The Past
At the core of the traditional newspaper industry are print products. These print products rely on advertisements and subscribers and are physically distributed, often on a daily or weekly basis (Karimi & Walter, 2015). The invention of the internet in 1989 severely impacted the industry and its advertisement and subscription based business model. Buyer power increased as customer were now no longer limited to physically distributed print products (Steglich, 2015). The effect of ‘first copy costs’ increased as advances in information technology led to falling distribution costs (Shapiro & Varian, 1988). Meanwhile substitutes, such as Nu.nl, grew in size, eating into the profits of traditional news suppliers. Coupled with increased competitive rivalry due to economies of scale, and an enormous growth in content, decreased margins to rock bottom.
Two of the substitutes and disruptors of the yesteryear business model are Nu.nl and Blendle. Both companies have distinct business models, but are equally important in the disruption of the newspaper industry.
The Present
The news website Nu.nl was founded in 1999 and was the first Dutch news organisation to publish news 24 hours a day. Instead of relying on subscription payments or print advertisements Nu.nl solely relies on online advertisements to run its business. Two distinct advantages Nu.nl offers are the fact that their website is freely accessible, and there is very little delay between events and publishing. Moreover Nu.nl greatly benefited from its first mover advantage and continues to be the most visited news website of the Netherlands. Blendle is an online news aggregator aimed at debundling news consumption. Founded in 2014 by two Dutch entrepreneurs the main selling point of Blendle is offering consumers the ability to pay for individual articles from multiple sources. Blendle’s business model relies on multipart pricing: firstly, prices per article differ based on length and journalistic effort. Secondly, Blendle has a reliable stream of income from subscriptions. They position themselves as the iTunes of news through disaggregation and then reselling it as a mixed bundle, or more accurately, a ‘mixed debundled rebundle’.
The Future
Despite having significantly different business models both companies are disrupting the current market. Blendle has interesting selling points, however as news becomes more commoditized, and consumers continue to expect free content Blendle might have to fight for survival. Meanwhile Nu.nl, the mainstay among the most used sources for news consumption in the Netherlands, will need to remain vigilant regarding possible substitutions. Though still a small player in the Netherlands, with a mere 9% market share, Facebook continues to grow as consumers’ primary news source (Emerce.nl, 2017). Meanwhile the increased use of ad-blocking software might be a threat to an advertisement based business model.
Do you still read a printed newspaper? Do you use an adblocking program while browsing journalistic websites? What are your thought about the future of ‘news’?
References
Emerce.nl (2017).Nederlander gebruikt Facebook niet als nieuwsbron. Retrieved 24 September 2017, from https://www.emerce.nl/nieuws/nederlander-gebruikt-facebook-nieuwsbron
Karimi, J., & Walter, Z. (2015). The role of dynamic capabilities in responding to digital disruption: A factor-based study of the newspaper industry. Journal of Management Information Systems, 32(1), 39-81.
Muck, A. (2017). Digital Disruption In The Newspaper Industry: How Publishers Are Pushing Back. Retrieved 24 September 2017 from https://www.forbes.com/sites/delltechnologies/2017/07/27/digital-disruption-in-the-newspaper-industry-how-publishers-are-pushing-back/#5257826ededb
Shapiro, C., & Varian, H. R. (1998). Information rules: a strategic guide to the network economy. Harvard Business Press.
Steglich, F. (2015). Disruption In The Newspaper Industry – A Framework. Retrieved 24 September 2017 from https://medium.com/@fst/disruption-in-the-newspaper-industry-f821aab38d26
