In question 1, we talked about the differences between the value chains of a traditional newspaper publisher and an on-line news publisher. The (dis)advantages of providing news on-line was covered also. For question 2, we evaluate the “worries about cannibalization” by comparing and contrasting the core products and target customers. And lastly, we discussed the trends and developments that represent opportunities and/or threats to the news publishing industry. We summarized the prospects for hard-copy and digital news providers.

1. Case Study

2. Question 1
Highlight the differences between the value chains of a
traditional newspaper publisher and
an on-line news publisher. Specify the (dis)advantages of
providing news on-line.

3. Outbound Logistic
Printed News
• Retailer stores
• Individual sellers
Online news:
• Website
• Mobile application
• PDF

4. Operation
Writing Editorial selection PrintingDesign Distribution
Writing Editorial selection Design Distribution

5. Services
User Engagement
Reader are free to voice their opinion
Connecting & Sharing
Reader can share articles to different social
media platform
Retrieving & Storing
Reader can easily find archived news

6. Advantages
• Cost-effective
• New advertising revenue
• Better accessibility
• Manage customer loyalty
• Timely & informative
• Environmental-friendly
Disadvantages
• Dependent on network
connection
• Need laptop or smart
device to open
• Less advertising revenue

7. Question 2
Evaluate the “worries about cannibalization” by comparing and
contrasting the core products and target customers in the
market “place” for newspapers and for on-line news.
Comment on the relationships between editorial integrity and
profits, specifically at SCMP and more generally (across different
strategic groups) in the newspaper industry.

8. • SCMP (2014):
Print Circulation 3% Digital Subscription 54%
Core Product Target Customers
Newspaper Newspaper (free or
subscription)
Age: 30 ++
Occupation: Business elite,working
professional,general public
Characteristic: Digital immigrant
Online News Online news (free or
subscription)
Age: 30 –-
Occupation: Students
Characteristic: Digital Natives
I.
II.
Overall circulation revenue 5% !!!
• Cannibalization effect is small

9. Editorial Integrity VS. Profit
• In general, reader choose newspaper with editorial integrity.
• Small scale boycotts on some newspaper in the past, hundred to
thousand people joined.
• The impact is minimal unless the scale becomes bigger.
• Continuous income from advertising, therefore reduction of
circulation in short time will not affect company’s profit seriously.
• SCMP won “most trusted newspaper” 5 times locally.
• SCMP use action to prove its editorial integrity and ethical journalism.

10. Question 3
Discuss the major trends and/or developments that represent
opportunities and/or threats to the news publishing industry.
Based on your environmental analysis, comment on the
sustainability of the “traditional” newspaper business model and
summarize the prospects for hard-copy and digital news
providers.

11. 1. Internet is major
information source for
“after 80s” and “after 90s”
Threat/Opportunity
Major Trend & Opportunities/Threats
3. More targeted
content
Threat/Opportunity
2. Future battlefield
– “Mobile First”
Threat/Opportunity
4. “Multi-homing”
habits of readers
Threat/Opportunity

12. Conclusion
Traditional newspaper is declining
Company must embrace digitalization
Initiate the change in parallel
Changing from print to digital
doesn’t mean a whole new world,
just changing of battlefield
Not just competition between
peers, but also competition
between every kind of content
providers – Twitter, we media,
podcast, YouTuber, etc.