Transcript Regional Online Newspapers: paths to glory, or the road to ruin?

Regional Online
Newspapers: paths
to glory, or the road
to ruin?
Cornelia Krüger
Paula M.C. Swatman
Institute for Management
University of Koblenz-Landau
Germany
Introduction
A state of crisis within the newspaper
industry generally:
 Advertising levels are declining
 Cost cutting by individual newspapers:
Will online editions of regional
newspapers disappear, or ...
 Can they become profit centres?

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Business models for
online content
“…the method by which a firm plans to
make money long term using the
Internet.” (Afuah and Tucci, 2001)
or, more generally …
… a coordinated plan to design strategy
along three vectors: (i) customer
interaction; (ii) asset configuration;
and (iii) knowledge leverage
(Venkatraman and Henderson, 1998)
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Comparison of Content
Provider Business Models
Authors
Catchword
Critical Success Factors
Sources of Revenue
Value Chain
Bartussek
Newsfilter
- Identify and serve customers’
needs;
- Traditional strengths;
- New income resources
Selling product
Advertising
Producer / Intermediary
Farhoomand/
Lovelock
Content Provider
Subscription fees
Intermediary
Niewiarra
Content Network
Networks
Revenue sharing
Network
Rayport
Content Business
Revenue sharing between content
provider and online service
Revenue sharing
Network
Weill/Vitale
Content Provider
Branding;
Recognised as best in class;
Network
Fees from third parties or
allies
Producer
Wirtz
E-Information
Differentiation
Pay per transaction;
Subscription
Intermediary
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Research approach

Our research questions:
Are the Internet business models
described above used by regional
newspapers, or are these companies
implementing some other business
model(s)?
 Are the Internet business models of
regional newspapers successful?

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Cases


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German newspapers…
 RZ Online
 SWOL
 RON Online
… compared to French…
 Sudouest
 La Dépèche
 Le Parisien
… and Italian regional newspapers online.
 Il Giornale di Vicenza
 La Gazetta di Modena
 L‘Alto Adige Trentino
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Findings from the Cases
5 basic potential revenue streams
 Increased consumer income: subscriptions (traditional income source)
 “pay per view”
 merchandise sales of various sorts;


increased advertising revenue:

 advertisements in the offline version – then
also available online
banner ads in the online version of the
service,
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RZ Online

3 versions of the paper:


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Customer approach:
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Original print version
‘standard’ online version
Unique ‘facsimile’ version of print edition – the
vehicle for online sales
Originally free to subscribers
Now charged at € 2 / month (1800
subscribers now)
Advertisers approach:


ISP / ASP service (domains and web sites)
Click-through advertisements
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SWOL
Goal is to be “the” online portal for the region and thus attract
local and regional companies to put their online advertising
on the Web sites related to SWOL.
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Advertisement attractiveness
depends on core competence
Loca
l
Regional
National
- Increasing
attractiveness for
online advertisement
- Increasing
attractiveness for
direct marketing
- Decreasing cost
per online customer
International
Core competence of newspapers: local, regional, national, international
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RON
Sales of advertising + archive material
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German Internet business
models – in theory and practice

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Still producers of news (mainly regional news – core
competence).
Intermediaries for international, national, business
and financial news, bought from news agencies or
other newspapers and magazines.
Adding value to this content to adapt it to their own
readers’ demands.
Creating regional networks:
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RZ-Online is building a network with a subsidiary to
sell Internet access and homepages.
SWOL is also offering topic-centred Web sites.
RON Online has even created a regional marketplace
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Critical success factors for
regional online newspapers
Network
 Several income resources
(subscription, pay per view,
advertising, revenue sharing)
 Regional core competence

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Comparison between the
German, French and Italian
experiences

France and Italy:
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Not one regional newspaper online was
selling content.
Used their Web site to acquire print
subscribers.
Financed their online versions by online
advertising.
Most of them were focusing on regional core
competence.
Italian regional newspapers had alliances
with Internet providers.
Content was offered for free.
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Reasons why


The percentage of people using the Internet
is smaller in France (22%) and Italy (34%)
than in Germany (48%).
It is less common to read a regional
newspaper in France and Italy than in
Germany. In Italy you find 97 regional online
newspapers and in France 104
(fr.yahoo.com). One can find about 178
regional newspapers online in Germany.
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Conclusions

Promising Internet strategy:
Building a network
 Creating a regional community
 Increasing several income sources

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