World Media Economics and Management Conference 2016

The journalistic industry has faced a big crisis over the last years with revenue decrease, major layoffs and lower circulation. The business model once based on scarcity and audience selling to advertisers is now outdated and the new scenario demands a change in the companies culture and operation. Taking this into account, this work presents a discussion about the news business and revenue models adopted by Brazilian media. To construct this didactic research we consider that business model is still an unsolved issue for this industry and present eight examples, four of big publishers and four of independent media. We bring a panorama of choices and adaptations that helps us to understand if there is a direct relationship between innovation and successful business models in the digital world.

The future of journalism is increasingly digital, mobile, and in flux. It is unexplored territory. Like the explorers and navigators of the Renaissance, various organizations–governments, NGOs, journalism groups, and universities, among others–have been trying to map the most promising routes through the new media ecosystem that will lead to sustainable publications that provide news and information crucial to a democratic society. As traditional news media organizations have lost revenues, laid off employees, and reduced coverage, new digital media have emerged as important players in providing public-service journalism, especially on the local level. Researchers from a variety of organizations have created databases of thousands of new digital media to study best practices and find new models for sustainability. This paper focuses on research conducted mainly in Europe, North America, and Latin America. Although the countries studied have varied cultural, linguistic, legal, business, and political environments, many of the findings were similar: The vast majority of the new digital media were fragile and barely surviving. The recommendations were also similar: These fledgling publishers needed training in management, marketing, sales, and technology, and they needed more diverse funding sources, better audience measurement, and more collaboration with public and private institutions. These road maps will be crucial to helping new digital media achieve sustainability and restore the declining commitment to accountability journalism so important to a democracy.

A body of literature shows the destabilizing role of ICT and change from analogue to digital in the cultural industries in general, and in press industry in particular. This literature demonstrates that constant experimentation and innovation in the area of organizational arrangements and business models (BM) has become a key competitive advantage. As a result, traditional BMs, which were dominant and stable in different cultural industries (such as media, film, music, publishing etc), have given rise to a multiplicity of arrangements in business management and the emergence of disruptive and innovative business models, which often successfully coexist in the same market segment. According to this view point, strategic and structural change is necessarily driven by competition or the need for efficiency. However alternative theories predicts that in depending on the industry structural characteristic, only early adopters of innovation may be driven by a desire to improve performance, whereas as an innovation spreads and organizational field becomes more established, there may be a push towards homogenization. The case of the French press is quite symptomatic of that standpoint. From the empirical analysis of 100 press websites observed over the period from 2004 to 2014, the paper substantiates the convergence process towards three dominant clusters of online BMs: “A minima Digital”, “Pure Players” and “Exploring Leaders”. Using a Probit econometric model the paper puts forward that this isomorphic process is mainly due to the fact that mimetic behavior over-weights search for performance in French press.

The aim of this paper is to analyze a use case of Korea Telecom’s innovation of the smart media business model. The term of ‘smart’ refers to ‘Internet connected’ in Korean media landscape. For this, a theoretical logic is approached based on the theory of business model innovation. Based on this backdrop, this study focuses on analyzing KT’s smart media business models chronologically in conjunction with the related type of the business model innovation.The finding shows, KT’s first stage of business model innovation is the launch of satellite TV. But it suffers from fierce price competition with cable TVs, even though KT tries ‘smart’ media activities like pseudo-interactivity, SMS, and HD quality offerings. After KT’s suffering from red ink with this, its second stage of business innovation is the launch of IPTV with unique ‘multicasting’ technology. As KT has still the problem of key channel sourcing, KT’s third stage of business model innovation is the launch of hybrid platform focusing on analog cableTV market, which results in its earnings and PayTV “monopsony” in Korea.During this monopsony time, KT plans to prepare for new competition with global ‘smart’ TV players like Google, Apple, and Netflix. In order to utilize external resources like User Generated Content (UGC) in fourth stage of business model innovation, KT launches ‘Open store’ on VOD section of IPTV and gives software development toolkits (SDKs) to long tail content creators. Especially based on the hybrid platform, KT utilizes not only the technical advantages of digital TV, but also invests in the HD and UHS quality content and channels. It is the fifth stage of integrated business model. Lastly, KT fully utilizes its previous business models and leverages its strong bundling power in front door to maintain the co-opetition (cooperation + competition) relationship with Over-The-Tops (OTTs).

This paper contains a proposal of new business models for journalism that has been established by analyzing leading trends and observing innovative companies. It also reviews the scientific literature on business models in the study of media management and economics in order to summarize their main ontological features. The typologies that exist have focused on part of the business model—revenue streams—and have not considered other crucial aspects, such as the creation of value. From our point of view, the potential business models for journalism fluctuate between scale and focus, influence and the potential to go viral, content and service, production and aggregation, and advertising and subscription. Six types of business models capable of subsidizing journalism activities appear between these extremes: 1) platform based, 2) viral content, 3) distributed journalism, 4) focused journalism, 5) curated and aggregated content, and 6) global media. This typology includes some of the existing solutions for making journalism sustainable in a digital paradigm dominated by technological giants in which legacy media has lost ground.