(Person) Percentage - Sabanci University Research Database

The Asian Media & Mass Communication Conference 2010 Osaka, Japan
Introduction
The traditional business model of the news media was rather straight forward: collect,
analyse, and bundle global, regional and local news, then enhance them with additional
background and explanatory information. The outcome of this process, i.e. a print publication
or a news broadcast, would be sold on a two-sided market to readers/audiences and
advertisers (Wirtz, 2009). Significant competition consisted mainly in other news providers
because the creation of news-based products was regarded as a high-skill domain to be served
by well-educated journalists (Shirky, 2009).
According to Singer (2008) the news media find themselves at “a crossroads as an
occupation, a business, a content form, and a public good” (p. 122). Pressure on the traditional
business model comes from various angles. The economic downturn not only limits the access
to capital on the financial markets it also affects the customers – audience and advertisers –
who find themselves restricted on the financial side. Web 2.0 technologies provide ordinary
citizens with the technological means to publish their own content such as videos, blogs,
product reviews as well as news from their local area. Thus, citizen media emerge as
competitors whose publication speed often exceeds that of traditional channels. The new
digital publication and consumption gadgets require specific content forms which depend on
additional investment in technology and/or staff. Consumer habits change induced by the
digital transformation as users “seek more control over where, when and how they consume
content and [expect] higher value from their (...) media choices” (PricewaterhouseCoopers
(PwC), 2009, p. 11). Analogously, advertisers introduce a new generation of models to benefit
from the evolving consumption habits through focussed advertising directed at a specific
audience or readership (PwC, 2009).
Overall, the competitive landscape of the news media has become very fragmented and
diverse displaying a multitude of business models. The first part of this paper examines
changes in the competitive environment of news media, current challenges of their traditional
business model and the existing changes in user habits and expectations. Based on the
analysis proposed modifications for the strategy developments are discussed as well as
necessary adjustments to the business model of and related organisational issues in news
media organisations.
The competitive Environment of News Media
In the past, it used to be complicated and expensive to collect information and to distribute
words and images from creator to consumer. In return for this, media organisations were
granted considerable control over the media and allowed to extract extensive revenues from
advertisers and the general public. Now that the cost of production and dissemination is much
more accessible, the exclusive power to define newsworthiness is lost (Shirky, 2009).
The Project of Excellence in Journalism (2009a&b) identifies several transformations in the
competitive environment of the news media. New competitors are exploiting online and
mobile channels to set up their business in a way that withdraws readers and audiences as well
as advertising revenues from established news media. Google grew to become an indirect but
very potent competitor for advertising. Although Google news carries virtually no ads its
business function is to attract users via the search. The advantage for advertisers lies in the
distinctive targeting via the interests users display in their search choices (Russ-Mohl, 2009).
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