The technology subject we will discuss is information goods. We will focus on the newspaper industry and the platforms Blendle and Flipboard, which disrupted this industry.
Due to digitalization, the newspaper industry has changed. For example, the threat of new entrants has increased, since the fixed costs are lower and the internet gives direct access to consumers. Furthermore, the bargaining power of suppliers and buyers has increased. Besides that, it is more difficult to compete within this market and substitutes are rising.
The first new technology we would like to introduce regarding this industry is Blendle, this is a platform where you can read articles from different newspapers, which currently provides over 100 publishers, and therefore you have access to more and broader sources of news. Blendle creates a personalized pages with news, based on your preferences. If you want to read an article, you pay on average 19 to 39 cents, this is the so called a micropayments model. In the Netherlands and Germany, so far 650,000 people paid for the service, and is now extended to the US. Blendle receives 30% of the readers’ payment, the other 70% goes to the publishers.
The second technology we introduce is Flipboard. This is also a platform for following news articles and magazines. Similar to Blendle, you are able to choose the topics you are interested in and it shows specific cover stories. When you find an article you are interested in, you click on it and you are redirected to the website of the publisher. Flipboard makes revenue from showing advertisements on their platform.
The advantages of both platforms is that they do not require a subscription, they use a recommendation system which personalizes the newspage and it is possible to follow other users and publishers. For the publishers the platforms bring reach and awareness to readers.
The advantages of Blendle over Flipboard are that there are no advertisements and the possibility to receive a refund when the article was not of good quality in the eyes of the reader. Furthermore, adblockers are common nowadays and therefore it is more difficult for publishers to earn revenue with their newssites and this platform makes it possible to earn revenue in a different way. However, the payment and the effort to pay are the main weaknesses of Blendle.
The strengths of Flipboard over Blendle are that there is no payment obliged for the articles and that they only use advertisements that are related to the articles, which increases revenue. The main weaknesses of Flipboard are that you are redirected to the publisher’s website, for which the costs of reading the article might not be clear upfront and that there are advertisements in between the articles.
Link to the related video: https://www.youtube.com/watch?v=3KLYqMeOVZg&feature=youtu.be
