Name three trends that have significantly changed economic models for news organizations in the digital age. (no more than 500 words total)
While the economic changes for new organizations have been profound in the “digital era,” three trends that have greatly impacted the business of news are the eroding relationship between audience size and revenue; the shift from scarcity of content to surplus of content; and persistent supply and demand challenges within the news industry.
First, as traditional print had to pay for their content, the provision of news online was thought to have a similar market price. It made sense, theoretically, that as more people wanted to read a newsroom’s content, their revenue should increase. However, the Internet was a triumph of open-source, and that meant that news organizations were forced to produce content for free. Soon, the relationship between audience size and revenue was severed.
Pay-walls, then, became the means to an economic end. If news was a consumer good, they argued, it should be treated as any other commodity.
Second, the decision to demand pay for content was a function of supply. For instance, the value of The New York Times’ content can only be understood relative to content from other competing media/news organizations. In the digital era, competition increased as news content shifted from scarcity to surplus.
Specifically, the Internet boom provided a platform and economic space for media organizations (both large and small) to capitalize on the its faster distribution capacity at lower costs that traditional print journalism.
News was still covered by ‘legacy’ organizations like the New York Times or the Washington Post, but bloggers, start-up media outfits, anyone else who had the capital to cover the modest start-up costs were also generating content.
While the New York Times might claim that it had, and still has, “all the news that’s fit to print,” the Internet it made clear that there was much more content fit to produce, and there were many vying to produce it.
Third, this surplus of information upset the balance between supply and demand, particularly in terms of advertising dollars. As critical revenue streams for news companies, advertising firms became weary of their old models’ profitability. If there were more people exposing themselves to more pages, sites, and online communities, advertisers were uncertain whether the audience exposed to their ads would be sufficient to justify the costs of the ads themselves.
Thus, the power shifted to consumers and away from providers, and advertising companies had to base investment of inconsistent online consumer patterns. As a result, advertising became more challenging for most news organizations, and it was only the largest that could profit from the use of small, or ‘remnant,’ ads. And only then because of the size of their online communities (i.e. Facebook or Google News.)
These trends leave us with a media environment today, that may privilege smaller, Internet and advertising savvy media organizations who recognize the strengths of Internet branding. Thankfully, many of these groups seem to share a desire to promote sustainable growth that permits free and independent journalism at the highest level.
List up to three advantages that a new, digitally based news company has over a traditional print or broadcast organization. (no more than 250 words)
The advantages of today’s digital newsroom include the speed at which news can be covered, the increased variety if offers consumers of news media, and the cost of publication and production.
First, with the interconnectivity of the Internet, content is procured, produced and published faster than traditional print and broadcast operations were capable of. The seamlessness of continual uploads, amendments and updates to news published online, makes the digital newsroom a more dynamic and responsive environment.
Second, lower barriers to entry in the market (low start-up costs) allow more individuals and groups into the industry. In theory, this should be a net benefit for consumer who will have more choices in media. An Internet media group, for instance, need not pay rents on paper to print on, nor does it need to invest in printing equipment or the transportation costs to distribute the information. With computers, tablets and mobile devices growing in dominance, content streamlined for the Internet also has a wider audience than broadcast, too. After all, there is a reason I can watch Chinese programming on YouTube and not on my television.
Third, a digital newsroom has the ability to deliver more news, to more people, more intelligently. Online analytics, viewer comments or response and targeted branding allows digital companies to provide tailored content to the consumers who desire it the most. Making news personal, makes it more desirable. In turn, it is likely to make it more profitable, too.
List up to three advantages that a traditional print or broadcast organization has over a new, digitally based news company. (no more than 250 words)
Traditional print or broadcast media, while challenged by the digital boom, still retains some critical advantages.
The first is reputation. Many traditional news organizations have procured a reputation for effective, objective or refined news coverage and analysis. This stamp of approval – public consent, as it seems – provides an edge to these organizations when compared to individual bloggers or start-up media companies who have yet to demonstrate their comparable skills.
Secondly, as discussed by Prof. Grueskin, print and broadcast companies provide an immersive, “lean back” experience which changes the way consumer interact with the news product. It should also be noted that print and broadcasts tradition of wide aggregation (covering a wide array of topics) serves to inform individuals of multitude of topics. This diversity of information can languish in an online environment where individual preferences aggregate news on the receiver’s behalf, allowing the viewer to read what interests them without ever seeing other content.
Finally, a recent report by two researchers from the University of Oregan have found that, as the title of their work suggest, “Medium matters.” Readers of newspapers are shown to retain more knowledge about the topics covered, than similar information covered online. Because the strength of journalism is not simply to inform, but to educate, newspapers’ ability to instill knowledge that remains longer, should not be dismissed. In this regard, print still has an important role to play.