Content is King

News Media Management in the Digital Age

Gary Graham, Anita Greenhill, Donald Shaw, Chris J. Vargo

• Publisher: Bloomsbury Academic
• Year: 2015
• Print ISBN: 9781623565459
• eBook ISBN: 9781623564506
• Edition: 1
• Topic: Social Sciences
• Subtopic: Business General
• Index: Social Sciences

From the viewpoint of newspaper organizations the main competitive media has shrunk to only one, the internet. But the effect of this innovation has been devastating in capturing the vast majority of the advertising revenues on which newspapers have depended. The larger the internet-based media became the more newspapers and other media shrank. Pairing an academic and former industry news manager, this textbook assesses the situation in which the regional news media industry finds itself, and explores methods, processes and techniques, which might usefully be introduced to help the news media firm secure a viable future.
In focusing on newspapers, magazines, TV and radio, the work is filled with real-life examples and interviews with news media managers, illustrating how management is being conducted in this age of turbulence. The goal is to give students practice in solving complex strategic problems and to provide them with a series of intellectual and professional exercises. Their method of using case studies will enable students to explore in detail key theoretical issues before applying them to real life management settings.

PART ONE

Media community

1

Content is King: Strategies for shaping media organizations

Donald L. Shaw, Chris J. Vargo, Gary Graham, and Anita Greenhill

UNDERSTANDING why some companies succeed and others fail is an interesting challenge. Many techniques, including the use of Charles Darwin’s theory of evolution, have been used to explain how organizations evolve. This book explores the deep social and commercial structure of the strategic response of newspapers to the current turbulence being created by the “digital age.” Newspapers face many strategic challenges if they are to identify and build appropriate digital business models and strategies in order to sustain themselves. Digital-age turbulence opens up market conditions and opportunities for the news industry when adjusting to these Internet, Web 2.0, and civic media technologies.

Turbulence delivers opportunities as well as chaos, risk, and uncertainty. It is important for the news industry to consider how it strategically aligns its production structure, markets, and competitors to this environment. Digital turbulence is leading to two major effects that managers need to consider: One is that the news firm needs to be able to defend itself from rapid market erosion; and the other is opportunity, which it needs to exploit. While many of the news companies around the world were ill prepared to succeed in an environment of continuous, unpredictable turbulence, they are now more aware of the need to absorb and deal with volatile change.

The mission for newspapers in this “hybrid” physical/digital marketplace seems a simple one: To create content that will satisfy the full range of consumers’ news needs and then build the links that will connect people to the relevant news they seek. However, this is much easier to say than it is to accomplish in a news environment characterized by fragmented interests and mostly passive consumption patterns across online and off-line news venues. There is a convincing case that the old models for packaging and delivering news no longer connect effectively with the audience now coming of age around the world. The habits of young consumers are radically different from those that have characterized news consumption for generations. Newspapers, scheduled broadcasts, and even websites have given way to a chaotic system of “self-aggregation”; this is producing disappointing results not only for news producers but—as this book shows—for consumers as well.

Our approach is not designed to focus purely on the strategic achievements of the news media, such as the development of a successful publication, or to report how they have successfully exploited a new market opportunity. Instead, it pushes and reinforces the idea that, for the local news media to survive, it needs to sustain itself as the primary “information artery” flowing into communities (Laswell, 1948). With the planned development of information-rich and data-driven cities (e.g., the era of big data and smart and intelligent cities), the crucial need for (and value of) “authentic” and “reliable” news sources have never been greater. Due to the proliferation of smart devices and interconnected services, cities are gushing with data, much of which relates to human behavior.

City life generates data streams around online social media, telecommunication, geolocation, crime, health, transport, air quality, energy, utilities, weather, CCTV, Wi-Fi usage, retail footfall, and satellite imaging. In modeling terms, the historical surgical extraction of the newspaper from its city surroundings may not be appropriate, and an open news model, subject to a range of external influences, may be more realistic. The news firm could make the volumes of data scalable for the community.

Local newspapers have a vital role to play in connecting communities together in these rapidly emerging future city landscapes. Although work on the future of the news industry tends to take a technological or economic standpoint, here we try and include a human and community dimension that focuses on the social factors involved in shaping strategy, something that is often overlooked. We critically portray the future media roles of community and consumers to be integrated and participative in the local news space.

The newspaper business has never been simple, but its dual business model has typically been straightforward. On the one hand, newspapers compile news and information for which readers pay money. On the other hand, newspapers gather revenues by selling awareness, attention, and interest through advertising. For the past 200 years, that approach proved robust. Profits flowed like ink. For the second half of the twentieth century, UK regional newspaper groups such as Trinity Mirror and Johnston Press averaged between 20 and 30 percent profit margins.

It is no secret that this model has been disrupted. The news industry’s health started declining in 2005 with the rise of new media. Interestingly, however, the most profitable year recorded for Johnston Press was 2008 (due to a program of dramatic cost cutting and reductions in the number of full-time journalists the group employed). This was in the face of a negative change in their regional newspaper circulation in the United Kingdom (2001–2012), a decline on average of nearly 30 percent (Newspaper Society, 2013). Thereafter, the challenges for national and local media likewise have accelerated.

Most traditional media still communicate in a primarily “one-way” manner. Strategies for newspapers, as with strategies in other media, must be developed within the context of community, regional, and national levels. Of course, you may be aiming to serve one of these levels, but awareness is required at all levels. Strategies for broadcast media and magazines need to reflect their particular ability to reach audience within a defined, social context.

In a new “age of turbulence,” it is imperative for managers, employees, and customers to be involved across all levels of the news production and consumption. Company communication networks must be vibrant and inquisitive of their audiences. Other companies not based on news production such as REI, Kiva, and Starbucks seem to get it and are therefore thriving. They use the news media to build brand awareness and loyalty. They embrace the audience as a community and embrace innovation anywhere and everywhere. Still, few news companies seem to be able to adapt this “brand”-sharing ethos with consumers in their operations and therefore are suffering the social and economic consequences.

This book is designed for those who manage, or hope to manage, newspapers or other news media. You might be planning your business right now, or you might be a student who plans to enter media management within the next five years. This book distills the experience of others from the management and business world into a series of manageable chapters. The chapters are designed to build strategic foresight, stretch your imagination, and encourage future envisioning in order to find and survey perspective customers and to develop products, services, and an identity that better meets customer requirements. Sometimes this means finding new audiences; other times it means expanding present audiences and better meeting their news and informational needs. We encourage you to use what you have learned from each chapter as a conceptual foundation and/or initial framework and to apply this in order to build the future of the news industry. The key themes covered in the book include the following:

Dealing with disruptive innovation

Experiences from newspapers in the United Kingdom, Germany, and the United States suggest that “disruptive” technological upheaval is unavoidable. Contemporary forms of capitalism seem to be creatively destroying business models. This is not unique to the news industry or journalism. Both industries are constantly susceptible to innovation; however, in order to cope with contemporary changes, the news industry’s business models in particular will need to be more flexible and malleable so as to be able to adapt to the development of new products and services. Products and services drive business models, not vice versa.

Those in the media business, however, argue that news is a special case. You may, for instance, argue that the news industry plays an important and special democratic role. CNN competing with BuzzFeed is not the same as IBM competing with Dropbox. Newspapers and television put the government in check by giving voters the information they need to make choices. News production keeps a society informed. These media also make markets more efficient. This book counterargues that news production, whether by newspapers or other media, is a business. As such, it can be interrupted and augmented. News media must accept change and adapt business models. Disruptive innovation shows us that even if a business model is not initially viable, media managers must take more risks (break down a history of risk aversion to innovation), scan future technological horizons, explore new markets, and experiment with new concepts. Given time, demand can grow, and there could be opportunities to build a base of consumers. Advertising on a service such as Twitter a decade ago seemed frivolous at best. Now it generates around $235 millions a quarter. It is unlikely that popular Twitter accounts such as the New York Times see that profit. But we do believe that if media managers can establish their leadership of and authority in new media early and provide substantial innovation to that medium, they can demand a share. The more embedded they are with the technology, the more they become identified as essential agenda setters in the area and the more they are first to exploit the commercial market opportunities. This leadership they have currently ceded to the technological companies such as Google, Apple, and Microsoft.

Even better, we challenge the industry to embrace innovation, to use new media and its burgeoning audience to regain control of the strategic game. A reliable base of consumers can create a viable target audience for advertisers, and advertisers can fund new journalistic ventures. While the advertising model is nothing new to print, television, and radio media, it is to social media journalism. If the disruptive innovation hypothesis holds true, sustainable profitable models will emerge in the long run.

The value of journalism

According to Porter (2012), the value chain identifies how value can be created and added in a supply chain. Porter suggests that going through the chain of organizational activities adds more value to the products and services than simply summing the costs of these activities. Therefore, the company gains marginal value for products and services by its organization and approach to markets. If a company runs efficiently, the company gains a competitive advantage. Customers notice—or should, if you operate efficiently—and are willing to provide returns on the products or services. This adds value to the company. The news company cannot be separated from the products and services it offers the market.

This value chain framework can be used as a powerful analysis tool for your strategic planning. You can build an organizational model for ensuring efficient leadership. It requires more than management; it rewards leadership. The value chain concept can be applied in the individual business unit and then it can be extended to the entire supply chain and distribution network.

To form a successful organization, it is important to both create and value in each activity that your business performs. This can be achieved through product differentiation or a low-cost “generic” approach. Value adding must be considered during all production-chain stages, from creation through to distribution and, importantly, even at the consumption stage. Maximum value is achieved by consciously adding value at each stage of the development process. All value-chain activities must be properly synchronized, aligned with strategy, and integrated together. A sound organization contains all the required functional departments needed to perform these activities. It needs an internal communication approach that synchronizes production, distribution, and knowledge about consumption activities efficiently.

Inevitably things change

If a business wants to succeed but it does not work out, it is important to remember that things change. The media business is changing constantly. It has been that way for more than a century. Change is accelerating. Success is possible through the developing strategies, valuing products properly, and targeting “niches” in the target audience. This includes developing a marketing approach that is continuously updated and responds to changing consumer tastes, habits, and buying patterns; one that reaches established audiences while pulling in those at the far marginal edges of the reader community. This includes fitting news production to the goals that are set. Journalists must deliver products that people want and in a format that they desire. Newspapers no longer monopolize the news consumption agenda or the distribution of content. They must take more of a stake in the future technology agenda and its economic and social implications.

“Media” is an imprecise word. Nowadays, it includes cell phones in pockets as well as the newspapers that are skim read on the commute home from work. It is a source of not only information but it is also a service (entertainment) delivery system. It now can address a global, national, or regional audience. Messages therefore must be tailored for specific audiences. Often media are classified in binary terms, either as traditional media or new m...

Table of contents

• Cover
• Half-Title
• Title
• Contents
• Notes on the authors and co-authors
• PART ONE Media community
• PART TWO Finding value in a world of disruptive technology
• PART THREE Experimenting with the audience
• PART FOUR Ongoing strategies
• Index
• Copyright