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How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology
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How Newspaper Companies Are Selling and Distributing Digital Content -- A Proposed Typology

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Newspapers are facing a tough time to maintain the viability of a dual business model that has proven lucrative in the past but is beginning to fail as publications move online. New ways to monetise …

Newspapers are facing a tough time to maintain the viability of a dual business model that has proven lucrative in the past but is beginning to fail as publications move online. New ways to monetise content are being sought. A review of the literature on content monetisation revealed a gap with regard to the different content monetisation types. In particular, work in the area seemed to look at the issue in too broad terms and there was a lack of narrow-focussed exploration of the various types of content sale/distribution. This research looked at two case studies of daily newspapers in South Africa and in the UK and tried to identify the types and propose a typology of content sale/distribution. Distribution was regarded as an alternative to sale on the assumption that if content can be delivered to a client, it can be monetised. Forty three-dimensional types of content sale/distribution were identified. The three dimensions of each type include the channel which is used to deliver the content, the sort of customer that receives the content (retail or wholesale) and the bundling options (bundled vs unbundled). The types were analysed and their viability was weighed. As many as 17 out of the 40 types were found to be not viable. For the remaining 23, there were various options to monetise content, including direct sales revenue and indirect advertising revenue; and some types of content distribution had the possibility to use content for purely promotional purposes. Recommendations were made as to how further research could build on the results presented in this dissertation and expand and improve the proposed typology.

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  • 1. UNIVERSITY OF CENTRAL LANCASHIRE HOW NEWSPAPER COMPANIES ARE SELLING AND DISTRIBUTING DIGITAL CONTENT A PROPOSED TYPOLOGY Dilyan Damyanov September 24, 2012MA Journalism LeadershipSupervisor: Francois NelThis dissertation is submitted in part fulfilment of the requirements of the MA inJournalism Leadership in the School of Journalism, Media and Communications at theUniversity of Central Lancashire.
  • 2. AbstractNewspapers are facing a tough time to maintain the viability of a dual business model thathas proven lucrative in the past but is beginning to fail as publications move online. Newways to monetise content are being sought. A review of the literature on contentmonetisation revealed a gap with regard to the different content monetisation types. Inparticular, work in the area seemed to look at the issue in too broad terms and there was alack of narrow-focussed exploration of the various types of content sale/distribution. Thisresearch looked at two case studies of daily newspapers in South Africa and in the UK andtried to identify the types and propose a typology of content sale/distribution. Distributionwas regarded as an alternative to sale on the assumption that if content can be delivered to aclient, it can be monetised. Forty three-dimensional types of content sale/distribution wereidentified. The three dimensions of each type include the channel which is used to deliverthe content, the sort of customer that receives the content (retail or wholesale) and thebundling options (bundled vs unbundled). The types were analysed and their viability wasweighed. As many as 17 out of the 40 types were found to be not viable. For the remaining23, there were various options to monetise content, including direct sales revenue andindirect advertising revenue; and some types of content distribution had the possibility touse content for purely promotional purposes. Recommendations were made as to howfurther research could build on the results presented in this dissertation and expand andimprove the proposed typology. ii
  • 3. Table of Contents1. Introduction .................................................................................................................... 1 1.1 “The media is dying” and other tales of terror -- is journalism doomed? .................... 1 1.2 What is backing up the claims? ................................................................................ 2 1.3 A global emergency .................................................................................................. 5 1.4 Who are the culprits?................................................................................................ 5 1.5 Is there a way out? ................................................................................................... 82. Literature review .......................................................................................................... 10 2.1 Business models .................................................................................................... 10 2.2 The dual business model of newspapers ................................................................ 15 2.3 Content monetisation.............................................................................................. 183. Goals of the research................................................................................................... 224. Methodology ................................................................................................................ 25 4.1 Approach ................................................................................................................ 25 4.2 Research design .................................................................................................... 27 4.3 Limitations .............................................................................................................. 285. Case studies ................................................................................................................ 30 5.1 Business Day ......................................................................................................... 31 5.1.1 Online offering ................................................................................................. 32 5.1.2 Mobile offering ................................................................................................. 34 5.1.3 Social media .................................................................................................... 36 5.1.4 E-edition and syndication ................................................................................. 36 5.2 Daily Post ............................................................................................................... 40 5.2.1 Online offering ................................................................................................. 41 5.2.2 Mobile offering ................................................................................................. 42 5.2.3 Social media .................................................................................................... 42 5.2.4 E-edition and syndication ................................................................................. 436. Discussion of findings and a typology proposal ............................................................ 477. Conclusion ................................................................................................................... 678. Bibliography ................................................................................................................. 70 iii
  • 4. List of Tables1. TABLE 1 – Business model definitions……………………………………………………...132. TABLE 2 – Types of content sale/distribution………………………………………………65List of Charts1. CHART 1: Business Day – Channels, customers & bundling options…………………...382. CHART 2: Daily Post – Channels, customers and bundling options……………………..44 iv
  • 5. 1. Introduction1.1 “The media is dying” and other tales of terror -- is journalismdoomed?Over the past years, there has been no lack of worriers proclaiming the imminent death ofmedia, journalism, newspapers, investigative reporting, local news or all of the above.The Media is Dying (@themediaisdying), a Twitter account, has been bombarding itsfollowers (25,337 as of writing this) with stories about newspapers shutting down or layingoff staff, among others, since 18 November 2008. As of 12 July 2012, it had 6,922 tweetsof gloom and doom.The Newspaper Death Watch, a website, has been “chronicling the decline of newspapers”since March 2007. Its owner, Paul Gillin, had predicted that the “near-total collapse of theAmerican newspaper industry as we know it is inevitable” almost a year before he startedthe blog (Gillin, 2006).The Washington Post writer Ian Shapira implied that news websites such as Gawker, theHuffington Post and the Daily Beast were at least partly responsible for the demise oforiginal journalism (Shapira, 2009). 1
  • 6. Kevin Toolis, a documentary filmmaker, was quoted in a Guardian article, saying thatinvestigative reporting was “dying a death” at the hands of financial pressures (Halliday,2010). He was not the first one to express that sentiment: more than a year earlier LauraFrank had lamented the decline of investigative journalism in an original report for thePublic Broadcasting Service‟s Expose documentary series (Frank, 2009).In a piece for the Comment is Free section of the Guardian‟s website, Henry Portermourned the death of local newspapers (Porter, 2009).Philip Meyer (2004) predicted that the last newspaper in the United States will be printedsomewhere in the first quarter of 2043.These are just a handful of examples of what has, over the past several years, become aweekly, if not daily, fixture of media commentary, blogging and research.1.2 What is backing up the claims?There has been plenty of bad news to support such a downbeat mood among media industryobservers and practitioners.The 2012 Economic Report of the President (ERP), prepared annually by the US Council ofEconomic Advisors (CEA), cited data from professional social network LinkedIn indicating 2
  • 7. that newspapers were the fastest-shrinking industry in the United States in terms of jobsbetween 2007 and 2011 (Krueger et al, 2012). The sector had lost 24.8% of its jobs,LinkedIn said. Between 2007 and 2011 the United States entered and emerged from arecession; but job decline in the newspaper industry remained steadily steep throughout theperiod, even when the economy picked up (Nicholson, 2012).Paper Cuts, a blog that tracks layoffs across US newspapers, estimated that the industryshed almost 16,000 jobs in 2008, almost 15,000 in 2009, almost 3,000 in 2010 and morethan 4,000 in 2011. By 12 July 2012 the website‟s counter for the year indicated more than1,170 people had been laid off that far into the year (Paper Cuts, 2008-12). From when thewebsite started in June 2007 to the end of 2011, Paper Cuts has collected a list of 204 USnewspapers that have closed or stopped publishing a newsprint edition.In December 2011, the University of Southern California Annenberg School forCommunication and Journalism predicted that “[m]ost US print newspapers will be gone infive years” (USC, 2011). The report added it was likely that only four large dailynewspapers would survive in print: The New York Times, USA Today, the WashingtonPost and the Wall Street Journal. Gillin (2011) noted at the time of the publication of thereport that there were still more than 1,400 metropolitan dailies that published a printedition in the United States. 3
  • 8. Perry (2012) estimated that, on an inflation-adjusted basis, print newspaper advertisingrevenue in 2011, at $20.7 billion, was the lowest since 1951, having slumped from a peakof $63.5 billion in 2000.The 2012 State of the News Media report of the Pew Research Centre‟s Project forExcellence in Journalism noted that classified ad revenue -- long a pillar of newspapercompanies‟ revenue models -- had lost almost three-quarters of its value in 2011 since apeak in 2000 (Edmonds et al, 2012). According to the same report, operating profit marginsat US listed news media companies fell almost 50% over the same period. The averageoperating profit margin of publicly traded US news media firms -- calculated as earningsbefore interest, tax, depreciation and amortisation (EBITDA) divided by total revenue --narrowed to 14.9% in 2011 from 28.3% in 2000. Coupled with the sharp decline inrevenues, that resulted in an even steeper deterioration in net profits, Pew said.Stock prices at the end of 2011 were down year-on-year for all nine companies tracked bythat measure in the Pew report: The Washington Post, Gannett, E.W. Scripps, New YorkTimes, A.H. Belo, Media General, Journal Communications, McClatchy and LeeEnterprises.Circulation did not fare much better. According to Pew, daily newspaper circulation fell to43.4 million in 2010, down 30% from 62.3 million in 1990. 4
  • 9. 1.3 A global emergencyAs recently as in 2011, a special report on the newspaper industry in The Economist arguedthat while the sector was having troubles in the western world and other rich countries, suchas Japan, newspapers were booming in emerging markets (The Economist, 2011).According to the report, there were no signs of a crisis in the world‟s fastest-growingnewspaper market, India. Even at the time of publication of the report, there wasdisagreement from local Indian media observer quarters; and more recently Indiannewspapers have been warned that what is happening at titles such as The Financial Timesin the UK and The New York Times in the USA, was “the writing on the wall” for them(Rangaswami, 2011; 2012). And Mayank Pareek, COO (Marketing & Sales) of automakerMaruti Suzuki India, told the 6th International News Media Association (INMA) SouthAsia conference that his company had slashed its print advertisement from 67% to 23%after a strategic analysis revealed that print was not delivering the maximum worth for thebrand (Hasan, 2012).Over in South Africa, print advertising revenues have followed a similar downward trend asin America (Patricios, 2012). The problem is global.1.4 Who are the culprits? 5
  • 10. What did cause such malaise? It seems like the newspaper industry was caught in a perfectstorm of cyclical and structural factors.The 2008 financial crisis, followed by a recession in the United States and elsewhere,certainly had its effect on advertising spending overall. However, eMarketer, a publisher ofresearch and analysis on digital media and marketing, estimated that US major media adspending rose to $153 billion in 2010 from $147.2 billion in 2009, and projected furthersustained growth through 2015 (Perrin, 2011). Meanwhile, newspaper ad spending wasprojected to fall to $19.8 billion in 2015 from $24.8 billion in 2009, eMarketer said.New competitors, such as blogs and social media, have been blamed for weakeningnewspapers. In 2009 Tom Curly, the chief executive of the Associated Press news agency,said blogs were diverting revenues away from original content creators; and mediaconglomerate News Corp‟s CEO Rupert Murdoch blamed bloggers for threatening thesurvival of newspapers (Yarow, 2010). In 2011 Bob Woodward, an investigative reporterknown for his work on the Watergate scandal in the 1970s, told students at the PoynterInstitute in Florida that the tombstone of internet giant Google‟s CEO Eric Schmidt shouldread: “I killed newspapers” (Greenslade, 2011). The relationship between blogs andnewspapers has been called parasitic and websites such as the Huffington Post have beenblamed for declining newspaper readership (Alterman, 2008).The Pew Research Centre‟s Project for Excellence in Journalism 2012 State of the NewsMedia report noted that while ad revenue dropped sharply from 2000 to 2011, circulation 6
  • 11. revenue remained flat (Edmonds et al, 2012). The report judged that to be a sign thatnewspapers were having a revenue problem rather than an audience problem. That lack ofgrowth in circulation revenue should be considered no problem is indicative of how dire thestraits are for newspapers in the advertising business. The same competitors that are takingaway readers from newspapers -- search engines, blogs, social media -- are also takingaway a large chunk of ad revenues. According to eMarketer‟s estimates, online ad spendingwas poised to grow from $22.7 billion in 2009 to $44.5 billion in 2015 (Perrin, 2011).If wider economic worries and fierce new competition for the attention of readers andadvertisers were not enough, the newspaper industry also had to face the collapse of thedual business model that had supported it for so long. Traditionally, newspapers havethrived on selling content to audiences in exchange for attention, and then selling theaudiences‟ attention to advertisers in exchange for money. On the revenue side of themodel, it continues to work very well -- firms like Google, Facebook and the HuffingtonPost work the same way. But on the cost side of things, newspapers are facing a burden thattheir new competitors do not have to worry about: printing and distribution costs.According to Vogel (2010), newspaper production and distribution costs can reach as highas 52% of revenues. Business Insider calculated the New York Times‟ delivery costs at$644 million a year: almost half of its total costs (Carlson, 2009). And the article quoted aknowledgeable source who claimed those estimates were so low, they were “not even in theballpark”. 7
  • 12. But newspapers cannot simply abandon their print production and go online. In a reportoutlining the search for new business models in the newspaper industry, the Pew ResearchCentre‟s Project for Excellence in Journalism interviewed 13 companies and found that --while print advertising revenue was, on average, declining at seven times the rate at whichonline ad revenue was growing -- print ad revenues were still about 11 times thosegenerated from digital advertising (Rosenstiel et al, 2012).Furthermore, many of newspapers‟ fiercest new competitors -- search engines like Googleand social media websites like Facebook -- do not have nearly the same cost for producingthe content that lands them an audience to sell to advertisers. They aggregate third-partycontent (including from newspapers) or rely on user-generated content (UGC) that isavailable free of charge.The trifecta of economic woes, fresh competition and an unsustainable business is enoughto justify the alarmist mood of the past few years. It has also spurred a lively debate of whatcan be done to save newspapers and journalism (WAN, 2007, to name just one of the mostrespected and long-standing periodical publications that deal with the issue.)1.5 Is there a way out?As the literature review below will show, there are various proposals about what can bedone to revamp the ailing newspaper business model and they include a variety of 8
  • 13. suggested new sources of revenue beyond traditional circulation and advertising revenues.It will also show that newspaper executives and strategists believe that the core value anewspaper creates is good content, and not, for instance, a good platform for carryingadvertisements. However, there is a gap in the literature on newspaper business andrevenue models when it comes to describing the actual ways in which content can be, and isbeing, monetised. In particular, no detailed description could be found of the waysnewspapers can sell/distribute or are already selling/distributing content directly to users inexchange for money or attention.The aim of this research is to suggest such a description by identifying ways in whichcontent is currently being sold/distributed by newspapers and attempting to create atypology for classification. The future of the newspaper businesses is likely to include awide variety of revenue sources and content sales are unlikely to disappear. Indeed, thereport cited above (Pew, 2011) suggests that circulation revenue is stable and here to stay.Any strategist plotting the launch of a new newspaper now or in the near future will have toconsider content as both a cost item and a revenue generator. Some first steps have alreadybeen taken and this contribution aims to move the discussion forward towards building abody of literature that can improve the understanding of potential new business models fornewspaper companies and be useful to the newspaper entrepreneurs of the future. 9
  • 14. 2. Literature reviewThe literature review in this section starts with an overview of relevant work on businessmodels in general and then moves on to provide an overview of literature dealing with thedualism of the traditional newspaper model in terms of product and customer. Then, theliterature on content monetisation is briefly reviewed, leading up to the three researchquestions of this dissertation.2.1 Business modelsPicard (2011), in trying to map out the business models for digital media, defined abusiness model as “the underlying business logic of an enterprise”, including what itscompetencies are, how it creates value, how it differentiates itself from its competitors, howits operations are run, what its relationships are and how it makes money. He was followingin the tradition of a number of researchers who have taken up the study of business modelsin the context of the internet in the late 1990s and early 2000s. Although the term had beenin use since 1960 (Osterwalder, 2004), it was not until its study was taken to the realm ofonline business that it achieved widespread popularity.Linder and Cantrell (2000) defined a business model as the core logic an organisation usesto create value. In a similar vein, Petrovic et al (2001) defined a business model as the 10
  • 15. value-creation logic of a business system. Magretta (2002) likened a business model to astory that explains how the business works and how its various pieces fit together.Trombly (2000), Hawkins (2001), Rappa (2001), and Afuah and Tucci (2002) focused theirdefinitions on the ultimate goal of a business to make money and be financially sustainable.Slywotzky (1996) combined value and profit in a definition that saw business models assystems for making a profit by delivering utility to customers.Many authors attempted to define business models by way of describing a set ofactors/roles and relationships/transactions within a network (Timmers, 1998; Amit andZott, 2001; Applegate, 2000; Weill and Vitale, 2001). Tapscott et al (2000) took a similarapproach, though they called the emerging system a “b-web” (business web), rather than a“business model”.Researchers in the last, and most numerous, group in various degrees defined businessmodels by way of their components, or elements. Other authors provided a concisedefinition, but, in addition, also offered a detailed description of the components of abusiness model. Table 1 on page 13 summarises what various researchers have identified asthe elements of a business model, either explicitly or as derived from their definitions.It should be noted that although many authors separated product from value (Slywotzky,1996; Hamel, 2000; Rayport and Jaworski, 2001; Stähler, 2002; Afuah and Tucci, 2002),many others did not (Mahadevan, 2000; Alt and Zimmermann, 2001; Amit and Zott, 2001;Weill and Vitale, 2001; Eisenmann, 2002; Fetscherin and Knolmayer, 2004). 11
  • 16. Building on work by Mahadevan (2000), Afuah and Tucci (2001), Amit and Zott (2001),Rayport and Jaworski (2001) and Eisenmann (2002), Fetscherin and Knolmayer (2004)identified five elements of a conceptual business model for content delivery: product,consumer, revenue, pricing and delivery (cf last column of Table 1). The pair argued thatproduct, consumer and revenue had been identified as parts of a business model by themajority of authors they were citing. (They identified Rayport and Jaworski‟s (2001) valueproposition as part of the consumer component.) They disagreed with Mahadevan (2000),Eisenmann (2002) and Rayport and Jaworski (2001) who reckoned pricing should be partof the revenue component; and cited Varian (2002) who had highlighted the importance ofthe pricing of information goods. Siding with Varian (2002), Fetscherin and Knolmayer(2004) isolated pricing as a stand-alone component of a business model. (This was also inline with what Afuah and Tucci (2002) had suggested.) Finally, they bundled most of theother components proposed by the various authors under the term delivery.The researchers then conducted an empirical study to test the impact of each component onprofit. They sent questionnaires to 75 newspaper and magazine companies that offered afree or subscription-based online archive or paid downloads of articles and got 24responses. On a scale of 1 to 3 -- with 1 being “not important”, 2 being “important” and 3being “very important” -- respondents rated the product as the single most important driver 12
  • 17. Slywotzk Hamel, 2000 Mahade Alt & Amit & Rayport Weill & Eisenmann, Stähler, Afuah & Fetscherin y, 1996 van, Zimmermann, Zott, 2001 & Vitale, 2002 2002 Tucci, 2002 &Component 2000 2001 Jaworski, 2001 Knolmayer, 2001 2004Customer How a Customer To whom Consumer company segments: does the firm selects its which sell customers customer segments are targeted and what the value proposition is for each segementProduct How a Core strategy: Mission: overall Content: Online Strategic What does What does Scope: what Product company business mission; vision and exchanged offering objective and the firm sell the firm sell products are defines product and strategic goals; goods and value offered to what and market scope; value information proposition: customers differentiat segments, in proposition, incl. target es its which the product features customer; offerings company product competes; offering; differentiation unique and from competitors valuable position targeted by the firmValue How the Customer Value Value Value Customer value company benefits: what stream proposition proposition: creates benefits are being for the what value utility for offered to the customer does the customers customer firm createCore Strategic Core Capabilitiescompetence resources: core competenciess competencies; strategic assets; core processesPartners Value network: Logistical suppliers, partners stream and coalitions that complement and amplify the firms resourcesOutsourcing How a Company When does company boundaries: what the firm rely defines the does the firm do on partners tasks it and what does it will outsource to the perform value network in-house 13
  • 18. and the ones it will outsourceResources How a Configuration: Governance Resource Connected company how of system activites: what configures competencies, transactions: does the firm its assets and the flow of need to do in resources processes are resources order to offer combined to and value and when; support a strategy information how are they connectedMarketing How the Customer Channels: Deliverychannels company interface: how the how the firm goes to firm goes to reaches market market; customer target information and customer insight; what the segments firm charges the customer forStructure Structure: the Structure: Architecture: Implementation: role of agents the links how and organisational invloved; and between through structure, processes: the transaction what systems, people structure of the stakeholders configuration and business model does the environment firm create valueRevenue How the Revenue Revenues Revenue Sources of How does the Revenue Revenue Revenue company stream model revenue firm collect model: how sources makes revenues does the profits firm make moneyLegal issues Affect all aspects of the business modelTechnology Enabler and IT What constraint infrastructure technologies does the firm employCritical What thesuccess firm must dofactors well to flourishSustainabilit How do costs How to keepy increase with making money growthPrices Pricing PricingTABLE 1 – Business model definitions.Partially based on Fetscherin and Knolmayer (2004) and Osterwalder (2004). 14
  • 19. for profit (with a mean score of 2.9). Revenue and pricing were both rated with a meanscore of 2.1, while consumer and delivery received mean scores of below 2.0.2.2 The dual business model of newspapersAccording to industry representatives, the product was the single most important driver forprofit. (Perhaps it is no coincidence that the largest number of authors in the table -- 11 ifwe count Mahadevan‟s (2000) value stream -- have identified it as a key component of abusiness model.) But what is the product that a newspaper company is providing?Reddaway (1963) argued that a newspaper business is producing two different products --copies (ie content) and advertising space -- and that it is selling it to two different customergroups -- readers and advertisers.Lindstädt and Budzinski (2011) -- citing also Anderson and Gabszewicz (2006), Dewenterand Haucap (2009), and Evans (2010), among others -- echoed that sentiment and, althoughwithout differentiating between two separate products, recognised that media firms whoserevenues come fully or partly from advertising are selling to the same two distinct customergroups. 15
  • 20. Bisco (2007) envisioned what a media company would look like in 2020 and predicted itwould have “settled comfortably into the role of supplying news and information to localconsumers, and marketing solutions for advertisers”.Picard (2008) indicated that, from a business model perspective, the main function of anewspaper is to be a delivery system for advertisements. He put the share of advertising inan average US newspaper company‟s income at 75-85% and argued that contemporarynewspapers were “completely dependent” on that revenue stream. He also outlined thegrowing threat posed by the internet as an advertising platform that was taking overnewspapers‟ primary advertising sales growth driver: classifieds.In a recent report, eMarketer, the research outfit, forecast that in 2012 spending on onlineadvertising will for the first time exceed the amount spent on print advertising innewspapers and magazines.This should not have come as a surprise to newspaperpublishers, who have been aware about the trend for more than a decade and have beeninvesting heavily in building up online offerings to try and capture a share of the onlinemarket.Chyi and Sylvie (2000) conducted a series of in-depth interviews with 14 US onlinenewspapers of various sizes and geographic distribution, and asked them how they feltabout their market, product, revenue and competition in that (then) new environment.Respondents were unanimous that advertising would be the main revenue driver for onlinenewspapers. Very few of the participating companies thought subscriptions (ie content 16
  • 21. sales) would work online, with some having tried such an approach and scrapped it, andothers saying they had no plans to charge for content online. Partially, the decision to offerfree content was due to concerns that a small subscription base could hurt advertisingprospects. There was also doubt a subscription-based model would work for mostnewspapers, because the same content was freely available through other sources online.However, when asked about their product, the interviewees focused exclusively on thecontent their newspapers were producing and putting online, rather than on the service theywere providing to advertisers; and in terms of competition many could not name even onedirect competitor -- defining that as a company that provided exactly the same content asthey do, not as a company that offered a similar outlet for advertising. Quality news andinformation, and specialised local coverage were cited as the biggest competitiveadvantages online newspapers had.Trying to predict what the future of newspapers would look like in 2020, Jarvis (2007)warned that newspapers were facing a threat in the online advertising market by companiessuch as Google, which he said were outcompeting newspapers for online ad revenues byoffering a better service to advertisers. At the same time, he added, the likes of Google didnot have the costs that newspapers had for producing content, instead using third-partycontent to reach an audience and expose it to advertisements.The literature reviewed so far reveals a contradiction that becomes obvious whennewspapers and those who study them discuss three of the five key business model 17
  • 22. components identified by Fetscherin and Knolmayer (2004): revenue, consumer andproduct. There are two distinct customer groups -- readers and advertisers. Online, revenuesare expected to come from the latter group, but effort is being primarily put into serving theformer; and when discussing the product, there is a focus on “content”, again putting theneeds of readers before those of advertisers. This situation is not new, but the contradictionwas easy to ignore. In the second half of the 20th century, newspaper companies enjoyedhigh profitability (Picard, 2008) on the back of what some have called a “virtual monopoly[...] over the mass distribution of written news” (Jensen, 2010). But faced with bothdeclining readerships and fleeing advertisers (Kirchhoff, 2009), newspaper companies canno longer ignore it.Newspapers nowadays are also facing another big dilemma, trying to juggle between adeclining print product and an online offering that is not growing fast enough to offset thedecline in print. At the same time, print production and distribution account for a largechunk of the costs of traditional, general-interest newspapers. Kirchhoff (2009) put it at30% and Picard (2011) estimated it much higher: at two-thirds of expenses. This researchwill be concentrating on online/digital content, but it is useful to remember the context:newspapers are still predominantly a print business.2.3 Content monetisation 18
  • 23. In the literature that looks at online content revenue/monetisation, the selling of content isusually just one option of a larger set of models that also include advertising and otheralternatives.Gallaugher et al (2001) listed seven revenue streams for online content providers: 1)advertising, 2) subscription, 3) online sales of print publications, 4) syndication, 5) pay-per-view sales of digital content, 6) sales of non-content merchandise and services, and 7)affiliate programmes.Stahl et al (2004) identified three main types of paid information goods online: 1) bundles,2) single digital article and 3) rebundles, or packages of digital articles that are provided ina specific way.Clemons (2009) predicted that advertising will not be able to support online businesses andproposed three alternative models: 1) selling real things (e-commerce), 2) selling virtualthings and 3) selling access. Clemons‟s research was looking at the wider online industry,but the second and third model could be applied specifically to online newspaper content.Sankaran and Raghunathan (2009) listed three content monetisation models: 1) advertising,2) subscription and 3) content aggregation. 19
  • 24. Publishers online can: sell content; give content free and sell advertising on the back of theresulting traffic; or opt for some sort of combination between the two (Groenveld and Sethi,2010).There are those, like Jarvis (2007), who believe advertising should be the dominant revenuesource. However, online advertising revenues have so far proved insufficient to cover thecosts or creating content in many cases (Kirchhoff, 2009; Dutta, 2012). A potential solutioncould be to cut the cost of creating content by aggregating third-party content or using user-generated content (UGC).On the other hand, trying to sell content online is seen as a very tall order indeed. AsGroenveld and Sethi (2010) noted, consumers are used to getting most of their content freeand are hard to be persuaded to start paying. Dutta (2012) echoed that sentiment.Newspaper companies have historically viewed content creation as their primary activity.Many still find it difficult to think about the product produced by a newspaper as anythingelse but content, despite the fact that they have grown dependent on advertisers forrevenues.The review of relevant literature demonstrated that content is recognised as anintegral part of newspaper companies‟ business models and content sales are largelyexpected to be part of the revenue mix of a newspaper publisher. But there is a gap in theliterature in that content selling seems to be under-researched. 20
  • 25. This research cannot hope to fill that gap, but will try to look at what might eventually do.The overarching research question, the broad aim of this research, is to try and map outhow content is being sold by newspaper companies online. Content, as seen in the literaturereview, is widely recognised as the main product of a newspaper company and -- to many --the most crucial element of a newspaper company‟s business model.The two most widespread revenue models for monetising content are to sell it or to give itfree of charge and sell advertising inventory. There are three more key components of abusiness model in Fetscherin and Knolmayer‟s (2004) aggregated definition: consumer,pricing and delivery. The questions this research is hoping to answer break down along thesame lines:-- with regard to consumers:RQ1: Is content being sold wholesale, to be re-used, or to end-customers, to be consumed?-- with regard to pricing:RQ2: Is content being sold in a bundle or unbundled?-- with regard to delivery:RQ3: What are the channels that media companies are using to sell content online? 21
  • 26. 3. Goals of the researchThe overarching research question is what media companies are doing in terms of contentsales in the digital space. The answer is bound to be multifaceted. Two possible dimensionsin which it can lie have been identified by reviewing the relevant literature: 1) aggregationvs disaggregation (Gallaugher et al, 2001; Stahl et al, 2004; Sankaran and Raghunathan,2009; Picard, 2011) and 2) retail vs wholesale (Gallaugher et al, 2001). These twodimensions correspond to two of the core elements of business models, as defined byFetscherin and Knolmayer (2004) -- pricing and customer. The third core element --product -- has been identified as content. For the purposes of this research content isdefined in the broadest possible terms -- text and images have long been a staple of thenewspaper industry, and video, audio and interactive content are proving effective means totell stories online. One more dimension -- 4) the channels used to sell content -- is coveringthe fourth core business model element, delivery. The final element, the revenue model, canbe twofold -- content sales in exchange for money or advertising revenue on the back offree content.As the literature review has shown, advertising is the dominant revenue source in thenewspaper industry. In the name of bolstering it amid turbulent financial times somenewspapers are tempted to give away content just so they have a larger audience they cansell to advertisers. Paywalls and other attempts to sell content are frequently frowned upon,if not universally, then by a large and noisy enough group of industry watchers to give 22
  • 27. pause to anyone who might consider them. This makes researching the actual ways inwhich content is being sold more challenging: newspapers may turn out simply to not sellthat much content in the first place. However, “free” content is not simply being handedout: newspapers are expecting in return to get consumers‟ attention, which can then be re-sold to advertisers. Acknowledging the challenges of researching the tiny universe of paid-for online newspaper content, this research will view attention as an alternative “currency”through which content is being “purchased” by readers. In the case studies that follow, thethree dimensions of the main research question will be examined for content that is bothsold in exchange for money and for content that is being given away free of monetarycharge in exchange for attention, which is then “converted” into advertising money.As in many other multi-currency transactions, the seller, ie newspapers, carries the risk offluctuations in exchange rates. One option to mitigate such risk is to switch the currency inwhich the product is being sold, ie in this case -- from “attention” to “money”. This is notwithout its own risks -- for instance, customers may refuse to pay in the new currency -- butat least one of the newspapers in the case studies is planning to do just that by going behinda paywall. Others have done so before, most notably in recent memory The Times in theUK.By looking at “free” as well as paid-for content, this research will be able to shed a light notonly on how newspapers are selling content online but also on whether they have thenecessary “infrastructure” in place to do so. 23
  • 28. This research will be taking a global perspective, looking for answers in the practices ofBritish and South African newspapers. Among the newspapers studied, there will be a mixof national and regional dailies, as well as general-interest and business newspapers. 24
  • 29. 4. Methodology4.1 ApproachThis research is interested in how newspaper companies are selling content online and willbe taking a qualitative approach to answer that question. Though definitions of the casestudy approach in research vary (Gerring, 2004), many researchers highlighted thequalitative nature of case studies (Yin, 1994). Indeed, a case study may allow forquantitative data to be sampled (Scholz and Tietje, 2001); but it is predominantly seen as aqualitative approach. In fact, Yin (1994) used the term case study to denote qualitativeresearch.As such, case studies have been criticised for lacking the power to generalise (Lee, 1989,cited in Gable, 1994). However, other researchers have disagreed and attempted to definecase studies through their ultimate purpose to allow generalisation (Gerring, 2004).A case study seeks to describe and interpret unique individuals or situations in a narrativefashion (Cohen et al, 2000). It is concerned with complexity (ibid.) and context (Hartley,2004). It wants to represent reality and provide a sense of „being there‟ (Cohen et al, 2000).This corresponds to the explorative and interpretational observation of natural settings thatcharacterised qualitative research in Reichardt and Cook‟s (1979) view. 25
  • 30. The main foci of a case study may be unique cases of individuals or situations, or ofbounded phenomena and systems, such as roles, organisations or communities (Cohen et al,2000). In Reichardt and Cook‟s (1979) definition, qualitative research focuses onunderstanding from the standpoint of the respondent.The case study approach emphasises the in-depth portrayal, analysis and interpretation ofunique and complex individuals or situations. It is subjective and descriptive and wants tounderstand the specificity of the object under study (Cohen et al, 2000). This echoesReichardt and Cook‟s (1979) definition of qualitative research, which also emphasisesunderstanding.Case study research is empathic and some of its data collection methods require that theresearcher is a participant-observer (Cohen et al, 2000). This portrayal of the researchermatches Reichardt and Cook‟s (1979) view of the qualitative researcher as a subjectiveinsider who is close to the object of the study.Generally, qualitative research is thought of as being inductive (CSU, 1993-2012).However, although case studies fall largely onto one side of the quantitative/qualitativedivide, it can be either deductive or inductive.Case studies can be used deductively in the falsification of theories: a single case thatcontradicts a theory can give ground for the theory to be rejected. In other words, research 26
  • 31. may start off with the formulation of a theory, which can then be disproved bydemonstrating a single case that contradicts it.Case studies can also be seen as an inductive method. In inductive case study research, oneor a few cases may be used as a basis for generalisation; ie if something is true in one or afew cases, it may also be true in many or all similar cases. Siding with Gerring (2004), thisresearch will be hoping to use the case study approach inductively and makegeneralisations of the type “if one newspaper is selling content in a certain way, then allnewspapers conceivably can”.Case study research‟s strongest suit is that it allows objects to be studied in their naturalcontext, which helps understand their complexity and facilitates the gaining of insights intoemerging topics (Benbasat et al, 1987, cited in Gable, 1994).4.2 Research designA couple of case studies were used to shed light on the ways various newspapers areselling/distributing content online. Two newspapers were studied -- the Daily Post in theUK and Business Day in South Africa. The pair represent local and national coverage, aswell as general-interest and specialty business coverage. 27
  • 32. In the first stage of building each case study, the author looked at the newspapers‟ websitesand audited their homepages, an individual story page, “About Us” pages, the variouscategory pages (eg, National, Markets, Sport, Politics, Opinion, etc), the footers of thepages and the widgets in the pages‟ sidebars. This audit allowed for a list of the variousobvious ways in which the companies are selling content online to be compiled. The resultswere broken down along the three dimensions of the research questions -- consumer types,pricing options and delivery channels. The annual financial reports of those companies thatpublish them were scanned for relevant facts as well.In the second stage of building the case studies, the author sent personalised questionnairesto editors from the studied newspapers asking them to confirm the findings in stage one andadd relevant information that might have been missed in the first stage. Additionalquestions were sent to the participants via email and one of them was interviewed withfollow-up questions via Skype.The data from the two stages was used to create a “profile” of each of the studiednewspapers, detailing the ways in which it sells and distributes digital content.4.3 LimitationsKerlinger (1986) listed the lack of controllability of variables, the lack of power torandomise and the risk of misinterpreting the data among the case study method‟s 28
  • 33. weaknesses. These are valid points, but they are outweighed by the advantages of using the-- arguably -- ultimate qualitative approach in trying to answer research questions that areinterested in the how.From a practical standpoint, the author was not able -- due to time and resource constraints-- to observe a greater number of newspapers, limiting the research to just two.Still, the newspapers that were studied represent both local and national, as well as general-interest and specialist coverage, and provide a global perspective, being based on twodifferent continents. 29
  • 34. 5. Case studiesThe case studies below use findings from the audit of the newspapers‟ homepages,individual story pages, “About Us” pages, the various category pages (eg, National,Markets, Sport, Politics, Opinion, etc), the footers of the pages and the widgets in thepages‟ sidebars. The annual financial reports of the publishing companies were also auditedbut revealed no relevant data. The audits identified 13 channels that seemed to be in use atBusiness Day (website, RSS feeds, newsletters, podcasts, Facebook, Twitter, Google+,LinkedIn, mobile site, iPhone app, iPad app, SMS alerts and e- edition) and 5 that seemedto be used by the Daily Post (website, RSS feeds, newsletters, Facebook andTwitter).Personalised questionnaires were constructed with a two-fold purpose. On onehand, the participating editors were asked to confirm whether these channels were indeed inuse and to identify further channels that their newspapers might be using. On the otherhand, the editors were asked about what types of customers (wholesale or retail) are beingreached via these channels and whether they were used to distribute individual pieces ofcontent or bundles of content. Additional follow-up questions were sent to both editors viaemail and one editor was interviewed via Skype. The questionnaires and subsequentfollow-up questions revealed that some of the channels identified in the audit phase werenot being used at Business Day, while the Daily Post was using several channels that theaudit failed to unveil. Additionally, both editors confirmed the sale of content via filetransfer protocol (ftp) or similar syndication technology. 30
  • 35. Another round of audits followed, this time aiming to check whether the channels (nowconfirmed) were:-- displaying a direct link to a revenue stream (paid content), or-- displaying an indirect link to a revenue stream (advertisements shown alongside thecontent), or-- displaying no link to a revenue stream and were being used for promotion purposes only.5.1 Business DayBusiness Day is a national daily South African newspaper that is published in print fromMonday to Friday and maintains a seven-days-a-week online offering. It covers all majornational and international news stories and pays special attention to South Africa‟s businessand economy.The newspaper is using a variety of channels to deliver content to customers. These can bebundled into three large groups: 1) online offering via website and related functionalities(such as RSS feeds, newsletters and podcasts), 2) mobile offering via a mobile site,applications, SMS alerts, etc, and 3) social media. An electronic edition of the print productis also being offered and can be read online or downloaded to computers and other devices.Finally, Business Day content is being sold on a wholesale basis through syndication.(Damyanov, audit, 2012a; Matthewson, questionnaire, 2012). 31
  • 36. A questionnaire, filled out by Steve Matthewson (Managing Editor News) also revealedthat:-- Business Day is charging for content delivered via some of these channels and has plansto start charging for others in the near future;-- the newspaper‟s digital content offering consists almost entirely of bundles of content onsome occasions and individual pieces of content on just one;-- Business Day has both retail and wholesale clients (Matthewson, questionnaire, 2012).The questionnaire also revealed that two of the channels identified at the audit stage werenot being used by the newspaper -- Google+ and LinkedIn (ibid.)A detailed discussion of what the newspaper is doing in terms of content monetisation viathe various channels follows below.5.1.1 Online offeringBusiness Day maintains a public website (http://www.bdlive.co.za/), which it uses todeliver bundles of content to retail customers. At the time of writing, the content is offeredfree of charge, but some of it requires a free registration to the website. However, BusinessDay has plans to start charging for at least some of it (Matthewson, questionnaire, 2012). 32
  • 37. This channel is indirectly linked to a revenue stream, as ads are being displayed alongsidethe content (Damyanov, audit, 2012b). In the future, when the content goes behind apaywall, there will be a direct link to revenues from paying customers, but Business Day isalso hoping to retain the indirect revenue from advertisements and hopes the detailedinformation it will have about paying subscribers will make them an even more attractiveaudience to advertisers (Matthewson, interview, 2012a).Through a separate, password-protected, website, Business Day is selling bundles ofcontent to wholesale clients. The newspaper plans to put in place a wholesale content salepolicy and system to sell individual pieces of content. At present, it is selling unbundledvideo content on an occasional basis (Matthewson, questionnaire, 2012). This channel has adirect link to a revenue stream, as clients are paying for it (Damyanov, audit, 2012b). Thisis not about to change.Business Day is delivering bundled content to both retail and wholesale customers free ofcharge via RSS feeds and plans to introduce charges in the future. The newspaper viewsRSS as one of the potential future distribution services it uses to supply specific contenttypes to corporate customers. The RSS feed itself would continue to provide headlines freeof charge, but registration is already required to read the full articles and in future paymentwould be required to read full articles (Matthewson, questionnaire, 2012). This channel hasno link to a revenue stream, but serves to feed traffic to the website (Damyanov, audit,2012b); and this will not change in the future. 33
  • 38. Newsletters are used to service retail customers only and in future they are only likely to beused to promote content on a retail basis. Even when the newspaper starts charging forcontent, the newsletters are likely to remain free (Matthewson, questionnaire, 2012).Newsletters are sponsored (Matthewson, interview, 2012b), providing an indirect linkbetween content and a revenue stream.Video podcasts, served on an individual basis, are free for registered retail clients. BusinessDay has not so far made them available on a wholesale basis, but may consider doing so infuture (Matthewson, questionnaire, 2012). Sometimes, sponsor pre-rolls are shown toconsumers (Matthewson, interview, 2012b), linking content indirectly to a revenue stream.5.1.2 Mobile offeringBusiness Day maintains a dedicated mobile site, which is a scaled-down version of themain website. Content bundles are being offered to retail users free of charge, but there areplans to start requiring payment (Matthewson, questionnaire, 2012). The website has anindirect link to a revenue stream from ads displayed alongside the content (Damyanov,audit, 2012b).An iPhone app and a similar, but not identical, iPad app are being used to deliver contentbundles free of charge to retail customers. At the moment, registration is not required oniPhone, iPad or the mobile site, but only because of technical limitations (Matthewson, 34
  • 39. questionnaire, 2012). Ads, displayed in-app provide an indirect link to a revenue stream(Damyanov, audit, 2012b). The newspaper plans to begin charging for content on a multi-platform subscription basis, so paying subscribers will be able to access the same contenton any platform (mobile, desktop, etc). Eventually registration will be required on allplatforms in order to sample content and payment will be required to access the full rangeof bundled content (Matthewson, questionnaire, 2012).Business Day does not rule out the possibility of also launching other apps on iPhone andother mobile devices that deliver specialist bundled content in specific verticals. AnAndroid app is in the planning -- it is being scoped and is due to launch in the next sixmonths (ibid.)The newspaper has no immediate plans to use mobile apps to sell content on a wholesalebasis, but is not ruling out the possibility of doing so. The planned wholesale content salepolicy and system will be able to accommodate the possibility of Business Day supplyingcontent on a wholesale basis to apps managed by corporate customers and even thepossibility of the newspaper developing apps and offering them on a white label basis tocorporate customers (ibid.)Registered retail customers can subscribe to free news alerts via SMS (Matthewson,questionnaire, 2012). There is no link between content distributed this way and a revenuestream (Damyanov, audit, 2012b). 35
  • 40. 5.1.3 Social mediaBusiness Day is using a Facebook page and a Twitter account to deliver content tocustomers (Matthewson, questionnaire, 2012). None of those can be monetised via contentsales at the moment, as the platform holders do not allow publishers to ask money frompeople visiting their Facebook or Twitter pages.Facebook apps can be used to deliver content to customers free of charge or in exchange forpayment. Business Day is not using such an app and has no immediate plans to launch one.Facebook will continue to be merely a means for engagement and for promoting content,for the foreseeable future, including the phase in which the newspaper begins charging forcontent on a retail basis (Matthewson, questionnaire, 2012).Twitter, too, is primarily used for interaction and to drive traffic. When Business Day startscharging for access, it may play a role in helping convert free registered users into payingsubscribers (Matthewson, questionnaire, 2012). There is no link to a revenue stream via thischannel (Damyanov, audit, 2012b).5.1.4 E-edition and syndicationAn e-edition of the print product is being offered via a third-party distributor to subscriberswho wish to consume the print edition as a complete product, but who are generally outsideof Business Day‟s main distribution area (Matthewson, questionnaire, 2012). This channel 36
  • 41. is directly linked to a stream of subscription revenues; and content in the e-edition sharespages with ads, providing an additional indirect link to a revenue stream (Damyanov, audit,2012b).Wholesale customers are also paying for Business Day content delivered to them throughftp (Matthewson, questionnaire, 2012). There is a direct link to a revenue stream frompaying customers (Damyanov, audit, 2012b).Business Day is using 12 channels to deliver content to customers: website, RSS feeds,newsletters, podcasts, mobile site, iPhone app, iPad app, SMS alerts, Facebook page,Twitter, e-edition, syndication (ftp). (See Chart 1.)One channel -- syndication -- is used exclusively for serving content to wholesale clients.Seven channels -- newsletters, podcasts, mobile site, iPhone app, iPad app, SMS alerts ande-edition -- are used to deliver content exclusively to retail customers. Four channels --website, RSS feeds, Facebook page and Twitter -- are used to distribute content to bothwholesale and retail customers. Overall, Business Day is reaching its wholesale customersthrough five channels -- (special password-protected) website, RSS feeds, Facebook page,Twitter and syndication -- and its retail customers through 11 channels -- (public) website,RSS feeds, newsletters, podcasts, mobile site, iPhone app, iPad app, SMS alerts, Facebookpage, Twitter and e-edition. 37
  • 42. Almost exclusively, content is being offered as a bundle -- either the entirety of contentproduced by the newspaper or a specific subset of it. The exception are the podcasts, whichare being provided on a piece-by-piece basis.CHART 1: Business Day – Channels, customers & bundling options.Wholesale channels are displayedvertically at the left-hand side of the chart and retail channels are displayed horizontally at the lower end. Redindicates channels that are used to sell content, yellow indicates free channels and blue indicates channels thatare free at present but are planned to go behind a paywall. A large bubble means that the channel is beingused to deliver a bundle of content and a small bubble means that the channel is being used to deliverindividual pieces of content.At the moment content is being delivered free of charge via 10 channels -- (public) website,RSS feeds, newsletters, podcasts, mobile site, iPhone app, iPad app, SMS alerts, Facebookpage and Twitter -- and payment is required for content being delivered via three channels -- (special password-protected) website, e-edition and syndication. Nine channels -- RSS 38
  • 43. feeds, newsletters, podcasts, mobile site, iPhone app, iPad app, SMS alerts, Facebook pageand Twitter -- are currently only being used to deliver content free of charge, two channels-- e-edition and syndication -- are only being used to deliver paid content and one channel -- the website, of which there is a public and a password-protected version -- is used for bothfree and paid content. There are plans to begin charging for content delivered via five of thenow free channels -- (public) website, RSS feeds, mobile site, iPhone app and iPad app.This will shift the balance in favour of paid content, which will be distributed via sevenchannels -- website, RSS feeds, mobile site, iPhone app, iPad app, e-edition andsyndication -- versus five channels that will be left exclusively for the distribution of freecontent -- newsletters, podcasts, SMS alerts, Facebook page and Twitter. In future there arenot planned to be channels that will be used for delivering both free and paid content.Content that is being sold by Business Day at the moment, is predominantly offered towholesales customers via the (password-protected) website and syndication; and only the e-edition is a channel used to sell digital content to retail clients. In future, though, there willbe more paid-content channels for retail customers -- six: website, RSS feeds, mobile site,iPhone app, iPad app and e-edition -- than for wholesale clients -- three: website, RSS feedsand syndication.Three of the channels -- (the password-protected) website, the e-edition and ftp -- have adirect link to a revenue stream from paying customers. The e-edition also has an indirectlink to a revenue stream from advertising. Six other channels -- (the public) website,newsletters, podcasts, mobile site, iPhone app and iPad app -- also have an indirect link to 39
  • 44. an ad revenue stream. Four channels -- RSS feeds, SMS alerts, Facebook page and Twitter -- have no link to a revenue stream.5.2 Daily PostThe Daily Post is a general-interest regional newspaper circulating in North and MidWales. According to Trinity Mirror plc, which owns it, the Daily Post is the newspaper thatreaches the largest audience in North Wales, even beating national newspapers.Compared with the national Business Day, the Daily Post is using almost all of the sameonline channels and more social media channels, but has a more limited mobile offering. Italso has an e-edition and is selling content through syndication (Damyanov, audit, 2012c;Gow, questionnaire, 2012).Aside from the paid e-version of the print product and the syndication deals, the Daily Postis charging for a very little portion of its content. The newspaper does not have plans tochange that.The grouping used in the Business Day case can be used here as well, although some of thegroups (eg, Mobile offering) are much smaller, even as others (eg, Social media) are larger:1) online offering via website and related functionalities (such as RSS feeds andnewsletters), 2) mobile offering via a mobile site, and 3) social media. 40
  • 45. A questionnaire, filled out by Alison Gow (Editor) also revealed that:-- the Daily Post is not charging for content delivered via most of the channels it uses;-- the newspaper‟s digital content offering consists almost entirely of bundles of content onsome occasions and individual pieces of content on just one;-- the Daily Post has both retail and wholesale clients (Gow, questionnaire, 2012).The questionnaire also revealed that six more channels (not identified at the audit stage)were being used by the newspaper -- mostly social media (ibid.)Following is a detailed discussion of what the newspaper is doing in terms of content salesand distribution via the various channels.5.2.1 Online offeringThe Daily Post maintains a public website (http://www.dailypost.co.uk/), which it uses todeliver bundles of content to retail customers. The content is offered free of charge, butsome of it requires a free registration to the website (Gow, questionnaire, 2012). Thischannel is indirectly linked to a revenue stream, as ads are being displayed alongside thecontent (Damyanov, audit, 2012d). 41
  • 46. Sometimes, wholesale customers such as TV stations, will pick up a story from the websiteand buy the re-use rights (Gow, questionnaire, 2012). This gives the website a direct link toa revenue stream as well.The Daily Post is delivering bundled content to retail customers free of charge via RSSfeeds (Gow, questionnaire, 2012). This channel has no link to a revenue stream, but servesto feed traffic to the website (Damyanov, audit, 2012d).Newsletters are used to service retail customers and are available free of charge afterregistration (Gow, questionnaire, 2012). At the time of writing, the newsletters were notcarrying advertisements, but the editor interviewed for this case study revealed that theyhave had in the past (Gow, interview, 2012b).5.2.2 Mobile offeringThe Daily Post maintains a dedicated mobile site. Content bundles are being offered toretail users free of charge (Gow, questionnaire, 2012). The mobile site is not running adsthat could link content indirectly to revenue (Gow, interview, 2012b), though it could.The newspaper is not making use of phone apps or SMS alerts (Gow, questionnaire, 2012).5.2.3 Social media 42
  • 47. The Daily Post is heavily using social accounts to deliver content to customers -- Facebook,Twitter, LinkedIn, Pinterest (Gow, questionnaire, 2012). None of those can be monetisedvia content sales at the moment, as the platform holders do not allow publishers to askmoney from people visiting their social media pages.Facebook apps can be used to deliver content to customers free of charge or in exchange forpayment. The Daily Post is not using such an app (Gow, questionnaire, 2012). Even so, theFacebook offering is fairly robust, incorporating brand pages, reporter profile pages andmarketing pages associated with distinct initiatives (ibid.)There is no link to a revenue stream via these channels (Damyanov, audit, 2012d).5.2.4 E-edition and syndicationThere is a page-turner e-edition for subscribers. It is one of the digital tools of whichadvertisers are very supportive. Often, if a special supplement is being put together with asponsor, the sponsor will ask for a page-turning e-edition to be created as well (Gow,interview, 2012a). Sponsorship and ads in the e-editions create an indirect link to a revenuestream; and subscriptions provide a direct one (Damyanov, audit, 2012d). The Daily Post isnot selling e-editions of individual issues (Gow, interview, 2012a). 43
  • 48. Daily PostCHART 2: Daily Post – Channels, customers and bundling options. Wholesale channels are displayedvertically at the left-hand side of the chart and retail channels are displayed horizontally at the lower end. Redindicates channels that are used to sell content and blue indicates free channels. A large bubble means that thechannel is being used to deliver a bundle of content and a small bubble means that the channel is being usedto deliver individual pieces of content.Wholesale customers are also paying for Daily Post content delivered to them through ftp(Gow, questionnaire, 2012). There is a direct link to a revenue stream from payingcustomers (Damyanov, audit, 2012d).The Daily Post is using 10 channels to deliver content to customers: website, RSS feeds,newsletters, mobile site, Pinterest, LinkedIn, Facebook pages, Twitter, e-edition andsyndication (ftp). (See Chart 2.) 44
  • 49. As in the case of Business Day, one channel -- syndication -- is used exclusively for servingcontent to wholesale clients. Eight channels -- RSS feeds, newsletters, mobile site,Pinterest, LinkedIn, Facebook pages, Twitter and e-edition -- are used to deliver contentexclusively to retail customers. Just one channel -- the website -- is used to distributecontent to both wholesale and retail customers. Overall, the Daily Post is reaching itswholesale customers through two channels -- website and syndication -- and its retailcustomers through nine channels -- website, RSS feeds, newsletters, mobile site, Pinterest,LinkedIn, Facebook pages, Twitter and e-edition.Similarly to Business Day, almost exclusively, content is being offered as a bundle -- eitherthe entirety of content produced by the newspaper or a specific subset of it. The exceptionis the website, from where wholesale customers pick up individual stories.Content is being delivered free of charge via eight channels -- website, RSS feeds,newsletters, mobile site, Pinterest, LinkedIn, Facebook pages and Twitter -- and payment isrequired for content being delivered via three channels -- website, e-edition andsyndication. Seven channels -- RSS feeds, newsletters, mobile site, Pinterest, LinkedIn,Facebook pages and Twitter -- are currently only being used to deliver content free ofcharge, two channels -- e-edition and syndication -- are only being used to deliver paidcontent and one channel -- the website -- is used for both free and paid content. The lattertwo mirror the situation over at Business Day, however the Daily Post has no plans to begincharging for content delivered via any of the now free channels. 45
  • 50. Content that is being sold by the Daily Post is offered to wholesale customers via twochannels -- website and syndication; and only the e-edition is a channel used to sell digitalcontent to retail clients.Two of the channels -- e-editions and ftp -- have a direct link to a revenue stream frompaying customers. The e-edition also has an indirect link to a revenue stream fromadvertising. One other channel -- the website -- also has an indirect link to an ad revenuestream. Six channels -- RSS feeds, mobile site, Facebook pages, Twitter, LinkedIn andPinterest -- have no link to a revenue stream. 46
  • 51. 6. Discussion of findings and a typology proposalA typology of ways to distribute and/or sell digital content emerges in the form of a largenumber of combinations of channels being used to deliver bundles or individual pieces ofcontent to either retail or wholesale customers. As many as 40 types of contentsale/distribution can be identified in this way. The current section looks at the variouscombinations and uses examples from the two case studies -- Business Day and the DailyPost -- as well as other media outlets to make generalisations about whether certain typesare viable of purely theoretical. The main focus of this dissertation is the newspaperindustry, but with newspapers increasingly becoming multimedia outlets and competingonline on an equal footing with TV stations, radio stations, magazines and pure-play onlinepublications, examples from other sectors of journalism are also used as relevant.6.1 Channel: website; Content: bundled; Customers: retailThis setup could encompass the website in its entirety or specific sections, such as Sports orPolitics, or various content packages centered around a central topic. However, thisdistinction is only meaningful in cases when the publisher is charging for the content; andin both cases studied the website is being used to deliver content to retail customers free ofcharge. One of the newspapers -- Business Day -- plans to introduce charges for the contenton its website but it does not plan to sell a variety of packages, opting instead for a singlecharge for the entirety of the content among multiple platforms. 47
  • 52. Other newspapers, such as The Times in the UK, charge for a single day‟s access, whichgives the purchaser the right to consume a specific bundle of content that is available on theday for which the subscription is valid (Reynolds, 2010).At the time of writing, the content on both studied websites is indirectly linked to a revenuestream from advertisements. This will not change even after the Business Day content goesbehind a paywall. Indeed, it is hoped that the newspaper will be able to sell a much moreniche and easy-to-target audience to advertisers (Matthewson, interview, 2012a, 2012b).Although not applied by either of the studied newspapers, examples such as The Times areevidence that this type of content delivery can be linked directly to a revenue stream.6.2 Channel: website; Content: unbundled; Customers: retailAs in the case of various packages being offered alongside the entirety of the content, thedistinction between bundled and unbundled delivery of content via a website is onlyapplicable when money changes hands. For instance, the majority of the content may beoffered free of charge, but certain articles may require payment to be accessed; or theremay be one price for a subscription to all of the content and a separate price for individualpieces of it. In both cases studied this setup is not applicable at the moment, since thewebsites are free. Business Day plans to start charging for content but even then it will becharging a single fee for access to the whole of its content and will not be selling it on apiece-by-piece basis to retail customers. 48
  • 53. Alacra, a US company that sells research, profiles and other content via an online store, isan example of a content provider charging for individual pieces of content (Alacra, 2012),providing a direct link for this type of content sale/distribution to revenue.6.3 Channel: website; Content: bundled; Customers: wholesaleThis type of content delivery is similar to 6.1, the difference being that customers in thiscase have the right to re-use and re-sell the content. Usually, content is being sold on awholesale basis, rather than given away; and that is the case in one of the case studies --Business Day is selling content to wholesale customers via a special, password-protectedwebsite. This provides a direct link to a revenue stream. However, in other cases, mediaoutlets are distributing content that is free to consume and re-use: with promotionalpurposes. For instance, Al-Jazeera, a Qatar-based news broadcaster, is distributing videofootage under a Creative Commons licence, under the terms of which users are free to re-use the content, even for commercial purposes, provided they attribute the content to thenetwork (Townend, 2009). In January 2011 it offered a bundle of its content coveringunrest in Egypt under a CC licence (Hopkins, 2011).6.4 Channel: website; Content: unbundled; Customers: wholesale 49
  • 54. This type of content delivery is similar to 6.2, the difference being -- as in 6.3 -- thatcustomers have the right to re-use and re-sell the content. One of the studied newspapers --the Daily Post -- is selling content in this way. The link between content and revenuestream is direct, but the Al-Jazeera example from 6.3 of giving content away on awholesale basis for promotional purposes is also applicable here. (Another way to look at itis this: since bundling is a pricing issue, and “free” is the same amount of price, regardlessof the volume, questions of bundling vs unbundling become irrelevant whenever moneydoes not change hands.)6.5 Channel: RSS feeds; Content: bundled; Customers: retailSimilarly to the website channel, bundled distribution of content via RSS feeds can apply tothe entirety of a newspaper‟s content, or to specific packages, such as Culture or Business.The channel is in use at both of the studied newspapers for the purpose of deliveringcontent bundles to retail customers. RSS feeds can provide a direct link between contentand a revenue stream. For instance, customers may pay a fee to receive a full feed ofcontent. However, at both studied newspapers, the channel is being used only forpromotional purposes and to feed traffic to the website. At Business Day, RSS has beenidentified as a technology that will be used to serve paying customers in future; but eventhen it will not provide a direct link to a revenue stream, but will be just a delivery vehiclefor content. 50
  • 55. Others though are using RSS feeds for direct content sales. For example, a firm called RSSBazaar was providing exactly this service (Hrastnik, 2005). Its website is no longer active,shedding doubt over the viability of its business model centered around aggregating feedsfrom various publishers and selling them to customers; however, the bundled distribution ofpaid content to retail customers has been proven to be technically feasible.6.6 Channel: RSS feeds; Content: unbundled; Customers: retailAs their name suggests, RSS feeds are continuous streams of content and thus, by nature, abundle option. It is technically possible to set up a specific RSS feed with the purpose ofonly sending one piece of content over it, but that seems highly impractical, rendering thistype not viable.6.7 Channel: RSS feeds; Content: bundled; Customers: wholesaleThis type is similar to 6.5, the difference being that users receive the right to re-use or re-sell the content. Of the two studied newspapers, Business Day has plans to use RSS feedsto deliver content to paying wholesale customers. However, the channel can also be used todistribute content for re-use under a Creative Commons licence, similarly to the Al-Jazeeraexample in 6.3.6.8 Channel: RSS feeds; Content: unbundled; Customers: wholesale 51
  • 56. This is not a viable type (cf 6.6).6.9 Channel: newsletter; Content: bundled; Customers: retailNewsletters are packages of content focused on a specific topic or event. Both of thestudied newspapers are using them to deliver content to retail customers free of charge.Business Day, which plans to introduce a paywall around its content soon, plans tocontinue using them as a free promotional tool. Interestingly, both studied newspapers onlyallow registered users to subscribe to newsletters. The registration process aims to givepublishers more data about their audience, which makes it more attractive to advertisers asthey can target their ads better. Both Business Day and the Daily Post seem to think theutility of a newsletter is high enough for customers to become willing to share their data;which is in contrast with the website that is open to everyone. Newsletters can (and do)feature advertisements, which provide an indirect link between the content in them and arevenue stream when the service is free of charge. It is also not uncommon for news outletsto sell subscriptions to newsletters, making the link between content and money a directone. For instance, Platts, a news provider specialised in the commodity markets, is sellingsubscriptions to a slew of newsletters tailored for different audiences (Platts, 2012).6.10 Channel: newsletter; Content: unbundled; Customers: retail 52
  • 57. Similarly to RSS feeds, newsletters are by definition bundles of content. Although it istechnically possible, it seems impractical to use the channel for distribution of individualpieces of content.6.11 Channel: newsletter; Content: bundled; Customers: wholesaleA wholesale customer receives the right to re-use and re-sell the content. It is feasible forcontent to be delivered to wholesale customers using this channel; however it is an unlikelypractice. Other channels make content more easily re-useable and re-sellable. (Indeed, ithas already been noted that the newspapers in both case studies seem to rate very highly theutility that newsletters provide to retail customers, cf 6.9.) It is more realistic to assumethat newsletters may be used as promotion tools to highlight content capabilities topotential wholesale customers, much in the way Business Day and the Daily Post arealready doing for retail clients.6.12 Channel: newsletter; Content: unbundled; Customers: wholesaleThis is not a viable type (cf 6.10).6.13 Channel: podcast; Content: bundled; Customers: retail 53
  • 58. Podcast bundles can be audio or video content that is distributed via, eg, a subscriptionthrough Apple‟s iTunes store or directly through the publisher‟s website, or otherplatforms. None of the studied newspapers is using podcasts to distribute packages ofcontent, but other news outlets do. For example, The Economist, a weekly news magazine,sells audio editions of each issue (The Economist, 2012). Apart from the direct linkbetween content and revenue stream provided by the sale of podcast subscriptions,advertisements may be embedded within audio or video files, creating an indirect link to adrevenue. One of the editors who were interviewed for the case studies said that although thenewspaper was not using podcasts, other papers in the group were; and they weresometimes using podcasts to carry ads (Gow, interview, 2012a).6.14 Channel: podcast; Content: unbundled; Customers: retailAccess to individual podcasts can be offered to retail clients free of charge or afterpayment. One of the studied newspapers -- Business Day -- is giving registered users freeaccess to video podcasts that do not form a specific package but are available on a piece-by-piece basis. Sometimes, they include pre-rolls with advertising messages, linking thecontent indirectly to a stream of ad revenue. Direct sales of individual podcasts are alsopossible, for example Fox News Radio is selling individual episodes of The O‟ReillyFactor show (Fox News Radio, 2012).6.15 Channel: podcast; Content: bundled; Customers: wholesale 54
  • 59. This type is similar to 6.13, the difference being that wholesale customers get the right tore-use the content, potentially including re-sale. None of the studied newspapers is sellingor distributing content in this way, but other companies do. For instance, Brightcove is aUS firm that sells video content packages on a wholesale basis (Brightcove, 2012), linkingcontent directly to a revenue stream. Other firms, such as video-sharing site YouTube,allow the re-use of content free of charge, but include ads that are visible on re-users‟websites and in their applications, earning the company ad revenue even when the contentis consumed away from its platform.6.16 Channel: podcast; Content: unbundled; Customers: wholesaleThis type shares similarities with 6.14 in that video or audio content is being offered on anindividual basis and with 6.15 in that users are allowed to re-use it. It is not in use at eitherof the two studied newspapers, but the YouTube example from 6.15 is applicable here aswell.6.17 Channel: social media; Content: bundled; Customers: retailSocial media have become powerful platforms to engage audiences and build interactionbetween them and the brand; and many newspaper companies have embraced them. Thetwo studied publications both have a social media presence. Business Day is on Facebook 55
  • 60. and Twitter and the Daily Post boasts a multitude of Facebook pages and is also on Twitter,LinkedIn and Pinterest. However, neither newspaper is using platform-specific apps that(on some social networks) allow publishers to charge for content; instead opting for purelypromotional activities. Other newspapers have built very robust app offerings. One such isthe Guardian, which is not charging for the consumption of content through its app, butsays it has caused a dramatic shift in referral traffic to its website (Belam, 2012).To the best of the author‟s knowledge at the time of writing, no news organisation is sellingcontent via a Facebook app. There are other companies, however, especially in gaming, thatare selling content (virtual goods) through their Facebook apps. One such company isZynga, the maker of the FarmVille app.6.18 Channel: social media; Content: unbundled; Customers: retailAs noted above, the distinction between bundled and unbundled options only makes sensewhen content is being sold. Newspapers seem to have so far shied away from sellingcontent through social networks. Companies like Zynga do sell individual items via in-apppurchases; and there appear to be no practical hurdles for a newspaper app to charge feesfor access to individual pieces of content.6.19 Channel: social media; Content: bundled; Customers: wholesale 56
  • 61. Social media are geared towards providing a superior end-customer experience so it seemshighly improbable that they can be used to sell content to wholesale clients.6.20 Channel: social media; Content: bundled; Customers: wholesaleThis is not a viable type (cf 6.19).6.21 Channel: mobile site; Content: bundled; Customers: retailIn both case studies, mobile sites are scaled-down versions of the main website, wherecontent is being offered at the same terms as on the website. Publishers seem to have notyet figured out the best way to structure their mobile offering, with many using both mobilesites and applications that grant access to their content, effectively competing againstthemselves on the same device. Business Day, for instance, has -- in addition to its mobilesite -- two mobile applications (one for the iPhone and one for the iPad), a third one (forAndroid devices) on the way and is also reaching mobile users via SMS.None of those channels currently have a direct link to revenue (though some have anindirect one, via ads), nor does the Daily Post‟s mobile site.6.22 Channel: mobile site; Content: unbundled; Customers: retail 57
  • 62. Similarly to the distribution of content via a website in 6.1 and 6.2, the distinction betweenbundled and unbundled delivery via a mobile site is only applicable when there is amonetary transaction. The examples given in 6.2 -- the majority of the content may beoffered free of charge, but certain articles may require payment to be accessed; or theremay be one price for a subscription to all of the content and a separate price for individualpieces of it -- are valid for a mobile site as well.In both cases studied access to the mobile site is free. Business Day plans to start chargingfor content but even then it will be charging a single fee for access to the whole of itscontent and will not be selling it on a piece-by-piece basis to retail customers.The Alacra example from 6.2 cannot be applied here, since Alacra does not have adedicated mobile site and the author is not aware of any relevant examples at the time ofwriting. However, there is no reason (other than strategic and business considerations) whysuch setup cannot be implemented by any media company that has a mobile site.6.23 Channel: mobile site; Content: bundled; Customers: wholesaleMobile phones and other handheld devices are highly personalised gadgets and do not seemlike the best platform to distribute content on a wholesale basis. Although in theory such asetup is possible, this setup appears to be not viable in practice. 58
  • 63. 6.24 Channel: mobile site; Content: unbundled; Customers: wholesaleThis is not a viable type (cf 6.23).6.25 Channel: mobile app; Content: bundled; Customers: retailMobile apps are an alternative to consuming content via a mobile site on handheld devices.The same basics apply, in that a publisher may be using a mobile app to provide access toall of its content or to specific subsets of it. One of the studied newspapers -- Business Day-- is using two separate mobile apps (one for iPhone and one for iPad) and has a third oneon the way (it will work on Android devices). The apps are currently free, with adsdisplayed in-app providing an indirect link between content and ad revenue, but once thenewspaper‟s content goes behind a paywall in the near future, clients will be required topay, linking content directly to money.6.26 Channel: mobile app; Content: unbundled; Customers: retailContent can be offered to customers on an unbundled basis, for instance through in-apppurchases of pieces of content. Neither of the studied newspapers is distributing or sellingcontent in this way, but the so-called “microtransactions” (in which consumers get an appfree of charge and then pay for content) are especially popular in game apps distributed viaApple‟s App Store, the Google Play store and the Amazon appstore (Sathe, 2012). 59
  • 64. 6.27 Channel: mobile app; Content: bundled; Customers: wholesaleAn interesting option was suggested by the Business Day editor interviewed for the casestudy. The newspaper‟s short-term plans include the introduction of a wholesale contentsale policy and system that will be able to allow Business Day to supply content on awholesale basis to apps managed by corporate customers, and even to develop apps andoffer them on a white label basis to corporate customers. The former option is not actually acase of the publisher selling or distributing content via a mobile app, as the content willappear in the client‟s app and will probably get there via other means. The latter however,will see Business Day content being sold or distributed through an app created and possiblymaintained by the publisher, even as the brand name will be that of the client.6.28 Channel: mobile app; Content: unbundled; Customers: wholesaleSimilarly to 6.23 and 6.24, this option seems improbable, due to the personalised nature ofmobile devices. The suggested example in 6.27 allows for the use of the mobile appchannel for selling content, where the value for the wholesale customer comes from beingable to re-use a whole bundle of content. The same example is hard to apply for unbundledsales.6.29 Channel: SMS alert; Content: bundled; Customers: retail 60
  • 65. SMS alerts are being used by Business Day to bring real-time updates to retail customersfree of charge. There is no link between content and revenue, and the channel is used forpromotional purposes only. Other providers, such as the website Cheap Footy Scores, areoffering a paid service that brings sports scores information to users via SMS (Cheap FootyScores, 2012), linking content directly to revenue. SMS alerts can also carryadvertisements, mixed with the news alerts, providing another, indirect, monetisationoption. For example, the Yes Network, the official TV channel of the New York Yankeesbaseball team in the US, is running ad-supported SMS alerts that are free to the consumerswho sign up for the service (Butcher, 2009).6.30 Channel: SMS alert; Content: unbundled; Customers: retailDue to technical limitations, each SMS usually only carries one piece of content. However,it is hard to imagine a situation, in which customers subscribe to only get one alert. Thevalue of an SMS alert service comes from the whole package of messages that reach theuser anytime, anywhere.6.31 Channel: SMS alert; Content: bundled; Customers: wholesaleSMS technology can be used to deliver content directly to customers‟ platforms, where thealerts can be published as short news updates, for instance. The author is unaware of an 61
  • 66. example of such a setup, but the rise of direct wireless machine-to-machine (M2M)communications that use SMS technology (Orange, 2012) makes this type look viable.6.32 Channel: SMS alert; Content: bundled; Customers: wholesaleThis is not a viable type (cf 6.30).6.33 Channel: e-edition; Content: bundled; Customers: retailBoth studied newspapers are offering electronic editions of their print product. Theserepresent the same content as the print product, just on a different platform; consequently,they share the same characteristics in terms of the link between content and revenue: ie,there is an indirect link, whenever the e-edition carries ads, and a direct link whenever thee-edition is being sold. Business Day and the Daily Post do both, but other combinations,eg an entirely ad-supported free e-edition, are also possible.6.34 Channel: e-edition; Content: unbundled; Customers: retailE-editions, much like newspaper hard copies are, by their nature, bundles of content. Thistype thus appears to be not viable.6.35 Channel: e-edition; Content: bundled; Customers: wholesale 62
  • 67. E-editions, whether they are replicas of a print product or purely digital publications, aregeared towards being read (ie, consumed) rather than re-used or re-sold. Better optionsexist for the delivery of content to wholesale clients and this type appears to be not viable.6.36 Channel: e-edition; Content: unbundled; Customers: wholesaleThis is not a viable type (cf 6.34 and 6.35).6.37 Channel: syndication; Content: bundled; Customers: retailFile transfer protocol (ftp) and other syndication technologies can be used to deliver contentthat plugs into customers‟ intranets. Although the content is being re-used in the customer‟sown information infrastructure, these are retail deals because only the client who buys thecontent is using it, albeit via many separate employees. The two studied newspapers are notusing this channel to reach retail customers, but providers such as the Insurance Journal do.The Insurance Journal, published by Wells Media Group, offers free news feeds that can beintegrated into intranets (Insurance Journal, 2012). In this particular example, there is nolink to a revenue source, since the feeds are being used to feed traffic back to the InsuranceJournal website. However, setups in which customers pay for the service or ad-supportedfeeds, are possible. 63
  • 68. 6.38 Channel: syndication; Content: unbundled; Customers: retailSyndication via ftp or similar technology is very similar to RSS feeds. Indeed, one of themeanings attributed to the abbreviation RSS is “really simple syndication”. Similarly to 6.6,it is possible to deliver an individual piece of content via syndication, but that seems highlyimpractical, rendering this type not viable.6.39 Channel: syndication; Content: bundled; Customers: wholesaleBoth Business Day and the Daily Post use syndication to sell content on a wholesale basis.Apart from this use of the channel, which provides a direct link between content andrevenue, other options are possible. In the Insurance Journal example from 6.37, news feedsare being offered to clients who may want to use them in their intranets (retail) or on theirwebsites where the content will ultimately be consumed by users other than the buyer (re-use, ie wholesale).6.40 Channel: syndication; Content: unbundled; Customers: wholesaleThis is not a viable type (cf 6.38).Seventeen out of the 40 types of content sale/distribution identified above have beendeemed not viable, leaving publishers with 23 viable options. Table 2 on page 65summarises the results from the analysis of the various types. 64
  • 69. TABLE 2 – Types of content sale/distributionType Combination Viability6.1 Channel: website; Content: bundled; Customers: retail Viable6.2 Channel: website; Content: unbundled; Customers: retail Viable6.3 Channel: website; Content: bundled; Customers: wholesale Viable6.4 Channel: website; Content: unbundled; Customers: wholesale Viable6.5 Channel: RSS feeds; Content: bundled; Customers: retail Viable6.6 Channel: RSS feeds; Content: unbundled; Customers: retail Not viable6.7 Channel: RSS feeds; Content: bundled; Customers: wholesale Viable6.8 Channel: RSS feeds; Content: unbundled; Customers: wholesale Not viable6.9 Channel: newsletter; Content: bundled; Customers: retail Viable6.10 Channel: newsletter; Content: unbundled; Customers: retail Not viable6.11 Channel: newsletter; Content: bundled; Customers: wholesale Not viable6.12 Channel: newsletter; Content: unbundled; Customers: wholesale Not viable6.13 Channel: podcast; Content: bundled; Customers: retail Viable6.14 Channel: podcast; Content: unbundled; Customers: retail Viable6.15 Channel: podcast; Content: bundled; Customers: wholesale Viable6.16 Channel: podcast; Content: unbundled; Customers: wholesale Viable6.17 Channel: social media; Content: bundled; Customers: retail Viable6.18 Channel: social media; Content: unbundled; Customers: retail Viable6.19 Channel: social media; Content: bundled; Customers: wholesale Not viable6.20 Channel: social media; Content: bundled; Customers: wholesale Not viable6.21 Channel: mobile site; Content: bundled; Customers: retail Viable 65
  • 70. 6.22 Channel: mobile site; Content: unbundled; Customers: retail Viable6.23 Channel: mobile site; Content: bundled; Customers: wholesale Not viable6.24 Channel: mobile site; Content: unbundled; Customers: wholesale Not viable6.25 Channel: mobile app; Content: bundled; Customers: retail Viable6.26 Channel: mobile app; Content: unbundled; Customers: retail Viable6.27 Channel: mobile app; Content: bundled; Customers: wholesale Viable6.28 Channel: mobile app; Content: unbundled; Customers: wholesale Not viable6.29 Channel: SMS alert; Content: bundled; Customers: retail Viable6.30 Channel: SMS alert; Content: unbundled; Customers: retail Not viable6.31 Channel: SMS alert; Content: bundled; Customers: wholesale Viable6.32 Channel: SMS alert; Content: bundled; Customers: wholesale Not viable6.33 Channel: e-edition; Content: bundled; Customers: retail Viable6.34 Channel: e-edition; Content: unbundled; Customers: retail Not viable6.35 Channel: e-edition; Content: bundled; Customers: wholesale Not viable6.36 Channel: e-edition; Content: unbundled; Customers: wholesale Not viable6.37 Channel: syndication; Content: bundled; Customers: retail Viable6.38 Channel: syndication; Content: unbundled; Customers: retail Not viable6.39 Channel: syndication; Content: bundled; Customers: wholesale Viable6.40 Channel: syndication; Content: unbundled; Customers: wholesale Not viable 66
  • 71. 7. ConclusionNewspaper publishers are facing immense challenges and struggling to maintain theviability of a dual business model that is becoming increasingly unstable. The five coreelements of a business model include product, consumer, revenue, pricing and delivery. Fornewspapers, revenue has long come through two main sources -- advertising and contentsales. At the same time, they have serviced two distinct customer groups -- advertisers andreaders, offering them two different products -- a platform for ads and newsworthy orentertaining content. There is a consensus among scholars and industry representatives thatadvertising will remain a main source of revenue for newspapers online, much as it hasbeen in print. At the same time, selling digital content is proving a tough call for mostnewspaper companies.The transactions in which users receive content from publishers are usually characterised asfree or paid. This dissertation argued that this dichotomy is not necessarily accurate, aseven in “free” transactions the publisher gets “paid”: just in a different currency --attention. The publisher can then “convert” attention into money through variousmonetisation methods, most notably by showing ads to the attentive audience. Providedthat a delivery channel exists that allows the publisher to deliver content (the product) tocustomers, revenue can be made in a variety of ways -- including direct content sales andindirect sources, such as ads. In terms of pricing, content can be sold/distributed in bundlesor on an individual basis. 67
  • 72. Case studies were built of how two daily newspapers -- Business Day in South Africa andthe Daily Post in the UK -- are selling/distributing content to retail and wholesalecustomers. The research focused on the channels that were being used, the type of customerthat was being served and whether content was being sold/distributed in a bundle orunbundled. These foci correspond to three of the core business model elements -- delivery,customer and pricing. The fourth element -- product -- was assumed to be content; and thefifth -- revenue was assumed to come either directly from content sales or indirectly viaads. Being based on two separate continents, the two cases provided a global perspective tothe issue. The scope of research was further increased by the fact that one of the papersrepresents a regional title and the other one is a national publication. Moreover, the DailyPost is a general-interest newspaper, while Business Day is a niche business title.Based on the case studies, 40 types of content sale/distribution were identified, bycombining the various channels, customer types and bundling options. These were analysedand their viability was weighed using examples from the case studies and from otherrelevant companies. As many as 17 out of the 40 types were found to be not viable. For theremaining 23, there were various options to monetise content, including direct salesrevenue and indirect advertising revenue; and some types of content distribution had thepossibility to use content for purely promotional purposes, rather than for making money.The proposed typology lays no claim to completeness and further research can expand thenumber of types, for instance by looking at even more channels, such as email, MMS, and 68
  • 73. application programming interface (API) technology. The links between content andrevenue, the monetisation options, could be added as a fourth dimension, boosting thenumber of types even further. Further research could also introduce a more robust way ofdetermining the viability of each type. In this research, generalisation was used toextrapolate that if one company is making use of a specific type, then others could too.With regard to the case studies, further research could expand each individual case andmore companies could be studied, so that examples are better researched and make forstronger evidence.As is, the research found answers to all its three research questions and -- in response to theoverarching goal of the paper -- created a proposed typology of content sale/distributionoptions that can be further improved. 69
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