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Times are changing. The expansion of digital technology has enabled media to use fixed and wireless network connectivity to reach users with new methods. Altering the industry structure in production, distribution and the methods to monetize content. Existing competitors have initially adopted some of the technological changes trying to cope with it. Now however, new entrants are disrupting the industry completely.
Rising stars like Blendl are centralizing most media stories and interviews in one application (Blendl.com, 2017). Also the rise of intelligent personal assistants Amazon Echo and Google Home who are able to consult online sources for news and other information. This broadens the offer of one single Platform giving the possibility to reach niche markets and the general public with one platform. These smart personalized solutions open the door to long tail strategies adding value to the industry as a whole (Brynjolfsson, 2011).
Accessing all information through one platform has decreased the switching costs between different news media. Increasing the power of customers and decreasing the power of suppliers who have to participate in applications and systems like these. Changing the direct web channels of media partly back to centralized platforms. The suppliers will have to change dramatically to adapt (Hagiu, 2014). It seems certain that the revenue from the traditional market will shrink, shifting from multiple sources towards more centralized platforms with contributions of different parties.
I think, and I follow therewith the general opinion, that due to these developments the news industry has become a vulnerable market. Where the scale-based advantages of incumbents are weakened and new entrants possibly have great opportunities to succeed. Currently the different companies within the industry are experimenting with pricing strategies. Varying from versioning, to group pricing and personal pricing or even completely free. Only time can tell whether the news industry will regain it’s profitability, by changing the prevailing Information Strategy while adopting the newly developed technologies successfully within new sustainable business models.
References
Blendl.com (2017) via Blendl.com
Brynjolfsson, E., Hu, Y., & Simester, D. (2011). Goodbye pareto principle, hello long tail: The effect of search costs on the concentration of product sales. Management Science, 57(8), 1373-1386.
Evans and Wurster (1997). Strategy and the New Economics of Information. Harvard Business Review. September-October, 70-82.
Hagiu, A. (2014). Strategic decisions for multisided platforms. MIT Sloan Management Review, 55(2), 71.
