Are newspapers important in the digital age
Newspaper and then? Digital transformation in the media industry
Who doesn't know them - the classic newspaper. Just a few years ago, it was part of everyday life for many of us to take a quick look at the current daily newspaper on the way to work on the train or at lunchtime during the break to keep up to date. If we look around the train today, we can hardly find a broadly unfolded newspaper; rather, we look at our smartphones and receive the most important news in real time.
The changed behavior of users, but also modern communication media, are therefore not exactly making it easy for the classic publishing industry. Newspaper publishers are more than ever on the lookout for sustainable product and value-added innovations in order to find an answer to the profound change of advancing digitization. It quickly becomes clear that traditional business models cannot guarantee sustainable success in the long term and are increasingly characterized by negative developments.
Newspaper still under pressure
The print circulation of newspapers is falling rapidly and digital offers have not yet been able to compensate for this decline. In order to ensure that journalism is fit for the future, newspaper publishers are experimenting with various digital strategies and acquiring new business models through cooperation and investments in digital companies in order to be able to keep up with the competition in the platform economy. There is more and more editorial restructuring, reorientation of journalistic content and diversification into new business activities. So far, newspaper publishers have only been able to generate an average of 6 percent of total sales from digital business models (PwC, 2016).
The total circulation of the newspapers sold was 27.3 million copies in 1991. Since then, the number of copies has been halved.
But how do classic publishing houses manage the digital transformation? How can traditional business models enable new success strategies through innovative, digital business model ideas?
Possible approaches for designing sustainable business models are:
- New digital products
- Agile organizational structure
- Diversification strategies
Digital products instead of newspapers
“Mobile first, digital first” is the motto according to which newspaper publishers should orient themselves in order to improve the user experience and increase the added value for the readers. Journalistic content should increasingly be produced independently of the channel at a "digital desk" and can then be published in the form of an e-paper, specialist newsletter or podcast. Depending on the preferred media usage behavior of the readers, digital offers should be tailored individually to the target group so that content is made available cross-media via smartphones, tablets and PCs using appropriately adapted formats. This can strengthen the bond between users and the product portfolio. In addition, there is a significant expansion of the product portfolio such as the Tagesspiegel or the Bild Zeitung through podcast and video offers, which adapt to media usage behavior and thus increase the added value for users. Editorial content must utilize the potential of the respective medium and be brought into innovative narrative formats and prepared in a high-quality manner. This can increase the willingness to pay so that, for example, paid content models can be used, which will develop into an enormously important source of income. The creation of such content requires organizational structures in which space is created for creativity and interdisciplinary collaboration is made possible.
Dynamism is required today
In the age of digitization, agile organizational structure is a buzzword that is not only used in hip start-ups, but also increasingly in traditional publishing houses. The current competition in which publishers operate is characterized by incredible dynamism. What still exists today may be out of date tomorrow. For example, while the apartment, job and car search in 2001 was still carried out via the advertising business of newspapers, three years later platforms such as “wg-gesucht.de” and “immobilien-scout24.de” established themselves The newspaper advertising business changed dramatically. To this day, regional publishing houses have largely reacted hesitantly to the massive changes in the market. Therefore, the development of an agile organizational structure is the prerequisite for breaking down the silo thinking of individual business areas and introducing interdisciplinary teams in order to be able to keep up with the dynamic development of the increasingly converging media markets. In addition, agility also enables the value creation process to be adapted more quickly to the digital requirements of the media markets. In addition, technical aids (business intelligence) should be increasingly integrated into the value creation process in order to better understand the needs and preferences of customers and to acquire new business areas.
Expansion of previous business activities (diversification strategies)
"The purest form of madness is to leave everything as it is and at the same time hope that something will change". The situation is similar with the development of traditional publishing houses. Because if you have based your business model on sales and advertising revenues for decades and leave everything as it was, you cannot expect anything to change. In the meantime, some publishing houses have partially distanced themselves from their core journalistic business and increasingly expanded their activities, relying on various pillars of income. One example is the Tagesspiegel, which has expanded the traditional advertising business with so-called "360 degree marketing". Due to the longstanding relationships with various advertising companies, the Tagesspiegel benefits from a high level of trust and reliability. In this regard, the Tagesspiegel advises and supports its customers on all aspects of marketing in the print and online area, which also includes topics such as SEO and streaming advertising. In principle, newspaper publishers should base their business fields on different pillars of income, so that on the one hand the product portfolio is differentiated and on the other hand diversification strategies are pursued through cooperation in order to strengthen the future viability of the newspaper publishers. "A media company can potentially have up to 12-15 revenue streams without moving away from its core," said Raju Narisetti, Professor of Professional Practice and director of the Knight-Bagehot Fellowship in Economics and Business Journalism at Columbia University.
Tips for practice
- “Mobile first, digital first” - publishing houses should adapt and expand their products to the preferred media usage behavior of the target group
- An agile organizational structure helps editors with interdisciplinary cooperation and increases the speed of reaction in order to react to market changes
- The development of new business fields strengthens the future viability through various sources of income
We offer various events and workshops where you can find out more about exciting digitization topics relating to change management, leadership, communication and motivation and exchange practical experiences with other entrepreneurs from various industries. Further information on current events can be found here.
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