapers An Introduction Newspaper model (Aggregated–Closed) Kiosk model (Aggregated–Open) iTunes model (Desaggregated–Closed) Web model (Desaggregated–Open) The RBV Model
2. Business Models Of Online Newspapers
3. Case study - Taloussanomat, Europe’s first online-only newspaper 4. The impact on traditional newspapers 5. Bibliography
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Online Newspapers Project Report | Group 9|OM-1 (C)
History of Online Newspapers
An online newspaper, also known as a web newspaper, is a newspaper that exists on the World Wide Web or Internet, either separately or as an online version of a printed periodical. Electronic newspapers first came into existence in the early 1970s, but online delivery of news started to make it presence felt in the 1990s. Earlier version of Online Newspapers were mostly text based and minimalistic. In 1994, there were less than ten newspapers that were available online. However, Online Newspapers demonstrated rapid growth by the end of 1990s and by mid 2001, more than 3,400 newspapers were online. The growth is not only attributed to growth and pentetration of internet, but since the late 1980s the profitability of newspapers in their traditional form has been decreasing and newspapers have since been looking for ways to generate revenue. Although the Online Newspapers haven’t resulted in quick profit publishers had expected, but it is still an avenue of stable growth and it’s impact on print newspapers is more than evident.
In the Pew Research Center's 2008 news media consumption survey, 39% said they read a newspaper yesterday -- either print or online -- down from 43% in 2006. The proportion reporting that they read just the print version of a newspaper fell by roughly a quarter, from 34% to 25% over the two-year period.
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Online Newspapers Project Report | Group 9|OM-1 (C)
Online Newspapers were initially seen as being complimentary to the print version of the newspaper and not as a separate entity. But slowly, many newspapers jumped on to the wagon of Online Newspapers and other publishers too felt pressured to have an online footprint. Now, it is not unusual to find newspapers which have only an online edition.
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Online Newspapers Project Report | Group 9|OM-1 (C)
Online Newspapers Today
? Redefining the design Headline size, dominant imagery, story placement and story length – these are the factors that defined a print newspapers. These elements guides the user as to how to read the newspaper and it tells him about what news hold more importance than the others. Though, for Online Newspapers, there is a shift of control from editors to readers, where the newspaper just suggests on how a newspaper can be read rather than dictating it.
? Interactive elements and customization Navigation tools, forum, comments section, chat room - these are the elements of an Online Newspapers that help a user increases interaction with the Online Newspapers and customizes the newspaper as per the requirements of any individual user. It not helps the user to control his or her behavior but also facilitates the feedback system. ? Content Online Newspapers started off with the content being mostly textual in content. But slowly, other elements came in to the focus that concentrated on interactivity. But one major concern was that the design and other elements of the Online Newspapers were overshadowing the content. E-newspapers have yet to find the balance between content and design. There is still a glaring need to find a perfect balance between interactive elements and content .
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Online Newspapers Project Report | Group 9|OM-1 (C) ? Evolution rather than revolution Online Newspapers have always been viewed as an revolutions that would transform the news industry, but as seen above they have been apprehensive in developing their boundaries in terms of design, technology, editing protocols and the level of interactivity. In addition to it, online advertisements didn’t bring the kind of revenues that publishers had initially hoped for.
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Online Newspapers Project Report | Group 9|OM-1 (C)
Value Chain of Online Newspapers
Content Provision
Content Aggregation
Platform Content Aggregation
Platform Provision
Network Operation
Customer
Given above is the traditional value chain of Online Newspapers. Different proposed business models involve different players at different levels of value chain. But first, we should define what these roles entail :
- Content Provision. Independent journalists, National and international news agencies, newspapers delivering content take up this role. Often it is the newspaper that itself produces a lot of content, also, an online newspaper is also a platform for written content such as literature, magazines, corporate publications and trade journals which as sourced from a host of different providers.
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Online Newspapers Project Report | Group 9|OM-1 (C)
- Content Aggregation. These actors in the value chain bring content, services, and advertising together in a coherent editorial concept. In the traditional value chair newspapers and magazines take up this ole. Even in the digital age it is taken that this function will remain an important task and this is where the competency of most of the Online Newspapers lay.
- Platform Content Aggregation. The basic difference between content aggregation and platform content aggregations is that while the former relates to the filtering, editing and branding the editorial concept of the publisher, the latter basically revolves around the bringing together or assembling of content that is already aggregated. For example. Newstand.com offers the consumer a choice between a large number of international newspapers and magazines in the digitized format.
- Platform Provision The provision of a technical platform that links content and technology. This role is significant because it determines, to a large extent, the control of who publishes on the device and what is possible on it.
- Network operation.
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Online Newspapers Project Report | Group 9|OM-1 (C) This is the domain of telecommunications operators6, whose services might be considered as substitutable commodities. There are many sub roles between network operations that comprise of service provision, device supply, device manufacturing and advertising. Different players or the same player take up these roles with the value chain.
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Online Newspapers Project Report | Group 9|OM-1 (C)
Business Models – An Introduction
The evolving business models of Online Newspapers have always been a worrying factor for most publishers since Online Newspapers didn’t bring in the online revenues the publishers had hoped for. The business models for Online Newspapers take cues from the evolving business models for the internet. A few of these models from which the business models of Online Newspapers takes are explained in brief below :
?
Brokerage Brokers are market-makers: they bring buyers and sellers together and facilitate transactions. Brokers play a frequent role in business-to-business (B2B), businessto-consumer (B2C), or consumer-to-consumer (C2C) markets. Usually a broker charges a fee or commission for each transaction it enables. The formula for fees can vary.
?
Advertising The web advertising model is an extension of the traditional media broadcast model. The broadcaster, in this case, a web site, provides content (usually, but not necessarily, for free) and services (like email, IM, blogs) mixed with advertising messages in the form of banner ads. The banner ads may be the major or sole source of revenue for the broadcaster. The broadcaster may be a content creator or
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Online Newspapers Project Report | Group 9|OM-1 (C) a distributor of content created elsewhere. The advertising model works best when the volume of viewer traffic is large or highly specialized.
?
Infomediary Data about consumers and their consumption habits are valuable, especially when that information is carefully analyzed and used to target marketing campaigns. Independently collected data about producers and their products are useful to consumers when considering a purchase. Some firms function as infomediaries (information intermediaries) assisting buyers and/or sellers understand a given market.
?
Merchant Wholesalers and retailers of goods and services. Sales may be made based on list prices or through auction.
?
Manufacturer (Direct) The manufacturer or "direct model", it is predicated on the power of the web to allow a manufacturer (i.e., a company that creates a product or service) to reach buyers directly and thereby compress the distribution channel. The manufacturer model can be based on efficiency, improved customer service, and a better understanding of customer preferences.
?
Affiliate
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Online Newspapers Project Report | Group 9|OM-1 (C)
In contrast to the generalized portal, which seeks to drive a high volume of traffic to one site, the affiliate model, provides purchase opportunities wherever people may be surfing. It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partner sites. The affiliates provide purchase-point clickthrough to the merchant. It is a pay-for-performance model -- if an affiliate does not generate sales, it represents no cost to the merchant.
?
Community The viability of the community model is based on user loyalty. Users have a high investment in both time and emotion. Revenue can be based on the sale of ancillary products and services or voluntary contributions; or revenue may be tied to contextual advertising and subscriptions for premium services. The Internet is inherently suited to community business models and today this is one of the more fertile areas of development, as seen in rise of social networking.
?
Subscription Users are charged a periodic -- daily, monthly or annual -- fee to subscribe to a service. It is not uncommon for sites to combine free content with "premium" (i.e., subscriber- or member-only) content. Subscription fees are incurred irrespective of actual usage rates. Subscription and advertising models are frequently combined
?
Utility The utility or "on-demand" model is based on metering usage, or a "pay as you go" approach. Unlike subscriber services, metered services are based on actual usage
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Online Newspapers Project Report | Group 9|OM-1 (C) rates. Traditionally, metering has been used for essential services (e.g., electricity water, long-distance telephone services). Internet service providers (ISPs) in some parts of the world operate as utilities, charging customers for connection minutes, as opposed to the subscriber model common in the U.S.
Some of the popular emerging business models that we are going to discuss are given below :
? Newspaper model ? ? Kiosk model iTunes model
? Web model ? The RBV Model
Since almost all the business models for Online Newspapers work on a model which work on the platform which a desktop computers or laptops, we will consider platform provision to be a commodity, or will be specified in the other cases.
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Online Newspapers Project Report | Group 9|OM-1 (C)
The Newspaper Model
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Online Newspapers Project Report | Group 9|OM-1 (C)
S. No.
Value Chain Role
Business Role Description
1.
Content Provision
The newspaper takes up this role. (e.g. independent journalists, national and international news agencies, newspapers delivering syndicated content etc.)
2.
3.
4.
The newspaper publishes an electronic version of its Content Aggregation newspaper onto the device. In principle this can be done in two ways: (1) the newspaper can be uploaded to the device as is, without any major adaptations to the structure; (2) the newspaper may, as Content Provider and Content Aggregator, make use of the new capabilities of this medium. The newspaper takes up the role of Platform Content Platform Content Aggregation –or part of that role in the following two ways: Aggregation ? Complement it’s own content. ? Involve third party content Platform Provision The role of Platform Provisioning may be taken up by the newspaper itself or by a third party. Service Provision Advertising The newspaper or any third party might be interested in taking this role up. If the device is a specially devised for an online newspaper then the third party would be instrumental in these roles.
5. 6.
7.
Others( Networks Telecom Companies, Internet providers. operations, Device
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Online Newspapers Project Report | Group 9|OM-1 (C)
The Kiosk Model
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Online Newspapers Project Report | Group 9|OM-1 (C)
S. No.
Value Chain Role
Business Role Description
1.
Content Provision
The newspaper takes up this role. (e.g. independent journalists, national and international news agencies, newspapers delivering syndicated content etc.)
2.
Content Aggregation
Different newspapers act as content aggregators for the platform content aggregators. The intermediary is the party which brings all the content together.
3. 4. 5.
Platform Aggregation
Content Sites like Newstand.com and Audibe.com act as both Platform content aggregator where they compile content from various aggregators of content. Service provision, can be considered as a commodity, so it will be considered as a third party contribution to the value chain.
Platform Provision Service Provision
6.
Advertising
This will be taken up by the Aggregator.
Platform Content
7.
Others( operations,
Networks Device Telecom Companies, Internet providers.
Manufacturing etc.)
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Online Newspapers Project Report | Group 9|OM-1 (C)
The itunes Model
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Online Newspapers Project Report | Group 9|OM-1 (C)
S. No.
Value Chain Role
Business Role Description
1.
Content Provision
The newspaper takes up this role. (e.g. independent journalists, national and international news agencies, newspapers delivering syndicated content etc.)
2.
Content Aggregation
Different newspapers act as content aggregators for the platform content aggregators. The intermediary is the party which brings all the content together.
3. Platform Aggregation This business model revolves around the idea that device 4. Platform Provision manufacturer aggregates the content and provides it to the user. So, for the user pays for device and for the subscription to the device manufacturer. The advertising 5. Service Provision also comes under the scope of the manufacturer. Content
6. 7.
Advertising Others( operations, Networks Device Telecom Companies, Internet providers.
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Manufacturing etc.)
Online Newspapers Project Report | Group 9|OM-1 (C)
The Web Model
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Online Newspapers Project Report | Group 9|OM-1 (C)
S. No.
Value Chain Role
Business Role Description
1.
Content Provision
In this business model all thOnline Newspapers, search engines, blogs as well as users turn into content creators and aggregators. All these value
2.
Content Aggregation
roles are vertically aligned. Secondly, the role of Platform Content Aggregation (at least at the device level)
3.
Platform Content Aggregation
no longer exists; on the one hand, this role largely taken over by the user, while on the other hand one could argue that search engines also take up part of it. Thirdly, Platform Provision can still occur in the shape of software making up the interface between the internet and the device.
4.
Platform Provision
5.
Service Provision
6.
Advertising
The advertising is taken up by individual Content providers or by third party advertising firms who place their advertisements on the content provider’s pages.
Others( Networks 7. operations, Device Manufacturing etc.) Telecom Companies, Internet providers.
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Online Newspapers Project Report | Group 9|OM-1 (C)
The Resource Based View Model for Online Newspapers
This model basically talks the Geographical Long Tail of Online Newspapers. This model incorporates any one of the business models talked about above, only that it concentrates on the consumers of the Online Newspapers and where they are located. RBV model prompts the search for value, but from the customer viewpoint :
? ? ? ? ? ? \
The amount of information The speed at which it’s disseminated The consumer’s distance from the source of the information/event The information’s exclusivity Its degree of specialization Whether it’s available in varying formats and media
Among U.S.newspaper Web sites, the long-distance market accounted for 65% of monthly unique visitors, 52% of quarterly page views, and 55% of quarterly minutes of the overall traffic – meaning a substantial unintended audience market segment exists outside the primary circulation area of the print edition.
This clearly divides the market in to the following catagories:
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Online Newspapers Project Report | Group 9|OM-1 (C)
Market
Information
Advertising
Local
Compete with all local media, especially Compete with all local the print newspaper counterpart, for readership media, especially the print newspaper counterpart and online city guides, for advertising dollars
Long Distance
Compete with online publications offering similar content for readership
Underdeveloped
“Geographic long tail” (GLT) concept might suggest that usage may become less and less concentrated among “local” readers, i.e., those within relatively close proximity to the newspaper, and more concentrated among long-distance users – with deep repercussions or online newspaper product development strategy. It basically says that a huge chunk of audience of online newspapers come from readers who are outside the print circulation region of the newspaper.
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Online Newspapers Project Report | Group 9|OM-1 (C)
Case study - Taloussanomat, Europe’s first online-only newspaper
Financial daily Taloussanomat stopped printing on 28 December 2007 due to a declining readership and heavy losses to focus exclusively on digital delivery via the web, email, and mobile. Taloussanomat’s daily print circulation shrank from 88,000 to 72,000 between 2001–2006. In contrast, and in line with other Finnish news websites, Taloussanomat’s website registered a 1,180 percent rise in weekly visitors over the same period .Taloussanomat’s online version continued after 2007 and is the second most trafficked financial news website in Finland In the first 40 weeks of 2008 Taloussanomat averaged 291,966 unique weekly visitors and was the fifth biggest online news site in Finland. Taloussanomat’s online version continued and is the second most trafficked financial news website in Finland; only beaten by Kauppalehti, which is online at www.kauppalehti.fi and retains a printed edition. It consists of the online-only financial newspaper www.taloussanomat.fi and two sites covering technology: www.itviikko.fi and www.digitoday.fi. The title also owns the Startel6 news agency. Taloussanomat achieved 52 percent cost savings by eliminating the production and delivery costs associated with the print edition. In addition it saved another ten percent through redundancies By going online-only its income fell by at least 75 percent due to the loss of print advertising and subscription revenue .But in absolute terms in absolute terms the cost savings achieved were greater than the loss from advertising revenue
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Online Newspapers Project Report | Group 9|OM-1 (C) Other than display advertising, which currently contributes 60 percent of revenues, income comes from three other sources: ? ? ‘Permission-marketing’, on the back of opt-in content such as email newsletters. This revenue stream currently contributes 5 percent. ‘Content syndication’, including via its Startel arm(sells financial information and tailored content to clients such as banks ), which currently contributes 20–25 percent of revenues. (Taloussanomat produces content for: ? ? ? ? Its own internet based services, which include www.taloussanomat.fi and its technology sites itviikko.fi and digitoday.ti, and other external web sites. Newspapers like Metro and Ilta-Sanomat, which are owned by its parent company Sanoma Oy. ) ‘Other sources’, such as the branded seminars that Taloussanomat runs, currently contribute 10–15 percent of revenues. The print and web version of Taloussanomat, including the Startel news agency and the technology supplements Itviikko and Digitoday, employed 69 people in November 2007—52 in its newsroom. Half a year later, in July 2008, the streamlined group had 41 employees just 31 of whom worked in the newsroom. Whereas the printed edition of the paper mainly reported on company news and markets, its online version has a greater consumer focus: a significant shift in the paper’s conception of financial journalism Break the news story to readers early on and then follow up with more detail, comment, and analysis by constant updates. The rationale is to retain readers for as long as possible. Taloussanomat is encouraged by the volume of the response—some of the stories get as many as 100 comments. This increases the interaction and feedback level of the newspaper.
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Online Newspapers Project Report | Group 9|OM-1 (C)
The Impact On Traditional Newspapers
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Online Newspapers Project Report | Group 9|OM-1 (C)
Bibliography
1. Http://community.naa.org/blogs/circulation/archive/2009/07/02/a-closer-lookat-the-print-online-audience.aspx 2. Http://digitalenterprise.org/models/models.html 3. Http://www.stylusinc.com/website/business_models.htm 4. http://businessmanagement.suite101.com/article.cfm/internet_business_develops_ new_business_models 5. Taking the paper out of news, Neil Thurman and Merja Myllylahti 6. E-newspapers: revolution or evolution?, Deniz Bokesoy 7. Newspaper value network, simon delaere, Leo Van Audenhove 8. Introducing the e-newspaper – audience preferences and demands ,Carina ihlström eriksson; maria åkesson 9. Developing an online newspaper business model: 10. Long distance meets the long tail, George Sylvie
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doc_846411452.docx
the business models of online newspapers and its impact on the print newspaper. It also presents the case study of Taloussanomat, Europe’s first online-only newspaper
Online Newspapers Project Report | Group 9|OM-1 (C)
Business Models Of Online Newspapers and their Impact on Print Newspapers
Acknowledgement
Page | 1
Online Newspapers Project Report | Group 9|OM-1 (C)
We would like to thank Prof. Sanjay Kumar for giving us the opportunity to work on this project and providing the guidance and feedback required at various stages of the project. The project has beena great learning experience for us. We also take this opportunity to thank Management Development Institute for facilitating us in getting the required resources and providing all the required facilities.
Page | 2
Online Newspapers Project Report | Group 9|OM-1 (C)
Table of contents
1. Introduction 1.1 1.2 1.3 2.1 2.2 2.3 2.4 2.5 2.6 History of Online Newspapers Online Newspapers of today Value Chain Of Online Newspapers An Introduction Newspaper model (Aggregated–Closed) Kiosk model (Aggregated–Open) iTunes model (Desaggregated–Closed) Web model (Desaggregated–Open) The RBV Model
2. Business Models Of Online Newspapers
3. Case study - Taloussanomat, Europe’s first online-only newspaper 4. The impact on traditional newspapers 5. Bibliography
Page | 3
Online Newspapers Project Report | Group 9|OM-1 (C)
History of Online Newspapers
An online newspaper, also known as a web newspaper, is a newspaper that exists on the World Wide Web or Internet, either separately or as an online version of a printed periodical. Electronic newspapers first came into existence in the early 1970s, but online delivery of news started to make it presence felt in the 1990s. Earlier version of Online Newspapers were mostly text based and minimalistic. In 1994, there were less than ten newspapers that were available online. However, Online Newspapers demonstrated rapid growth by the end of 1990s and by mid 2001, more than 3,400 newspapers were online. The growth is not only attributed to growth and pentetration of internet, but since the late 1980s the profitability of newspapers in their traditional form has been decreasing and newspapers have since been looking for ways to generate revenue. Although the Online Newspapers haven’t resulted in quick profit publishers had expected, but it is still an avenue of stable growth and it’s impact on print newspapers is more than evident.
In the Pew Research Center's 2008 news media consumption survey, 39% said they read a newspaper yesterday -- either print or online -- down from 43% in 2006. The proportion reporting that they read just the print version of a newspaper fell by roughly a quarter, from 34% to 25% over the two-year period.
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Online Newspapers Project Report | Group 9|OM-1 (C)
Online Newspapers were initially seen as being complimentary to the print version of the newspaper and not as a separate entity. But slowly, many newspapers jumped on to the wagon of Online Newspapers and other publishers too felt pressured to have an online footprint. Now, it is not unusual to find newspapers which have only an online edition.
Page | 5
Online Newspapers Project Report | Group 9|OM-1 (C)
Online Newspapers Today
? Redefining the design Headline size, dominant imagery, story placement and story length – these are the factors that defined a print newspapers. These elements guides the user as to how to read the newspaper and it tells him about what news hold more importance than the others. Though, for Online Newspapers, there is a shift of control from editors to readers, where the newspaper just suggests on how a newspaper can be read rather than dictating it.
? Interactive elements and customization Navigation tools, forum, comments section, chat room - these are the elements of an Online Newspapers that help a user increases interaction with the Online Newspapers and customizes the newspaper as per the requirements of any individual user. It not helps the user to control his or her behavior but also facilitates the feedback system. ? Content Online Newspapers started off with the content being mostly textual in content. But slowly, other elements came in to the focus that concentrated on interactivity. But one major concern was that the design and other elements of the Online Newspapers were overshadowing the content. E-newspapers have yet to find the balance between content and design. There is still a glaring need to find a perfect balance between interactive elements and content .
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Online Newspapers Project Report | Group 9|OM-1 (C) ? Evolution rather than revolution Online Newspapers have always been viewed as an revolutions that would transform the news industry, but as seen above they have been apprehensive in developing their boundaries in terms of design, technology, editing protocols and the level of interactivity. In addition to it, online advertisements didn’t bring the kind of revenues that publishers had initially hoped for.
Page | 7
Online Newspapers Project Report | Group 9|OM-1 (C)
Value Chain of Online Newspapers
Content Provision
Content Aggregation
Platform Content Aggregation
Platform Provision
Network Operation
Customer
Given above is the traditional value chain of Online Newspapers. Different proposed business models involve different players at different levels of value chain. But first, we should define what these roles entail :
- Content Provision. Independent journalists, National and international news agencies, newspapers delivering content take up this role. Often it is the newspaper that itself produces a lot of content, also, an online newspaper is also a platform for written content such as literature, magazines, corporate publications and trade journals which as sourced from a host of different providers.
Page | 8
Online Newspapers Project Report | Group 9|OM-1 (C)
- Content Aggregation. These actors in the value chain bring content, services, and advertising together in a coherent editorial concept. In the traditional value chair newspapers and magazines take up this ole. Even in the digital age it is taken that this function will remain an important task and this is where the competency of most of the Online Newspapers lay.
- Platform Content Aggregation. The basic difference between content aggregation and platform content aggregations is that while the former relates to the filtering, editing and branding the editorial concept of the publisher, the latter basically revolves around the bringing together or assembling of content that is already aggregated. For example. Newstand.com offers the consumer a choice between a large number of international newspapers and magazines in the digitized format.
- Platform Provision The provision of a technical platform that links content and technology. This role is significant because it determines, to a large extent, the control of who publishes on the device and what is possible on it.
- Network operation.
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Online Newspapers Project Report | Group 9|OM-1 (C) This is the domain of telecommunications operators6, whose services might be considered as substitutable commodities. There are many sub roles between network operations that comprise of service provision, device supply, device manufacturing and advertising. Different players or the same player take up these roles with the value chain.
Page | 10
Online Newspapers Project Report | Group 9|OM-1 (C)
Business Models – An Introduction
The evolving business models of Online Newspapers have always been a worrying factor for most publishers since Online Newspapers didn’t bring in the online revenues the publishers had hoped for. The business models for Online Newspapers take cues from the evolving business models for the internet. A few of these models from which the business models of Online Newspapers takes are explained in brief below :
?
Brokerage Brokers are market-makers: they bring buyers and sellers together and facilitate transactions. Brokers play a frequent role in business-to-business (B2B), businessto-consumer (B2C), or consumer-to-consumer (C2C) markets. Usually a broker charges a fee or commission for each transaction it enables. The formula for fees can vary.
?
Advertising The web advertising model is an extension of the traditional media broadcast model. The broadcaster, in this case, a web site, provides content (usually, but not necessarily, for free) and services (like email, IM, blogs) mixed with advertising messages in the form of banner ads. The banner ads may be the major or sole source of revenue for the broadcaster. The broadcaster may be a content creator or
Page | 11
Online Newspapers Project Report | Group 9|OM-1 (C) a distributor of content created elsewhere. The advertising model works best when the volume of viewer traffic is large or highly specialized.
?
Infomediary Data about consumers and their consumption habits are valuable, especially when that information is carefully analyzed and used to target marketing campaigns. Independently collected data about producers and their products are useful to consumers when considering a purchase. Some firms function as infomediaries (information intermediaries) assisting buyers and/or sellers understand a given market.
?
Merchant Wholesalers and retailers of goods and services. Sales may be made based on list prices or through auction.
?
Manufacturer (Direct) The manufacturer or "direct model", it is predicated on the power of the web to allow a manufacturer (i.e., a company that creates a product or service) to reach buyers directly and thereby compress the distribution channel. The manufacturer model can be based on efficiency, improved customer service, and a better understanding of customer preferences.
?
Affiliate
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Online Newspapers Project Report | Group 9|OM-1 (C)
In contrast to the generalized portal, which seeks to drive a high volume of traffic to one site, the affiliate model, provides purchase opportunities wherever people may be surfing. It does this by offering financial incentives (in the form of a percentage of revenue) to affiliated partner sites. The affiliates provide purchase-point clickthrough to the merchant. It is a pay-for-performance model -- if an affiliate does not generate sales, it represents no cost to the merchant.
?
Community The viability of the community model is based on user loyalty. Users have a high investment in both time and emotion. Revenue can be based on the sale of ancillary products and services or voluntary contributions; or revenue may be tied to contextual advertising and subscriptions for premium services. The Internet is inherently suited to community business models and today this is one of the more fertile areas of development, as seen in rise of social networking.
?
Subscription Users are charged a periodic -- daily, monthly or annual -- fee to subscribe to a service. It is not uncommon for sites to combine free content with "premium" (i.e., subscriber- or member-only) content. Subscription fees are incurred irrespective of actual usage rates. Subscription and advertising models are frequently combined
?
Utility The utility or "on-demand" model is based on metering usage, or a "pay as you go" approach. Unlike subscriber services, metered services are based on actual usage
Page | 13
Online Newspapers Project Report | Group 9|OM-1 (C) rates. Traditionally, metering has been used for essential services (e.g., electricity water, long-distance telephone services). Internet service providers (ISPs) in some parts of the world operate as utilities, charging customers for connection minutes, as opposed to the subscriber model common in the U.S.
Some of the popular emerging business models that we are going to discuss are given below :
? Newspaper model ? ? Kiosk model iTunes model
? Web model ? The RBV Model
Since almost all the business models for Online Newspapers work on a model which work on the platform which a desktop computers or laptops, we will consider platform provision to be a commodity, or will be specified in the other cases.
Page | 14
Online Newspapers Project Report | Group 9|OM-1 (C)
The Newspaper Model
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Online Newspapers Project Report | Group 9|OM-1 (C)
S. No.
Value Chain Role
Business Role Description
1.
Content Provision
The newspaper takes up this role. (e.g. independent journalists, national and international news agencies, newspapers delivering syndicated content etc.)
2.
3.
4.
The newspaper publishes an electronic version of its Content Aggregation newspaper onto the device. In principle this can be done in two ways: (1) the newspaper can be uploaded to the device as is, without any major adaptations to the structure; (2) the newspaper may, as Content Provider and Content Aggregator, make use of the new capabilities of this medium. The newspaper takes up the role of Platform Content Platform Content Aggregation –or part of that role in the following two ways: Aggregation ? Complement it’s own content. ? Involve third party content Platform Provision The role of Platform Provisioning may be taken up by the newspaper itself or by a third party. Service Provision Advertising The newspaper or any third party might be interested in taking this role up. If the device is a specially devised for an online newspaper then the third party would be instrumental in these roles.
5. 6.
7.
Others( Networks Telecom Companies, Internet providers. operations, Device
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Online Newspapers Project Report | Group 9|OM-1 (C)
The Kiosk Model
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Online Newspapers Project Report | Group 9|OM-1 (C)
S. No.
Value Chain Role
Business Role Description
1.
Content Provision
The newspaper takes up this role. (e.g. independent journalists, national and international news agencies, newspapers delivering syndicated content etc.)
2.
Content Aggregation
Different newspapers act as content aggregators for the platform content aggregators. The intermediary is the party which brings all the content together.
3. 4. 5.
Platform Aggregation
Content Sites like Newstand.com and Audibe.com act as both Platform content aggregator where they compile content from various aggregators of content. Service provision, can be considered as a commodity, so it will be considered as a third party contribution to the value chain.
Platform Provision Service Provision
6.
Advertising
This will be taken up by the Aggregator.
Platform Content
7.
Others( operations,
Networks Device Telecom Companies, Internet providers.
Manufacturing etc.)
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The itunes Model
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Online Newspapers Project Report | Group 9|OM-1 (C)
S. No.
Value Chain Role
Business Role Description
1.
Content Provision
The newspaper takes up this role. (e.g. independent journalists, national and international news agencies, newspapers delivering syndicated content etc.)
2.
Content Aggregation
Different newspapers act as content aggregators for the platform content aggregators. The intermediary is the party which brings all the content together.
3. Platform Aggregation This business model revolves around the idea that device 4. Platform Provision manufacturer aggregates the content and provides it to the user. So, for the user pays for device and for the subscription to the device manufacturer. The advertising 5. Service Provision also comes under the scope of the manufacturer. Content
6. 7.
Advertising Others( operations, Networks Device Telecom Companies, Internet providers.
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Manufacturing etc.)
Online Newspapers Project Report | Group 9|OM-1 (C)
The Web Model
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Online Newspapers Project Report | Group 9|OM-1 (C)
S. No.
Value Chain Role
Business Role Description
1.
Content Provision
In this business model all thOnline Newspapers, search engines, blogs as well as users turn into content creators and aggregators. All these value
2.
Content Aggregation
roles are vertically aligned. Secondly, the role of Platform Content Aggregation (at least at the device level)
3.
Platform Content Aggregation
no longer exists; on the one hand, this role largely taken over by the user, while on the other hand one could argue that search engines also take up part of it. Thirdly, Platform Provision can still occur in the shape of software making up the interface between the internet and the device.
4.
Platform Provision
5.
Service Provision
6.
Advertising
The advertising is taken up by individual Content providers or by third party advertising firms who place their advertisements on the content provider’s pages.
Others( Networks 7. operations, Device Manufacturing etc.) Telecom Companies, Internet providers.
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The Resource Based View Model for Online Newspapers
This model basically talks the Geographical Long Tail of Online Newspapers. This model incorporates any one of the business models talked about above, only that it concentrates on the consumers of the Online Newspapers and where they are located. RBV model prompts the search for value, but from the customer viewpoint :
? ? ? ? ? ? \
The amount of information The speed at which it’s disseminated The consumer’s distance from the source of the information/event The information’s exclusivity Its degree of specialization Whether it’s available in varying formats and media
Among U.S.newspaper Web sites, the long-distance market accounted for 65% of monthly unique visitors, 52% of quarterly page views, and 55% of quarterly minutes of the overall traffic – meaning a substantial unintended audience market segment exists outside the primary circulation area of the print edition.
This clearly divides the market in to the following catagories:
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Online Newspapers Project Report | Group 9|OM-1 (C)
Market
Information
Advertising
Local
Compete with all local media, especially Compete with all local the print newspaper counterpart, for readership media, especially the print newspaper counterpart and online city guides, for advertising dollars
Long Distance
Compete with online publications offering similar content for readership
Underdeveloped
“Geographic long tail” (GLT) concept might suggest that usage may become less and less concentrated among “local” readers, i.e., those within relatively close proximity to the newspaper, and more concentrated among long-distance users – with deep repercussions or online newspaper product development strategy. It basically says that a huge chunk of audience of online newspapers come from readers who are outside the print circulation region of the newspaper.
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Case study - Taloussanomat, Europe’s first online-only newspaper
Financial daily Taloussanomat stopped printing on 28 December 2007 due to a declining readership and heavy losses to focus exclusively on digital delivery via the web, email, and mobile. Taloussanomat’s daily print circulation shrank from 88,000 to 72,000 between 2001–2006. In contrast, and in line with other Finnish news websites, Taloussanomat’s website registered a 1,180 percent rise in weekly visitors over the same period .Taloussanomat’s online version continued after 2007 and is the second most trafficked financial news website in Finland In the first 40 weeks of 2008 Taloussanomat averaged 291,966 unique weekly visitors and was the fifth biggest online news site in Finland. Taloussanomat’s online version continued and is the second most trafficked financial news website in Finland; only beaten by Kauppalehti, which is online at www.kauppalehti.fi and retains a printed edition. It consists of the online-only financial newspaper www.taloussanomat.fi and two sites covering technology: www.itviikko.fi and www.digitoday.fi. The title also owns the Startel6 news agency. Taloussanomat achieved 52 percent cost savings by eliminating the production and delivery costs associated with the print edition. In addition it saved another ten percent through redundancies By going online-only its income fell by at least 75 percent due to the loss of print advertising and subscription revenue .But in absolute terms in absolute terms the cost savings achieved were greater than the loss from advertising revenue
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Online Newspapers Project Report | Group 9|OM-1 (C) Other than display advertising, which currently contributes 60 percent of revenues, income comes from three other sources: ? ? ‘Permission-marketing’, on the back of opt-in content such as email newsletters. This revenue stream currently contributes 5 percent. ‘Content syndication’, including via its Startel arm(sells financial information and tailored content to clients such as banks ), which currently contributes 20–25 percent of revenues. (Taloussanomat produces content for: ? ? ? ? Its own internet based services, which include www.taloussanomat.fi and its technology sites itviikko.fi and digitoday.ti, and other external web sites. Newspapers like Metro and Ilta-Sanomat, which are owned by its parent company Sanoma Oy. ) ‘Other sources’, such as the branded seminars that Taloussanomat runs, currently contribute 10–15 percent of revenues. The print and web version of Taloussanomat, including the Startel news agency and the technology supplements Itviikko and Digitoday, employed 69 people in November 2007—52 in its newsroom. Half a year later, in July 2008, the streamlined group had 41 employees just 31 of whom worked in the newsroom. Whereas the printed edition of the paper mainly reported on company news and markets, its online version has a greater consumer focus: a significant shift in the paper’s conception of financial journalism Break the news story to readers early on and then follow up with more detail, comment, and analysis by constant updates. The rationale is to retain readers for as long as possible. Taloussanomat is encouraged by the volume of the response—some of the stories get as many as 100 comments. This increases the interaction and feedback level of the newspaper.
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Online Newspapers Project Report | Group 9|OM-1 (C)
The Impact On Traditional Newspapers
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Bibliography
1. Http://community.naa.org/blogs/circulation/archive/2009/07/02/a-closer-lookat-the-print-online-audience.aspx 2. Http://digitalenterprise.org/models/models.html 3. Http://www.stylusinc.com/website/business_models.htm 4. http://businessmanagement.suite101.com/article.cfm/internet_business_develops_ new_business_models 5. Taking the paper out of news, Neil Thurman and Merja Myllylahti 6. E-newspapers: revolution or evolution?, Deniz Bokesoy 7. Newspaper value network, simon delaere, Leo Van Audenhove 8. Introducing the e-newspaper – audience preferences and demands ,Carina ihlström eriksson; maria åkesson 9. Developing an online newspaper business model: 10. Long distance meets the long tail, George Sylvie
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