The Cross-Roads to Digital: Newspaper Models and the Change to an Industry

1. IntroductionThe interest in the newspaper business model is growing as people watch the industry fight for survival in this disruptive information age. Despite investments by companies into the Internet, the revenues gained through online marketing are not making up for the lost revenue of the print ads (Rosenstiel et al, 2012). In fact, despite these investments, newspapers are in the same situation they were ten years ago, cutting costs and staff where they can, as the organizations themselves are bought and sold from seller to seller.Newspapers are no longer the hotspot for advertising. As more companies turn to online marketing, the Internet giants such as Google and Facebook are gaining a larger piece of the advertising market share (Protalinski, 2012). As a result, advertisers are turning to those organizations that have the greatest access to people and success in marketing, leaving newspapers in the difficult position of finding new places to grow, as they cannot charge premium prices for their ad space as hyper-competition drives the price down. Access to other sources of news and information on the Internet, available in this growing information age, is creating a service issue for the newspaper industry. The desire for the content is not enough for the business to be successful. Research shows that users get their news source from multiple sources rather than loyalty to just one (Pew Research Center, 2010a). They offer no unique value-proposition to the end user. A value proposition describes how an organization fulfils the needs of the user in a manner differentiated from its competitors, convincing a user he/she should buy from a specific paper.Accepting the premise that the news industry is not sustainable, the following question provides a point of entry into the examination of the status of the newspaper industry: Is there a framework that can be used to be determined if a newspaper organization's model can succeed? This project began as a search for a business model that could be replicated to various newspapers regardless of size. The goal was to evaluate the existing models in use, identify the success and failing factors of those models and build a new model from those factors. However, as the research delved further, there appeared another problem that needed to be addressed.The literature showed that there are papers that appear to be succeeding. Yet many of these models are also still unproven. This is not surprising, in the general world of e-commerce, many models remain unproven - even Facebook. Specific measures to determine the success and failing factors of these businesses do not exist. The industry needs a way to measure success and failure of the models. This paper focuses on empirical data and relevant literature. Though most of the literature used is recent, in this fast paced environment its usefulness is limited by the speed of change and the time it takes to research and analyze new data, and turn it around.2. Research MethodologyThis paper examines recent literature, including studies about trends within the industry, and business models being implemented at different organizations, in order to identify problem areas for sustainability and growth within the industry. In pursuing this information, other research options were considered such as a survey or analyzing data sets. These options were dismissed as many organizations are conducting and producing this type of research. A focus on existing literature, allows for the information to be looked at it a new way.Information was collected from both popular and scholarly literature and was categorized thematically for analysis in the following areas are organizational structure, culture and leadership, revenue streams, non-traditional revenue, innovation, and a size/local factor. Many researchers and surveys have identified these categories as areas of issues for the industry. One contribution offered in this paper is the identification of these categories as attributes. …