From Ink to Pixels Looking for viable business models for digital media

Olga Dorovskykh

Industry in Transition

Newspapers were unprepared for the crisis: they “exhibited profit margins higher than most industrial sectors and the largest share of ad expenditures of all media” (Boczkowski 2005)

Business Model (BM)

•  A business model articulates the logic and provides data and other evidence that demonstrates how a business creates and delivers value to customers. It also outlines the architecture of revenues, costs, and profits associated with the business enterprise delivering that value. (Teece 2010)

Components of a digital newspaper business model: •  Ad revenue •  Subscriptions •  Partnerships and

sponsorships •  Events •  Diversification with

consumer products •  Archive re-use and

repurposing •  Crowdfunding and

crowdsourcing •  Native Ads

The need for viable BM

•  Decline of free press (Besley and Roberts 2012) •  Market is easy to enter for competitors (Compaine and

Hoag 2012) •  Need for huge investments to make over the current

business model and to train staff (Cox 2014) •  News orgs “opened gambit” in building free websites –

paywalls are not working (Curran 2010) •  Advertising a volatile source because of the born-digital

competitors like Google (Schlesinger and Doyle 2014)

Theoretical Framework

•  Diffusion of Innovations (Rogers 1962, 1995) •  Disruptive Innovation (Christensen 1995) •  Long Tail Economics (Anderson 2006) •  The Tipping Point (Gladwell 2000) •  The Black Swan (Taleb 2007)

Diffusion of Innovations

•  Diffusion of innovations is a central theory for the research

Early adopters love to experiment with innovations

Research Questions

•  The goal is to see how journalists perceive the business models of their enterprises and to gain insights into how these models will be shaped in the nearest future

•  RQ 1: “How journalists view the future of their enterprises?” •  RQ 2: “How journalists describe their perceptions of

promising business models for online media?” •  RQ 3: “How journalists see themselves as adopters of new

business technologies and trend setters for other media?” •  RQ 4: “How journalist view the decision-making process of

their media managers and the consequences of this process? ”

Sample and Method

•  Semi structured technologically mediated 30-50 minute interviews with 10-12 technology writers that work for born-digital publications.

•  People who write about startups and economy have more insight into the state of IT industry; at the same time they are not responsible for business decisions and unbiased.

•  Born-digital publications that are early adopters of new business models and are successful financially: TechCrunch, All Things D, Huffington Post, Buzzfeed, etc.

Sample and Method

•  Transcribing and coding interviews as soon as the first ones become available (adjusting interview questions if needed)

•  Reading and re-reading transcribed interviews to get immersed into data

•  Primary-cycle coding with constant comparison •  Secondary-cycle coding and categorizing, writing memos,

pinning illustrative examples •  Testing the codes/categories looking for negative cases •  Theoretical saturation and developing hypothesis from codes

Linking the theory and the method

•  “Making sense of these patterns of innovation furnishes analytical insights about construction, products and use of new media”

•  “…Trajectory from exploring to settling to hedging expresses a culture of innovation marked by reactive, defensive, and pragmatic traits. Newspapers usually followed players that moved first in relation to potentially relevant technical and social developments…” (Boczkowski 2005)

Expectations/Limitations

•  Identifying crucial components of business models and looking at they are being adopted within media enterprises

•  Assessing the journalists attitudes towards the perspective of becoming entrepreneurs

•  Assessing their way of thinking •  Study can be limited by the access to these people (but

Mizzou Mafia can help)

Thank you! Walter Isaacson, Time magazine's former managing editor, author of "How to Save Your Newspaper” believes the key to attracting online revenue is an iTunes-like method of micropayment.