In a rapidly changing world, the newspaper industry is experiencing some rough water. With the rise of the Internet, it appears news can be created and accessed by everyone, which endangers the revenue model behind newspapers.
The first traditional newspaper appears in 1605, this paper was completely written by hand (MDR, 2011). Hence, these papers were very expensive and only available for the elite. This all changed with the invention of printing (Bellis, M). In 1833 the penny press arises; newspapers are now sold for only 1 cent, which makes news available for everyone (Economist, 2011). Around 1950, the newspaper industry is highly profitable, mainly due to prosperity and advertising revenues. However, in 2000 Web 2.0 is brought to life and the industry drastically changes. (Picard, 2008).
A industry disruption is set in motion due to a change in frequency and reach (Doctor, 2015). Traditionally, newspapers are tangible goods and news is shared offline, which limits the above mentioned characteristics. To elaborate on this disruption, Porter’s Five Forces model is applied (Porter, 2008). With the rise of the Internet, the threat of new entrants also increases. Anyone can publish on the Internet. Since there are so many potential suppliers, their bargaining power has decreased. Threat of substitutes has increased: platforms such as Twitter and Facebook are capable of delivering news just as well. To make matters worse, the bargaining power of buyers has also increased. Since news is everywhere, and mostly free, customers are not purely dependent on newspapers anymore. All in all, a higher industry rivalry has emerged. (Shapiro, 1998).
Companies are already adapting to the distion. Some have digitized their traditional paper, which increases user friendliness. Others have started a collaboration with (social) media companies. And still others have created an entire new business model. Blendle is an example of such a disruptive innovation. This platform not only personalizes the product, it also enables customers to pay for only specific articles. (Rogers, 2017).
In a world where everything is getting more personalized (Chen et al., 2012), we expect the newspaper industry to do the same. Blendle is already taking a step in this direction. Prices of news might, in the future, be purely determined according to the prediction of how a person would value a certain article. Secondly, we predict, bundled information will be offered to highly specialized niche markets. Filtering out irrelevant information and offering unique content to these niche markets, will create complete ease for customers. Specialized advertisements can be used in niche markets, resulting in higher revenue. (Sambrook, 2017).
To conclude, the Internet has put pressure on the newspaper industry. At this moment, solutions are developed to conquer this, if possible. We expect that in the future personalized pricing will arise and bundled information will be offered to specialized niches markets.
References
- Bellis, M. (2017) Johannes Gutenberg and the Printing Press. Retrieved from https://www.thoughtco.com/johannes-gutenberg-and-the-printing-press-1991865.
- Chen, H., Chiang, R. H., & Storey, V. C. (2012). Business intelligence and analytics: From big data to big impact. MIS quarterly, 36(4).
- Doctor, K. (2015). Newsonomics: The Financial Times triples its profits and swaps champagne flutes for martini glasses. Retrieved from http://www.niemanlab.org/2015/02/newsonomics-the-financial-times-triples-its-profits-and-swaps-champagne-flutes-for-martini-glasses/.
- Mitteldeutscher Rundfunk (2011). In Leipzig wurde 1650 die Tageszeitung erfunden. Retrieved from http://www.mdr.de/zeitreise/weitere-epochen/neuzeit/zeitungsgeschichte100.html.
- Picard, R. G. (2008). Shifts in newspaper advertising expenditures and their implications for the future of newspapers. Journalism Studies, 9(5), 704-716.
- Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review, 86(1), 25-40.
- Rogers, Tony. (2017, May 7). How Can Newspapers Remain Profitable in the Digital Media Age? Retrieved from https://www.thoughtco.com/how-can-newspapers-remain-profitable-2074032.
- Sambrook, R. (2017). Stop press? Last words on the future of newspapers. Retrieved from http://www.independent.co.uk/arts-entertainment/stop-press-last-words-on-the-future-of-newspapers-a7558006.html.
- Shapiro, C., and Varian, H. 1998. Pricing Information. In Information Rules: A Strategic Guide to the Network Economy. Cambridge, MA: Harvard Business School Press.
- The Economist (2011). Reinventing the newspaper. Retrieved from http://www.economist.com/node/18904178.
Group members – Group 26
- Marilou Das – 401712
- Eva Kustermans – 386411
- Bart van Lunteren – 386610
- Gozewien de Wekker – 379700
