DEVELOPING AN ONLINE

NEWSPAPER BUSINESS MODEL

LONG DISTANCE MEETS

THE LONG TAIL

Online Newspaper Backgrounder Revenues up, market share down Online ad gets 20-30 % of print ad’s worth Online profit margins half of other media

Current Models Pay-by-view Free Free w/some pay-by-view Result: Publishers say, “Online is key, but I

won’t be experimenting or doing anything positive about it as part of my investment strategy” (WAN 2006 survey)

The Search for Competitive Advantage

Implies: Resource-based view theory Suggests: A firm’s strengths lies in its

resources The place to start: A firm’s value chain Process: Dis-assemble, then re-assemble

the parts or elements to meet the new market’s needs

Then what? Core competencies Mistake: Match products w/demographics Better: Deliver convenience,

comprehensiveness, timeliness; not a niche Examine assets for value, from customer’s

viewpoint, but also for “inimitability”

Distance in Online Context Online = global reach Online value in eyes of customer “Proximity” takes on new meaning in online Two online audiences:

local and long-distance (Chyi & Sylvie, 1998 & 2007)

Distance audience basically ignored

Along Comes the Long Tail LT: In distributing a commodity, info tech –

specifically the Internet – increases the share of niches (Anderson, 2006).

Online Benefit: Internet markets arm audience members with search capabilities.

A Big “But”: The consumer – not the newspaper – determines the product (GLT)

Key: Partnering & Distribution

Why?: Media have intended & unintended uses, rendering the newspaper ill-equipped in marketing, audience knowledge, delivery systems and context of use.

So: Make news for non-newspaper delivery vehicles

Such as?

Possible Partners Mobile media; it…

moves

has willing-to-pay users

headed to broadband sophistication

allows time shifting

is growing in use

Possible Partners (cont.) Local, retail businesses; they…

$ aren’t classified ads

$ attract people and invite socializing

$ have bonded with their customer bases

$ are venues that make papers unobtrusive

$ invite informational searching

$ spend $ online

GLT Pluses Content-as-search eliminates much guessing

about what attracts consumers. Searchable content resolves usability design

issues and provides “original” content and eliminates need to ally with a popular browser to drive traffic.

Offers a sense of community without imposing the journalist’s or editor’s view of that sense.

Challenges

What’s Not to Like?

Challenges (seriously) Training – creating value for some, learning

value for others Organization – serious local R&D Organization – outsourcing Organization – tech infrastructure (search

interface) Organization – planning (continuously)