DEVELOPING AN ONLINE NEWSPAPER BUSINESS MODEL LONG DISTANCE MEETS THE LONG TAIL

Online Newspaper Backgrounder Revenues up, market share down Online ad gets % 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 chainvalue 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)local and long- distance 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)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 $ onlinespend $ 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)