BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 1

Business Models for the Digital Transition of News

Caroline Odom

JOUR 3030H, Spring 2019

When Marshall McLuhan proclaimed “the medium is the message” in his book

Understanding Media, he emphasized the idea that users of a medium tend to focus on the

content being distributed rather than the technology, format and effects of the medium itself

(Carr, 2010, p. 2). For example, people pay attention to the information and stories that are

presented in the news but often fail to consider the technology and design that distribute

information. They absorb the content but do not notice that the medium can impact perception

and understanding of the message (Carr, 2010, p. 3).

The medium of focus in this paper is one that increasingly touches multiple aspects of

daily life– the Internet– and its relationship to the information of daily life, news which is

delivered and consumed through digital journalism. Amidst the issue of fake news and a

decrease in consumer trust in recent years, digital journalism has struggled to reach the level of

success once experienced by print news (Skok, 2015). One can easily assume causation between

these events, but the obstacles faced by digital journalism result from more than just content. If

McLuhan was right and the medium is the message, journalists should focus on how the message

is delivered through the medium as much as they focus on the message itself. However, digital

publishers suffer losses because they act as consumers often do and ignore the medium.

To examine the transition from print to digital media, this paper will compare the formats

and how consumers interact differently with print and digital journalism. By exploring these

differences along with the problem of failing to consider different business models, the desires of

digital readers, and the goals of digital journalism, the overall intention of the paper is to identify

business models such as the Resource-Based View, Subscription as a Service model and the

Minimum Viable Product approach that align more closely with the aims of digital journalism.

Through careful examination of the lack of success in digital journalism, failed solutions, such as
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 3

using the same business models as print, and possible solutions, like models that account for the

differences between print and journalism, journalists can use changes in the industry to the

advantage of both themselves and their readers. By focusing on the medium, publishers can

better ensure the success of the message.

Transitioning from Digital to Print

While discussing the changes in the newspaper industry, Bharat Anand, a professor of

Business Administration at Harvard, stated, “If you haven’t diagnosed the problem right, it

doesn’t matter how smart you are. You might be barking up the wrong tree” (Kenny, 2011). The

struggles of digital journalism are results of a misdiagnosed problem. One way to understand the

issues of the current digital news environment is to look at the transition from print to digital

news and the challenges presented by digital news when compared to print. According to

research conducted at the University of North Carolina, more than one in five newspapers has

closed in the last 15 years due to changes in the economic models that previously upheld print

news (Hagey, 2019, para. 7).

In 2008 and 2009, years of economic recession in the United States, print publications

suffered from decreases in circulation and losses in advertising revenue, causing many

newsrooms, such as the Rocky Mountain News and the Seattle Post Intelligencer, to shut down

their print operations while maintaining an online presence, and other newspapers, like the

Tribune Company and the Chicago Sun Times, to file for bankruptcy. Although newspapers

attempted to decrease financial burden by shrinking the size of their papers, consolidating

sections and discontinuing publication of some daily editions, these actions did not have the

intended results (Grabowicz, n.d.). Joshua Benton (2018), director of the Nieman Journalism Lab

at Harvard, claims that although mass closures are an issue, the mass shrinkage that has resulted
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 4

from newsrooms’ attempts to decrease their financial obligations is a greater concern, illustrated

by newspaper companies employing 271,000 fewer people now than they did in 1990 (Snyder,

2017, para. 4).

In attempts to regain revenues, newspapers looked to the online market made available by

the Internet. Despite high hopes for recovery, the transition to digital journalism presented a new

set of challenges without the hoped-for financial returns. Even though online revenues grew for

several years leading up to 2008 and 2009, they began to diminish, and most newspapers

generate only 15 percent of total revenues from online today (Grabowicz, n.d., para. 6). Although

the initial loss in revenues could be due to the recession, digital journalism’s growth could not

catch up with the steeper demise of print. Eighteen hundred newspapers closed in the past 15

years and only 400 local-news sites have replaced them (Hagey, 2019, para. 9), and PEW

Research Center reports that newspapers lost revenue from digital advertising at seven times the

rate that they gained revenue from digital ads (Skok, 2012, para. 3).

Challenges and a Failed Model

The additional challenges that came with the unfamiliar medium of the Internet

contributed to the unexpected financial losses in the digital transition. As many newspapers

entered the digital realm within a similar timeframe, local or regional papers, which previously

had little competition in print, faced limitless competition on the Net (Benton, 2018). Consumers

once accepted the newspaper of their town or region as their only option, but the Internet

presented an array of options, each only a click away.

Furthermore, digital journalism presented unfamiliar operational challenges to

newsrooms like determining what content would be produced for print publication versus digital

publication (Kenny, 2011). The difficulty of operating both print and digital publications is that
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 5

one product has changed little in its format while the other changes constantly, and adding a new

operation initially inhibits a firm’s ability to fully understand the demand for either (Sylvie,

2008).

Because newspapers did not know how to confront these challenges, or even know to

consider them at all, they continued to use the models that worked for over 150 years of print

news. Digital newsrooms divided the work similarly to a print newsroom where each part of the

organization executed its job independently (Skok, 2017a). But systems that worked well for the

print industry inhibited the growth and improvement of digital news because digital news is a

different product that is consumed differently (Skok, 2012). The financial hardship felt by

newsrooms was largely due to reliance on advertising. Although early internet services such as

MSN, AOL and CompuServe relied on advertising revenue, the expansion of internet services

deprived digital publications of digital advertising dollars, especially with the emergence of

search engines like Google and the more recent domination of social media giants like Facebook

(Skok, 2017c). In combination, these two entities now control 89% of the digital advertising

market, leaving little room for journalism to find adequate financial support through ads

(Hansen, 2019, para. 5).

Additionally, the attitudes of the newsroom contributed to stagnated growth. Newsroom

staff lacked consensus about whether they should hold on to current methods of production and

distribution or risk attempting methods that they had never used before, creating a divided

culture and increasing the industry confusion within the organizations (Skok, 2017a). The

newspaper industry is often assumed to be a “mature” industry—one that cannot experience

more growth beyond its current state, causing a lack of investment in new ideas and a continued

reliance on advertising, even as advertising revenue has declined (Kovach & Rosenstiel, 2001).
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 6

When newspapers entered the online world, the assumption carried into the new medium and

journalists ignored opportunities.

Without any single, effective business model standing out within digital journalism, the

industry as a whole experienced disarray regarding the best way to develop and market online

news (Sylvie, 2008).

Consumption of Digital News

To better understand how digital news is different than print, look at how readers have

reacted to the digital transition by examining the consumption patterns of digital news.

Observing the changes in access to news provides context for digital journalism’s situation and

data on how Americans obtain information reflects the shift from print to digital. In 2017, PEW

Research Center conducted a two-part study to develop a profile on the modern news consumer

and found that of consumers who prefer reading news to other forms of consumption such as

watching or listening, 59% prefer to seek their news online. Additionally, 81% of those surveyed

receive some news from websites, apps, or social media, but only two in 10 American adults get

some news from print on a regular basis, a decrease from 27% in 2013 (Mitchell, Shearer,

Gottfried, & Barthel, 2016).

The study also exposes that readers consume digital news differently than print news,

both in their methods of access and on a deeper, cognitive level because the medium itself affects

consumption. For example, a printed newspaper must be physically received, and the pages

remain unchanged, aside from underlining and highlighting done by the reader. However, the

online format offers endless opportunities for obtaining, editing, and interacting with the news.

Another 2017 PEW study examined the ways that Americans encounter digital news by tracking

the news habits of 2,000 American adults for a week and observed that digital news is mostly
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 7

accessed through social media and direct visits to news sites. In 60% of instances, people found

their main news topic1 while doing or reading about something else, while the remaining

instances involved people intentionally seeking their news (Mitchell, Shearer, Gottfried, & Lu,

2017). This information reveals that a majority of digital news users approach consumption of

journalism with very little focus compared to print readers, so it makes little sense for news

outlets to interact with the online market in the same way that they interact with the print market

The PEW analysis on how Americans encounter news also identified six different follow-

up actions that consumers commonly have after digital news, including speaking to someone in

person or over the phone about the news, searching for more information, posting on social

media or electronically sending the story to someone else (Mitchell, et al., 2017). Although a

print reader can tell someone about what they read or share a copy or clipping of the paper,

digital news offers new chances for connectedness and interaction through electronic sharing, a

difference that online consumers should not only recognize but also capitalize upon.

These statistics show that readers prefer interacting with digital news over print, so it

does not make sense that digital journalism continues to experience stagnation. They suggest that

something is amiss in the operation of the digital news industry, and that digital newsrooms are

not operating in a way that will lead to sustainable growth.

The Medium and our Minds

Beyond seeking and responding to news, the reading process also differs between print

and digital, both in the actions of a reader and the subconscious, cognitive phenomena. In his

article “Is Google Making Us Stupid?” (2008), Nicholas Carr describes the Internet as a “swiftly

1
The PEW study defines main news topic as, “The subject area about which respondents got all or most of their
news in a news instance. Respondents were first asked to indicate which of eight topics they got news on in the past
two hours and then, if they indicated more than one topic, which one they got the most news on” (Mitchell, Shearer,
Gottfried, & Lu, 2017).
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 8

moving stream of particles” that is changing the way we consume information as we adopt the

patterns of the web as our own (para. 4). Carr entitles the tendency of a digital reader to skim and

travel quickly from link to link without fully engaging with a single body of writing as “power

browsing” and claims that this type of reading decreases the likelihood for deep processing to

occur because full attention is never given to the text (para. 8). Carr is not the only person that

has noticed this problem. In three separate surveys of graduate students at universities in Taiwan,

Mexico, and the United States, students reported that they find it easier to comprehend print

(Jabr, 2013). Dr. M. Kutscher (2017), a pediatric neurologist at New York Medical College,

worries that the way we read online will negatively impact the formation of deep reading skills

that are so crucial to thoughtful pondering, critical analysis, and inferential thinking.

The design of digital news can also contribute to a cognitive inability to process because

an abundance of opportunities for distraction exists if hyperlinks, videos and photographs are

overused (Opgenhaffen & d'Haenens, 2011). Although these features can enhance readers’

interaction with news, the brain can only handle so much and easily becomes overloaded with

information, contributing to dilution of the overall message and passive consumption as

information loses its meaning (Charters, 2004). Screens already require more brain power for a

lower level of processing (Jabr, 2013), and too much cognitive effort can further harm the

reader’s ability to process and truly connect with the information that is presented (Opgenhaffen

& d'Haenens, 2011). The presence of hyperlinks is a good example. In the reading of print, a

footnote may lead a reader to additional information in an index or at the bottom of the page, but

a hyperlink removes the reader to a new digital location (Carr, 2008), causing increased overload

in the brain as users can’t find their bearings (Opgenhaffen & d'Haenens, 2011). Reading is not a

skill that comes naturally but is one that must be learned. Because of the brain’s plasticity,
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 9

learned reading and processing habits can be changed or even unlearned and replaced as the

brain rewires itself in response to modified stimuli (Carr, 2008).

Why should journalists care about the reading habits of its audience? The Elements of

Journalism (Kovach & Rosenstiel, 2001) emphasizes that journalists need to organize

information in a way that helps citizens, but Carr (2008) points out that some current revenue

models, such as those that focus on advertising, encourage journalists to go against the idea of

journalistic responsibility and “drive us to distraction” rather than encouraging deep reading and

comprehension. The Shallows: What the Internet is Doing to Our Brains (2010) cites literary-

historian Walter Ong’s belief that technology serves as a catalyst for, “interior transformations of

consciousness… when they affect the word” (p. 51), meaning that the way people read matters

because it largely impacts the way they understand the surrounding world. If the role of the

journalist as defined in Elements is to help citizens create a common language and help

communities define themselves, the current approach of distraction is neither ethical nor

sustainable for journalism. Even though the Internet functions as a constant stream of particles,

journalists should create content that filters that stream (Charters, 2004), and newspapers can

design their digital news in a fashion that prevents cognitive overload.

The Need for a New Business Model

As newspapers realize the unsustainability of current digital business models, publishers

should not ignore observed distinctions between users’ interactions with print and digital news

because they support that digital journalism is a different product that requires redefined business

models and strategies designed specifically for the medium. Stories based on high traffic and

attracting attention do not lead to economic stability because they fail to create a solid consumer
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 10

base (Grabowicz). As journalists seek to remedy digital journalism’s struggle, they should

consider goals that can make digital journalism a better product.

How should digital journalists define their goals? Consider the journalistic responsibility

defined by Kovach and Rosenstiel that places the reader first. How can this responsibility be

carried out through online news? Opportunities for readers to control, interact with and

communicate through the format are an advantage that digital journalism has over print and lead

to greater gratification for readers based on the desire to not only encounter information but use

the information to connect with others (Opgenhaffen & d'Haenens, 2011). Kovach and

Rosenstiel call this desire for connection the “awareness instinct:” people seek information

because it provides security and creates a sense of community (Kovach & Rosenstiel, 2001). The

more opportunities to interact with features such as polls and commenting, the more users relate

with the information. The data about how readers consume digital journalism supports the idea

that connectedness matters to them because social media is a key part of how readers access, and

each follow-up action involves a sharing of information to contribute to a larger dialogue outside

of the story itself (Mitchell, Shearer, Gottfried, & Lu, 2017).

Newsrooms should also consider how they can benefit from investing in the relationship

between journalists and readers. A key idea in Kovach and Rosenstiel’s book is that journalists

work for readers, and the best way to serve them is to communicate with them to understand

what they want. In the same way that the Internet permits increased connection among users, it

also permits connection between the producers of journalism and its consumers.

Using the data about interactions with digital news, publishers of online news can find a business

model that permits flexibility and also lends itself to what enhances the user experience and

fulfills journalistic responsibility: opportunities for connection and interactivity. Two approaches
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 11

to help digital newsrooms change their model to meet these general goals are the Resource-

Based View and the Software as a Service Model.

Resource-Based View

George Sylvie (2008) of the University of Texas at Austin’s school of journalism

extensively discusses the Resource-Based View (RBV) in his paper, “Developing an Online

Newspaper Business Model.” He supports that any firm’s strengths exist not in its final product,

but in its resources. With this approach, a newsroom focuses on the value chain, a series of

processes that contribute to the firm’s capabilities by understanding its existing operations and

current resources. David Skok (2012) of Nieman Reports and a former Nieman Journalism

Fellow at Harvard says that these resources include those that are tangible, like equipment and

technology, and those that are intangible, like relationships with other firms and with the market.

Skok (2012) also emphasizes that news organizations should question whether they “have the

processes and priorities… to succeed in this new situation.” Processes include the regular

patterns that exist in the operation of the newsroom, and priorities are the objectives at every

level of the newsroom.

Although the value chain will be different for every firm based on the existing and

potential resources of the firm, each should consider its position within the larger market to see

in what ways it is unique and where it can improve. The definition of value will also vary for

newsrooms based on their specific organization and how they desire to interact with readers, but

examples of newsroom value as offered by Sylvie (2008) are the amount and speed of

information, the specialization of content, and the relationship established with the consumer (p.

6).
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 12

Sylvie (2008) also argues that a newspaper can create value by differentiating the content

of print and online products. Because the Internet can reach larger geographic audiences,

newspapers should consider that their print and digital entities can have different audiences, even

for smaller papers. Although firms may be challenged to balance the demands of both and may

doubt that they have the resources to produce distinct content for two mediums, the point of the

RBV is to help firms figure out how they can change to fit the current market based on what they

already have. Firms can use the RBV to determine if differentiation is feasible and how it can be

accomplished. Newspapers can produce seperate material for these different audiences instead of

limiting the digital publication to just another platform for the content from the print publication.

Acknowledging of the difficulty of balancing print and digital management, Sylvie

proposes that newspapers do not have to manage these platforms alone but can partner with other

organizations that already understand how to design and market within the online medium.

Through collaboration, the newsroom reduces the pressure placed on staff to understand the

digital medium when they may not have the resources or previous experiences to do so.

With a “disintegrated, open system” comes new chances to remodel the product, and

newsrooms can look to the aforementioned elements of connectedness and relationships to create

value that is not present in the print publications. Although what appeals to the audience may

change over time, Sylvie (2008) explains that the RBV is not a strategy that is used once. Rather,

it is an ongoing process of evaluation and adaptation to changing conditions. As technology

continues to advance and user preferences change, firms will also have to remain open and

moldable to what the reader wants in response to how technology advances.

Software as a Service

Once newsrooms evaluate their current operations and how they create value, they must

determine how they want to respond to make a better product. A model proposed for digital

journalism that can be combined with the RBV is the idea of Software as a Service (SaaS). In an

article addressing this model, Skok (2017b) claims that a disruptive market is emerging and that

readers want quality, and this model derives value from what the consumer wants. The SaaS

model invites the reader into the process of improving the product through a loyal subscription

relationship, establishing a relationship with the reader that provides revenue instead of

newsrooms relying on ads or high traffic that doesn’t lead to a stable base.

When people have a problem, they will use the product or service that solves the

problem. The SaaS model is based on the idea that readers have a need to stay informed and

connected while journalists have the solution through their publications (Skok, 2012). When

newspapers focus on the job, they can better meet the needs of the audience, and focusing on that

relationship benefits both parties because “it is our readers—not our advertisers—who are

determining our fate… When you’re assigning stories not for clicks but for loyalty and retention,

the journalism and the community will be better for it” (Skok, 2012, para. 39).

Skok (2017c) cites that the key to subscription is found in the “RFV formula:” recency,

frequency and volume. Information about when the user last visited the site, how often they visit

and how much they consume with each visit predicts whether a user is willing to subscribe or

will maintain a subscription. Although the creation of a paywall or subscription requirement on

digital news sites could be a significant change for consumers, the recent willingness of

consumers to pay for subscriptions to services such as Netflix, Spotify and Apple Music shows
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 14

consumers are willing to pay for services that use technology in a unique way and bring value to

their experiences.

Minimum Viable Product

Subscription requires “focus, engagement, [and] loyalty” (para. 46), and through

subscription models, the readers help build the journalism and can expose new opportunities for

the newspaper to connect with the audience and the community as journalists have better access

to why readers return and what they care most about (Skok, 2017c). Just as the RBV is not a one-

and-done analysis, the SaaS method does not automatically build a reliable, loyal base for

journalists to serve. In an article that focuses on what it means to exist in a digital environment,

Skok (2017b) cites the Minimum Viable Product approach to SaaS, in which a digital firm

releases a product that meets the known needs of consumers, learns what users like or dislike

about the product, and then edits and improves in small increments until the product pleases the

consumer base. Skok (2017b) claims that through this method, journalists can find a way to

reach the audience through any platform. Furthermore, he suggests that this would help

journalists focus more on how stories, topics, questions, and design can fit the platform based on

what readers want.

Why These Models Work

The Internet has definitive capabilities that contribute to the effectiveness of the RBV,

SaaS, and MVP models for digital journalism. First, the Internet provides data and metrics to

reveal how readers interact with the medium and what motivates their use. By seeing how

readers interact, journalists can understand the needs and desires of users and adapt the design of

the medium to meet them.

Metrics and Motivation

An advantage of digital news is that readers leave a digital trail that companies can track

to better understand readers (Mitchell, Matsa, & Stocking, 2016). The use of these metrics

strengthens a subscription model while a subscription model also contributes to more reliable

metrics (Skok, 2017c). If newspaper revenue relies on subscriptions, publishers can carry out the

MVP model by using the data amassed to clearly see the ways that the digital medium is

manipulated by readers. Under the SaaS model, metrics go beyond the number of clicks and

views. Publishers can examine how readers engage with the content, what content does well, and

what content has potential to do better. (Kramer, 2019). Because metrics provide information on

what readers want, journalists can create more personalized user experiences that lead to better

attitudes and increased motivation2 to encounter the news, which positively correlates with the

formation of more mental connections (Opgenhaffen & d'Haenens, 2011).

Newsrooms should consider the importance of motivation and intentionality because the

motivated interaction with information results in different behavior than random encounters with

news (Mitchell, Shearer, & et al., 2016). A publisher of a print newspaper can assume that most

readers are going to approach the material with focus and intent, but online publishers need to

find a way to design their product in a way that targets the motivations of readers to encourage

loyalty and steady consumption patterns, especially because a person’s motivation impacts the

amount of attention they are willing to give (Opgenhaffen& d'Haenens, 2011).

When the Anchorage Daily News in Alaska reviewed its past coverage of the annual dog

sled races, it noticed that stories that focused on more interesting angles rather than just basic

2
In the study, Opgenhaffen and d'Haenens (2011) define appetitive and aversive motivations systems in which,
“appetitive system is activated by pleasant or positive stimuli, while the aversive system is activated by unpleasant
or negative stimuli,” and, “activation of the appetitive system influences the ongoing cognitive processing: stimuli
that are novel or motivationally relevant will be better encoded” (p. 9).
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 16

coverage were preferred by readers, so it determined that consumers preferred unique stories

and, in response, produced more of those. Through metrics, the paper gained feedback and

strengthened the relationship with readers by meeting their want of creative stories, therefore

increasing the motivation of readers to interact with the stories.

Web Design

If readers potentially struggle to comprehend digital text, newspapers have a duty to design

digital journalism in a way that contributes to their understanding. Metrics play another role here

because publishers can compare formats and see how they hold the attention of readers. As

publishers have more access to consistent data from a solid subscription base, they can determine

what elements and features of web design their audience most prefers to create an experience

that is exclusive from that of print.

In The Shallows (2010), Carr highlights that the Internet is “bidirectional,” meaning that

users can quickly and easily interact with journalism instead of only receiving it (p. 85). An

example of a publication that does this is The Guardian, an online-only publication that invites

its readers into the process of journalism through its concept of “open journalism” by combining

the experience and access of the journalists with the public’s ability to serve as witnesses and

contributors (Kovach & Rosenstiel, 2011). By focusing on these opportunities for connectedness,

digital publishers differentiate their product from the print product, establish a relationship with

consumers, and help readers connect through their ability to contribute and communicate, not

just about, but also through the news.

With page design, digital medium also offers more flexibility with photos and videos that

can enhance the text, as well as interactive features like social media links and polls. Skok (2012)

says that value can be created by increasing “context and interpretation” of the information
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 17

presented in the news, or what The Dallas Morning News calls the PICA approach: Perspective,

Interpretation, Context, and Analysis. The presence of interactive features can bring the PICA

approach to life. Furthermore, having both visual and verbal content present improves memory

since information is being processed in two different areas of the brain. Interactive features help

readers connect and contribute to motivation, but publishers have to avoid the point at which

these features contribute to cognitive overload rather aid understanding. If understanding the

story requires readers to split their attention to connect the different features with the

information, cognitive overload can occur. The different types of cues should be “redundant and

reinforce each other” (Opgenhaffen, 2011), meaning that each should have an intentional

purpose in what it brings to the text.

An example of an online publication that has approached design differently than other

digital news publishers is Aftenposten, a Norwegian newspaper that has existed for over 170

years but entered the online realm in the 1990s (Kenny, 2011). In Aftenposten’s early online

days, their staff produced photography-heavy content and uploaded all stories to the main page

instead of organizing by section as a print paper does. When the design team decided to reformat

the site to more closely resemble other online publications, the site experienced a decline in

traffic, so they returned to the old method. Aftenposten exemplifies that the online format is not

just a forum to replicate print design but an opportunity for a different design and user

experience. Aftenposten also acknowledges an overall goal of promoting connectedness between

users, and the company asks, “How can we help readers help each other” (Kenny, 2011)?

Aftenposten creates a forum for communication that has helped readers solve issues, such as

when volcanic ash from an eruption in Iceland spread to Norway and increased difficulty in

traveling through the region. As Aftenposten noticed that users needed to communicate about this
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 18

issue but had no singular, organized forum to do so, and the paper responded by using its digital

capabilities to quickly create a forum for the communication and sharing of information between

readers.

Aftenposten’s response to the desires and needs of readers exemplifies the advantages of

digital journalism that are often ignored when newspapers assume that print and digital should

operate the same way. As news transitions online, journalists should recognize their

responsibility to citizens and how that corresponds to news design. Digital publishers can

organize information and media in a way that helps the reader, whether that be through using

new formats like Aftenposten, working with audiences as The Guardian does, or simply

providing opportunities for connection (Kovach & Rosenstiel, 2011). When making decisions

about formatting and design, digital publishers must consider the advantages and disadvantages

of each feature and how each will contribute to the reader’s overall experience and understanding

(Opgenhaffen, 2011). Beyond the initial transition online, newspapers also must make efforts to

stay aware of evolving technologies and new chances for improvement as technology develops,

meaning that newspapers must find a strategy that allows for fluidity and adaptation (Sylvie,

2008).

The New York Times

One news organization that has experienced greater digital success than others is The

New York Times (Hansen, 2019). The past strategies and future plans of the Times reflect the

Resource-Based View, the Software as a Service approach, and the idea of Minimum Viable

Product. Revenue data from the newspaper reflects the difficulty of transitioning online, but

recent data documents a hopeful future for the company. In 2005, over half of the paper’s

revenue came from advertising, but in 2016, advertising revenue shifted to less than half of total
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 19

revenue (Malik, n.d.). To replace the loss in ad revenue, the paper implemented a paywall in

2011 that gave users access to 20 free articles a month but required subscription if users wanted

to access more (Hansen, 2019). Following this bold change, the paper gained half a million paid

subscribers to its digital platform and refuses to stop there (Malik, n.d.). By 2020, the Times

hopes to increase its digital revenue to $800 million from 2016’s $500 million (Malik, n.d.).

How has the company attained this success, and how does it hope to continue to grow? In

an interview with the magazine Wired (Snyder, 2017) Arthur Gregg Salzburger, a key strategist

in the digital transition and the next-in-line to operate the Times, stated, “It’s not should we

change, it’s how do we change” (para. 10). To answer this question, the Times conducted a series

of assessments of the newspaper’s operations and released the Innovation Report in 2014, which

found that the staff was generally averse to digital change. The transformation of company

culture was integral if the Times wanted to digitally meet the needs of current and potential

readers. Based on the Software as a Service model, the goal of the paper is to transform digital

subscriptions to make a Times subscription “indispensable to the lives of its existing subscribers

and more attractive to future ones” (para. 3).

Although Salzburger recognized the culture of the Times as a resource, he knew that the

culture had to change if the company wanted to grow. To encourage this change, the company

enacted new initiatives, such as the Beta Group to experiment with different digital approaches

and the 2020 Group that studied the newsroom for a year and determined that the web design

needed more visuals and formats, additional voices, and different ways to collect and display

data. With these efforts, the culture has changed, and the Times now employs “more journalists

who can also write code than any other news organization” (para. 27), contributing to the

aforementioned growth that the paper experienced in recent years.

The Times also recognizes that despite its resources and ability to adapt, it is not equipped

to handle all innovations alone (Snyder, 2017). In 2016, the Times partnered with Facebook to

produce and stream live videos, something that the company was able to experiment with

because Facebook already had the platform and viewer base established (Snyder, 2017). The

company sees that its own value chain can be boosted through partnerships with other

businesses, and it also recognizes the challenge of continued growth. The Chief Revenue Officer

at the Times, Meredith Levien, says that although the company has a larger pay model than any

other newspaper, subscriptions are still small compared to streaming companies like Netflix or

Spotify. She says, “So it will have to be proven that it can be done around news. I think it can.”.

The Times may be considered an extreme example because of its size, ample resources,

and the advantage of its reputation, but the company knew that if it could master the digital

medium, readers would express willingness to pay 3(Hansen, 2019). Small operations can learn

from the way the Times acknowledged the reason for lack of growth, analyzed the problem,

implemented change, incorporated what users want, and experienced growth. The company

capitalizes on customer engagement and creating “unique experiences for all subscribers”

(Hansen, 2019, para. 11). Even for smaller companies with fewer resources, this is an attainable

goal made possible by applicable and adaptable business models.

Summary

Is Levien correct that digital news can achieve the same levels of success as other digital

services? Even with an examination of the problem and proposed solutions, no simple, easy

answer exists. Determining the best methods for digital journalism requires time,

3
The Times content paywall has decreased to a limit of five articles for non-subscribers, and the company has
developed multiple packages for different levels of services offered by the company (Hansen, 2019).
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 21

experimentation and observations, but these investments should be considered investments in the

advancement and modernization of journalism.

Based on data that already exists and newsrooms that have already experimented with

innovation within digital formats, digital publishers can estimate which paths of experimentation

will yield the highest payoff for both the newsroom and the audience. Thus far, subscription-

based operations have yielded the greatest success. The changes that need to occur with digital

news do not only benefit one side of the relationship but create a better product and better

communication for both. Ideally, readers receive journalism they deserve that fits well into a

modern, changing environment and newsrooms achieve financial advances and receive feedback

from users that they need to produce a better product.

The combination of the Resource-Based View, the Subscription as a Service model, and

the Minimum Viable Product approach provides an outline for how digital publishers can

approach redefining their participation in the market. Hopefully, by addressing the issues,

assessing capabilities and considering how digital news can serve users differently than print, the

medium and the message will cease to function as separate entities and instead become

connected components that work together to revolutionize digital journalism and give the

industry the step up it needs to achieve success.

References

Benton, J. (2018). What will happen when newspapers kill print and go online-only? Most of that

print audience will just… disappear. Retrieved March 11, 2019, from

http://www.niemanlab.org/2018/09/what-will-happen-when-newspapers-kill-print-and-

go-online-only-most-of-that-print-audience-will-just-disappear/

Carr, N. (2008). Is google making us stupid? Retrieved February 1, 2019, from

https://www.theatlantic.com/magazine/archive/2008/07/is-google-making-us-

stupid/306868/

Carr, N. (2010) The Shallows: What the internet is doing to our brains. New York, NY: W.W.

Norton and Company, Inc.

Charters, E. (2004). New perspectives on popular culture, science and technology: web browsers

and the new illiteracy. College Quarterly, 7(1), 1-13.

Grabowicz, P. The transition to digital journalism. Retrieved March 28, 2019, from

https://multimedia.journalism.berkeley.edu/tutorials/digital-transform/

Hagey, K. (2019). Facebook wants to feed users more local news. There just isn't enough of it.

Retrieved on March 9, 2019, from https://www.wsj.com/articles/facebook-wants-to-feed-

users-more-local-news-there-just-isnt-enough-of-it-11552903201

Hansen, Morton. (2019). Behind the great success of The New York Times. Retrieved April 9,

2019, from https://medium.com/@dskok/the-digital-philosophy-41afbdd7e61e

Jabr, F. (2013). The reading brain in the digital age: The science of paper versus screens.

Retrieved February 19, 2019, from https://www.scientificamerican.com/article/reading-

paper-screens/
BUSINESS MODELS FOR THE DIGITAL TRANSITION OF NEWS 23

Kenny, B. (Producer). (2016). Digital change: Lessons from the newspaper industry [Audio

podcast]. Retrieved from https://hbswk.hbs.edu/item/how-newspapers-can-turn-a-profit-

online-that-s-classified

Kovach, B., & Rosenstiel, T. (2001) The Elements of Journalism. New York, NY: Three Rivers

Press.

Kramer, M. and O'Donovan, B. (2019, March 13). How to build a metrics-savvy newsroom.

Retrieved on March 16, 2019, from

https://www.americanpressinstitute.org/publications/how-to-build-a-metrics-savvy-

newsroom/single-page/

Kutscher, M. (2017). The effects of digital technology on reading. Retrieved March 11, 2019,

from https://www.psychologytoday.com/us/blog/your-childs-brain-and-

behavior/201701/the-effects-digital-technology-reading

Malik, O. How is the New York Times really doing? Retrieved March 5, 2019, from

https://om.co/2017/02/20/how-is-the-new-york-times-really-doing/

Mitchell, A., Matsa, K., and Stocking, G. (2016). Long-form reading shows signs of life in our

mobile news world. Retrieved March 15, 2019 from

http://www.journalism.org/2016/05/05/long-form-reading-shows-signs-of-life-in-our-

mobile-news-world/

Mitchell, A., Shearer, E., Gottfried, J., and Barthel, M. (2016). The modern news consumer.

Retrieved March 15, 2019, from http://www.journalism.org/2016/07/07/the-modern-

news-consumer/

Mitchell, A., Shearer, E., Gottfried, J., & Lu, K. (2017). How Americans encounter, recall and

act upon digital news. Retrieved February 12, 2019, from

https://www.journalism.org/2017/02/09/how-americans-encounter-recall-and-act-upon-

digital-news/

Opgenhaffen, M., d'Haenens, L. (2011). The impact of online news features on learning from

news: A knowledge experiment. International Journal of Internet Science, 6(1), 8-28.

Skok, D. (2012). Mastering the art of disruptive innovation in journalism. Retrieved March 3,

2019, from https://niemanreports.org/articles/breaking-news/

Skok, D. (2017a). Digital transformation means focusing on readers, not platforms. Retrieved

March 10, 2019, from https://medium.com/startup-grind/digital-transformation-in-

newsrooms-means-focusing-on-readers-not-platforms-ae7dc6b6262a

Skok, D. (2017b). The digital philosophy. Retrieved March 3, 2019, from

https://medium.com/@dskok/the-digital-philosophy-41afbdd7e61e

Skok, D. (2017c). Why the SaaS era of digital journalist may be our most exciting yet. Retrieved

March 3, 2019, from https://medium.com/startup-grind/why-the-saas-era-of-journalism-

will-be-our-most-exciting-226f4e872b46

Snyder, G. (2017). The New York Times claws its way into the future. Retrieved March 5, 2019,

from https://www.wired.com/2017/02/new-york-times-digital-journalism/

Sylvie, George. (2019). Developing an online newspaper business model: long distance meets

the long tail. Retrieved March 5, 2019, from

https://www.researchgate.net/publication/237332129_DEVELOPING_AN_ONLINE_N

EWSPAPER_BUSINESS_MODEL_LONG_DISTANCE_MEETS_THE_LONG_TAIL