Content is King: News media management in the digital age 9781623566623, 9781623565459, 9781501312731, 9781623567507

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Content is King

Content is King News media management in the digital age

Gary Graham, Anita Greenhill, Donald Shaw, and Chris J. Vargo

Bloomsbury Academic An imprint of Bloomsbury Publishing Inc

N E W YO R K • LO N D O N • OX F O R D • N E W D E L H I • SY DN EY

Bloomsbury Academic An imprint of Bloomsbury Publishing Inc 1385 Broadway New York NY 10018 USA

50 Bedford Square London WC1B 3DP UK

www.bloomsbury.com BLOOMSBURY and the Diana logo are trademarks of Bloomsbury Publishing Plc First published 2015 © Gary Graham, Anita Greenhill, Donald Shaw, Chris J. Vargo, and Contributors, 2015 All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publishers. No responsibility for loss caused to any individual or organization acting on or refraining from action as a result of the material in this publication can be accepted by Bloomsbury or the author. Library of Congress Cataloging-in-Publication Data A catalog record for this book is available from the Library of Congress. ISBN: HB: 978-1-6235-6662-3 PB: 978-1-6235-6545-9 ePDF: 978-1-6235-6750-7 ePub: 978-1-6235-6450-6

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Contents Notes on the authors and co-authors  vii

PART ONE  Media community  1 1 Content is King: Strategies for shaping media organizations 

Donald L. Shaw, Chris J. Vargo, Gary ­Graham, and Anita Greenhill  3 2 News media and understanding their communities  Anita Greenhill and Maria José ­Hernández Serrano  15 3 Disruptive technologies and community engagement  Chris J. Vargo and Donald L. Shaw  39 4 The convergence of politics and entertainment: The politics of personal concern  Young Mie Kim  53

PART TWO  Finding value in a world of disruptive ­technology  71 5 Establishing leadership and strategic management 

Gary Graham and John Hill  73 6 Value activities and newspapers  Gary Graham and John Hill  89 7 Self-organizing digital news  Anita Greenhill and Gordon Fletcher  107 8 News consumption and cross-media synergies  Gary Graham and Anita Greenhill  127

PART THREE  Experimenting with the audience  143 9 Changing media policy environments and the production

of news  Mikko Sihvonen and Seamus Simpson  145

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10 News organizations and online communities: The science of

how to build effective social networks  Chris J. Vargo  163 11 News media strategic visions and speculative futures  Paul Jones, Chris Vargo, Gary Graham, and Anita Greenhill  177

PART FOUR  Ongoing strategies  197 12 Digital integration of consumers into local press value chains 

Gary Graham, Anita Greenhill, and Maria José Hernández Serrano  199 13 The economics of paywalls  John Hill  219 14 Concluding thoughts on the future of the news industry  Gary Graham and Anita Greenhill  228 Index  239

Notes on the authors and co-authors Gordon Fletcher is a senior lecturer in Information Systems at the Salford Business School, University of Salford, UK. He is the codirector of the Centre for Digital Business and the author of many articles and book sections on the intersections of the digital and cultural. Gary Graham is an associate professor in Operations Management at the Leeds University Business School, UK. He is the author of thirty internationally refereed research papers, a coinvestigator on six EPSRC/ESRC grants, and the author of three books. Anita Greenhill is a senior lecturer in People, Management and Organisations at the Manchester Business School, the University of Manchester, UK. Greenhill has published over sixty articles in fields such as information technologies, sociology, virtual communities, policy and education, and qualitative research methods. Maria José Hernández Serrano is a professor in the Department of Education Theory and History at the University of Salamanca, Spain. She has participated in various international conferences, presenting work on learning with information technology, and has authored numerous articles on education in the digital age. John Hill was formerly a visiting research fellow at Leeds University Business School, UK, and Manchester Business School, UK, where he applied his forty years in the newspaper industry in the UK, Africa, and the Middle East to academic examinations of the field of communications. Paul Jones is a clinical professor in the School of Information and Library Science at the University of North Carolina at Chapel Hill, USA. He is the director of ibiblio.org, a digital library of public domain and creative commons media.

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Young Mie Kim is an associate professor in the School of Journalism and Mass Communication and Donovan Wright Faculty Fellow of the College of Letters and Science at the University of Wisconsin-Madison, USA. Kim’s research has appeared in journals such as Communication Research, the Journal of Communication, the Journal of Politics, and others. Donald L. Shaw is Kenan Professor in the School of Journalism and Mass Communication at the University of North Carolina at Chapel Hill, USA. He is best known for his work on the agenda-setting function of the press with Max McCombs and for his studies of nineteenth- and twentieth-century American and Southern press history. Mikko Sihvonen is an associate lecturer in the Department of Languages, Information and Communications at Manchester Metropolitan University, UK. His past research has focused on how political and economic trends influence cultural institutions in broadcasting. Seamus Simpson is a professor of media policy in the School of Arts and Media at the University of Salford, UK. His research focuses on a range of Internet, telecommunication and digital media convergence governance issues. He is senior editor of the Oxford Research Encyclopedia: Communication. Chris J. Vargo is an assistant professor of public relations at the University of Alabama, USA. His research uses computer science methods to investigate social media using theories from the communication and political science disciplines.

Part One

Media community

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1 Content is King: Strategies for shaping media organizations Donald L. Shaw, Chris J. Vargo, Gary ­Graham, and Anita Greenhill

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nderstanding why some companies succeed and others fail is an interesting challenge. Many techniques, including the use of Charles Darwin’s theory of evolution, have been used to explain how organizations evolve. This book explores the deep social and commercial structure of the strategic response of newspapers to the current turbulence being created by the “digital age.” Newspapers face many strategic challenges if they are to identify and build appropriate digital business models and strategies in order to sustain themselves. Digital-age turbulence opens up market conditions and opportunities for the news industry when adjusting to these Internet, Web 2.0, and civic media technologies. Turbulence delivers opportunities as well as chaos, risk, and uncertainty. It is important for the news industry to consider how it strategically aligns its production structure, markets, and competitors to this environment. Digital turbulence is leading to two major effects that managers need to consider: One is that the news firm needs to be able to defend itself from rapid market erosion; and the other is opportunity, which it needs to exploit. While many of the news companies around the world were ill prepared to succeed in an environment of continuous, unpredictable turbulence, they are now more aware of the need to absorb and deal with volatile change. The mission for newspapers in this “hybrid” physical/digital marketplace seems a simple one: To create content that will satisfy the full range of consumers’ news needs and then build the links that will connect people to

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the relevant news they seek. However, this is much easier to say than it is to accomplish in a news environment characterized by fragmented interests and mostly passive consumption patterns across online and off-line news venues. There is a convincing case that the old models for packaging and delivering news no longer connect effectively with the audience now coming of age around the world. The habits of young consumers are radically different from those that have characterized news consumption for generations. Newspapers, scheduled broadcasts, and even websites have given way to a chaotic system of “self-aggregation”; this is producing disappointing results not only for news producers but—as this book shows—for consumers as well. Our approach is not designed to focus purely on the strategic achievements of the news media, such as the development of a successful publication, or to report how they have successfully exploited a new market opportunity. Instead, it pushes and reinforces the idea that, for the local news media to survive, it needs to sustain itself as the primary “information artery” flowing into communities (Laswell, 1948). With the planned development of information-rich and data-driven cities (e.g., the era of big data and smart and intelligent cities), the crucial need for (and value of) “authentic” and “reliable” news sources have never been greater. Due to the proliferation of smart devices and interconnected services, cities are gushing with data, much of which relates to human behavior. City life generates data streams around online social media, telecommunication, geolocation, crime, health, transport, air quality, energy, utilities, weather, CCTV, Wi-Fi usage, retail footfall, and satellite imaging. In modeling terms, the historical surgical extraction of the newspaper from its city ­surroundings may not be appropriate, and an open news model, subject to a range of external influences, may be more realistic. The news firm could make the volumes of data scalable for the community. Local newspapers have a vital role to play in connecting communities together in these rapidly emerging future city landscapes. Although work on the future of the news industry tends to take a technological or economic standpoint, here we try and include a human and community dimension that focuses on the social factors involved in shaping strategy, something that is often overlooked. We critically portray the future media roles of community and consumers to be integrated and participative in the local news space. The newspaper business has never been simple, but its dual business model has typically been straightforward. On the one hand, newspapers compile news and information for which readers pay money. On the other hand, newspapers gather revenues by selling awareness, attention, and interest through advertising. For the past 200 years, that approach proved robust. Profits flowed like ink. For the second half of the twentieth century,

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UK regional newspaper groups such as Trinity Mirror and Johnston Press averaged between 20 and 30 percent profit margins. It is no secret that this model has been disrupted. The news industry’s health started declining in 2005 with the rise of new media. Interestingly, however, the most profitable year recorded for Johnston Press was 2008 (due to a program of dramatic cost cutting and reductions in the number of full-time journalists the group employed). This was in the face of a negative change in their regional newspaper circulation in the United Kingdom (2001–2012), a decline on average of nearly 30 percent (Newspaper Society, 2013). Thereafter, the challenges for national and local media likewise have accelerated. Most traditional media still communicate in a primarily “one-way” manner. Strategies for newspapers, as with strategies in other media, must be developed within the context of community, regional, and national levels. Of course, you may be aiming to serve one of these levels, but awareness is required at all levels. Strategies for broadcast media and magazines need to reflect their particular ability to reach audience within a defined, social context. In a new “age of turbulence,” it is imperative for managers, employees, and customers to be involved across all levels of the news production and consumption. Company communication networks must be vibrant and inquisitive of their audiences. Other companies not based on news production such as REI, Kiva, and Starbucks seem to get it and are therefore thriving. They use the news media to build brand awareness and loyalty. They embrace the audience as a community and embrace innovation anywhere and everywhere. Still, few news companies seem to be able to adapt this “brand”-sharing ethos with consumers in their operations and therefore are suffering the social and economic consequences. This book is designed for those who manage, or hope to manage, newspapers or other news media. You might be planning your business right now, or you might be a student who plans to enter media management within the next five years. This book distills the experience of others from the management and business world into a series of manageable chapters. The chapters are designed to build strategic foresight, stretch your imagination, and encourage future envisioning in order to find and survey perspective customers and to develop products, services, and an identity that better meets customer requirements. Sometimes this means finding new audiences; other times it means expanding present audiences and better meeting their news and informational needs. We encourage you to use what you have learned from each chapter as a conceptual foundation and/or initial framework and to apply this in order to build the future of the news industry. The key themes covered in the book include the following:

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Dealing with disruptive innovation Experiences from newspapers in the United Kingdom, Germany, and the United States suggest that “disruptive” technological upheaval is unavoidable. Contemporary forms of capitalism seem to be creatively destroying business models. This is not unique to the news industry or journalism. Both industries are constantly susceptible to innovation; however, in order to cope with contemporary changes, the news industry’s business models in particular will need to be more flexible and malleable so as to be able to adapt to the development of new products and services. Products and services drive business models, not vice versa. Those in the media business, however, argue that news is a special case. You may, for instance, argue that the news industry plays an important and special democratic role. CNN competing with BuzzFeed is not the same as IBM competing with Dropbox. Newspapers and television put the government in check by giving voters the information they need to make choices. News production keeps a society informed. These media also make markets more efficient. This book counterargues that news production, whether by newspapers or other media, is a business. As such, it can be interrupted and augmented. News media must accept change and adapt business models. Disruptive innovation shows us that even if a business model is not initially viable, media managers must take more risks (break down a history of risk aversion to innovation), scan future technological horizons, explore new markets, and experiment with new concepts. Given time, demand can grow, and there could be opportunities to build a base of consumers. Advertising on a service such as Twitter a decade ago seemed frivolous at best. Now it generates around $235 millions a quarter. It is unlikely that popular Twitter accounts such as the New York Times see that profit. But we do believe that if media managers can establish their leadership of and authority in new media early and provide substantial innovation to that medium, they can demand a share. The more embedded they are with the technology, the more they become identified as essential agenda setters in the area and the more they are first to exploit the commercial market opportunities. This leadership they have currently ceded to the technological companies such as Google, Apple, and Microsoft. Even better, we challenge the industry to embrace innovation, to use new media and its burgeoning audience to regain control of the strategic game. A reliable base of consumers can create a viable target audience for advertisers, and advertisers can fund new journalistic ventures. While the advertising model is nothing new to print, television, and radio media, it is to social media

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journalism. If the disruptive innovation hypothesis holds true, sustainable profitable models will emerge in the long run.

The value of journalism According to Porter (2012), the value chain identifies how value can be created and added in a supply chain. Porter suggests that going through the chain of organizational activities adds more value to the products and services than simply summing the costs of these activities. Therefore, the company gains marginal value for products and services by its organization and approach to markets. If a company runs efficiently, the company gains a competitive advantage. Customers notice—or should, if you operate efficiently—and are willing to provide returns on the products or services. This adds value to the company. The news company cannot be separated from the products and services it offers the market. This value chain framework can be used as a powerful analysis tool for your strategic planning. You can build an organizational model for ensuring efficient leadership. It requires more than management; it rewards leadership. The value chain concept can be applied in the individual business unit and then it can be extended to the entire supply chain and distribution network. To form a successful organization, it is important to both create and value in each activity that your business performs. This can be achieved through product differentiation or a low-cost “generic” approach. Value adding must be considered during all production-chain stages, from creation through to distribution and, importantly, even at the consumption stage. Maximum value is achieved by consciously adding value at each stage of the development process. All value-chain activities must be properly synchronized, aligned with strategy, and integrated together. A sound organization contains all the required functional departments needed to perform these activities. It needs an internal communication approach that synchronizes production, distribution, and knowledge about consumption activities efficiently.

Inevitably things change If a business wants to succeed but it does not work out, it is important to remember that things change. The media business is changing constantly. It has been that way for more than a century. Change is accelerating. Success is possible through the developing strategies, valuing products properly,

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and targeting “niches” in the target audience. This includes developing a marketing approach that is continuously updated and responds to changing consumer tastes, habits, and buying patterns; one that reaches established audiences while pulling in those at the far marginal edges of the reader community. This includes fitting news production to the goals that are set. Journalists must deliver products that people want and in a format that they desire. Newspapers no longer monopolize the news consumption agenda or the distribution of content. They must take more of a stake in the future technology agenda and its economic and social implications. “Media” is an imprecise word. Nowadays, it includes cell phones in pockets as well as the newspapers that are skim read on the commute home from work. It is a source of not only information but it is also a service (entertainment) delivery system. It now can address a global, national, or regional audience. Messages therefore must be tailored for specific audiences. Often media are classified in binary terms, either as traditional media or new media. But because audiences are composed of individuals, strategic power is gained when the news message is constructed in terms of communities. Everyone lives in different types of communities: virtual, psychical, public, private, work, and entertainment. Civic communities are composed of the institutions that nourish society: schools, hospitals, governments, factories, retail stores, the police, healthcare providers, traffic control, the military, and hundreds of others. The communities that make up these institutions create laws and rules and administer them. Traditional media such as newspapers, local radio, and television cover the activities of these organizations and institutions and therefore their communities. But everyone also lives within the context of his or her own personal life. Some community members like to play or watch basketball, while others hit golf balls or volunteer for church work. Some join clubs and meet with people who share interests and commitments. No urban community today in the United States or Europe is totally homogenous. Everyone lives across a range of heterogeneous experiences, and these are all drawn into the overall community makeup. Magazines, cable channels, blogs, and many other media communication channels therefore need to be considered to cross a breadth of your audience’s interests. Public media often strives for large audiences. Magazines and specialized cable channels (such as ESPN or Fox News) reach audiences that gather around special interests. Content is still king in all media delivery systems. Providing information, entertainment, and advertising is core to the news manager’s mission. But contemporary demands mean that more needs to be done than less. It is also important to represent the full range of a chosen audience, including the identified communities of interest, as well as a range

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of public and personal interests. Individuals meld information from a variety of types of media with personal experiences to form a coherent picture of the world around them. Research shows that they do so in a way that is compatible with their interests and views. Therefore, it reflects their personal experience. They also absorb community knowledge from media. Successful media managers must appeal to the collected individuals in the audience. Audiences will meld messages differently over time, and how they draw on media to do this will evolve differently over time. Finding the successful mix will attract an audience. Finding the advertisers whose own interests are matched to the target audience community will bring profits. Media managers who manage media communities must therefore find the right place and the right balance in the marketplace.

Media continues to be more microscopic Where media once brought people together, it now equally disperses people. The Internet has now accelerated the separation of peoples into microcommunities with a simultaneous broadening of choice and compression of communication. Media continues to evolve from large to small, from mass to personalized. Audiences distribute their attention across a variety of personal media communities (e.g., Facebook, Twitter, Instagram, and Tumblr).

Enlarged awareness, the social era For the news manager, it is important not to underestimate the pervasiveness of the “social era.” We are living in an era of connectivity and mass personalized communication. Social media should be broadly embraced, particularly in relation to marketing and service strategies. There is more to the use of social media than just “Like us on Facebook!” or “We’re so sorry you’re having a problem.” The better performing news companies are those using social tools to listen to the market. It is therefore vital to listen to the communities being served—the target audience. Social media has altered all aspects of production, and not just content production; for example market-research opportunities have also changed. In the social era, social media and business leadership are merging in a variety of ways. This affects the way an organization creates, delivers, and captures value. Value leads to profit. This also shifts the ethos according to which many media managers lead and work. It is therefore vital to “stop, look,

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and listen” and then act. This business technique needs to happen regularly and needs to be intricately built into the news manager’s business approach. The changes emerging in the social era also challenge the idea that competition can only be maintained in isolation. Organizations from the industrial era became more powerful by getting bigger and buying up their competition. In the social era, connectivity and communication between managers, workers, and customers can now make a business successful. While the industrial era was about the mass production of tangible goods and convincing consumers to buy them, the social era is about the power of collaboration and co-creation when resources are limited. This book indicates that the social era could be the news manager’s focus. We must draw value from connecting humans and what they can do for a business. Connected humans are empowered. Connected humans spread the word, good or bad. Connected humans read more content than ever. In the socially aware model, powerful organizations are fast and fluid, and they utilize the potential of flexible networks and connected human beings. This requires a change in thinking from top to bottom.

Disruptive technologies in history The traditional media business model of a large socially and politically connected entity that dominated previous news epochs in some form still remains. However, individual consumption and variety have now diminished that power by broadening consumer choice. Media technologies are dis­ ruptive because they challenge traditional business money-making models and because they enable leverage to attract new customers who were not traditionally conceived of as such. Once, it was assumed that everyone highly valued all forms of national, regional, and local community news. We now know that the most popular articles on BuzzFeed are lists of cats and 1990’s pop culture references. Communication technologies have broadened choice, and therefore people can broaden the types of content they want to digest as news. It is therefore important not to start with the question “What is the product I want to produce or improve?” but to ask “what is the community and what type of content do they want to read?” Communities can be understood as having different levels; their content therefore can be local, regional, national, and global. Moreover, communities can form around political affiliations, special interest groups, values, morals, alma maters, and more. As people gather, so do communities. What is the community of interest to your audience? What would happen if your present or future newsroom was organized around

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communities? What if the newsroom recognized the differences in audience interests among communities? The book is divided into four parts. Part 1 covers issues related to the media community and includes the following chapters: Chapter 2, “News Media and Understanding Their Communities,” evaluates the impact of the Internet on the production and consumption of news. A key feature of this chapter is the notion of community. In communities, members share feelings, thoughts, political opinions, and vocational information. Traditional media are important historically. A community without a newspaper is like a church without a pulpit, and the sense of community refers to the individuals’ subjective feeling. If news is no longer defined by a geographic location and if people living side by side do not have a sense of community, then newspapers will have an uphill struggle. To be successful, news media have to build on, or create, a sense of community. Chapter 3, “Disruptive Technologies and Community Engagement,” suggests there is a long history of different types of media rising to dominance and then falling into decline. This has happened to daily newspapers, to mass circulation magazines, to network radio and television, and lately to some newer media. These life cycles are part of business. Some media have attempted to be innovative. Most companies develop new products, but even those companies that innovate can become obsolete, particularly when disruptive technologies interrupt revenue streams. Your job as a media manager is to report on the entire social context in which your audience lives. This chapter argues that news managers must adopt and not be afraid of disruptive technologies, while carefully monitoring the market for possibilities in content and delivery. Viewing politics as a self-actualization process for the individual, Chapter 4, “The Convergence of Politics and Entertainment: The Politics of Personal Concern,” argues that the convergence of politics and entertainment might help citizens find personal relevance in politics and better connect themselves politically by addressing a wide range of personal interests, values, and identities and by guiding everyday lifestyle issues in self-actualizing political engagement processes. Coupled with political elites and advocacy groups’ strategic adaptation to the postbroadcast age, the convergence of politics and entertainment indeed provides an opportunity for those who consider particular issues personally important (especially those marginalized from conventional politics) to become politically activated and organized for collective action. The implications for the functioning of democracy are discussed.

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Part 2 of the book is focused on finding value in a world of disruption. Chapter 5, “Establishing Leadership and Strategic Management,” suggests that media managers need to work out what they are currently supplying to any particular community. Certainly, some problems have surfaced with Internet news distribution. Internet news lacks depth. It is a headline service. Is that what your audience wants? It may be. As for advertising, there are also issues, because advertising can be targeted but lacks the same width of reach of display advertising and therefore reduces the revenue stream of traditional media. Therefore, the challenge for news media is different from online entertainment services. Chapter 6, “Value Activities and Newspapers,” points out that many managers try to evaluate company activities from the point of view of the organization rather than from the point of view of the consumer. They may not be aware they are doing this. In fact, however, newspaper managers focus on the strengths of their organizations that are already in place. This may not be the direction in which their business will inevitably go in the future. Chapter 7, “Self-Organizing Digital News,” reflects the rise of Web 2.0 sources. This chapter explores the idea of self-organizing news. Compared to traditional structures of beat reporting, self-organizing news emphasizes community journalism within the context of audience interest. This chapter focuses on the value that can be created when news organizations value audience interest. Here, this book encourages you to ask “what kind of value can you bring to your audience that is not readily available from other sources?” For example, you will see how some media have used crowdsourcing and other types of news content to challenge traditional media business models. Chapter 8, “News Consumption and Cross-Media Synergies,” highlights the positive effects that cross-media “synergy” can have on print and online distribution outlets. Both of these media have inherent strengths. Joining forces can enhance strength and reduce weakness. The chapter also theorizes that print operations need to be integrated with digital services. The result may reduce the circulation decline of the printed product. Classic theories of competitive strategy emphasize the importance of exploiting synergy. This chapter examines 100 regional newspapers across Britain in a test. It shows there could be synergy between print copy issues per week and online digital editions. This synergy could positively influence business performance. The chapter concludes that such print-product characteristics as price, the number of issues per week, and the classified advertising rates have power to interact as key online variables.

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Part 3 includes chapters linked to experimenting with the audience. Chapter 9, “Changing Media Policy Environments and the Production of News,” aims to create a context for prescribing a set of coherent policy responses that can be aimed at protecting and promoting the long-held public-interest value of news in the media environment. News is not just a business like any other in an increasingly marketized and complex media environment. Policy inaction risks obscuring, to the point of ineffectiveness, one of the key staples of public value in media. This is ironic, since much of the new technologies now available present significant opportunities for enrichment and revitalization rather than dilution and decline. The underlying message of Chapter 10, “Active Online Community Building: Opinion Leaders and Virality,” is to not underestimate the power of the average consumer. Each consumer comes with an additional network of connected users. While any one network may not be particularly powerful, many small networks combined make things go viral. Again, remember that the most viral stories on the Internet come from mass cascades of easily influenced individuals. Your media organization must have enough “seeds” (i.e., followers or friends) across the entire network you want to reach. Only then can you be assured that your message is reaching that entire network. To reach an entire population, many average consumers must be listening to you across that entire population. When developing a social media marketing strategy, make sure you are reaching not only for people that are interested in your stories but also individuals that cover the complete spectrum of your target audience. Reach across all relevant geographics and demographics. Chapter 11, “News Media Strategic Visions and Speculative Futures,” suggests that prototypes could provide the news media manager with strategic insight into the social and commercial implications of future technological advances. Journalists themselves have experimented dramatically from time to time. Who could have imagined such a journalist as Hunter S. Thompson? Thompson became news through free-ranging style and imagination of journalists and other writers. Through traditional fiction and science fiction they reimagine the connection between the future of media and the audience. The final part of the book focuses on ongoing strategies in the news industry. The aim of Chapter 12, “Digital Integration of Consumers into Local Press Value Chains,” is to understand the impact of “social era” technologies on the news-industry value chain; to examine the perception of consumer engagement (interactivity) and value creation within the online environment; and to question the manner in which local news media organizations engage

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with consumers within the digital landscape. Specifically, the chapter seeks to answer the research question of how the social era is transforming the role and participation of consumers in the news value chain. Chapter 13, “The Economics of Paywalls,” suggests that paywalls have been one of the strategies that the newspaper industry applies in order to compensate for the dramatic decline in advertising revenue. The chapter explores the economics of paywalls and assesses the financial payoff of their implementation. It concludes by suggesting that attracting a large audience and converting news website visitors into paying subscribers before running dry is for many companies now a matter of survival. Chapter 14, “Concluding Thoughts on the Future of the News Industry,” summarizes the various messages of Content Is King. In a world more interconnected than ever before, the news industry is in flux. Therefore, news media managers have to consider economic turbulence and the chaos turbulence creates. Content-driven news landscapes do provide new opportunities. News business leaders who embrace and respond to the fast-changing pace of innovation need to implement new systems to detect turbulence in advance. They need to understand the communities they serve and the market opportunities that are emerging as the news space fragments further. While nothing before us or on the digital horizon promises to replicate precisely the depth and sweep of the daily newspaper, the search to find a viable future marketplace niche must continue. In responding to turbulence, we suggest that news media executives need first to experiment with business models that can enhance their social (community) capital; second, to strengthen their market position as trusted sources of digital news content; and third, to develop new products embedded in “social era” modes of competitive advantage (civic participation). They cannot solely strategically rely and wait on technology service providers such as Apple to save them (by finding the right technological solutions to their problems). They also need to ask communities the right questions so that they can remain relevant and develop more user-centric business models.

References Lasswell, H. D. (1948). “The structure and function of communication in society.” The Communication of Ideas, 37: 215–28. Newspaper Society (2013). NS Database Newspaper reports. http://www. nsdatabase.co.uk/ (accessed May 22, 2013). Porter, M. (2012). Redefining German Health Care: Moving to a Value-Based System. Heidelberg: Springer.

2 News media and understanding their communities Anita Greenhill and Maria José ­Hernández Serrano

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n this chapter, we question the news making possibilities for and by communities and the impact that the Internet and Web 2.0 are having on the production and consumption of news. We question whether consumers will be willing over time to interact in (virtual) community spaces if news producers contest these spaces. Furthermore, we ask if there is a need for a more socially responsible (Meyer, 2004) understanding of the quality of producer/consumer interactions occurring in shared online community news spaces, and we attempt to assess the viability of generating future online value chains and business models.

A history of news content In the shifting landscape of news production, “news” can no longer be predominantly defined by its geographical location; the local, regional, national, or international news audience has given way to a more communityoriented understanding of news making (Domingo et al., 2008). Hartley (1996: 83) states that “news papers don’t publish in vacuums; they exist in places. And places can be just as individual as people.” However, one of the most voiced concerns about the technological impact on news production

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concerns the future of newspapers (refs). Meyer argues that at current rates of decline, newspapers will disappear by 2050. However Meyer (2004, 2008) and Franklin (2008) also emphasize the vital role that news media plurality plays in maintaining public-service journalism and community democracy. Furthermore, he describes the historic success of US newspaper businesses as their ability to “match its success as a business with self conscious attention to match its social service mission” (2004: 66). Meyer (2004) has also provided a model to enable newspaper managers and organizations to successfully evolve their business from the starting point of technological disruption. Meyer considers the Internet a disruptive technology because “it moves information with zero variable cost,” and also because “anyone with a computer can become a publisher” (Meyer, 2008). To confront the threats posed by disruptive technologies, Meyer’s model argues that there is a heightened need to preserve the social responsibility functions that newspapers historically have successfully matched with their business process, in whatever new media combinations emerge (Meyer, 2009). In particular, social responsibility functions must continue to be embodied in a newspaper’s ability to provide “information” to its reading public. Information in the form of news is provided not only for the empowerment of the democratic process but also so citizens can be an active part of the working system. News in this way is an enabler, or, in James Madison’s words, “people who mean to be their own governors must arm themselves with the power which knowledge gives.” Meyer’s model is one of the most valuable tools for analyzing the role of newspapers in communities because it promotes social influence. News media is the “social glue” facilitating community connectivity and temporal belonging. As a response to the challenges of the Internet and Web 2.0, traditional news providers are attempting to retain their community influence—as trusted sources of locally produced news, as well as of analysis and investigative reporting about public affairs. However, there are concerns that news media organizations are moving online to (virtual) community space rather than creating their own spaces. The coming of the Internet and Web 2.0 means that societal, cultural, and technological changes have significantly altered the way in which we communicate and engage with each other across varied times and spaces. Community news media traditionally incorporated local newspapers, radio, and television, which acted as a mirror to the communities they served; however, the impact of new technologies and in particular Web 2.0 means that we can now all be newsmakers. With ever-expanding access to information and service choices, location no longer holds a singular grasp over our ability to produce and consume. Writers such as Thurman (2010) argue that the advance of social media/Web 2.0 is eroding away the timeliness, relevance, and utility of the local news product.

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Bloggers and citizen journalists are now challenging the traditional power and control of news production by creating their own distribution mechanisms. The very idea of community news is changing, as bloggers jostle with journalists for “scoops”. As Bustamante (2004: 803) notes, the function of old media was to inform society. Consumers are now turning to other, noncorporate sources for “news,” and this is leading to falling advertising revenues, the reduction of market share, and the marginalization of previous sources of firm strength (Howe, 2006).

What is Web 2.0 community news production? Examination and consideration of the “community” are flavor of the month (refs). However what a “community” actually is and what it may mean to news production requires careful consideration. Lev-On (2012: 101) provides a useful definition about communities in relation to contemporary media environments: The “sense of community” concept refers to individuals’ subjective feeling of belonging to a bigger and stable structure which can be relied upon for a variety of purposes. It is often argued that the sense of community refers to a particular quality of the relationships between community members, namely the strong bonds between members. People with a sense of belonging to a community are those who believe they have an impact on what happens in their community, and are also affected by the community and act in accordance with its common values and norms. Also people with strong sense of community feel a strong emotional connection to the rest of the members, who support each other and believe that the community can fill their needs and indeed does so. Such criteria have inspired McMillan and Chavis (1986) to incorporate four elements in their analysis of sense of community: membership (feeling of belonging or having a sense of personal relatedness), influence (of the individual over the group, the group over its members), integration and fulfilment of needs (members’ needs are addressed by the resources they gain by becoming community members), and shared emotional connection (manifested in shared history, similar experiences etc). (101) For Lev-On (2012: 111) the significance of community is that, via communication processes, communities are maintained and members share their feelings, thoughts, political opinions, and vocational information. Also, ­community members are able to choose between growing arrays of

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­ edia that best meet their various needs. In contrast, Lauterer (2006: 84) m ­discusses ­“community” as it relates to journalism and reporting, questioning the d ­ egrees of authenticity ranging from intense to petty and shallow, and suggesting that community can be broken down into three distinct types: communities of place, communities of ideas, and communities of ethnicity. Social psychologist Amitia Etzioni, meanwhile, writes that communities are essentially “Webs of social relations that encompass shared meanings and above all shared values.” (Etzioni in Lev-On, 2012: 111). In contrast, ­Benedict Anderson famously associated “community” with the “nation.” He defines the nation as “an imagined political community—and imagined as both inherently limited and sovereign. . . . It is imagined because the members of even the smallest nation will never know most of their fellow-members, meet them, or even hear of them, yet in the minds of each lives the image of their communion” (Anderson, 2006: 6). In the context of the media, research has shown that newspaper reading is related to political engagement, community knowledge, social trust, and community participation (Carpenter, 2012). When translating these descriptions into a digital mediated world, the feeling of connectedness is central and is most relevant in how the connection is augmented to a global scale. In a broader picture, the Internet is a network of connections (Castells, 2001), and when the Internet absorbs our way of relating to others, to the news, and to the world, it is also absorbing our sense of belonging or togetherness, which now is dependent on the quantity and quality of the connections. Locationbased communities can gain a global sense, as spatial consciousness of being with others exists now in the form of connectivity (Hine, 2000). If no access restriction exists, online newspapers are distributed and read worldwide; thus, accessing and participating in this new media turns people into citizens of a global world, influencing their sense of belonging and roots. Identity, as sense of belonging to a community, is one area that has been most impacted upon in relation to the consumption of news. For the newspaper industry, a core issue is deciding whether the news needs to be oriented toward the proximal or global community and its knowledge and participation. Lev-On (2012: 88) reminds us that if people living side by side have no sense of community—that is, if they do not hold a separate and distinct identity—a newspaper will have a long uphill struggle in trying to inculcate those required community values. It will take time, risk, and financial commitment, along with consistent, solid coverage. Most importantly, a community without a newspaper is like a church without a pulpit or altar. Something is missing— a familiar voice, a sense of home, a continuity. The character of a place is defined and confirmed by its newspaper. We acknowledge the importance to the history of news production that geographical location has played both

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for news content (Lev-On, 2012) and the growth of news organizations such as the Guardian and the New York Times (ref); however, this chapter makes a significant shift away from the historical emphasis on geographical location to explore the impact that Web 2.0 is having on notions of “community audiences” and therefore the production of news. Franklin and Murphy (1991: 14–15) describe “localized” press: The local press operates within a well-established network of local media which are its rivals both for audiences and, perhaps more critically, for advertising revenues. The local press, moreover, in common with other local media, generates news in co-operation with a range of local sources: from the allotments society offering copy about its recent vegetable show, to more important and routine sources such as a friendly sergeant at the local police station who will alert the local hack when a potentially interesting story arises. Although it is barely ten years since Franklin and Murphy’s assertion, and the categories of who makes up a community audience have not altered significantly, what has changed with the uptake of Web 2.0 is the additional ways in which community audiences can now contribute and generate news, send and receive information, and meet and engage with authorities and others. Hartley defined “news” for journalism students as being grouped around and within six major topics: politics, the economy, foreign affairs, domestic news, occasional stories, and sport (Hartley, 1982: 38–9). However, in presenting news in this manner, it is also useful to identify potential neglected areas of the news coverage. For example, the Annan Committee on the Future of Broadcasting (1977) received a number of suggestions about neglected news areas as pertaining to the British press: These suggestions were for more European (EEC) and foreign affairs, more regional news (including from the other British nations, Scotland, Ireland, and Wales), and more coverage of local government; there were also demands that the news should “anticipate problems” rather than simply reflect them, and that it should include more good news. Hartley (1982: 38–9), in line with Habermas’s assertions regarding “public space,” noted that these categories of news did not include vast areas of social life and that there was an overwhelming “bias” toward “public” as opposed to “private” life and toward men rather than women; and that little was said about the lives of ordinary people—only about the decisions made in politics, the economy, and so on, which are assumed to effect those lives (usually in the wallet)—and only what was said by “representative” personalities. Personal relations, sexuality, family and working conditions, and

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more or less coherent voices that sound a different note to that of the familiar “spokesman”—all these were invisible in news at that time. Questions were posed by the committee about the press and whether biases arise because the events that get so much coverage already “affect our lives” or do they affect our lives largely because they are constantly reported in the news? While the debate was significant at the time, it is clear to see that the impact of Web 2.0 and community reporting, citizen journalism, and blogging have all impacted on the above issues and on the “voices” that are accessible, and that a broadening of “representation” has occurred; however, what remains unclear is what relationship these forms of information content and storytelling have with news production. With the ubiquity of technology and uptake of Web 2.0 usage, communities now emerge and are hosted in online settings as well as off-line, providing opportunities for strong intimate ties, reciprocal relations, emotional support, and a sense of belonging (Wellman and Gulia, 1999; Preece, 2000). However, creating virtual communities is fundamentally based on connecting people with similar shared domains; these are common interests, needs, and/ or expectations (Hernández Serrano, 2011). Being connected to a global community with members from different cultures offers new opportunities for becoming aware of, and learning about, cultural expressions and differences (Cachia, 2008). In this sense, the media has an important role in the connection within a community and with other communities. O’Reilly (2006: 47) reminds us that news is not made by echoing anything; it is made in the telling. Similarly, news should not be understood as a separate force, outside the social relations it seeks to report, but as very much a part of them. News reporting contributes to the discourse of the news, while news makers themselves act within the constraints, pressures, structures, and norms that bring the larger world of social relations to bear on their work. News is, however, one social agent among many, and news organizations themselves reflect the relationships that develop between them and other agencies. In this way, news organizations are defined not only by what they are but also by what they are not.

News makers and social responsibility Rather than simply “transporting a message,” the news process of the newspapers assists in creating stories and enhancing a sense of community (Schubert, 2011). Meyer (2004) recognizes the significance of social relations and based his model of social influence on the idea of social responsibility, from which a newspaper has a social function for its readers and for the

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communities it is connected to. Meyer (2004) compared newspaper use in different communities and questioned their credibility and public trust. As a result, Meyer posits social influence as being highly dependent on credibility and content quality, through which the commercial influence is enhanced (newspaper circulation as a measure of consumer acceptance, and profitability from investors). Research in a similar vein to Meyer’s model also highlights the relevance of credibility, confirming that if the individual perceives the media to be highly credible, they will rely on the media for information (Wanta and Hu, 1994; Kiousis, 2001; Abdulla, Garrison, Salwen, Driscoll, and Casey, 2002). One of the main concerns today, with Web 2.0 and the interconnection that it provides, is that credibility tends to be a connected phenomenon, heavily dependent on social links and a sense of community. Not only are events, news, and interest shared online, but also recommendations (Hermida, 2012). Social connection shapes the standards of judging information/news as credible or in terms of its quality. Furthermore, credibility is also shared among connections and may influence the decisions involved in news consumption. This credibility that is shared is termed “distributed credibility” by Burbulles (2001). The idea of distributed credibility suggests that the reliability of judgments about the truth of information—and even more so judgments about usefulness, relevance, interest, or worth—“cannot be assessed outside the nature of the online communities of which one is (overtly or tacitly) a part, nor of the communities producing and legitimizing the information found online” (Burbulles, 2001: 447). So, like-minded people who share a common interest or need may collectively evaluate the truthfulness and believability of information sources in the same way. Thus, the connection, real or imaginary, leads to the same judgments. Attention to connected communities must be the priority for the newspaper to offer content that meets the community audience member’s interests, needs, and expectations. News content as an element of connection needs to be measured through the community audience’s feeling of proximity, in order to gain credibility and, thus, social influence. Fundamental to proximity is an interesting distinction in the terminology used to refer the production of news from journalists and community audience members. The term “story” is often used to refer what the community audience contributes (Erdal, 2009; Carpenter, 2010), while the term “news” is predominantly reserved for journalistic work. Nevertheless, “news” is always subject to verification, while “stories” are often more credible to the community audience member, particularly when the content is personal and proximal. It is in this way that the community audience member feels a sense of proximity to what or who is connected. However, taking the sense of community and proximity into account does not necessary imply a physically specific closeness but rather

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a feeling of connectedness. Thus, obtaining credibility will be a task of first discovering, and then promoting or enhancing, meaningful connections within the news product. By extending these concepts, we can see that at the center of the issue of news content and news production is the question of ownership and therefore who owns or controls news content. Web 2.0 has provided a broader array of choice and therefore the means by which audience members can contribute to the production of news. Web 2.0 has, however, had little impact on legitimizing history. It has been the historical association of news production and professional “journalism” that documents, captures, and reproduces news as a legitimized account. Significantly, Web 2.0 has had most impact on this area, particularly in relation to the feeling of connectedness and therefore the contested relationship of who owns the news. While on the one hand, the production and distribution of news continues to be legitimized by established news channels, on the other there has been a shift in the historical legitimization of collective evaluation and connected communities and how they are sharing their stories. As a tool to contribute content as well as a means of collective evaluation and connectivity, Web 2.0 is growing as a socially accepted and legitimized producer of news. These changes are most notable in the growing number of hyperlocal news sites. The commitment to hyperlocal news, such as the experiences of the niiu platform,1 demonstrates that as newspapers are personalized, they tend to be proximal although not exclusively locational, because community audience members choose specific regional news contexts to which to form an alliance (Schubert, 2011). Increasingly, news producers are turning their attention to local content as part of their business strategy (Carvajal and Avilés, 2008). Considering proximal content depends on the way in which news or a story can connect with community audience members, their current or future interests, and their needs and expectations. The function of news intensifies community engagement, which in turn cements “the ‘social glue’” that facilitates community connectivity and temporal belonging (Graham and Greenhill, 2013: 9). The chapter progresses in the following manner. First, we further consider the impact that Web 2.0 is having in the production of news. We then explore the relationship between news, journalist, and audience by drawing on a Web 2.0 logic, using Gillmor’s shift of user/prosumer ideology to explore

Niiu offered the first experience of an individual, customizable, printed newspaper. Published in Berlin, Germany, from November 2009 until January 2011, it consisted of a daily newspaper with a range of news stories from newspapers and online resources, selected and composed according to each reader's individual preferences.

1

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the possibility of audience and journalist being closer than ever before and whether the use of the technology has impacted on this relationship. We are careful not just to consider the position of disruptive technologies, but also examine the social dimension of participatory practices. Finally, we present the idea of Web 2.0 as an ecosystem for news production and posit a viable hybrid model for the future of news production.

Web 2.0, a disruption or a new logic? In 2006, Time Magazine chose “You” as the Person of the Year; the choice was an attempt to recognize users’ contributions to different online community news spaces such as YouTube, Wikipedia, and other websites featuring audience contribution. The user’s ability to turn from a consumer into a producer of information and news is significant in the evolution from Web 1.0 to a second generation, or Web 2.0, form of interaction (Andersen, 2007). The term Web 2.0 encompasses different meanings. By drawing on O’Reilly’s (2004) definition, we refer to an evolution in the use of the Web, considering the Web as a platform for sharing, collaborating, and participating. The common use of the term “social Web” is interchangeable with the term Web 2.0 and remains central to understanding how the user/prosumer is an integral part of the Web. The vast literature around the Web 2.0 phenomenon can be divided into two groups. On the one hand, Web 2.0 is understood as a platform, in the same way as described by O’Reilly (2005), as architecture of participation; hence, the second Web generation refers to the numerous tools and services available to promote social interaction. And, on the other hand, and fundamental for consideration in this chapter, Web 2.0 is considered more than a simple technological change; what most clearly characterizes the new wave of change is an evolution in the use of such technologies. The use of the technology for collaborative purposes increases participation and entails a transformation of greater importance. Jenkins (2009) incisively distinguishes this transformation, reminding us that while interaction is something that may or may not be facilitated by technology, the participation that characterizes the media today is cultural. As a result, new practices, norms, values, and constructs are gestating a culture, the culture 2.0. Proposing Web 2.0 as a social and cultural exchange allows us to overcome the instrumentalist forms of thought within which technologies are interpreted simply as tools that allow us to do things; it also acknowledges an increasing rapidity or efficiency in communication or information usage. Technologies do “do things for us,” but as Turkle (2008) put forward, technologies also “do things ‘with’ us,” therefore making themselves into “subjective technologies”,

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which make us think about ourselves, about others, and about the world. In this way, the innovative participative possibilities that are a characteristic of Web 2.0 place us at the beginning of a new logic from which new practices and interpretations of the practices are being altered. This Web 2.0 logic crucially affects the culture of doing journalism, including the ways that producing and consuming news can occur. Instead of passively viewing news content, the evolution of Web 2.0 logic toward collaborative formats presupposes a major involvement of the community audience and its uses of the media. As Gillmor (2005) has illustrated, today the Web is we, we are the We-b; that is to say that the Web functions not only because the users are there, but because they are core to the Web itself (Horrocks, 2004). By acknowledging new practices, such as online collaboration in journalism, the idea of a Web 2.0 logic introduces “representational changes,” in the same way Olson described “alterations in the ‘ways of seeing reality’ for explaining or predicting the world and its phenomena” (Olson, 1998: 16). New practices introduced with Web 2.0 alter the representation of such practices, which in turn impacts on our epistemology; as stated by Blake y Standish (2000), “new forms of interpersonal interaction lead to changes in our vision of identity and community, new ways of manipulating imagery, both visual and auditory that must modify our notions of representation” (6). Therefore, the use of media involves a difference from which some of the old practices can be translated, while others introduce new concepts, practices, and experiences that have no near off-line equivalents. With such introductions, a new logic emerges. In the context of news production, the logic of Web 2.0 can be explained in terms of two pathways to innovation in the media sector: The first is that journalists and citizens are closer than ever before; complimentary to this, the second is that the way we are related to the news has significantly changed. The first dimension, that journalists and citizens are closer than ever before, deals with the informative authority of the news companies. Previously, a centralized and hierarchical model was used: “We select and we write, the audience reads”; Web 2.0 logic now means that news production is being shaped by the model “we select, we write, we read”: and “we share” when the participatory possibilities of Web 2.0 are considered. The first dimension recreates a tension between professional control and open participation in news production (Lewis, 2012). Moreover, by moving away from the technological perspective and deterministic perspective and the inevitable claim that new technologies can substitute old, precedents can be countered (media convergence means that both the old technologies and the new must constantly adjust and find new ways of working together). As a result, new roles, functions, actors, practices, and scenarios are generated as well as adapting to those that existed traditionally. The result is a dynamic mix of emerging

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forms of news production, including new forms of journalism, news, and community audience participation. On the one hand is traditional centralized print media; on the other, the multiple possibilities of online news production driven by participatory technologies (e.g., participatory journalism, citizenship journalism, or civic/democratic journalism). Furthermore, participatory news encourages production, makes possible the practice of individuals publishing information online with the aim of benefiting a community (Carpenter, 2010), and creates an amalgam of cross connections between newspapers that use stories, videos, and photos reported by citizens; journalists that create personal blogs publishing their opinions; (re)tweets through mobile phones; Facebook group opinion; and so on. A second dimension of Web 2.0 logic is that the way we read and related to the news has also significantly changed, meaning that the way news content is determined and the way we are informed has also changed. When reading traditional print newspapers, the reading tends to be lineal, and the editor decides the focus through the selection of remarks or headings. Conversely, the reading of online news is multimedial, intertextual (Erdal, 2009), and based on a network of links, as Web 2.0 is hyperconnected. Moreover, either in totality or partially, online mediums have no restrictions in terms of space; the limits of quantity are reduced, time pressures have altered, and online news can now be changed and updated within seconds. Furthermore, information sourcing has changed as a result of the ceaseless searching practices of users and their ability to now go straight to the source and news that is led by their interests by typing a keyword in a search engine. Instead of being attracted to a specific article by the way the news was presented, consumers now have different expectations. Rich Site Summary (RSS)2 systems or other information aggregator systems also demonstrate that the user can now choose and personalize their news domains. However, what has changed most is the reporting of news through the participatory possibilities brought with Web 2.0. News can now be copied, cut, and reframed from multiple networks and platforms; as a result, the incoming news trends are decided by the number of (re)tweets, hashtags, or followers, for example. From the two dimensions discussed above, the next step is to give an insight into the characteristics that a Web 2.0 news ecosystem will bring. Considering that it is often difficult to make sense of the nature and direction

RSS is a standardized Web format used to publish frequent updates, such as blog entries, news headlines, audio, and video. A standardized XML file format allows the information to be published once and viewed by many different programs. RSS feeds benefit publishers by letting them syndicate content automatically; and they benefit readers who want to subscribe to timely updates from favorite websites or want to aggregate feeds from many sites into one place.

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of media change, the next section aims to put it into context, giving a theoretical frame from which to reflect about the innovations in the use of technologies instead of solely focusing on the disruption of technologies. Exploring the debate about the future of newspapers in a technological mediated world, it is argued, needs to be extended beyond the threats or disadvantages of news production initiated by Web 2.0 technologies. Innovations and community-oriented social influence, when combined, have the potential for creating immense change without having to be disruptive. As stated by Latzer (2009), the concept of disruptive technologies takes a company perspective, not a user’s perspective. Therefore, broadening the perspective to include journalists, news readers, and community audiences working together broadens the potential for informed social influence through collaborative engagement, which in turn has the ability to enable positive change in terms of news production. The use of disruptive models may be useful for supporting the management and advancement strategies relating to the practical elements of news production; however, for the successful evolution of a news company’s future, the user’s perspective is also required. In the case of news companies, at a microlevel it is significant to understand the way their community audiences are experiencing technological change and therefore when and how such changes may become embedded. By focusing on exploring scenarios for change and innovation via the use of technology, and as they relate to social responsibility functions (as presented by Meyer), the enabling of the journalist and the community audience can be explored, as opposed to merely focusing on the disruption of technologies. Accordingly, because the news that is generated belongs to an innovative ecosystem, where different forms of journalism coexist and are entwined with a variety of networked information, a more nuanced understanding of news production is possible. Ecosystems with high doses of technology imply significant modifications for news production and consumption. Therefore, it is no longer advisable to keep being defensive of substitutive strategies (Porter, 1985) in news production, nor simply to keep implementing reproductive “cloning” tactics (Erdal, 2009) such as creating online versions of printed material. Instead, a more participatory version of news is what is required. What is fundamental for incorporating Web 2.0 and community-oriented production of news is to acknowledge changes and innovations and to embrace the innovations themselves. In this way, building Web 2.0 media into news production will work hand in hand with innovation. Web 2.0 and its application to news production signifies a shift, a convergence between computational logic—the characteristic of the computer—and the communicative logic characteristic of the media itself (Siapera, 2011). We propose that there is

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a third logic playing a key role in this junction, a social logic; this is the logic necessary when using Web 2.0. By drawing on Meyer to more fully consider disruptive technologies in relation to Web 2.0 and the Internet, we can see that the changing digital landscape has impacted on the triangular relationship between journalist, news, and community audience. Each of the corners of the triangle have been mediated by technology; from the tools and innovative devices used by journalists to the different access platforms for users to be informed, or the multimedia styles available for the (re)edition of the news. But the most important change is the extent to which news production is altering according to the technological changes associated with Web 2.0 and other contemporary Web 2.0–driven innovations. If we look closely at this threelogic junction (computational logic, communicative logic, and social logic) and cross it with the triangular relationship journalist–news–community audience, we can observe the basis of a new ecosystem (see Figure 2.1) in which a number of mixed forms of news production and consumption can be included. The communicative logic joins the journalist and the news in their traditional forms of journalism. The social logic based on Web 2.0, meanwhile, joins the news with the community audience, from which new forms of journalism can emerge. Computational logic makes it possible for to connect the journalist and the community audience; it enables an increase of exchange, both online

NEWS

Traditional Journalism

Crossing practices

JOURNALIST

Figure 2.1  A Web 2.0 news ecosystem.

New ways of Journalism

COMMUNITY AUDIENCE

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and off-line, which can then generate different intersecting practices by these parties.

A Web 2.0 ecosystem for the news The exploration of a Web 2.0 ecosystem for news production provides insight into innovative news production and the potential that interactive tools have for the participatory process of social online practices. Thus, within the context of Web 2.0 news production, the traditional information and communication cycle is broken into a variety of possibilities, so that news may be reported, analyzed, debated, corrected, and reinterpreted in a manner not previously observed (Notess, 2004). The participatory practices of Web 2.0 not only bring stakeholders, journalists, and community audience a more personalized version of the news, but it also enables them to take part in the redefinition of journalistic practices. Hermida (2012) notes that Web 2.0 and social media have reinforced the value of the community audience to the media; however, and despite the myriad of participatory practices, other emerging studies confirm that participation in the processes of news production have been severely circumscribed and are still dominated and controlled by news journalist professionals (Domingo et al., 2008; Harrison, 2009; Hermida and Thurman, 2008; Hermida, 2012; Sienger et al., 2011). Furthermore, some examples of Web 2.0–enabled participation demonstrate that the involvement of community audience members is not always oriented toward informational aspects of the news; they may also include more culturally specific or private stories. For example, Jönsson and Örnerbring (2011) contest that community audience members are mostly empowered when creating popular cultureoriented content and personal/everyday life–oriented content rather than news/informational content, suggesting that the synergy between community audience members and journalists is still relatively static or asymmetric. Regardless of the debate, it is important to note that without mentioning the enhancement of the successful involvement of community audiences in news production, it is possible to overemphasize the few proactive senders from the large disperses of receivers and the passive audiences (Anderson, 2011; Loosen and Schmidt, 2012). From our point of view, the embrace of a Web 2.0 ecosystem as a plausible future online newspaper value chain can be broken down into three directions: first, the establishment of incentives for the community audience to activate or enhance their extrinsic or intrinsic motivation to participate (i.e., ways of rewarding based on explicit recognition or material prizes); secondly, with

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regards to the production of the news, the mechanism of verification need to be translated away from established journalist practices toward community audience reports, both in relation to reliability (trust) and the readability (style) of the information/news being gathered; and thirdly, the regulation of the creation and management of news production, including the sharing and referencing of user-generated contents (UGC), because there is a gap between what technologies allow community audience members to do when reporting an event and what is legally appropriate to turn into public news. Within current forms of social media news production, the tools for interaction and possibilities for participation are offered by news media; however, there is little evidence of long-term change for community audiences. Progression from interaction that is technologically enabled to effective participation that is socially promoted requires a rethinking of how successful practices can be promoted in the different stages of news production and consumption. Further understanding of the news media communities enhanced by a Web 2.0 ecosystem requires a rethinking—or reinvention—of newspapers’ strategies and methods of analysis, such as innovative models, hybrid contentment building and legitimizing, and the ability to blend traditional journalism with innovative ways of empowering news production.

A hybrid model for preserving the social influence within the Web 2.0 ecosystem The model of the Web 2.0 news ecosystem that we describe can help one understand how to overcome challenges for the future. However, as Meyer has illustrated, the value of news production should not be measured in monetary terms alone, for the production of news requires many things, including journalistic integrity, legitimization, and trust; these elements of news production therefore involve an essential component of social responsibility. Changes to traditional news production and the process of gathering, producing, and consuming news via Web 2.0 (virtual) and community involvement are significant; so too is the need to widen participation and community engagement (Graham and Greenhill, 2011: 10). Acknowledgment and modification of community connectedness and the referents for the community identity prompts a rethinking of how to move the news production forward and how to take the advances of the social responsibility of Web 2.0 news production forward. From the point of view of a Web 2.0 news ecosystem, this shift requires news producers to successfully combine the opportunities enabled by Web 2.0 with community strengths; however,

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we advocate that the core element of social responsibility on the part of news producers should not be ignored. This chapter therefore proposes a viable hybrid model for the future of the news (see Figure 2.1) as a positive synergy of all these combinations and potentialities. The model suggests a way to successfully combine Web 2.0 logic in news production, so as to add value and enhance community legitimization and participation and to maintain the social responsibility of the news produced. Interactions created and recreated via social media in this way reinforce community characteristics and will noticeably strengthen communities and the connections that can be created and nurtured either online or in person as fostered by the news produced (Meyer, 2008). Community audiences have the ability to contribute to and influence the making of the news; equally, new media has the potential to maintain social responsibility by keeping communities informed. Therefore with news production’s embrace of Web 2.0, social responsibility is also augmented, moving from being informed by news and by the community to being willing to participate. Web 2.0 makes it inevitable that people will take part in news production as well as consuming news; therefore, for the needs of the community to be addressed and for audiences to belong to different (virtual) communities, it is important for content-based communities, which are less and less outsider-oriented communities, to become active both in the production of news as well as being the recipients of news. In order to address current and future issues concerning the production of news content, we frame a hybrid model by drawing on Meyer and taking and reframing the key terms he introduced. Ideas about media convergence and convergence culture (Jenkins, 2006) are also taken into account, as “the use of different media attracts different market niches” (200). The result is a hybrid model for preserving social influence within the new Web 2.0 ecosystem of news production, which outlines six types of considerations for news production combinations (see Figure 2.2): Local and Global. The combination of local and global news content is one of the biggest concerns in news production. Several forms of Web 2.0 logic make it possible for local and global news content to coexist. As Web 2.0 makes global news gathering more and more possible, a dependency on global topics emerges; however, local news helps people to locate themselves in the communities in which they live. Operating in between the local and the global is functionality relevant for a feeling of belonging and the connection with a community. As stated by Radcliffe (2012), even if news or content services are online, “they are pertaining to a town, village, single postcode or other small, geographically defined community.” Enhancing the knowing of the community links together the shared domains (interest,

News media and understanding their communities

Web 2.0 potentialities

Community connectivity potentialities

Space-time independence Social updating

Community leadership HYBRID

Newsroom convergence Prosumers/Lurkers

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Participation/Engagement MODEL Combination of

Shared domains Identity

- LOCAL AND GLOBAL - ATTENTION AND INTERPRETATION - CIRCULATION AND CONVERSATION - AUDIENCE LEADERSHIP AND MEDIA IDENTIFICATION - INFORMATIVE AUTHORITY AND DISTRIBUTED CREDIBILITY - CROSS-MEDIA CONTENTS AND CROSS-MEDIA PROFESSIONALS

Figure 2.2  Hybrid model for preserving social influence. needs, and expectations) of audiences and therefore must guide the content production in order to connect the community audience with both local and global issues. Circulation and Conversation. News content in circulation must not be different from conversable content. One of the main variables analyzed by Meyer (2004) is news circulation. The more news circulation, the more profitability for the newspaper industry. However, as circulation depends upon credibility and social trust, it is of the utmost importance. Gillmor (2004) asserts that we can measure news success through its “news conversation,” that is, news is suitable for understanding in social interactions. Furthermore, Domingo et al. (2008) state that a more reciprocal relationship between reporters and their community audience is needed, suggesting that news should be a conversation rather than a lecture (Gillmor, 2004; Kunelius, 2001). So, considering turning the news into fuller conversations, with the use of diverse participatory formulas, may enlarge the news spread toward a global debate and therefore increase circulation and community relevance. Attention and Interpretation. Meyer (2004) states that the superabundance of information is provoking an attention scarcity. Focusing attention on the diversity of the news implies the “fight for the attention” (Innerarity, 2004) that many news producers are experiencing. However, more than the fight for attention, the competitive challenge also brings up the issue of news interpretation. In a Web 2.0 participatory scenario, the user can draw on many

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combinations and interpretations of the news presented. Interpretation in this way may override the reporting (Donahue, Tichenor, and Olien, 1972; Gladney, 1990; Hindman, 1998; Janowitz, 1952; Johnstone, Slawski, and Bowman, 1976; Reader, 2006; Schaffer, 2007; Tichenor, Donahue, and Olien, 1980). Consequently, as Graham and Greenhill (2011) advocate, the news media need to deal with the change from a news product supplier to a multimedia content service provider, wherein the user participates in the different stages of the news process. As Meyer (2008) foresees, the newspapers that survive will probably do so with some kind of hybrid content: analysis, interpretation, and investigative reporting in a print product that appears less than daily and is combined with constant updating and reader interaction on the Web. Informative authority and Distributed credibility. Discussion on the informative authority of the news industry has been polarized, focusing either on the positive side, based on trust and nonsubjective information conveyance, or on the negative side, based on content restriction and market influence. The credibility of a news provider, in Meyer’s interpretation, is a way to demonstrate public trustworthiness: “Newspapers have the position of trust in the minds of the public” (2008). However, this credibility depends on community ties too. So the informative authority of the news provider needs to be combined with the distributed credibility in the public sphere. This combination provides more opportunities in relation to news circulation and, therefore, news profitability. Community Audience leadership and Media identification. Social media tools can contribute to community building if common practices and values exist (responsibility, commitment, support, etc.) and if all possible stakeholders have similar hierarchical positions. These changes can be facilitated if enough closeness for sharing meanings and participating in collaborative practices are realized (Hernández Serrano, 2011). Social tools can provide leadership to the community audience by engaging participants and making them responsible for the quality of their contributions (Schaffer, 2007). Community audience responsibility also relates to the social responsibility mentioned by Meyer (2004). This social responsibility stimulates identification with a news community and, as a result, identification with the media. At the same time, media identification is related to the business influence. More precisely, this sense of social identification can encourage individuals to cooperate, offer assistance, and share with others (Brickson and Brewer, 2001). For this reason, personalizing services in social media generate the individual's feeling of being (re)presented in a virtual space by a continuous selection and leaking of personal information (Burbulles and Callister, 2006). For news media, this is a means of returning to the community responsibility for

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newspapers through the representation of the interests of their associated community audiences. Cross-media contents and Cross-media professionals. Technological convergence facilitates some operational synergies in the integration of various news platforms. Cross-media production involves a number of intertwining forms of cooperation and recycling of content (Erdal, 2009). However, this coordination never adequately crosses the point of having journalists of one medium working with one another (Carvajal and García, 2008). As a result, journalists are specialized in the production of news in one or two media, while increasingly the community audience is able to cope with news from a variety of media, as well turning into multimedia reporters. The value chains that relate to media convergence have promoted the convergence of content along with the confluence of news professionals, which may or may not overlap, complement each other, or move together. It is through individual experience or small-group activity that light can be shed on the ways that news can be mediated or intermediaries can be used in the production and consumption of the news. Assuming that constant media innovations demand know-how about how to integrate the available media and popular media into the production of news, then it is the existing interdependence between the media industry and their community audience that holds the key to recreating the necessary connections among journalists, citizen journalists, community reporters, news witnesses, and so on. The hybrid model is not designed to solve all the issues currently being faced by news producers, in particular, economic issues such as falling profit margins; however, it is designed as a tool to illustrate the relationship between news production and social responsibility in a Web 2.0 era. By combining communicative logic with social logic, we illustrate how combining traditional news practices with community audience news practices, such as locally relevant content, can be integrated into news production. The combination both broadens contribution by widening the capacity for journalist contributions and reinstates social responsibility as an embedded news production ethos, therefore strengthening technology-injected news credibility and personal identification with the media and making the news production community relevant.

Conclusion In this chapter, we have explored the news making possibilities for and by communities and the impact that the Internet and Web 2.0 are having on the production and consumption of news. We have shown that, as a response to

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the challenges faced by news media with the introduction of the Internet and Web 2.0, there is a need to shift away from how traditional news providers are attempting to retain their community influence. We have argued for the need to embrace Web 2.0 logic so as to enhance the perception of news content as a trusted source of locally produced news and therefore build the foundations of social responsibility back into news production. We have argued that, while the coming of the Internet and Web 2.0 have significantly altered the way in which we communicate and engage with each other, it is important for news producers to reconsider how community news media is being produced to best serve both communities and their audience in a Web 2.0–enabled world. Particularly, the impact of new technologies, and especially Web 2.0, has meant that we can all be newsmakers or feed into part of the news production value chain. Because of the ever-expanding access to information and service choices, location no longer holds a singular grasp over our ability to produce and consume; with the uptake of Web 2.0, what has changed is the way in which community audiences can now contribute and generate news, send and receive information, and meet and engage with authorities and others. For example, community reporting, citizen journalism, and blogging have all impacted on the “voices” that are accessible, and a broadening of the “representation” of these voices has occurred. All these changes have had a significant impact upon the ways and means news can be produced and consumed. We have proposed a hybrid model as a way to explore how these changes to information content and storytelling can collaborate within news production. Myer has illustrated that the value of news production should not be measured purely in monetary terms, as many things are required, including journalistic integrity, legitimization, and trust; we have therefore drawn upon these concepts in the hybrid model as essential components of social responsibility. Changes to traditional news production and the move toward gathering, producing, and consuming news via Web 2.0 (virtual) and community involvement is significant; so too is the need to widen participation and community engagement. Furthermore, we asked whether there is a need for a more socially responsible (Meyer, 2004) understanding of the quality of producer/consumer interactions occurring in shared online community news spaces, and we have attempted to assess the viability of generating future online value chains and constructed a business model to explore these issues. The purpose was not to describe news as a “type” of new online community, but to consider the influence of the community audience as part of the evolution of news production in the context of Web 2.0 and its associated logic of participation and connectivity.

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We developed the hybrid model from the communicative logic that joins the journalist and the news in their traditional forms of journalism, and we then expanded the foundations of the logic to include the social logic of the Web 2.0 ecosystem. Finally, we incorporated computational logic, because it makes it possible to connect the journalist and the community audience, which enables an increase of exchange, both online and off-line. All these logics we illustrate can then generate different intersecting practices by these parties. From our point of view, the embrace of a Web 2.0 ecosystem is a plausible future online newspaper value chain, and it can be broken down into three directions: first, the establishment of incentives for the community audience; secondly, the production of news; and thirdly, the mechanism of the verification and regulation of the creation and management of news production, including the sharing and referencing of UGC. We have argued that understanding news production in relation to the Web 2.0 ecosystem is needed because there is a gap between what technologies allow community audience members to do when reporting an event, and what is legally appropriate to turn into public news originating from a legitimate news source. The model of the Web 2.0 news ecosystem that we have described can therefore help understand how to overcome the challenges that will be faced in the future.

References Abdulla, R., Garrison, B., Salwen, M., Driscoll, P., and Casey, D. (2002). The credibility of newspapers, television news, and online news. Miami, Florida: AEJMC 2002 (Association for Education in Journalism and Mass Communication). Anderson, B. (2006). Imagined Communities: Reflections on the Origin and Spread of Nationalism. London: Verso Books. Andersen, P. (2007). What is Web 2.0?: Ideas, Technologies and Implications for Education. Bristol, UK: JISC. Anderson, C. W. (2011). “Deliberative, agonistic, and algorithmic audiences: Journalism’s vision of its public in an age of audience transparency.” International Journal of Communication, 5: 529–47. Blake, N. and Standish, P. (2000). “Introduction.” Journal of Philosophy of Educations, 34 (1): 1–16. Brickson, S. L. and Brewer, M. B. (2001). “Identity orientation and intergroup relations in organizations.” In M. A. Hogg and D. J. Terry (eds). Social Identity Processes in Organizational Contexts, 49–66. Philadelphia: Psychology Press. Burbulles, N. C. (2001). “Paradoxes of the web: The ethical dimensions of credibility.” Library Trends, 49 (3): 441–54. Burbulles, N. and Callister, T. (2006). Educación: Riesgos y promesas de las nuevas tecnologías. Barcelona: Granica.

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Cachia, R. (2008). Social Computing: The Case of Social Networking. IPTS Exploratory Research on Social Computing. Institute for Prospective Technological Studies (IPTS), Joint Research Centre, European Commission. http://ipts.jrc.ec.europa.eu/publications/pub.cfm?id=1884. Carpenter, S. (2010). “A study of content diversity in online citizen journalism and online newspaper articles.” New Media and Society, 12 (7): 1064–84. Carvajal, M. and Avilés, J. G. (2008). “From newspapers to multimedia groups.” Journalism Practice, 2 (3): 453–62. Castells, M. (2001). The Rise of Network Society. New York: Blackwell. Domingo, D., Quandt, T., Heinonen, A., Paulussen, S., Singer, J. B., and Vujnovic, M. (2008). “Participatory journalism practices in the media and beyond.” Journalism Practice, 2 (3): 326–42. Donahue, G. A., Tichenor, P. J., and Olien, C. N. (1972). “Gatekeeping: Mass media systems and information control.” In G. F. Kline and P. J. Tichenor (eds). Sage Annual Reviews of Communication Research: Vol. 1. Current Perspectives in Mass Communication Research, 41–69. Beverly Hills, CA: Sage. Erdal, I. J. (2009). “Repurposing of content in multi-platform news production.” Journalism Practice, 3 (2): 178–95. Franklin, B. (2008). “The Future of Newspapers.” Journalism Studies, 9 (5): 630–41. Franklin, B. and Murphy, D. (1991). What News? The Market, Politics and the Local Press. London: Routledge. Gillmor, D. (2005). We, the Media. Beijing: O’Reilly. Gladney, G. A. (1990). “Newspaper excellence: How editors of small and large papers judge quality.” Newspaper Research Journal, 11 (2): 58–72. Graham, G. and Greenhill, A. (2013). “Exploring interaction: Print and online news media synergies.” Internet Research, 23 (1): 89–108. Harrison, J. (2009). “User-generated content and gatekeeping at the BBC hub.” Journalism Studies, 11 (2): 243–56. Hartley, J. (1982). Understanding News. London: Methuen. Hartley, J. (1996). Popular Reality: Journalism, Modernity, Popular Culture. London: Arnold. Hermida, A. (2012). “Social journalism: Exploring how social media is shaping journalism.” In E. Siapera and A. Veglis (eds). The Handbook of Global Online Journalism, 309–28. Malden, MA: Wiley-Blackwell. Hermida, A. and Thurman, N. (2008). “A clash of cultures: The integration of user-generated content within professional journalistic frameworks at British newspaper websites.” Journalism Practice, 2 (3): 343–56. Hernández Serrano, M. J. (2011). “Progressing the social dimension towards the collaborative construction of knowledge in 2.0 learning environments. A pedagogical approach.” In B. White, I. King, and P. Tsang (eds). Social Media Tools and Platforms in Learning Environments: Present and Future, 289–310. Heidelberg, Germany: Springer. Hindman, E. B. (1998). “Spectacles of the poor: Conventions of alternative news.” Journalism and Mass Communication Quarterly, 75 (1): 177–93. Hine, C. (2000). Virtual Ethnography. London: Sage. Horrocks, C. (2004). Marshall McLuhan y La Realidad Virutal. Barcelona: Gedisa.

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Howe, J. (2006). “The rise of crowdsourcing.” Wired Magazine, 14 (6): 1–4. http:// www.wired.com/wired/archive/14.06/crowds.html. Innerarity, D. (2004). La Sociedad Invisible. Madrid: Espasa Calpe. Janowitz, M. (1952). The Community Press in an Urban Setting. New York: Macmillan. Jenkins, H. (2006). Convergence Culture: Where Old and New Media Collide. New York: New York Press. Jenkins, H. (2009). Confronting the Challenges of Participatory Culture: Media Education for the 21st Century. Cambridge, MA: MIT Press. Johnstone, J. W. C., Slawski, E. J., and Bowman, W. W. (1976). The News People: A Sociological Portrait of American Journalists and Their Work. Urbana: University of Illinois Press. Jönsson, A. M. and Örnebring, H. (2011). “User-generated content and the news.” Journalism Practice, 5 (2): 127–44. Kiousis, S. (2001). “Public trust or mistrust? Perceptions of media credibility in the information age.” Mass Communication and Society, 4 (4): 381–403. Kunelius, R. (2001). “Conversation: A metaphor and a method for better journalism?” Journalism Studies, 2 (1): 31. Latzer, M. (2009). “Information and communication technology innovations: Radical and disruptive?” New Media and Society, 11 (4): 599–619. Lauterer, J. (2006). Community Journalism: Relentlessly Local. Chapel Hill, NC: University of North Carolina Press. Lev-On, A. (2012). “Communication, community, crisis: Mapping uses and gratification in the contemporary media environment.” New Media and Society, 14 (1): 98–116. Lewis, S. C. (2012). “The tension between professional control and open participation.” Information, Communication and Society, 15 (6): 836–66. Loosen, W. and Schmidt, J. H. (2012). “(Re-) discovering the audience. The relationship between journalism and audience in networked digital media.” Forthcoming in Information, Communication and Society, 15 (6). McMillan, and Chavis (1986), “Sense of Community: A Definition and Theory.” Journal of Community Psychology, 14: 6–24. Meyer, P. (2004). “The influence model and newspaper business.” Newspaper Research Journal, 25 (1): 66–83. Meyer, P. (2008). “The elite newspaper of the future.” American Journalism Review, October–November. http://www.ajr.org/Article.asp?id=4605 (accessed March 1, 2009). Meyer, P. (2009). The Vanishing Newspaper: Saving Journalism in the Information Age. Columbia, MO: University of Missouri Press. Notess, G. (2004). “The changing information cycle.” Online, September–October 28 (5): 40–2. O’Reilly, T. (2005). What is Web 2.0: Design Patterns and Business Models for the Next Generation. http://ssrn.com/abstract=1008839. Olson, D. R. (1998). El mundo sobre el pape: el impacto de la escritura y la lectura en la estructura del conocimiento. Barcelona: Gedisa. Porter, M. E. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press.

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Preece, J. (2000). Online Communities: Designing Usability, Supporting Sociability. New York: John Wiley & Sons. Radcliffe, D. (2012). Here and Now: UK Hyperlocal Media Today, NESTA Publication. http://www.nesta.org.uk/publications/assets/features/here_and_ now_uk_hyperlocal_media_today. Reader, B. (2006). “Distinctions that matter: Ethical differences at large and small newspapers.” Journalism and Mass Communication Quarterly, 83 (4): 851–64. Schaffer, J. (2007). Citizen Media: Fad or the Future of News? Institute for Interactive Journalism. http://www.kcnn.org/research/citizen_media_report/. Schubert, B. (2011). American Journalism After “The age of mechanical reproduction”: The Transition from Print to the Digital Age and its Cultural Implications. GRIN: Verlag. Siapera, A. (2011). Understanding New Media. London: Sage. Tichenor, P. J., Donahue, G. A., and Olien, C. N. (1980). Community Conflict and the Press. Beverly Hills, CA: Sage. Turkle, S. (2008). The Inner History of Devices. Cambridge, MA: MIT Press. Wanta, W. and Hu, Y.-W. (1994). “The effects of credibility, reliance, and exposure on media agenda-setting: A path analysis model.” Journalism and Mass Communication Quarterly, 71 (1): 90–8. Wellman, B. and Gulia, M. (1999). “Virtual communities as communities: Net surfers don’t ride alone.” In M. A. Smith and P. Kollock (eds). Communities in Cyberspace, 167–94. New York: Routledge.

3 Disruptive technologies and community engagement Chris J. Vargo and Donald L. Shaw

E

ven when companies are leaders and they invest in innovation, they can still become obsolete (Levitt, 1960). Regardless of industry, giants still fall. Disruptive innovation theory warns of the bureaucracy of big business (Christensen, 2011). It suggests that the newspaper’s decline due to poor management is a misnomer. Instead, it may have been the failure to invest in emerging media techniques such as microblogging, user-generated content or sponsored content. These oversights likely led to the decline. The founder of disruptive innovation theory, Clayton Christensen, suggests that the choice not to invest was due likely to the fact that such investments would have yielded a much lower return on investment (Christensen, Skok, and Allworth, 2012). Why would a media company profit just a cent from a YouTube video view when it can sell a single newspaper for two dollars? Disruptive innovation teaches a hard lesson in marginalizing returns. Profit cannot always be maximized (Dyer, Gregersen, and Christensen, 2011). Christensen himself states that even though news media are losing advertising revenue offline seven times as fast as they are growing it online, they must continue to pursue online news (Christensen, Skok, and Allworth, 2012). Disruptive innovation boldly claims that investment in technologies should come because of future promise, not initial return. News media have not been completely absent at the technological wheel (Terry and Jason, 2010). History shows us that companies such as Knight Ridder built the first prototype newspaper e-readers in 1994 (Kaye and Quinn, 2010). In fact, most well managed companies continuously innovate their products. Christensen points out a systemic flaw in these innovations. Labeled “sustaining technologies,” these innovations usually come in the form

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of improvements that increase the performance of established products and revenue streams. In the Knight Ridder example, the e-reader, while innovative, was largely a digital version of the daily newspaper. It would have incurred the same daily cost as a newspaper and largely fed into the existing revenue stream of daily subscriptions. Why would managers of a media organization stray? Daily subscription fees were successful and established value in the form of stable revenue (Kaye and Quinn, 2010). For another example, think of early newspaper websites that uploaded digital copies of their newspapers, unaltered, often as exact PDF copies. Instead of offering full-stories as Web content, stories were for subscribers only. Alone, favoring these existing revenue streams does not result in the failure of firms. Indeed, some do pay for e-subscriptions to the New York Times. But when compared to the number of print subscriptions, it is well known that the majority of consumers refuse to pay for online news. It is estimated that digital subscriptions only make up from 1–3 percent of total subscriptions for newspapers (Chyi and Lee, 2013). The focus for these industries has been primarily on existing revenue streams. This leaves the door open to alternative business models. This is when disruptive technologies have the opportunity to change a market (Kaye and Quinn, 2010). Often, disruptive technologies do not return the same amount of revenue when compared to mainstream markets, at least at their conception. They typically emerge because they contain things that the consumer values. Nearly all of the metrics that measure a disruptive technology are evident in new news media. These metrics, while defined broadly for all types of business, are tailored below for the news industry: Twitter is cheaper, smaller, more frequent, and more convenient than cable network news. Google News is cheaper, smaller, more frequent, and more convenient than newspapers. Feedly is cheaper, smaller, more frequent, and more convenient than magazines. Christensen provides evidence that the door opens for cheaper, smaller, more frequent, and more convenient innovations when products lose sight of customers (Christensen, Skok, and Allworth, 2012). This is a phenomenon to do with companies and their tendency to “overshoot” their market. Any time a company delivers a product that is more costly and exhaustive than the customer would ideally prefer, an opportunity is created for a disruptive technology. We are not arguing here that newspapers are too exhaustive for readers. But we do know that consumers, if given a choice, would prefer not

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to pay for costly subscriptions (Chyi and Lee, 2013). Certain audiences do not desire in-depth news coverage. Few read the newspaper cover to cover. Given these dispositions, freely accessible content did indeed disrupt newspapers and their traditional revenue streams. When the performance of products improves beyond consumer demand, the choice is no longer based on the higher performing product. That is to say, when more than 100 credible news sources all deliver acceptable information, and some offer content for free online, the basis of consumer choice often evolves. This change goes first to convenience and then ultimately to price. However, one less bleak conclusion that we can derive from disruptive technology is that although it can be initially unprofitable, history shows that over time, these markets can be made profitable once an industry learns how to use the platform. At the time of writing this chapter, we see that microblogging services such as Twitter are beginning to be monetized. Still, news organizations must ensure they are receiving their due share of the profit.

The rise and fall of mass media The bold predictions of disruptive innovation apply to what we have observed in the journalism news industry. However, there is one important difference. The scholarship here seems to indicate that once a disruptive technology is introduced, the older technology becomes obsolete. In the case of news media, that would amount to the end of newspapers. Ahlers noted that this is not the case, and that while disruptive technology has displaced traditional news consumption, it has not done so to the degree imagined (2006). Many alternative media outlets have emerged in the history of mass media. The preceding media have not have completely disappeared. In actuality, media have cycles. Media are young, then middle aged, and then finally reach their golden years. In The Rise and Fall of American Mass Media, Shaw sketched an historian’s perspective on the evolution of newspapers, magazines, radio, television, and e-mail in the United States (Shaw, 1991). Daily newspapers achieved their greatest circulation growth, relative to population, in the 1920. In the 1920s, more than one daily newspaper circulated per adult. Although the number of subscriptions to newspapers appears to have stabilized in recent years, now only 23 percent of Americans read newspapers on a printed page. This is compared to 47 percent as recently as 2000 (Kohut, 2012). Yet daily newspapers are still important. The New York Times remains the major player in the American news industry.

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Figure 3.1  The rise and fall of the American mass media. (Adopted and updated from Shaw [1991].) Benjamin Franklin published one of the first magazines in Philadelphia, The General Magazine, in 1741. After the Civil War, magazines exploded to fit the interests of women, merchandizers, sportsmen, political parties, farmers, Sears and Roebuck, and thousands of others. Some emerged as major mass magazines, such as the Saturday Evening Post, Collier’s, Life, and Look. But despite large circulation, these magazines did not thrive in the competition for advertising revenue against television. Life died in 1972 and Look in 1971. These mass magazines sought to attract wide audiences. They did, to a degree. But just as newspapers’ subscriber rates were interrupted, so were those of the magazines before them. With broadcast television costing no monthly fee, consumers once again shifted from convenience to price. Broadcast television was cheaper, smaller and more convenient. The caveat of rise and fall in relation to disruptive innovation still holds true for magazines. Smaller, more targeted magazines thrive. These revenue streams, while initially much smaller than large mass-appeal magazines, have grown into a thriving market. Magazines for different hobbies, trades, and demographics return profits. This narrowed focus was perhaps the single innovation that saved magazines. Just as most innovations in their infancy, small magazines were initially less profitable than their mass counterparts. As Christensen preaches, despite small initial returns, these products can quickly outgenerate industry leaders.

From disruptive technologies to disruptive consumer trends The history of news media shows that the medium itself has not been the key reason that people flocked from one media to another. Instead, the uses

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and gratifications drove the flock. Convenience and cost drove consumption. The majority of innovations discussed in disruptive innovation are new technologies. While this is certainly one type of innovation, technologies are not the only things that innovate and change over time (McQuivey, 2013). Innovations themselves now stem from consumer trends. Moreover, innovations in technology typically result in more power for consumers to exert choice and freedom. Customer preference is now innovation. Coined “digital disruptors,” new companies that structure themselves on the basis of consumer insight and engagement are poised to succeed in this new environment. Digital disruptors continuously assess consumer need. They deliver their product in the exact moment that the consumer wants it. They also “innovate the adjacent possible.” Digital disruptors take traditional products and experiment with adding new benefits. In this chapter, we suggest a core benefit that the news has been providing for years: community. Digitized news does not provide a new core benefit that other news media did not. In fact, data show that consumers’ needs are relatively static (Christensen, Skok, and Allworth, 2012). Digital disruptors dented the media industry because they now satisfy needs better (Terry and Jason, 2010). How? Technological innovations provided levels of customization and interactivity far beyond the scope of the media businesses typically rooted in a static medium, such as print or television. This customization is not just the freedom of media choice (i.e., on a tablet, on a phone, on Twitter, etc.); it is the freedom of community choice. Newer, online types of media organizations have seized the sense of community via digital disruption. This does not mean that traditional media organizations cannot be reconfigured to address the consumer’s needs for community. But before for this change can occur, the disruption must first be understood. Newer media understand groups of people. They reach out to them. They speak directly to them. The following section focuses on new technologies that can allow this process to go on more quickly, more cheaply, and more effectively than ever before (Abernathy and Richard, 2010).

Delivering community In media, while technology plays a role in disruption, so does community. Media presents a picture of the world. In some ways, that picture also constitutes a “community.” The news media and what they cover are often the only voices for groups of people. The media decide what issues are important to the groups of people that subscribe to them. The conscious choices that news media managers make are media agendas. They cover X instead of Y. They devote

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a certain amount of resources to issue C, which is more than they devote to issue A. These agendas in many cases represent a community. How do you know the local happenings of your neighborhood? This comes from other people or from media such as newspapers, television, or social networking services. So as media technologies evolve, the pictures of community evolve. Consumers constantly seek to maximize their participation and enjoyment of life by selecting and participating in attractive and rewarding communities. Clayton Christensen, the disruptive innovator himself, encourages managers to ask themselves what exactly the job is that the consumer wants done. In some regards, consumers now want you to portray the community (or communities) that they are interested in. As with magazines, the specialization of news can disrupt general news (Christensen, Skok, and Allworth, 2012). Community engagement, or lack thereof, can also disrupt news media organizations. Compared to fifty years ago, newspapers are lively, readable, entertaining, and accessible. But demand has frayed. Consumers are attracted to different communities via different media technologies. Newspapers represent agendas of a geographical community. For older people, reading newspapers means knowledge of the courts, streets, schools, and laws of the places where consumers live and work. It is an extension of their community. However, this type of readership is in decline. The thirty-year-old every day citizen today reads newspapers far less than the previous generation of thirty-year-olds (Stevenson, 1994). But geographical community is not the only part of a consumer’s identity. Media technologies allow consumers to select from an ever-expanding number of communities. Just as mass magazines now specialize, so do millions of Tumblr blogs and Twitter feeds. Consumers once again choose convenience. After all, why wait for a newspaper? If you want an update on the impending snowstorm, check Twitter. Technology allows the rearrangement of any number of different media on demand. Media technologies allow the audience the freedom to find their communities of interest.

Vertical and horizontal community A particular type of news media has disrupted the likes of more mainstream news media, such as local newspapers and cable news. An example of this new type, Twitter, is particularly disruptive because it allows consumers to customize news digests while lowering the cost of consumption. This new type, of “horizontal media” appears to be chipping away at more traditional

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mainstream media (Vargo et al., 2014; Shaw, El-Toukhy, and Terry, 2010). Vertical media can be thought of as a pyramid, such as those in Giza, Egypt. These reach more than 400 feet into the air; imagine the sweeping view from the top (Shaw and Vargo, 2012). Historically, newspapers evolved to fit this level of social structure. Certain media sit atop this structure and broadcast down vertically. Their goal is to communicate with the greatest number of people possible. Consumers have come to call this mass media. But parallel to these vertical media are magazines, cable television, FM radio, Tumblr, Snapchat, YouTube, and Twitter. These media enable our audience to find content based on specific individual preferences. Moreover, they can communicate with others interested in the same topics. Horizontal media only create news that is of interest for niche audiences (Abernathy and Richard, 2010; Christensen, Skok, and Allworth, 2012). Vertical media inform our audience about where consumers live and work. Horizontal media is where our audience plays and dreams (Shaw, El-Toukhy, and Terry, 2010). Of course there is overlap. Vertical newspapers carry news about sports. So does Sports Illustrated, blogs, websites, Twitter, and Facebook. Consumers subconsciously balance the two forms of community, vertical and horizontal. Audiences read the New York Times on the Web. They pick and choose topics of interest rather than leafing page by page through the newspaper. In doing so, of course, consumers rearrange a vertical medium into a “magazine” of personal interest. Disruptive technologies allow our audience the freedom to organize their community in satisfying ways. Consumers constantly seek individualistic connections. Media that connect individuals into small groups allow our audience to reconstruct the social worlds they ideally prefer. These sources often offer social support and encouragement for ideals and beliefs. While these media have not developed ways to generate revenue widely, disruptive innovation tells us that they have the capability to do so. Media managers must now visualize the balance of community their audience desires. While it is hard to imagine responsible citizens living completely in a horizontal community, it is likely that it will play some key role.

Media’s new roles Small magazines, social organizations, and blogs continue to reach sizable audiences. Some media succeed for a while, and some fail after a while. The answer is not the technology alone. Twitter is another social media

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service that connects users with topics, issues, and people that they care about. The technology of sharing short text messages with other people has been around for over twenty years. Therefore, it was not the technology that was the answer. Instead, Twitter focused on making it easy to connect with communities of people that had common interests. These communities took to Twitter and made its usage skyrocket. However, the direction of development is not always up. Rupert Murdoch spent $580 million to purchase MySpace, a social medium created before Facebook. Murdoch was quoted as calling the buy a “huge mistake,” and he sold the company for $35 million in 2011 (Lynley, 2011). It is hard to argue with the dramatic disruptive impact social networking services have made on the dissemination of media. With that said, the majority of all new social media are not disruptive. In fact, the majority of new services created on the Internet fail. In the last few years, even Google failed twice with Google Buzz and Google Wave (and now perhaps a third time with Google+). News apps Circa, Google Currents, and Yahoo! Editions all launched with great promise but suffered the same fate. In fact, most new technologies do not disrupt the communication patterns of news media or people. There are of course, very notable exceptions: Snapchat, Facebook, and Twitter. What makes these services so exceptional? The technology itself is a mere service with an intuitive interface. Yet, those services somehow facilitate community building to a greater degree than possible before. Communication services that enable communities to form easily and most effectively have are the most successful. Again, as McQuivey states, the innovation usually concerns added consumer benefit, not a new technology (2013). Since the onset of Facebook, the service has been centered on communities. Facebook’s original mission was simple: It was a way to keep up with and talk to your college community. The growth of the service was fueled around these communities. Everyone was associated with the school they attended. Facebook expanded its website one college at a time. Since its expansion to a broader audience outside of college, Facebook still focuses on existing social connections and on extending that relationship online. While things such as Facebook groups and pages now exist for companies and organizations, the majority of the interactions stem from person-to-person relationships. While existing in-person communities are powerful, one of the real innovations of Twitter was the focus the service placed on connecting with like-minded people and things. Here, the emphasis was placed more on imagined communities; not just circles of friends, but circles of social support. On Twitter, social circles form around person-to-person friendships, geographic areas, sports teams, political ideologies, and hobbies. People are less concerned with the intimacy of their interactions, instead focusing on

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what information the other users tweet. Interacting with strangers is not taboo, as it has been with other services like MySpace and Facebook. It also appears that news disruption of the last decade has also dealt with the liberation and increased dissemination of content. Whether it is community-driven journalism or news services themselves sharing the news via these new social services, there appears to be an expectation that the content will be fast and free. This is particularly disruptive to the journalism industry, which, until this point, has directly profited from advertising whether online or offline, when advertising was served to the consumer. The expectation has shifted to accessibility and instant delivery. Social media services appear to be disruptive when they ensure a higher degree of accessibility than previously available. Tweets can be viewed on almost any device, at any time. No newspaper firewalls exist, there is no waiting, and, most importantly, no financial investment is required. This represents another accurate foreshadowing of disruptive innovation as defined by Christensen. Finally, these services all appear to add a level of interaction that is not only novel but also beneficial to the user. Now, journalists can be contacted or questioned instantly. Users can comment on the news. They can curate it into custom lists and share those lists with others. Audiences can aggregate together and collectively speak using hashtags. The top news stories are no longer solely at the mercy of news editors but instead can be dictated by the aggregate. Social media services such as Twitter now offer the highest degree of social reinforcement yet. Whatever a person’s views are, compatible social support is available. No matter how eccentric, no man is an island. New “horizontal” news media have also become forms of social reinforcement (Vargo et al., 2014; Shaw and Vargo, 2012). These media are as highly customized to the specific communities they serve. Just as they are diverse, audiences are fragmented. More traditional news services such as the Associated Press and CNN have great presences online, but mainstream media’s reach online is now supplemented by bloggers, citizen journalists, and friends. Now, there is no one source that is charged with reporting the heartbeat of a nation. A typical user of a social networking site such as Twitter may rely on a myriad of news services, as many as 300 plus, for their daily news digest.

Tactics: Learning from communities There are ways to subdivide the communities that a media organization must serve. In this case, newspapers might compete with online blogs and

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horizontal media. Just as the New York Times now has 535 Twitter accounts that include journalists that cover beats from LBGT to vegan dining, so can other newspapers. While the New York Times has unsurpassed reporting power, other newspapers can identify which types of communities their audiences are also engaged in and join those conversations. Media managers should follow audiences and must create the communities that most closely match their viewers. News managers must embed themselves within disruptive technologies, regardless of their initial promise. Every member of your business should be an innovator, from the executives to the reporters (Dyer, Gregersen, and Christensen, 2011). When a media outlet takes on a new social media service, it must put forth an aggressive effort to connect with customers who need them, not just reuse existing content. This goes beyond making a Facebook page and setting up a Tumblr account. Actively finding members of the community and attempting to connect with them yields the best results for engagement (see Chapter 10 for a full review) (Terry and Jason, 2010). Audiences must be analyzed and investigated. Their interests, thoughts, opinions, and concerns represent valuable feedback. Surveys are no longer the best measure of an individual's media consumption. Their digital footprints are direct, quantifiable points of data. Harnessing demand can drive profit from the technology. The overwhelming majority of all news media now have a social media presence. Journalists now share their stories across all types of services. But photo sharing, blogging, microblogging, live blogging, and live streaming are not enough. Demand must be created. This demand, once quantified, can be used to negotiate revenue agreements with services such as YouTube and Facebook. If a journalist’s feed is in demand and thus drives traffic, it should share in the profit of the service in which it exists. At the time of this writing, few journalistic sources have capitalized on this possibility in the ways that record companies have with their music. Christensen also cautions managers not to fear failure. For every Nate Silver and his blog “538,” there are thousands of failed endeavors. Making a new news service requires both persistence and ingenuity. Making that service profitable is generally an iterative process of trial learning. Large organizations are at an inherit disadvantage when it comes to the development of a new technology. Often, values and cost structures within large organizations are static. This can result in stifled innovation. Business norms must not interfere with innovation. To avoid this pitfall, disruptive innovation theorists suggest the creation of “spin-off” companies. Here we might envision alternative media startups. It is crucial that these offspring remain free from the parent companies’ cost structures and pressures. If the news organization and its business ethics

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and practice impede the process of innovating to cover new communities, separate start-up media should be created. Things that bound traditional news sources, such as objectivity, journalistic styles of writing, and profit margins, should not bound these new endeavors. Instead, they should exist outside of traditional management so they might innovate the most freely. The real driver must be learning and discovery, not senior management. Therefore, when projects are embarked upon, the final results are often not known. Two products with drastically different profit margins have trouble coexisting under the same corporate umbrella. One will always compete against another, often at a cost to innovation and future promise. Instead, when different cost models exist, different companies should be created. The best, most innovative companies are not delivery driven but discovery driven (Dyer, Gregersen, and Christensen, 2011). Innovation marks progress in these businesses. Scale and size are two assets that media organizations traditionally used to exert dominance. In the digital landscape of news, scale no longer matters (McQuivey, 2013). Now everyone has the ability to create and publish content. Social media has torn down the barriers to entry. Of course, just because content is now easy to distribute does not mean that anyone with the desire to publish stories on the Internet is successful. There remain ways to gain competitive advantages. Through the knowledge of and engagement with consumers, companies of smaller scales can succeed. While companies have been trying to understand their consumers for centuries, this process has drastically changed. No matter how small profit margins might be in the early onset of a company, growth can still be observed and appreciated (Carayannopoulos, 2009). If today Twitter signed an agreement with newspapers resulting in one cent per click and two cents for a retweet, would small town newspapers be saved? Unlikely. But then it would be possible that a small start-up organization could leverage local news. It runs on a razor-thin profit margin (Carayannopoulos, 2009). Then, with proper incubation, it could attempt to scale and grow. These investments must be viewed as essential experiments. These ventures should not be cut if times get hard. Doing so prevents an organization from fostering disruptive innovations.

What might a disruptive media company look like? Consider the varying ways in which news can be delivered. It may differ in the technological method in which users discover, read, or interact with

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the news. Currently, we see innovations in different technological devices such as tablets, augmented reality, and interactive television. How can the media harness these technological innovations to disrupt the current way of consuming news? Each answer is an experiment that may be worth trying. Alternatively the news coverage itself can vary. Scholars talk of the need to invest in innovations that harness different methods of reporting, such as crowdsourcing and big-data journalism. Startups that embrace these ideas should be pursued. Shortly after their inception, they must actively be put in front of consumers who want to use them. The rest is often uncontrollable. Undoubtedly, even the most optimistic scholars of innovation conclude that while the overwhelming majority of new ideas fail, the chase is necessary to avoid obsolescence. Finally, new advertising revenues must be explored. The New York Times recently took a huge chance and pioneered what it called a “branded content studio.” Outside of the control and norms of its advertising department, the studio set out to write full-length feature stories for its advertisers, which it would run as stories on its namesake site (Moses, 2014). The initial reaction within the company was likely mixed. Would this disrupt advertising revenue? Would this compromise journalistic objectivity and integrity? The studio addressed concerns and sought to generate compelling, factual, and journalistically integral pieces of journalism for brands. It leveraged existing reporters throughout its newsroom and encouraged them to go where the facts did. It was able to generate “sponsored content” or “branded content” for large-pocketed clients such as Netflix, who ran a wildly successful piece on women’s prisons for an upcoming premiere of a television show about the subject. Now, brands with compelling stories to tell turn to a plethora of online branded content studios embedded in major news organizations, such as the Huffington Post and the Wall Street Journal, to create content. The result for the media organization is additional advertising revenue. When delivered compellingly, both the advertiser and consumer feel they are producing content that is engaging at a rate that far exceeds traditional online advertising.

Conclusion While media do not seem to disappear, revenue streams most certainly appear to be susceptible to disruption. Taking heed of alternative technologies is not enough. Listening intently to your audience and what it cares about is important, but watching what other types of media they consume is crucial.

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Clayton Christensen challenges news organizations to “watch people and get a deep understanding of how they live their lives” (Christensen, Skok, and Allworth, 2012). Your job as a news manager is no longer to report on the place in which you live but rather the social and economic contexts in which your audience lives. Know what your audience likes and dislikes. Scholars are now arguing that if your audience is fragmented on viewpoints or ideologies, you must be too (Abernathy and Richard, 2010). Do this by whatever means possible, even if it requires creating separate companies for each ideology. Despite the initial return on investment, being first counts. Demand must always precede monetization when it comes to news. The competitive advantage of being a leader in new media will yield long-term benefits after economic models are established. This investment does require allocation of resources and should not be taken lightly. If treated as a serious and required inquiry, disruptive innovation shows that ideas can eventually yield fruitful revenue streams. Like any investment, innovation needs time and room to grow. The process is also highly iterative and prone to trial and error. Still, the payoff comes in the form of obsolesce insurance—the ability to adapt to the changing landscape in concert with the surroundings and not to purely react to already present forces.

References Abernathy, P. M. and Richard, F. (2010). “The news landscape in 2014: Transformed or diminished? (Formulating a game plan for survival in the digital era).” Geopolitics, History, and International Relations, 2 (2): 9. Ahlers, D. (2006). “News consumption and the new electronic media.” The Harvard International Journal of Press/Politics, 11 (29): 29–48. Carayannopoulos, S. (2009). “How technology-based new firms leverage newness and smallness to commercialize disruptive technologies.” Entrepreneurship Theory and Practice, 33 (2): 419–38. Christensen, C. M. (2011). The Innovator’s Dilemma: The Revolutionary Book That Will Change the Way You Do Business. New York, NY: Harper Business. Christensen, C. M., Skok, D., and Allworth, J. (2012). “Breaking News-Mastering the art of disruptive innovation in journalism.” Nieman Reports, 66 (3): 6. Chyi, H. I. and Lee, A. M. (2013). “Online news consumption: A structural model linking preference, use, and paying intent.” Digital Journalism, 1 (2): 194–211. Kaye, J. and Quinn, S. (2010). Funding Journalism in the Digital Age: Business Models, Strategies, Issues and Trends. New York, NY: Peter Lang. Kohut, A. (2012). Trends in News Consumption: 1991–2012. In Changing News Landscape, Even Television is Vulnerable. Pew Research Center for the People and the Press. Washington, DC: Pew Research.

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Levitt, T. (1960). “Marketing myopia.” Harvard Business Review, 38 (4): 24–47. Lynley, M. (2011). “Murdoch says $580 million Myspace buy a ‘huge mistake.’” Business Insider. New York, NY. McQuivey, J. (2013). Digital Disruption: Unleashing the Next Wave of Innovation. Cambridge, Mass. & Las Vegas, NV: Forrester Research, Inc. Amazon Publishing. Moses, L. (December 1, 2014). Inside T brand studio, the New York Times’s native ad unit. http://digiday.com/publishers/new-york-times-native-ad-unit/ (accessed March 6, 2015). Shaw, D. L. (1991). The Rise and Fall of American Mass Media: Roles of Technology and Leadership (No. 2). Roy W. Howard Project, School of Journalism, Indiana University. Shaw, D. L. and Vargo, C. J. (2012). “The Media and Social Stability: How Audiences Create Personal Community.” International Forum of Higher Education in Media and Communication. Beijing, China: CACIE. Shaw, D. L., El-Toukhy, S., and Terry, T. (2010). “Seeking the H zone: How we mix media messages to create compatible community in the emerging papyrus society.” Central European Journal of Communication, 2: 207–19. Stevenson, R. L. (1994). “The disappearing reader.” Newspaper Research Journal, 15 (3): 22–31. Terry, F. and Jason, A. W. (2010). “Journalism as social networking: The Australian youdecide project and the 2007 federal election.” Journalism: Theory, Practice and Criticism, 11 (2): 131–47. Vargo, C., Guo, L., McCombs, M., and Shaw, D. (2014). “Network issue agendas on Twitter during the 2012 US presidential election.” Journal of Communication, 64 (2): 296–316.

4 The convergence of politics and entertainment: The politics of personal concern Young Mie Kim

T

he media landscape has drastically changed over the past few decades. The media industry has become decentralized, specialized, and segmented with the introduction of cable television, and more recently, online news outlets, blogs, and social media (Cohen, 2004). The overall size of the news audience has continually shrunk, and newspaper readership and network television viewership has steadily dropped (Ahlers, 2006). By 2008, network television viewership had dropped to 44 percent from 71 percent in 1987. Instead, approximately 40 percent of the public watch “niche news” on cable television (Owen, 2012). Media producers cater to specific groups of audiences and have expanded the content and style of political media beyond traditional news programs. The hybrid of “hard” and “soft” news has transformed the logic of journalism (Altheide, 2004; Baym, 2005). Entertainment-oriented, personalized, “soft” media forms and styles—or “infotainment” hybrids— have drawn the attention of lay people, particularly those younger and less politically interested (Baum and Jamison, 2006). The changes in the current political and media environments pose important questions for scholars who study public opinion, political communication, and democracy. Prior (2007), for example, argues that the current decentralized media environment promotes a gap between the politically interested and the uninterested. As the politically uninterested are drawn to entertainment media and choose not to engage in politics, public opinions and votes are biased toward those who tend to hold more extreme opinions than those favored

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by median voters. Brundson (2003) criticizes the fact that the market-driven, commercialized, entertainment-oriented media environment lacks core values and contains no vested public interest, arguing that it only encourages voyeurism, individualism, and identity fetishism. On the other hand, Baum and Jamison (2006) argue that “soft” news is more effective than traditional news for political learning and vote consistency in the low-information environment, at least for politically inattentive citizens. Young (2013) found that people learn about politics from entertainment because they believe it is unbiased, fun, and contextualized. Moving beyond the dichotomy of a pessimistic or optimistic view on the convergence of politics and entertainment, I propose to take a different perspective. From the perspective of life politics (Giddens, 1991), I argue that the convergence of politics and entertainment might help citizens better find personal relevance in politics and connect themselves to politics through selfhood, value reflection, and identification by addressing a wide range of “niche” issues in the context of everyday lifestyles and by providing guidance for self-actualizing political engagement processes. The convergence of politics and entertainment shifts citizens’ epistemology of politics and offers a new way of political engagement (Jones, 2004; van Zoonen, 2005). I also highlight the fact that the convergence of politics and entertainment has been widely adopted, not only by individual citizens but also by political elites and advocacy groups as they strategically adapt to the changing environment. Political elites’ and advocacy groups’ adoption of entertainment helps them selectively target special interests and extend strategic polarization to consolidate their support. By situating the convergence of politics and entertainment within a broader historical context and by examining the patterns of the convergence at multiple levels (i.e., citizens, advocacy groups, and political elites), I attempt to adequately discuss the implications of the convergence of politics and entertainment for the functioning of democracy.

The “New” media environment: The development of digital technologies and the rise of entertainment styles The media landscape has dramatically changed with the development of “new” communication technologies and the rise of entertainment styles. Since the introduction of cable television, today’s media industry has become drastically decentralized with various media outlets and more choices for viewers (Cohen, 2004). On average, people watch network television news

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in the evening about one day a week (Cohen, 2004). At the beginning of this century, the percentage of voters who identified network television as their major source of election information dropped to less than 50 percent (Pew Research Center, 2000). Digital communication technologies, such as the Internet, online social networks, and mobile communication technologies, have moved decentralization and specialization to a whole new level. Digital technology has increased information affordability, giving individuals many more options across various media. The increased affordability indeed potentially narrows the gap between resource-rich, large, mainstream political institutions and resource-poor, small, marginalized political groups and individuals. Widely available information also translates to increased controllability of information. Compared to traditional news media, wherein messages are highly controlled through the gate-keeping processes employed by journalists, the decentralized, hyperlinked networks enable political groups and individuals to bypass filtering and directly reach audiences. Today’s media—and especially traditional news media—have significant challenges when it comes to successfully setting “the” national agenda and transmitting the generalized concerns of the state to the general public. Digital media has also increased audience (now termed “users”) interactivity and content specialization. While broadcast media have limitations in their feedback system, digital media communication is inherently two way and many to many (Shirky, 2008). Whereas broadcast media tend to focus on content that a majority of the population can relate to (e.g., the lowest common denominator), the content of digital media specializes in a multitude of issues, including subjects that are usually unavailable on mass media unless they are emerging on the national agenda. As a whole, this increased interactivity and content specialization permits political groups and individuals to narrowly target individuals who have a high likelihood of responding to tailored messages. The increased interactivity and specialization also enables individuals to choose information in a highly selective manner; it also allows them to customize content to meet their needs and wants. In essence, individuals can produce their own content (Tewksbury and Rittenberg, 2012). In the “new” media environment, there is no one media outlet that the majority of individuals consume. The decentralized and specialized media environment offers “new” formats and styles beyond those of traditional “hard” news. While newspaper readership and network television news viewership have continually declined, audiences of entertainment media or the hybrid of information and entertainment (i.e., “infotainment”) have continually grown (Baum and Jamison, 2006). The entertainment-oriented media forms and styles in

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the decentralized and specialized media environment have resulted in the marriage between politics and entertainment—that is, the convergence of politics and entertainment. The convergence of politics and entertainment has raised serious concerns among scholars, pundits, and media critics. Katz (1996) laments that the decentralized media environment fragments audiences’ interests as it lacks the promotion of core values and consensus among the public. Mancini and Swanson (1996) criticize the personalization of politics in the market-driven, entertainment-oriented media environment, arguing that it reduces the quality of political communication. Putnam (2000) blames entertainment media (entertainment-oriented television) for the decline of civic engagement and the collapse of community. Prior (2007) argues that the decentralized media environment promotes the gap in political knowledge, polarization, and voting between the politically interested and the politically uninterested (i.e., the vote depression effect) because the politically uninterested are drawn out to entertainment and choose not to consume traditional news (cf. Baum, 2005). Such concerns are based on the assumption that the broadcast-dominant media environment provides a better condition for political learning and participation. Traditional broadcast media (particularly television) functioned (or was expected to function) to bring a nation together by reflecting on the nation’s core values, shared interests, and single most important issues. Traditional television valued social cohesion and strived to enhance public knowledge by providing objective, factual information. It is worth noting, however, that television—indeed, any technological development—coincides with specific historical, social, and political contexts. Television was developed in the historical moment when society experienced a growing population in a widely dispersed geographical area after the Second World War. The development of television, therefore, embodied social needs for promoting shared values, enhancing political knowledge, and mobilizing political engagement across a diversified population (Lunt, 2009), while satisfying individuals’ need for privatized entertainment. At that time, Western liberal democracies shared similar assumptions when it came to freedom and social order (Thompson, 2006): Each nation should be governed by a single and unified political authority represented by people who express informed opinions and participate in politics without any barrier of social and economic status. However, do we have the same meaning of freedom and social order in contemporary democracies? Should we apply the same logic, norms, and expectations when evaluating the role of media in the functioning of contemporary democracies? It appears that the social and political changes experienced by Western democracies call into question the previous

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assumptions of the state, as well as general political concerns, shared interests, and social cohesion. In an attempt to situate the convergence of politics and entertainment in historical, social, and political contexts, I first review contemporary sociopolitical contexts and discuss a “new” logic of freedom and social order from the perspective of life politics (Giddens, 1991).

The “New” sociopolitical environment: The context Contemporary democracies have experienced many changes over the past few decades. The state has been under threat by corporations, markets, and private sectors that are motivated by self-interest rather than the general concern of the state (Wilis and Schor, 2012). The distinction between citizens and consumers, states and markets, public and private domains becomes increasingly blurred. A growing number of scholars have evidenced and labeled this change postindustrialization (e.g., Beck, 1999; Bennett, 2003; Inglehart, 1997; Inglehart and Welzel, 2005; Giddens, 1991; Melucci, 1996; Norris, 2001). Social scientists also have witnessed the decline of traditional, formal, political institutions. Most individuals in the United States, for instance, feel that traditional political parties do not attend to their political needs; rather, Americans think issue advocacy groups better serve their interests (Grossman, 1995). The authority of traditional, formal, hierarchical political institutions (such as traditional political parties, trade unions, and government) has continually declined (Dalton, 2000). Traditional institutions appear to be losing their mobilizing power of transferring “the general concern of the state” to individual citizens. The grand political ideal to which everyone can attach to no longer exists. The simple ideological dichotomy of capitalism versus socialism in the Cold War era has given way to multiple values and ideas (Beck, 1999; Giddens, 1991). Withdrawn from traditional political institutions, individuals may attempt an encroachment into personal and private spheres (Inglehart and Welzel, 2005). Less politically obvious, however, individuals still remain committed to democracy (Inglehart, 1997). Although individuals participate less in formal political organizations (Putnam, 2000), and political ideology is less significant when it comes to forming political identities than in the past (Beck, 1991), people’s political interests and beliefs still give rise to emerging forms of ideas and engagement (Inglehart and Welzel, 2005). Lifestyle issues such as abortion, affirmative action, taxes, and environmental issues play a

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substantial role in politics. Political identity derives from individuals’ values, social identities (based on race, ethnicity, and gender, for instance), and personal lifestyle choices rather than from traditional political institutions. The strong attachment to such issue concerns are manifested in various contexts as emerging forms of politics: political consumerism, brand politics, body politics, green politics, vegetarianism, and bioethics politics, among others. Indeed, this multiplicity of values, interests, and identities poses a significant challenge to understanding the public as an aggregated group of individuals who share the core values of the state and the general concerns of the nation. In observing such changes in contemporary politics, Giddens (1991) argues that politics in late modernity has been experiencing the transition from emancipatory politics to self-actualizing politics, termed life politics. Life politics concerns the politics of choice and the politics of life decisions. Freedom is redefined as self-actualization through reflexivity processes. Life politics involves how individuals make decisions that directly affect their own lives, but it also involves the values and ethical principles in their lifestyle choices in everyday life. For instance, day-to-day choices on pregnancy and reproduction, genetically treated food (or organic food), and products using nanotechnology reflect long-term consequences for one’s life. Therefore, preferences and choices in the policy debate on such issues have a direct consequence for one’s life. Life politics concerns the creation of a morally justifiable life that promotes self-actualization. Although life politics centers on individuals’ self-actualization processes, (i.e., the project of self), Giddens (1991) emphasizes that life politics goes beyond lifestyle choices, self-indulgence, or the simple politicization of a personal agenda. Life politics also encompasses collective aspects. In environmental politics, for example, history has observed that an individual’s personal choices—whether to recycle, to drive, to purchase locally produced food—are effectively organized and manifested as collective action, which challenges traditional institutions. Life politics signifies the return of institutionally marginalized issues, yet ones that demand institutional sensitivity. Life politics inherently involves collective struggles, public debates, and the reconfiguration of institutional political endeavors (Furgerson, 2001). Life politics redefines freedom as self-actualization rather than emancipation and reconfigures social order through remoralization and negotiations. From the perspective of life politics, I now turn to the discussion of how the convergence of politics and entertainment has the potential to promote selfactualization and demand the return of institutionally marginalized issues. By redefining freedom and social order in the contemporary sociopolitical context and by recontextualizing the convergence of politics and entertainment at multiple levels of political communication processes (i.e., individuals, groups,

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and elite levels), we can move beyond these dichotomous debates and engage a richer discussion around the logic of the hybrid and its implications for the functioning of democracy.

The personal is political: How the convergence of politics of entertainment facilitates the politics of personal concern From national consensus to personal relevance and connection Giddens (1991) argues that life politics brings the personal to the forefront of politics: “The personal is political” (Giddens, 1991). Adopting Giddens’s interpretation of late modern politics, Lunt (2009) argues that the hybrid between information and entertainment media indeed exhibits reflexive modernity and governmentality through self-actualization and self-regulation, and redefines the functioning of media. To Lunt, the postbroadcast age appears to observe an emerging norm—that is, public service for the politics of identity rather than value consensus building. This implies that the postbroadcast media environment perhaps suggests a different logic for the normative function of media in democracy. I pay special attention to several characteristics of this convergence and politics in the postbroadcast environment. First of all, compared to the broadcast age, the decentralized media environment and hybrid of information and entertainment offered by media decentralization encompass a wider range of political concerns and the pluralistic nature of publics. They embrace the existence of systematically different subgroups of the population who exhibit diverse values, interests, and identities (Kim, 2012). In support of this, Sears and Kosterman (1994) observe that hybrid news generally contains more niche stories than traditional news. Embracing diversity in the audience, the decentralized media environment offers perhaps an even different set of agenda or priorities concerning political issues that appeal differently to different subsets of the population. Even the “most important issue” facing the country (the national agenda) varies by “niche” media outlets. For instance, Stroud (2011) finds that compared to liberal-leaning media, conservative media outlets cover the issue of Iraq more than any other issue and name terrorism as the most important problem facing the country. It is almost impossible to assume the existence of a national agenda that every citizen should care about exclusively.

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While the decentralized media environment offers almost unlimited options that address a wide range of issues, individuals’ motivational factors such as personal values, interests, and identities come into play in media usage. Stroud (2011) observes that individuals’ predispositions (in this case, partisan identity) motivate exposure and influence media choice. Although people may not avoid unpleasant, attitudinally inconsistent information (Garrett, 2009), they can approach preferred media that better address matters that are personally important. Kim’s study (2009) empirically evidences that individuals in the new media environment choose media allowing them to find more specialized information that fits within their interests, rather than general public-affairs information. Especially people who care about a particular issue tend to use “new” media such as cable news, talk radio, and Internet over traditional television. As a result, individuals consolidate their “specialty” areas of personal concern, widening the gap in domain-specific knowledge and further polarizing attitudes on these issues of personal concern. The distribution of political interests, knowledge, and engagement may be unequal across various issues. However, it is important to note that in the postbroadcast age, it is nonhierarchical and horizontal (Han, 2009). In the golden age of television, social cohesion based on the national concern was highly emphasized as a democratic value because political interests, knowledge, and engagement were not only unequally but also hierarchically distributed (i.e., in a pyramid structure). Only a small number of people had the resources for understanding and participating in politics (e.g., education, skills, motivations). However, when the convergence of politics and media addresses personal values, interests, and identities and offers an opportunity to find personal relevance in politics, people profoundly care about an issue of personal concern and become specialists on that issue. They may still not hold a mastery of politics across the spectrum of political issues due to limited resources and education; however, people hold a better understanding of their issue of personal concern. The model of the citizenry in the postbroadcast age is different in that it assumes unequal, yet nonhierarchical, horizontal distributions of political interests, knowledge, and engagement. It also emphasizes self-actualization of the personal in politics within various specialty domains rather than simply a single important issue facing the nation. This suggests that political entertainment has the potential to attract even audiences previously alienated and marginalized from conventional forms of political involvement (such as minority and young voters) and those who are less attentive to politics (Baum, 2006). In support of this, Riegert and Ramsay (2013) did a content analysis with the results showing that a significant number of people using political humor and satire as key elements in writing blogs are minorities. The convergence of politics and entertainment

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thus provides an opportunity for individuals to better actualize personal values, interests, and identities rather than working toward consensus building and social cohesion. These diverse values, interests, and identities are often manifested in an ordinary citizen’s everyday lifestyle issues: They have direct implications on one’s life, such as healthy living, consumer rights, and technology adoption. Labeled as “cultural jamming” (Lasn, 2000), the convergence between politics and entertainment has been best exemplified in campaigns focusing on personal matters and life style issues in the form of brand politics or logo politics. Utilizing marketing tactics to fuse culture and lifestyle, election and political campaigns also have become increasingly personalized (Chroust, 2000; Holtz-Bacha, 2008). The hybrid styles, genres, and programs focus on the personal and signify the collective, addressing questions of personal lifestyle choices, empowerment, self-regulation, and self-improvement. The hybrid forms (especially when combined with digital tools such as social media) allow people to find personal relevance in political issues in their own way by sharing personal stories in everyday life and developing personal relationships through shared life experiences (Bennett and Segerberg, 2011). It suggests that individuals foray deeply into popular culture forms through lifestyle issues manifested in the hybrid of information and entertainment and navigate their own personal relevance through various contentious encounters in life (Melucci, 1996). Another important aspect of a hybrid style is that it brings in “specialists” groups of lay people on media and redefines political authority. Taking Oprah!, Car Talk, and Little Angels as some examples, Lunt (2009) finds that sharing “expert” advice through audience interactions and relations is a very unique feature of the hybrid programs in the postbroadcast age. Experts in hybrid programs are usually not “the” authority for education, but rather a form of a repository of advice, using reserves from personal experience. “The role of the expert has shifted from the authoritative provision of public information to that of therapist or coach offering advice to participants in the practical accomplishment of the transformation of the self” (Lunt, 2009). Celebrity endorsement has become increasingly widespread and openly political, as they make personal connections to political issues or political candidates in life experience contexts (Beck, 2014). This suggests that the logic of the postbroadcast media has changed from the provision of factual knowledge for education to guidance toward self-actualization and self-control. As Jones (2004) argues, “new political television” (especially the convergence of politics and comedy shows) shifts citizens’ political epistemology, rejecting the paradigm of political authority and embracing the paradigm of open-ended, experiential, and lay knowledge of politics.

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Lastly, the convergence between entertainment and politics provides affective intelligence (van Zoonen, 2005), which is vital to facilitating and maintaining political engagement. Kim and Vishak’s study (2008) evidences that compared to traditional news, the hybrid news (in this case, The Daily Show with Jon Stewart) encourages people to instantly form impressions by simply updating existing feelings toward issues, policies, and political elites. As a result, individuals may form emotions about politics, but not necessarily acquire political knowledge. Feeling overpowers thinking. Yet, by providing the feelings of personal connection and by conveying emotions that stimulate political interpretations of personal values, interests, and identities, the convergence of politics and entertainment guides people to develop strong political identities and engage in political action. Bartsch and Schneider’s recent experimental study (2014) observes that feelings aroused in infotainment stimulate reflective thoughts about politically relevant content, issue interest, and information seeking. Personal commitment on a particular issue becomes political when people discover personal connections between everyday life and personal concerns. People are moved to act by a strong feeling of personal relevance and connection (Han, 2009).

Organizing personal concerns: Political elites and groups’ strategic targeting, strategic polarization Thus far I have described how the convergence of politics and entertainment in the new media environment facilitates individuals to become politically engaged. By offering niche content addressing a wide range of values, interests, and identities, the postbroadcast environment has been shifting its focus from national consensus building to the guidance of individuals’ projects of self-actualization. Emphasis on self-actualization promotes an individual’s “specialization” on the issue of personal concern in a “horizontal” manner, thus opening up an opportunity for traditionally marginalized groups to engage in politics without large resources. Indeed, encounters and lifestyle issues in everyday life manifested in the hybrid programs offer individuals a way to better connect themselves with politics through selfhood, reflection, and identification. The convergence of politics and entertainment redefines authority in politics to be more of a guide or therapist rather than an educator or an informer. Personal concerns based on self-interests, values, and identities become the guidelines for people’s self-actualizing politics. “The personal is political” (Giddens, 1991).

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The politics of personal concern driven by the convergence of politics and entertainment, however, cannot be simply reduced to the individual citizen level. It cannot be fully explained without an understanding of how political elites and advocacy groups—the other two major political actors in political communication—adapt themselves to the postbroadcast environment and participate in the politics of personal concern. As Giddens (1991) rightly points out, the collective (especially advocacy groups and social movement organizations) play an important role in the project of self-actualization in life politics. I argue that beyond the self-organization of personal interest, political elites’ and advocacy groups’ strategy for adaptation to the postbroadcast media environment—selective targeting, selective media use, and strategic polarization—facilitates the activation of the individual’s personal concerns and collectively organizes the politics of personal concern. Over the past few decades, the number of political items, particularly news on government and policies as well as the direct voices of political leaders, has continually declined (Cohen, 2004; Hallin, 1992; Hess, 2000; Leighley, 2004; Patterson, 1994). Decentralization brought about ever-increasing competition in the news media industry, causing it to turn to more interesting stories in order to sell. Even in an elite newspaper such as the New York Times, business, marketing, and stock-market news items outnumber any social or political stories (Leighley, 2004). Local newspapers focus on human interest stories— weather, sports, and crime—rather than national or local politics even during election campaigns (Hess, 2000). Political news tends to emphasize conflict and attack (Patterson, 1994; Swanson, 1992) and the proportion of negative references to politicians has increased over time (Patterson, 1994). Political news items have become less covered, more negative, less consumed, and less trusted. Therefore, political elites must find alternative, more controllable, and specialized venues that will cast them in a positive light. Entertainment media is the perfect venue for political elites to garner positive attention. Unlike traditional news media, these talk shows, late-night comedy shows, and news shows provide them with almost full control of the content. Political leaders can lighten up political tension and conflict and provide episodic personal relevance to the political issues they emphasize. This also allows politicians to shine light on the more personal aspects of themselves, reducing the distance between them and the voters. In the decentralized and specialized media environment, politicians are not simply “going public” (Kernell, 1997/2004) to reach out to the majority of voters or “median voters” (Downs, 1957). Rather, contemporary political leaders narrowly target their supporters and “activate” already existing support. Niche media outlets such as these hybrid forms provide the perfect venue to consolidate support as

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these media outlets tend to address niche issues. In support of this, Taniguchi (2011) shows that candidates who frequently appear on “soft” news programs garner more votes than those who do not (also Kim, Shen, and Dylko, [2008]), and have person-oriented votes rather than party-oriented votes. Advocacy groups selectively target potential supporters by utilizing various forms of niche media and personalized campaigns by blending entertainment and politics. Prior to the postbroadcast environment, only resource-rich, membership-based, large, formal institutions were able to actively mobilize the public and otherwise maintain collective action. As a result, the opportunities for resource-poor groups to organize and sustain collective action were quite limited. With decentralized information access and the lowered cost of information dissemination in the postbroadcast environment, advocacy groups widely adopt culturally fused tactics and social marketing techniques for their campaigns. Collective action has permeated into everyday life. Collective action has become more event driven, situational, culturally fused, and personal (Norris, 2002). In support of this, Kim and colleagues (2010) find that issue advocacy groups facilitate information-rich, grassroots-oriented mobilization more than ever before, and that there seems to be a shift in the focus of advocacy groups’ strategic activities from traditional, inside-lobbying to grassrootsoriented mobilization. This tendency is persistent even among Washingtonbased mainstream issue-interest groups. Kim and her colleagues (Kim and McCluskey, 2009; Kim, 2010; Min and Kim, 2012) explain that these trends are perhaps due to the adoption of niche media. A more recent study (Min and Kim, 2012) supports this idea by showing that groups clearly understand the utility of niche media in public mobilization. Especially, grassroots-oriented groups with fewer resources frequently utilize niche media to engage with their supporters (Kim, 2010; Min and Kim, 2012). Interestingly, Riegert and Ramsay’s study (2013) observes that almost every activist blog in Lebanon explicitly criticizes the sectarian system, human rights violations, as well as religious, gender, and environmental norms by heavily utilizing humor and satire in the hybrid style of politics and entertainment. By targeting distinctively segmented audiences through niche media, political elites and advocacy groups establish a shared identity, which is the key to the politics of personal concern. Political elites and advocacy groups clearly identify “friends” (and “foes”) to establish long-term support and consolidate the relationship. Recent research has clearly demonstrated that political elites have increasingly organized issue conflicts, and as a result, elite polarization (especially in regard to social issues such as abortion, gay rights, and racial matters) is much greater than it was forty years ago (e.g., Layman, Carsey, and Horowitz, 2006; Nivola and Brady, 2008). Similarly, issue advocacy groups also

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organize and extend issue conflicts, taking more extreme views on multiple issue dimensions and polarizing sentiments of the issues (Abramowitz, 2006; McCluskey and Kim, 2012). This strategic polarization is an important factor that motivates those who are personally committed to an issue, as it carries over the feelings of personal relevance and identity with intense emotions. With political elites’ and advocacy groups strategically adapting themselves to the new media environment by adopting niche media blended with entertainment that targets special interests and polarizing issue interests, citizens who consider issues that are personally important have more ­opportunities to engage in value-oriented, issue-specific, culture-fused, lifestyle politics.

Conclusion By situating the convergence of politics and entertainment in the context of contemporary democracy and by examining the patterns of the convergence at multiple levels (i.e., citizens, advocacy groups, and political elites), thus far, I have discussed the democratic potential of the convergence of political and entertainment for the politics of personal concern. I argue that the convergence of politics and entertainment guides individual citizens to find personal relevance in politics and to better connect to politics by addressing a wide range of personal interests, values, and identities. By guiding personal choice matters and everyday lifestyle issues that have long-term consequences for one’s life and by giving authority to lay people’s “speciality,” the convergence of politics and entertainment helps people engage in the project of selfactualizing in the political realm. Coupled with political elites and advocacy groups’ strategic adaptation to the postbroadcast age, the convergence of politics and entertainment indeed provides an opportunistic condition for those who consider particular issues personally important (especially those marginalized from conventional politics) to become politically activated and organized for collective action. The convergence of politics and entertainment in the contemporary sociopolitical context calls into question the previous assumptions concerning the state, general political concerns, shared interests, and social cohesion. Traditional institutions appear to lose mobilizing power in transferring “the general concern of the state” to individual citizens. The grand political ideal to which everyone can attach to no longer exists. The simple ideological dichotomy of capitalism versus socialism in the Cold War era gave way to multiple values and ideas. There is no one central media outlet that the majority of individuals choose to consume. As Chadwick (2013) rightly points out, perhaps “the original media logic approach was overstated, even during

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the heyday of broadcast media” (22). Interdependent with the sociopolitical context, the logic of the postbroadcast environment is much more complex than we had assumed. In a similar vein, Lunt (2009) proposes an alternative idea for a public-service model for media in the postbroadcast age: a merger between the function of surveillance for society and that of guidance for selfimprovement that demands institutional recognition. The convergence of politics and entertainment also challenges the assumption of the passive, uninterested, uneducated, unengaged public. Criticizing the notion of the general public in the contemporary political environment, Kim (2007, 2008, 2009, 2012) argues that the “new” media environment (characterized by the development of digital technologies and the rise of “infotainment”) facilitates systematically different pluralistic subgroups of the population who consider particular issues personally important, that is, issue publics. Kim (2009, 2012) posits that, based on their values, interests, and identities, issue publics tend to selectively choose information fitting with the issue of their own personal concern; they consolidate domain-specific political knowledge and hold extreme attitudes in regard to the issue of their personal concern. As a result, they passionately engage in collective action. Kim (2012) proposes to recontextualize issue publics in contemporary politics in terms of life politics. The politics of personal interests has different ramifications for the functioning of democracy. On the one hand, it feeds self-selection-based fragmentation (Sunstein, 2001). Pluralistic values and personal interests, coupled with intense feelings, emotions, and passion, might only portend conflict and polarization. On the other hand, pluralistic values, identities, and ideals manifested in life politics possibly apply healthy pressure to traditional institutions and may increase flexibility in organizing collective action (Melucci, 1996). Ultimately, the politics of personal concern may provide more opportunities for people to exercise freedom in lifestyle choice and the power of life politics (Giddens, 1991). However, no democratic ideal has the answer for it yet. Perhaps, as Chadwick (2013) argues, the hybrid rejects a simple dichotomy and pushes us away from the “either/or” to the “not only, but also” way of thinking.

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Shirky, C. (2008). Here Comes Everybody: The Power of Organizing Without Organizations. New York: Penguin Press. Sunstein, C. (2001). Republic.com. Princeton, NJ: Princeton University Press. Taniguchi, M. (2011). “The electoral consequences of candidate appearances on soft news programs.” Political Communication, 28 (1): 67–86. van Zoonen, L. (2005). Entertaining the Citizen: When Politics and Popular Culture Converge. Lanham, MD: Rowman and Littlefield. Young, Dannagal G. (2013). “Laughter, learning, or enlightenment? Viewing and avoidance motivations behind The Daily Show and The Colbert Report.” Journal of Broadcasting and Electronic Media, 57 (2): 153–69.

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PART TWO

Finding value in a world of disruptive technology

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5 Establishing leadership and strategic management Gary Graham and John Hill

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hen considering the adoption of a new strategy for a media organization, it is essential to establish just what type is in operation currently. In long-established industries, while the objective is usually well known because it is expressed in concrete terms, the method by which this is to be achieved is generally lost in the mists of day-to-day detail, and what remains is an emergent strategy, which has been moderated to such an extent by perceived opportunities that it no longer resembles the original intention. This is not to argue that strategies should not be amended, but to suggest that these incremental changes should not be instituted without the same amount of care and consideration that would be given to a major strategic change. Porter offers three generic strategies: overall cost leadership, differentiation, and focus. In a highly competitive environment, overall cost leadership and its effect on price means that there is an automatic competitive advantage for the low-cost leader. In the media industry, low price has tended to be of less consequence than differentiation, where the drive has been to offer a product that is superior in content terms; that is, in ways in which the consumers will value the uniqueness. The final strategy, focus, has a much narrower aspect inasmuch as it addresses the concentration of an organization on a particular segment of the market (Porter, 1987). Overall cost leadership requires application of sustained capital investment in updated plant to ensure that production costs are kept low, and close management of the workforce within a highly structured organization. Differentiation requires strong marketing abilities on the part of the firm and excellent cooperation from the distribution channels. Focus in the media industry demands that one or both these characteristics are channeled

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into one specific part of the market. In reality, focus requires rather more concentration on differentiation, if only because the task of serving a part of the total market compels attention to be paid to the specific needs of that segment, whether this is geographically, socially, financially, or demographically distinct. The history of the formulation of strategic theory, which is less than fifty years old, has evolved around two main concepts: the broad concept set out by Andrews, which includes goal-setting; and the narrow version proposed by Ansoff (1957), and later expanded by Hofer and Schendel (1978), which separates these functions. This was later echoed by Eason (1988) in his “user involvement” model. Clearly, it is not always possible to determine one set of features without reference to the other, as the desired goals might not be achievable in terms of resource availability, core competences, or the unanticipated arrival of substitutes; as in the case of the Internet, all or any of these can dramatically alter the permanence of the status quo.

Why some succeed and others fail It was an economist, Alfred Marshall (1890), who proposed that Charles Darwin’s theory of evolution could be used to explain why some organizations survive and others fail. Whereas the organisms about which Darwin wrote cannot change their essential characteristics, the commercial organizations that exist today are mostly capable of necessary change, although some do not take advantage of this, thereby condemning themselves to permanent reactivity and so ceding their future to their rivals. This would be a rare occurrence in the media business, where even the most lethargic organization would be unlikely to reject change when faced with possible extinction. It is not always simple to determine the point at which any media firm should begin the transition to a new strategic position, but for those for whom their overriding concern is efficiency, it is a reasonable assumption that structure has taken precedence over strategy and the refining of their processes has become all-consuming. They are what Mintzberg (1994) describes as machine bureaucracies, content to keep doing what they do well, although there may be increasingly evident reasons for change. Of the four types of commercial organization defined by Miles and Snow (1978), research has shown that only one firm in twenty is what they describe as prospectors: these firms actively seek opportunities to further their business, are more concerned with strategy than with structure, and aim to retain flexibility, retaining as large liquid financial reserves as possible. The remainder are either already fully fledged machine bureaucracies or have

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most of the required characteristics of an established hierarchy and a wellestablished paradigm together with a marked reluctance to contemplate timely change. It follows that the process of opening an organization to new ideas is considerably easier in one that is closer in attitude to a prospector than to a comparatively hide-bound machine bureaucracy.

Types of local media Local media organizations are of two distinct types, those that principally supply information, and those that principally offer entertainment. When attempting to determine how to relocate a strategic objective, it is necessary to distinguish the needs and desires of consumers for these subject matters. In terms of information, their need would be for clear, concise reporting of events that affect the readers and viewers, with at least some commentary on the consequential effects that these events might have. In the case of entertainment, the content should simply be that—entertaining—covering those areas of life around which most leisure activities are built. The principal entertainment media in local media industries are television stations, both public service and commercial. The second group are local radio stations, which again are of two types, public service and commercial, of which the latter are in the majority. All of these businesses are faced with the problem of supplying varied content, which must attempt to satisfy a large part of the stations’ audiences, and very little of which can be generated within the organization. So the “make or buy” question for these stations largely resolves itself to “buy” only. Of course there is some local content, which is usually insisted upon by the licensing authority as a condition of the broadcasting authorization. This degree of control over both television and radio stations in matters of where, when, and what broadcasting can take place contrasts starkly with the freedom that newspapers and magazines enjoy in most developed countries, where the print media have been established for many years. In the United Kingdom, despite several high-level enquiries, including Royal Commissions on the press, the government has been unable to extend its control over newspapers, although the final outcome of the recent Leveson Enquiry is not yet clear as the newspaper industry is fighting a bitter battle over the question of the illegal acquisition of private information by the staff of some national newspapers. It now appears that many commercial organizations and some professional firms stand accused of precisely the same “hacking” activities of which newspapers have been found responsible. This has made it difficult for the

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authorities to proceed against the newspapers in an attempt to effect some degree of control without including the other offenders, many of whom appear to be in the professions. It now appears that there is probably little prospect of effective controls on the newspaper industry in Great Britain for the foreseeable future.

The area of influence The major constraint on local media, whether print or broadcast, is their geographic area of influence. For television and radio stations, this is determined for them by the licensing authority that decides on the output power they may use, so determining their audience size. For newspapers, the controlling factor is rather more oblique and is established by the unique constraints of newspaper finances. As the cover price of a newspaper is usually less than its production cost and the newspaper profitability is made up of the revenues from advertising, being up to four times that of newspaper sales, each time a copy of the newspaper is sold in an area from which it is not possible to obtain advertising, the newspaper company sustains a loss. This has the effect of limiting newspaper sales areas only to those geographic areas where advertising can be sold, and so it becomes a self-restraining mechanism. Only in those nations with recently established newspaper industries and a government determined to closely control all media is it possible to override democratic processes and set up comprehensive regulations. Before the introduction of the Internet, this was feasible; now, with the widespread use of hand-held devices of many types, it is considerably less so. Only in the most repressive regimes is it possible to approximate the degree of control that was possible at one time. For radio and television stations, within the usual broad requirements with regard to content, there are other specific requirements that vary from country to country. Most apply to the fair representation of differing viewpoints, although this clearly does not apply in the more repressive administrations. In some countries, the promotion of political points of view is permitted as advertising on radio and television, while in others the total amount of money that can be spent by, or on, the promotion of a particular candidate in an election is limited. Especially in elections, television coverage is seen by politicians as being by far the most effective medium, and there is considerable competition to secure a place on the televised forums that have become increasingly popular with candidates.

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The three types of strategy There are three distinct requirements for strategies in the media industry. The first is that for nationally distributed newspapers, magazines, and broadcast companies. The second is for large (although less than nationally distributed) newspapers, magazines, and broadcast organizations, and the last is for the very local versions of these three media. As existing organizations with established markets, media companies do not have complete freedom to reset their strategic policies as they would if they were new entrants; they have mobility barriers, as described by McGee and Thomas. These are the equivalent of entry barriers that a new organization faces when entering a market. The difference is that, whereas a new entrant can avoid some at least of the problems facing it by modifying its offering to the market, the incumbent media company must seek to maintain the level and quality of service and content for the continuing market upon which it must depend while making the transition. As was noted earlier, a basic tenet of newspaper managements, certainly in advanced countries, is that the cover price of newspapers should be kept low as far as possible in order to encourage and protect maximum readership levels and hence optimum advertising revenue levels. While this was most evident in newspapers, it did not apply as markedly in magazines for two interesting reasons. The first concerns the life cycle of publications; when viewed over an extended period, the aggregated circulation graph of these gives the appearance of a smooth curve rising and falling in a gentle fashion. In reality, each segment of the curve is made up of a sequence of steep sales curves for each of the publishing periods. The overall lifetime profile for a leisure-interest magazine is conditioned by the reader cohort that it is designed to attract, and as the readers pass from one cohort to another as they age, the readership falls. It is the general policy in many magazine companies not to attempt to resurrect readerships but rather to allow one to disappear and to replace it with another aimed at what they have come to identify as an audience with longer-term potential. This has the benefit of allowing the publisher to adjust the cover price of the publications upward to what is an essentially new potential market. Newspapers do not have this degree of opportunity to adjust their cover prices; the readership cohort of a newspaper lasts for a much longer period of time, and in any event, with a price level measured in pence, any increase is seen to be a larger percentage rise. Yet another problem is found in the fact that many readers choose to have their newspapers and magazines delivered by a newsagent and to settle the bill either by the week or by the month. When

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the price of any one publication in the customer’s selection rises, this directly affects the total bill, and customers may seek to reduce this where possible. Cancelling a periodical is a major step, whereas deciding to cancel some or all of the daily deliveries of a daily newspaper and electing to purchase copies from a street seller provides a controllable means of reducing the bill. Magazines purchased by households generally contain leisure-interest content that readers are reluctant not to be able to access, whereas newspapers and news-interest weekly periodicals often have content that runs over several issues and means that the reader remains informed even if some issues are missed. Once the continuity of the daily delivery of a newspaper from a newsagent is broken, it is extremely difficult to restore, so that newspaper sales figures sustain a permanent loss. The effect of a lower circulation has a direct bearing on the advertising rates newspaper managements can levy, and so there is a closely coupled double effect on newspaper revenues.

Content quality It is the quality of content that determines the success or failure of any medium, and it is the expectations of the audience that condition the eventual outcome. An audience that requires little background material providing an explanation or amplification of the story is likely to be satisfied with little more than a headline; the more those readers are involved with the event, the possible consequences, or the individuals involved, the more they will be concerned with learning as much as they can. It is for this reason that the reduction, and in some cases the elimination, of subeditors in newspapers has had such a serious effect upon sales. Theirs was the task of ensuring that the headline and opening paragraph attracted as many readers as possible. Without their expertise, the publication is reduced to an almost totally reactive role, which often conveys the impression that nobody cares to sell the story; or, alternatively, that the story is not sufficiently interesting. These are the types of management decisions that determine the structure of a firm, and, as a direct consequence, set the boundaries of the range of strategies that that firm may follow. McGee and Thomas (1986) have defined mobility barriers—obstacles to the easy transition to another strategic position—as being of three types: market-related strategies, industry supply and cost characteristics, and the competence characteristics of individual firms. The authors point out that these are similar to Porter’s differentiation and cost strategies. Mobility barriers are a reflection of decisions made by firms, and they establish the key strategies that are available to them.

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In the media industry, it is difficult to establish a clear-cut pattern of strategic groups, as there is sometimes a considerable amount of replication of the type of content, although not necessarily of the content itself. It is for this reason that the criterion for selection has been the market served, which are local communities, rather than any other division. This choice includes local newspapers, both daily and weekly, and commercial television and radio stations. As we saw earlier, it is possible to separate these into media that principally provide information in the form of news, and media that offer entertainment. The gulf between the information and entertainment roles constitutes the largest mobility barrier at this level of strategic grouping. The move from being an organization that generates a large percentage of its content to one that buys in content from specialist firms offering entertainment material involves not only abandoning the market-related identity for which it is known but also setting up of relationships with new content suppliers and, finally, undertaking the provision of a sufficient level of competence. There is little doubt that the costs in terms of both money and time would make this unworkable. A move in the opposite direction, from an entertainment to an information provider, would involve the same problems, although from the reverse direction. Other problems, which are in many respects even more difficult problems to overcome, are the perceptions the community has of the local media. As they will have established views of each medium and the degree to which they have come depend on each, they are unlikely to take kindly to attempts to radically change what they have come to value. While this can be thought of as a public-relations problem, it is important to recognize that it will only be resolved by the investment of time and money in the maintenance of a desired image.

The strategic criteria To a limited extent, many of the problems that we have seen in the dramatic changes proposed here are echoed in any proposed move to Internet publishing. Leaving aside the question of whether or not an Internet publication can be made profitable, the same three strategic criteria apply: 1 Is the move sufficiently market related? 2 Are there any problems of industry supply and cost characteristics? 3 Are there likely to be any competence issues?

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The first of these criteria is likely to be most easily achievable by media already in the area of the provision of information, as Internet publications are principally information sources, as are print media. In this regard, it is possible to reduce the potential number of organizations capable of making the transition to newspapers and news magazines only. There do not appear to be problems of industry supply for organizations already in the business of collecting and providing news items, nor are there competence issues, as news journalists can equally well write for Internet publications as for print. The more local the focus of any publication, the higher the degree of content appeal for the target community. With print publications, the opportunity to sample the product has extended to virtually all the population. This is not the case for Internet news publications; leaving aside the fact that not all households have access to the Internet, there is the problem that the Internet has a great many competitors for the attention of members of a household, not all of which are concerned solely with news about the community. This problem will largely disappear over time as new, cheap devices appear that can access the Internet, and which will supplement the computer for members of the household. There is one problem that will restrict the popularity of Internet news sources, and that is the growing recognition that this is essentially a headline medium, excellent for flagging the existence of reports on a new event but less effective for broadening the details. In order have their news needs satisfied, the members of what has become known as the hurry-up generation require a flood of news items covering breaking events, and they are not so concerned with knowing the whys and wherefores. Digital-only publications are at a disadvantage in that they can hold the attention of their readers for a relatively short period of time, so making the effectiveness of the accompanying advertising more problematical.

The beginning of convergence? This is one reason why local newspapers that have launched a digital edition have a much better chance of redirecting readers to the print edition in which the headline story can be expanded. There also appears to be a move on the part of some digital-only publishers to explore the possibility of initiating a print version, once the problem of the very high investment needed has been resolved. It was thought at one time that traditional publishers could cooperate, but after their experiences in the early days of the Internet, when

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digital publishers wrongly claimed to be capable of producing readership for the print media, they were not persuadable. A combined print and digital publishing organization has considerable advantages over single-output operations. In the first place, a print operation extending into digital already has a hard-copy production investment, which is a sunk cost; and an existing cadre of experienced staff producing a stream of news items. A digital operation seeking to move in the opposite direction, that is, into hard-copy printing, faces a problem in finding the necessary production facilities. As the alternative to purchasing the printing and ancillary plant needed, it would be crucial to contract production to a printing firm that had experience of newspaper production. However, this solution in turn creates other problems. If the contract printer already produces other publications, the intending customer will be obliged to accept whatever production schedule slots are available, whether this suits the distribution patterns of the new publication or not. It also means that the digital publisher is ceding a vital part of the operation to a third party who may adopt an opportunistic attitude at some later date. The imbalance of the necessary investment between print publishers who are considering moving into the digital field and digital publishers who are contemplating a move in the opposite direction is of such magnitude that very few organizations that are not already in the print business will be able to justify the expense. The low cost of setting up a digital publishing operation has the consequence that it attracts a great many “me-toos,” and this increases the competition for both readers and advertising revenue. The resulting fragmentation of the marketplace sets a limit on the potential profitability of any of the digital publications and seriously deflates the value of each, thereby making viable amalgamations very unlikely. A seemingly insurmountable obstacle for smaller digital publishers is their dependence on what have come to be called chimney-fire news items, those relatively trivial stories that can be obtained as a result of a telephone call to a service organization that is prepared to give a statement. These statements often pass unchecked as the editorial team in a digital operation is usually very small, and the opportunities to follow up these stories rarely exist. In general, the quality of the editorial content of local digital newspapers is poor; there are some notable exceptions, but in the main these are publications with several experienced journalists who have considerable knowledge of newspaper management and long-established contacts in the local community. Perhaps the longest lasting problem that local digital publications face is that of obtaining revenue to sustain their operations. They are not large enough, nor is their editorial content of sufficient quality to justify any product charge

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to viewers, and their viewership is not large enough for them to levy a viable advertising charge. The fatal factor, however, is that the potential advertisers can easily and cheaply mount their own website. The local digital publication cannot do anything for advertisers that they cannot do for themselves. Only when the publication’s viewership figures are of a sufficiently high level do they become attractive to advertisers.

The defection of the advertisers The problem of advertisers being able to access the Internet has particularly affected traditional newspaper organizations and can be fairly said to have led directly to the serious disordering of the traditional local newspaper business, particularly with the onset of intermediaries that directly affected high-revenue areas such as homes for sale, employment, and items wanted or for sale. The loss of these types of advertising had a double effect: The first was that they were generally charged at rates well above the average for other types of advertising in the same publication, so the publication had a high yield, once they were severely curtailed. The second effect was that the number of pages in an edition, while remaining high to accommodate the lower-charge advertising, generated considerably less revenue for the marginally fewer pages involved, resulting in similar costs and hence less profit. Within local communities, it is likely that the main providers of local information will be local print media together with local digital media. Local radio is likely to follow the US pattern of depending upon large national advertisers or multiple outlets as the local retailers encounter increasing pressure from Internet stores offering low prices and fast delivery. Just how much communities will regret the loss of local outlets remains to be seen. In the meantime, the local newspaper and the local digital publication will continue to fight for survival.

Cutting costs to survive In the changed environment of the newspaper business, most of the laborintensive working practices that had served the industry well for many years have had to be jettisoned in pursuit of lowered costs. The economies of scale no longer applied as once they did, with declining circulations and decreasing pagination inexorably forcing up the unit costs of practically every aspect of the newspaper production process. In the newspaper companies worst affected by the drive to protect profits by reducing costs,

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not only were there redundancies in the labor force, but also entire layers of management were cut. The effects of these cutbacks differed from department to department. In the editorial department, reporter and subeditor numbers were reduced and these staff were given additional tasks. In the advertisement department, not only were numbers reduced but also sales training, which had played such a central part in the success of some British newspapers from the 1960s onward, was almost totally abandoned. The largest savings were made in the production area; not only were the manning levels reduced on the presses, but also the direct inputting of editorial copy by the journalists who had written the stories had lessened the need for compositors. It would be reassuring to think that these savings were being made in pursuance of a coherent strategy. In fact this was not always the case; mostly these were knee-jerk reactions to pressure from stakeholders to maintain profit levels and resulted in the loss of some parts of the baby with the bathwater, an effect that might not become evident until a new strategy was decided upon. In the widespread panic that followed the realization that the newspaper industry was sliding into the abyss, the only strategy—if strategy it was—was to survive for that day, week, or month, and very little thought was given to the long term. As the fog of battle began to clear and the realization grew that the industry might survive after all, managements began to cast about for possible strategies; the first priority was to seek a stable customer base, and the second was to assess that segment for potential for growth. It is important to recognize that products do not become niche from choice, especially those that have existed believing that size was everything; they were pitch-forked into a niche because they lost substantial numbers of their former customers. In these circumstances, it is always a question of makingdo-and-mending, of holding on to as many readers as possible while analyzing which parts of this smaller audience have the capacity to grow. This clingingto-the-wreckage phase, consisting of undifferentiated promotion, needs to be replaced as soon as possible by a campaign targeted at the largest segment with the greatest potential. According to Brandt,1 there are six major bases for determining what categories of segmentation are available: 1 Demographic 2 Geographic

Brandt, S. C. (1996).

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3 Usage rate 4 Benefit 5 Psychological and attitudinal 6 Lifestyle

The applicability of these individual segmentation categories in the media industry depends largely upon the type of medium being considered. For example, an evening newspaper with a widespread circulation area can use geographic segmentation, whereas this would be unnecessary for a weekly newspaper whose distribution area would embrace only one community. Segmentation by demography is probably the most useful of all for newspaper managements as it permits classification of audiences by age, sex, income, and similar factors that facilitate effective marketing. Usage-rate segmentation is useful when identifying those who purchase the newspaper habitually compared with infrequent purchasers. The last three categories, benefit, psychological, and lifestyle, are possibly of more use to magazines than to newspapers but should be borne in mind in circumstances when, as at present, step changes in the market are likely.

Niche strategy Just as Andrews claimed that strategy follows structure, it can also be said that segmentation determines strategy in the case of the newspaper business, where the strategy a newspaper is forced to follow is largely determined by the size and composition of whatever segment is available. It is therefore of some importance that needed resources are readily available when a strategy is eventually decided upon. It is critical that the idiosyncratic skill sets required for newspaper publishing are not discarded in the rush to protect profits by reducing costs. Newspaper managements faced with the alternative of either harvesting or divestment are unlikely to be concerned with protecting resources that might turn out to be valuable in the long run, as it is unlikely that there would be a long run. A niche strategy would be likely to work best for a publication whose future was still in the balance, and which had sufficient human resources with the necessary skill sets remaining. Candidates capable of instituting a coherent niche strategy would need to have a sufficiently large core segment to make the exercise viable and an active marketing policy to attempt to grow that segment to make it less vulnerable.

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Niche boundaries The geographical boundary of any niche is determined by the area of the community in which the niche exists, and it is comparatively easy to establish by plotting the circulation pattern. In the early stages of formulating a niche strategy, this is the only one that counts, but following on is the need to assess the approximate size of the niche, and this introduces the need to research the community universe and ensure that the target niche is sufficiently large to be financially viable. This is the point at which the other criteria as outlined by Brandt are deployed. The first is the demographic assessment, and in this case the focus of interest is not the usual range of gender, age, status, and so on but rather the attitudinal aspects of members of the community. The German sociologist Ferdin and Tönnies2 (1855–1936) hypothesized that groups of people consisted of two types of human association: gemeinschaft, which is usually translated as “community”; and gesellschaft, which is taken to mean “society” or “association.” Gemeinschaft is considered to be a more cohesive social entity; Tönnies regarded family or kinship to be perfect descriptors of gemeinschaft, whereas gesellschaft describes a group that is motivated largely by self-interest. He has been at pains to point out that these groupings are not mutually exclusive and that other shared characteristics such as place or belief systems could also be major contributors to gemeinschaft. To be useful, these concepts need to be grounded in research, and here there is a very useful indicator in the form of some attitudinal research carried out by the Newspaper Society in the United Kingdom. Local Matters asked a series of questions of local communities categorized by community cohort, and the one of greatest interest in this context is that which sought to determine the degrees of commitment to the community. Of the seven divisions (shown in the following illustration) when asked the question “Do you feel you are a part of the local community?” the three young families, teen families, and empty-nesters (families whose children have now left home) replied in the affirmative with scores well above the average of 43 percent. The full results to the question are presented in Figure 5.1. These categories will almost certainly satisfy Tönnies’ requirements to be regarded as a gemeinschaft sectors.

Refer to Gemeinschaft und Gesellschaft, Leipzig: Fues’s Verlag, 2nd ed. 1912, 8th edition, Leipzig: Buske, 1935 (reprint 2005, Darmstadt: Wissenschaftliche Buchgesellschaft); his basic and never essentially changed study of social man; translated in 1957 as “Community and Society”; Tönnies (2005).

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Figure 5.1  Commitment to the community. If these committed categories are taken to be an indicator of the amount of commitment in a community, then they are likely to form the basis of a niche that local newspapers could use to establish a stable circulation. There is also the possibility of carryover from the pre-family category, where couples have taken steps to find a home and to become, if not involved in, then certainly interested in the affairs of their local community. It is vital that detailed research of this type is used to determine the niche size, as each newspaper circulation area will differ from every other with regard both to the degree of commitment and to the size of the identified niche. Provision of information for this committed readership will not only reinforce the relationship but will also provide the marketing initiatives to attract the custom of the peripheral category, nonreaders. The forced withdrawal of local newspapers from the mass-market concept to the focused provision of local news, while forcing a complete rethink of policies and processes, has the major benefit of destroying the groupthink mind-set, which has so bedeviled strategy formulation in the regional newspaper industry. Newspapers will, once again, be fit for purpose, once they know what that purpose is.

Evening newspapers Of all regional newspaper categories, evening newspapers have been the ones to have suffered most damage in this decade’s catastrophe, and the

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reason is simply stated—they were outfocused by agile digital competitors who recognized that the evening newspaper’s unremitting drive for larger and larger circulations had become a vulnerability rather than a strength. The newspapers followed a simple rule—increase circulation, charge advertisers more for the greater readership, and increase profits to keep owners (or their market analysts) happy. Such was the single-mindedness with which this was pursued, that the protestations of the advertisers were totally ignored—until an alternative to newspaper advertising presented itself in the form of the Internet. Overnight, the media scene was transformed as the advertising categories on which the large newspapers depended, for example property sales, car sales, and job vacancies transferred to online publications, which were both cheaper to access and easier to access for both the firms and potential customers. No longer were the advertisers obliged to pay for circulations in areas of the community from which there was no likelihood of their attracting custom, and there was the possibility of their obtaining trade from anyone outside the newspaper’s circulation area who scanned the Internet site. As noted earlier, it was not possible to make any form of profit from the copy price alone, so large size became a catastrophe for most regional newspaper publishers.

Conclusion In the situation in which regional newspapers now find themselves, the options that at one time existed—mass-market, segmented, and niche— have now resolved to only one: niche. We have already noted that the mass market has disappeared as far as newspapers are concerned, and in any event it had only ever been more apparent than real in the sense that, for the overwhelming majority of newspapers, their circulations just never justify the title of mass market. Equally, they were just not large enough to permit viable segmentation, even if the production facilities had existed to permit this. Newspapers generally, and certainly local newspapers, have always had the composition of niche products, but their managers persisted in the view that they were rather more than that, and the myth that they were massmarket goods took hold. The only true mass-market products were the national newspapers that competed against each other across the nation. Whereas both the daily and weekly regional press were geographically constrained to their own areas, the national newspapers could circulate their products anywhere they could find a market. Another difference was that in the British newspaper industry

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the nationals concentrated on the political and economic news emanating from London, the political and economic center of the country, whereas the regional newspapers provided news of local events and decisions which would directly affect residents.

References Ansoff, I. (1957). “Strategies for diversification.” Harvard Business Review, 35 (5, September–October): 113–24. Brandt, S. C. (1996). “Dissecting the segmentation syndrome.” Journal of Marketing, 30 (4): 22–7. Eason, K. D. (1988). Informational Technology and Organizational Change. London: Taylor and Brown. Hofer, C. W. and Schendel, D. E. (1978). Strategy Formulation: Analytical Concepts. St. Paul, MN: West Publishing. Marshall, A. (1890). Principles of Economics: An Introduction. New York: Macmillan. McGee, J. and Thomas, H. (1986). “Strategic Groups: Theory, Research and Taxonomy.” Strategic Management Journal, 7 (2): 141–60. Miles, R. E. and Snow, C. (1978). Organizational Strategy, Structure and Process. New York: McGraw Hill. Mintzberg, H. (1994). The Rise and Fall of Strategic Planning: Reconceiving the Roles for Planning, Plans and Planners. New York: Free Press. Porter, M. E. (1987). “From competitive advantage to competitive strategy.” Harvard Business Review, May–June (3): 43–59. Tönnies, F. (2005). Community and Civil Society. Cambridge, UK: Cambridge University Press.

6 Value activities and newspapers Gary Graham and John Hill

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any, if not most, managers tend to evaluate value activities from the organization’s perspective rather than from the viewpoint of the consumer. It is the reader of a newspaper who provides the end value to the myriad actions of the newspaper’s staff in constructing each product. The newspaper’s evaluation of value is of no consequence in the creation of a publication that the readers consider valuable. In short, it only matters if it matters to the reader. The history of newspapers is generally regarded as being marked by an apparent disdain for the views of readers; however, this is less than fair to newspaper managers, who lacked the facility to interrogate a sufficiently large sample of their readership to yield a reliable survey result. By the time reliable survey methods became available, the majority of newspaper senior managements were perfectly happy with their own assessments of what their readers wanted, and their markets continued to be seriously underresearched. It is important to note that the newspaper market changed only slowly in those days, and so managements felt reasonably secure in waiting to see how readers reacted to the newspaper initiatives as indicated in copy sales. For as long as the market changed slowly, this did not pose a large problem, but as change started to accelerate, this lack of contact with their customers proved to be very damaging. Newspapers knew they had to react; they simply did not know how.

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Why and how do readers value newspapers? To understand the relationship between residents and their local newspaper, it is necessary to trace the basic needs of all individuals and to assess the degree to which these are catered for by newspapers. It has been decided to use Maslow’s1 Hierarchy of Needs, despite the arguments that have raged regarding its efficacy. Maslow offers five categories of need: 1 Physiological needs, which are the basic requirements to sustain life,

such as food, water, shelter, sleep, and so on. 2 Safety, which embraces an army to repel foreign forces, a police force

to ensure civil order and the protection of property, and a medical service to ensure good health. 3 A sense of belonging; this originates within the family and extends to

friendships in the community. 4 Esteem, which is of two types: esteem for others and others’ esteem

for the individual; and a sense of confidence, a well-developed selfesteem, and a feeling of achievement. 5 Self-actualization, which comes down to making the maximum use of

the characteristics and talents inherent in each individual. Of these five categories, it is the middle three that newspapers can assist in reinforcing. Without the information that the local media provides, individuals are dependent on word-of-mouth reporting to gain any knowledge of what is happening in the outer world, and word of mouth can often be of questionable reliability. This is not a matter of great importance in the case of the first category, which is almost entirely centered within the individual or his or her immediate vicinity, and for which information from an outside source is superfluous. The last category, that of self-actualization, is something of which the individual will be fully aware without having to refer to the columns of the newspaper, the radio, or the television screen. He or she will have a very clear idea of just how moral, creative, spontaneous, unprejudiced, and realistic they are. For the categories of safety, belonging, and esteem, it is the information aspect of the media that is of prime importance to the individual. Court reports make it clear that malefactors are being apprehended and punished, and so the community as a whole is being protected. News stories concerning the Maslow (1943) edited by Fadiman and Robert (1997).

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activities of the rescue services give an indication that lives and property are being protected. Military actions, whether at home or abroad, point to an active and aware defense force. All of these underline that the safety of the individual and the community is a matter of concern to the authorities and help in building confidence. A sense of belonging starts within the family and then transfers to the community as each individual grows into adulthood and becomes increasingly aware that they are members of a community. Belonging exists at many levels and at many degrees of intensity. For a young person, as a member of a family unit, the sense of belonging is as a subordinate member; however, when marriage is contemplated, then affection for the proposed partner gains in intensity and a transfer in the sense of belonging begins. Where newspapers have a part to play in strengthening this sense of belonging is with birth notices, school photographs, reports of sports days, examination results, and all the other minutiae of community life. The newspaper as a journal of record serves to highlight each individual’s progress as a member of the community; it offers concrete recognition of achievement. For the esteem category, the mere fact that a newspaper has taken note of an individual’s successes adds greatly to confidence building and a sense of achievement. It promotes both respect from others and, critically, respect for others. It encourages the individual to stand out from the crowd within a peer group or the community in which he or she lives, and it makes it easier to move to self-actualization, the happy state in which an individual realizes that they have made the best of any talents or opportunities they have.

Measuring value It is tempting for managers of long-established media firms, particularly newspapers, to believe that they, with their years of experience, have a much better idea than anyone else about the factors that make readers value their products. This is almost never true, as the managers usually focus on the strategic assets in the organization, that is, those factors, processes, or methods that have been introduced to differentiate their product from their competitor’s. The only way to know if these differentiations are valued by the customers is to ask them, either formally through surveys or focus groups or informally through social contact. Of these options, the former is clearly less prone to misunderstanding. All local media are essentially one-way communication mechanisms, but each has a facility for some form of feedback from customers; in the case of newspapers, it is in the “Letters to the Editor” columns, in commercial radio

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it is phone-ins, and with television it tends to be vox-pop street interviews. In every case, these devices are both rudimentary and imprecise and of little significance in assisting policy decisions. When constructing the research, the first step has to be discovering what the audience considers to be valuable to them. All local media offer information, and it is the type of information required by each cohort within the community that is of most particular interest to different media. Thus, couples with school-age children will be concerned about educational facilities, the elderly about medical facilities, and so on. By embracing all the main local media in the research and by asking that these be given a numeric value for each of the questions, it becomes possible to rank each of the media for each of the questions. Because there is an upper limit on the number of questions that can be asked of volunteers, it is vital that those questions are as representative as possible; it is because of this aspect that focus groups are most useful, prior to the launch of the main research. In the following hypothetical example (Figure 6.1), six questions have been posed to the universe concerning local taxes, property prices, schools, medical facilities, crime levels, and community news. The respondents have been 4 3 2 1 0 1

2

3

4

5

6

–1 –2 Newspaper –3

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Figure 6.1  The relative values of competitive media within a single marketplace.

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asked to indicate the level of importance to them of news of these subject areas on a scale ranging from 5 for extremely valuable down to 5 for those for whom these subjects are of little interest. The importance of the ratings is to give an indication of the relative values of competitive media within a single marketplace. Each question is designed to be read as the degree to which the reporting of these subject areas is valuable to the respondent. If the survey sample is sufficiently large, it will be practicable to provide a profile for each individual cohort, from pre-marrieds to empty-nesters. This process will identify those areas where the quality of content can be improved in order to maximize coverage within the niche. Much of the process outlined above is based on the work of Bowman and Faulkner (1996), and it attempts to define the uniqueness of newspapers as commercial undertakings. As products, they are sold at less than they cost to make; as social mechanisms, they provide a source of good quality information about the community; and as journals of record, they chart the progress of individuals as members of that community. Each community, and the local media serving that community, are unique, and the value research is most valuable as a planning tool if it is conducted in each discrete community. Value is an ever-changing concept in the eyes of the consumers who will form the judgments. An innovation introduced by one competitor will be, for a time, a strategic asset for that company, and for the others it will be an entry asset or a basic requirement necessary to compete. It becomes a zero-sum game; the innovation enhances the value of one competitor and lessens the value of the others, until they can imitate or improve upon the enhancement, at which point the value balance changes in favor of the new innovator. Innovation in any industry causes the industry’s competitive environment to become more dynamic, and this transition can be particularly difficult for media, particularly newspapers, which have been what Mintzberg (1994) describes as machine bureaucracies: operations that are very efficient at what they do but find it practically impossible to contemplate radical change. As newspapers represent generally the largest player in the local media, this has had a deadening effect upon the whole sector, without the energizing effect of innovation; the whole industry sector becomes listless.

Value and cost There is little point in discussing the enhancement of value without an assessment of the costs and consequences attached. It is necessary to begin

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with the strategy that is to be followed in a declining market, such as that of local newspapers. There are three alternatives: 1 Accept the situation and decline in influence and profitability,

harvesting what is possible. 2 Attempt to stem the losses in copy sales and advertising and identify

a viable niche in the local market. 3 Actively seek to promote both revenue streams using marketing

techniques. The harvesting strategy, which at first sight appears to be the simplest to implement, has the potential to become uncontrollable at particular points in what is a volatile process; once cost-cutting measures begin to be evident to both readers and advertisers, it is very difficult to prevent an exodus turning into a torrent. This could make it impossible to obtain reasonable prices for remaining assets. The process of active marketing signals to the market that the medium intends to survive, and it can help to provide a breathing space while the work to find a viable market niche continues. At best, these signals can stop or lessen the outflows of revenues; at worst, they can serve notice on both competitors and the community that the demise of the medium cannot be assumed. This is a holding tactic only and must be replaced by an active strategy as soon as possible. Having identified that a viable strategy exists, the marketing function can be concentrated on reinforcing readership within the niche segment and on actively promoting the potential to advertisers serving the community. This has to be a never-ending activity in order to help prevent fall-off in readership, or to prepare the ground for, or justify, a price increase, should this be considered necessary. Innovation is the sine qua non and the mainspring of a dynamic local media sector, and dynamic local media is one plank, but only one, in the launch platform to attempt to raise traditional media above the teeming masses of electronic media.

Value activities, value chains and VRIN It is sometimes confusing to try to distinguish what is meant by the descriptions of value activities and value chains, especially in the case of media companies operating at a local level, where they rarely compete directly with each other.

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Value activities are those actions and processes that are performed to add value to the product or service; a value chain is an identification of those parts of the firm’s activities that are strategically relevant in the search for differentiation or cost saving. Value-chain analysis, as written about widely by Michael Porter (1987), has greater applicability in those industries that supply mass markets and compete directly with others in the same field, rather than with publications and media companies that supply to clearly defined regional communities and rarely, if ever, compete with one another. In many ways, it is unfortunate that this analysis is known as value chain, giving the impression that there has to be a sequence of effects running throughout the entire productive cycle. This may well explain why this powerful tool is not much used in the newspaper and periodical publishing industries, where the whole production chain is short and largely self-contained.

Valuable, rare, non-inimitable, and non-substitutable (VRIN) A recent addition to the range of operational techniques available to media managers is the VRIN conditions that are such a vital part of resource-based theory (RBT). The conditions which underline resources are valuable, rare, inimitable, and non-substitutable (VRIN) and represent a source of resources that can lead to supernormal profits if secured by the firm rather than by outside suppliers. While competition at a local level is restricted, it does exist, and it is of enough importance to measure both the width and depth of those strategic resources that contribute to a customer’s decision to purchase the good or service. To help determine this, it is necessary to assess just how valuable the resource or asset is to the customers, so there should be a revenue stream that is directly attributable to the asset. It is assumed that the assets are embedded in the production process, so it is often extremely difficult to establish which asset is responsible for the addition of value, as there is often a bundle of assets bearing on the product. The rarity of an identified asset has a considerable, but indirect, effect upon the value created for the customer. If a publisher possesses an asset that is not found in competitor firms, and this asset creates a marked improvement in either the product or the service, then it is reasonable to expect either superior sales volumes or superior margins in comparison with its rivals. If assets are both valuable and rare, then these criteria make it possible to categorize them as strategic assets, provided always that they are not

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simple and quick to replicate. The longer it takes for competitors to provide acceptable versions, this period of inimitability becomes more extended, as will the flow of revenues for the initial implementer. Similarly, where the asset is not substitutable, the revenues will remain enhanced. When attempting to apply the VRIN principles, it is critical to understand that the assessment of whether the asset is valuable or not is primarily for the consumer to decide and not for the media managers; the latter are usually concerned only with the revenues that result, and this is not always as significant as it may first appear. Rarity, however, is considerably easier to see, although the longevity of the imitability or of the substitutability requires a degree of foresight that may not be available to managers, in which case it is often more sensible to forecast a shorter respite period than is indicated.

The customer matrix In introducing their customer matrix, Faulkner and Bowman have taken the perceptions of customers along two dimensions: the price they perceive they are being asked to pay, and the use they consider the product or service would be to them. The first of these, the perceived price (PP), is not only the price paid for the item in the first place, but also includes any additional costs associated with the purchase. For example, a newspaper ordered from and delivered by a newsagent may have a delivery charge attached to the price. A walk to the shops in the rain to collect a magazine will also have a cost, especially when compared to remaining dry and reading the same magazine in a computer version. The PP is made up of a combination of monetary and nonmonetary factors, all of which are synthesized into a price that is considered to be either high or low by the customer’s standards, to which the newspaper management has no access. This amounts to a judgment of value for money, and this is the difference between what consumers would be prepared to pay and what the price is. This is what economists refer to as the consumer surplus, and sales result when the utility of the product is superior to those of the competition, or when the utility is as high but the price is less. These two factors, perceived price and perceived utility, are interdependent, and both Faulkner and Bowman’s customer matrix and strategy clock are constructed around this fact. The perceived use value (PUV) is self-explanatory to the extent that each customer will know just how useful the product or service is to them individually and will judge it on that basis. A seriously complicating factor is that the content of media changes from day to day, week to week, or month

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to month, and what a reader may find interesting in one edition will, almost certainly, not appear in the next, so that the product’s utility will change between editions. This is not a problem experienced by manufacturers whose products change only infrequently. It is important for media companies to acknowledge that research must be at best continuous and at worst frequent to ensure that a true picture of the perceived use utility for the total readership is obtained. This means that illustrating the customer matrix is complicated and represents a particular moment in time, that point at which the research questions are asked. It is also necessary to construct a graphic for the two main elements of any medium: the extent to which they supply information and/or entertainment. An example of what is proposed is shown in Figure 6.2. In general, both newspapers and the Web are seen to have a high information content of interest to local communities and middle-grade PP. Both radio and television stations are regarded in this instance as having low use value and low PP. Magazines are perceived to have a high PP and a medium use value. While both the radio and television stations are free to view, the cost of a television license adds to the PP as far as viewers are concerned. Equally, the perceived cost of the Web is seen to embrace the access costs of the Internet service provider. When the analysis is turned to the entertainment content of the same media, the positioning of the media is considerably altered. Television

High The Web The Paper PUV

Magazines

Radio Low

Television

Low

PP

Figure 6.2  The customer matrix—PUV and PP of information content.

High

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is considered to be the primary source of entertainment in the home (Figure 6.3), and its PP is thought of as being low even though there are license fees to pay and some electricity is used. Magazines are thought of as being expensive, due mainly to their high unit costs, and so have both a high PP and a high PUV. Radio, as an entertainment medium, parallels television in having a small perceived cost and a high use value. The Web sits in a central position, commanding a medium use value at a medium PP. The newspaper offers little in the way of direct entertainment and has a very low PP; its main strength is in the provision of information. It is again important to emphasize that the graphics used in Figure 6.3 are for demonstration purposes only. Each community will have media that are uniquely fitted to their environment and will require specific research in order to locate each of them within the community universe. Without this baseline research, it will not be possible to navigate a product into a different position in the matrix, should this be deemed necessary. Faulkner and Bowman offer a method by which it is, in theory, possible to navigate a product within the media environment that surrounds it. Their strategy clock facilitates an improvement of the medium’s competitive position. As we see in the graphics, media as information providers have a different profile from media as entertainment sources, so, as before, the strategy clock needs to be used in both dimensions.

High

Television Magazines Radio

PUV

The Web

The Paper

Low

Low

PP

High

Figure 6.3  The customer matrix—PUV and PP of entertainment content.

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In general, a move northward will improve the PUV and maintain the PP at its original level. A move southward will worsen the PUV level. To the east, the PP will reduce, and to the west it will increase. If we refer back to the information graphic in Figure 6.3, it will be clear that a move to the northwest would improve both the PUV and the PP of the newspaper within its environment. However, the position of the newspaper in the entertainment graphic indicates that, because of its position in last place in the PUV measure, any attempt to improve the entertainment content would so change the character of the newspaper as principally an information medium that there might well be an adverse reaction from the core readership. By judicious applications of improvements, the navigation of the product to a better position can be brought about. Effective strategy is about concentrating on giving the customer constantly improving value. In the case of a newspaper, where information is its main raison d’être, there is little point in diverting resources to building the entertainment content of the product, to which the reader attaches very little value in comparison to its usefulness as a source of timely information. There are few successful commercial activities that do not center on the enhancement of value.

Newspaper flow diagram At every stage in the flow structure of a typical newspaper, as shown in Figure 6.4, there are opportunities to improve the value of the product to the reader, either through the content, the presentation, or the delivery. In precisely the same fashion, developments are possible for each of the other information media, up to and including the Internet. The flow diagram in Figure 6.4 representing a typical newspaper, identifies possible enhancement points. Each decision point is numbered and a detailed explanation is attached. 1 The initial page estimate is provided by the advertisement

department, who have some idea of how much advertising they are likely to receive from the next edition. As the number of pages is determined by the amount of advertising, they are likely to be the only people who are capable of providing this information. 2 The advertising from advertisers who liaise with the advertisement

sales staff is known as local direct and is not as likely to be booked as far in advance as possible.

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Newspaper Publishing Flowchart

Step One The external contact cycle.

Type of Content Advertising

1

Type

Type

Buy

Make Local Direct

Editorial

First page estimate

2

Make

Advertising Agency

Buy

Local News Stories

3

Compile editorial

Compile ads 6 Make-up final layout

Feature Stories

4

8

Locate stories on relevant pages

Final layout

5

7

10

9 11

Step Two Internal operations

Advise Production Dept 12 of order of pages for printing

Advise Production Department of number of pages

either

13 Start sending completed ads for composition

Send completed editorial pages to Production for setting

14

15 Compose stories on department's terminals and send pix to Production

Production Department integrates all advertisements and editorial matter

Forward completed pages for plate-making 17 16 Advise the Circulation Department of the size of the news paper

Printing press is webbed with newsprint for the required number of pages

Commence printing

Newspapers

Step Three External cycle

Circulation and Distribution Department

Figure 6.4  Flow structure of a typical newspaper.

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 3 Advertisements from advertising agencies, who usually represent the

larger advertisers.  4 Those local events which are thought to warrant editorial coverage

are listed in the editorial diary and will form the backbone of the news stories for the next edition.  5 Feature stories that may be needed to fill the space left unfilled by

local coverage are ordered at this point. These are general interest stories, except in cases when it is decided to commission coverage of out-of-area events that have a bearing on the local community.  6 Advertisements that are originated by newspaper advertisement

staff for local advertisers are listed and special positions are decided. Complete advertisements from advertising agents are checked and registered.  7 The editorial content is now compiled and missing copy is registered

and sought.  8 The advertisement layouts are finalized.  9 These are then marked-up with the relevant editorial stories and

pictures in the editorial department. 10 The production department is advised of the final size of the edition. 11 The order of the pages is advised by the editorial department. 12 Those advertisements needing composition are sent to production. 13 Editorial stories for setting or that have been preset in editorial are

forwarded. 14 Linked to 13. 15 Completed pages are sent for plate-making. 16 The printing press is webbed with newsprint for the number of pages

required in this edition. 17 Papers are made available to the circulation department for

distribution. The newspaper flowchart is divided into three steps, which are convenient when seeking opportunities to enhance the product from the reader’s perspective.

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Step one, the external contact cycle, is largely concerned with the quality of inputs in both editorial and advertising; both need to be as informative as possible, not only the headline and illustration but also the body copy, which describes the event or the product or service being offered. The principle that governs both types of announcement is that they should be written from the viewpoint of the reader, emphasizing the benefits (or detriments) that can accrue from knowing about the news item or from purchasing the good or service. Newspaper pages are normally organized in a particular pattern, usually with current news in the front of the book, feature material in the center, and sports reports at the back. As all the pages have the advertisements sited first, it is important that the editorial part of the page should have a V shape, with the widest possible opening at the top of the page, so that there is adequate room for headlines and photographs. To achieve this effect, the advertisements are built up from the bottom of the page, with the largest advertisements in each of the bottom corners and the remainder built against the outside edges of the page. Step two, the internal operations, is the stage at which the disparate elements that have been assembled into pages are presented to the production department. Where the editorial staff have the technical ability to set their own copy and to locate this on the relevant page, this obviates the need for the production department compositors to become involved in the typesetting of the editorial matter. However, their services are needed for the typesetting of the advertisements, which use a larger range of typefaces and sizes. There is an increasing need for reporters to be equipped with cameras, both still and movie, to provide pictures for the digital version of the newspaper. The overriding consideration at this stage is that the entire product should be easily readable, not only the editorial stories and photographs, but also the advertisements, both classified and display. The editorial matter is set to a predetermined house style, which helps establish the look of the newspaper and is readily identifiable on the newsagent’s counter. The final stage, step three, concerns the mechanisms called into use when the product leaves the production department and is conveyed to the potential audience by way of the newsagent and street-seller network. Newspaper managements depend almost entirely upon experience to decide how many copies to produce; there is some input from newsagents, but in the main it is a matter of repeating the quantity. The newsagents and street sellers have the facility to return and be credited for unsold copies, and in the event of these exceeding what the newspaper regards as an unacceptable number, the delivery number can be reduced.

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Where the newspaper management believes they are about to publish a particularly interesting story, they can arrange what is called a box-out, where every delivery is increased to cover the anticipated additional sales. As the returns policy applies to these additional copies, the box-out is not a disadvantage to the seller. The newspaper flowchart is the most complicated of all local media. Next in degree of complexity are magazines. While they do not have the same volumes of made content as newspapers, they tend to carry a large number of long-form editorial stories and photographs. As the vast majority of magazine publishers do not have their own individual designated production facilities but rather use the services of an outside printer, there is the need to institute a production editor to streamline the flow of copy to the printer that is unlikely to be situated in-house.

Magazines structure The distribution of magazines is usually undertaken by wholesalers, who replace the entire functions of a newspaper’s circulation department, except for the subscription department, which most often is retained within the publishing company. This places at least part of the sales intelligence information within the control of the management apex, a necessary function if an active marketing policy is required. The editorial functions of magazines are very similar to those of newspapers, except for the fact that their low requirement for made content means that they have very few staff reporters, instead commissioning freelance journalists and photographers to cover local events. Apart from an editorial apex, the majority of staff are involved in administration or advertising sales.

Television By comparison with print media, the commercial television companies buy in the overwhelming majority of their content, particularly their programs and national news items; only local news is not contracted out. Because of the high cost and expertise necessary for the production of television advertising, most of this is either produced by or through advertising agencies. There is comparatively little voice-over-slide advertising created for very local advertisers, so there is no requirement for a large sales force focused on local direct advertisers; in the case of the British television industry, for

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example, virtually all sales activities on behalf of television stations take place in London.

Radio Commercial radio stations in Britain, while organized in a similar fashion to the larger television companies, tend to have a greater dependence on local advertising and so a larger local sales force. The majority of their advertising revenues from national advertisers is obtained through advertising agencies usually based in London or in the capital city of the country in which they are located. As with regional television stations, they purchase their national news from specialist news providers, while maintaining a small reporting staff to cover local news stories.

Internet publications Internet publications are becoming increasingly accessible as entrepreneurs of all persuasions are attracted by the low cost of entry. These are developing into three main categories: 1 Stand-alone ventures that depend heavily on local advertising. 2 Sponsored publications that receive most of their operating costs

from outside the media world, for example from local councils or other organized groups. 3 Local newspaper spin-off publications that are designed to protect

whatever remains of their local advertising revenues and their readership by using the electronic version to promote the print form. The stand-alone publications are having considerable difficulty in generating sufficient revenue to have the funds for further growth; this is often because they are unable to provide verification of their viewership. They are prevented from raising their charges for advertising as these must remain no greater, and preferably lower, than advertisers would have to pay to provide their own Web pages. Sponsored publications are often subsidized by organizations who do not believe that their viewpoints are well enough reported upon by the traditional media. There is a continuing danger that the supporting organizations may seek to have their political programs exclusively promoted. This happened in the

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United Kingdom when some local councils used sponsored print publications to promote the policies of the ruling political party using council funds. The newspaper-owned electronic publications, the media’s last category, have found themselves in the position of being neither fish, nor fowl, nor good red herring. They can headline local stories but do not provide a comprehensive account, as they wish to persuade the viewer to purchase the printed newspaper in order to read the whole account. Advertisers in the print edition can have their announcements carried at very little additional cost in the Web version, as can those who use the newspaper’s classified advertising columns. It is this perception of the digital newspaper as a poor relation that is probably doing the most harm to their value strategy.

Conclusion It is important to identify the factors influencing the nature and form of the newspaper value chain, which is now undergoing a lot of transformation due to the developments in other media. The changes in the supply chain of the newspaper industry and their impact on the value chains will affect a host of industries and the way the traditional business structure of this industry functions and delivers goods and services. There is a strong need for technological innovation in a few critical parts of the production value chain and in the postproduction processes that encompass the printing and distribution of printed newspapers. The supply chain models could reduce the time needed to market and compete with industry trends in emerging media such as the Internet, which delivers information instantaneously. The idea is to reduce the timelines and distribution costs (improving efficiency) while innovating on products and processes (market effectiveness). Newspaper publishers have recognized the need to transform and invest in other media and businesses, including commercial printing, packaging, and e-commerce. Almost every large newspaper has an effective e-paper and is available on the Web. It will be interesting to observe the future supply chain dynamics to serve the changing needs and emerging value-chain segments of the industry. The critical success factors that will ensure a sustainable growth for the newspapers would essentially evolve from content focused on consumer needs, right pricing for the product to enable sustenance, and technology to support the innovation. As newspapers serve the purpose of information dissemination, their value chain is under a tremendous influence from various factors. New vehicles of information dissemination like the tablets, smartphones, interactive television, and other mobile technologies bring information very rapidly and without intermediaries on a 24/7 basis. This

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puts tremendous pressure on traditional systems and brings new value-chain paradigms into the newspaper’s management of resources. News dissemination is solely dependent on various technologies, and with the rapid advancement in hardware, software, and pathways, the transfer of information is increasingly becoming faster and better. This further increases the cost of development for newspapers to create the content to suit the new technologies. The news-industry value chain is passing through a decline stage in its life cycle, and the transformation into a new economic model will have a major influence on the traditional supply models of this industry. Transformation and change are permanent and inevitable features of any industry; it is for newspapers to look at new opportunities and find future avenues of growth and prosperity. The past has also shown that established media often endure in the face of new technology platforms much better than one would expect, and that often very complementary relationships can emerge.

References Bowman, C. and Faulkner, D. (1996). Competitive and Corporate Strategy. London and New York: Irwin. Fadiman, J. (ed.), Robert, D. (ed.), and Maslow, A. H. (1997). Motivation and Personality. London: Addison-Wesley-Longman. Maslow, A., Frager, R. and Fadiman, J. (1997). Motivation and Personality. New York: Harper and Row. Mintzberg, H. (1994). The Rise and Fall of Strategic Planning: Reconceiving the Roles for Planning, Plans and Planners. New York: Free Press. Porter, M. E. (1987). “From competitive advantage to competitive strategy.” Harvard Business Review, May–June (3): 43–59.

7 Self-organizing digital news Anita Greenhill and Gordon Fletcher

W

hile traditional news-reporting organizations, especially newspapers, are experiencing a declining readership and a loss of advertising (Mahdian and Tomak, 2008), organizations with a Web-based business focus are seeing an increase in revenues (Hume and Gill, 2013). Social media as a vehicle for distributing user-generated content has taken the social and cultural role of the Internet to a new level (Dutton, 2009) as a “co-mingling of electronic and physical space” (Page and Phillips, 2003: 73), creating a circumstance and experience that is popularly labeled Web 2.0. The technologies of Web 2.0 are themselves claimed (Grewal et al., 2010) to have evolved Web-based practice from the underengaged and near-passive consumption of information to the creation, linking, and interrelating of content by multiple users (Cormode and Krishnamurthy, 2008). These practices can be readily evidenced on social networking sites (SNSs), where people create digital profiles of themselves in which interests and friends are intertwined with messages, photographs, and video (Boyd and Ellison, 2007), enabling an active mode of interaction. The changing media landscape has also seen traditional news-reporting organizations bringing their materials online. Since 1980, newspaper publishers have had their own websites or have had their reporting available online (Shedden, 2004), in the hope of persuading visitors to purchase the print newspaper for access to more details of the limited set of stories on the site. However, as increasingly more people utilize Web-enabled communication devices and online tools, there remains little clarity or certainty about the role and purpose of traditional news-reporting organizations within this new media landscape. Our starting point is the recognition of the significance of this shifting media landscape and the increasing separation of news—in its broadest sense—from news-reporting organizations. Traditional news organizations

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not only reported and presented the news but also contributed significantly to what was defined as news (Shaw et al., 2000). An ability to control the definition of the news was itself a consequence of the close association between news reporting and the organizational ownership of the media actually used to present and distribute news, particularly newsprint and free-to-air television broadcasting (Doyle, 2002). The ability to buy and sell news distribution media, such as newspapers or magazines, as a cheap consumer commodity also enabled the concentration of ownership around a small elite with broadly common interests, further refining and controlling the purpose and focus of news and news reporting (Akhavan-Majid and Wolf, 1991). Extensive exclusive economic control of media and news distribution infrastructure then enables the agglomeration of “national” (or superregional) print and broadcast news networks to become the defining parameters for reporting and “newsworthiness” at all levels, including the regional and local. This “big” economic perspective regarding what constitutes important news is still largely preserved within corporate national television and newspaper agendas. Some anomalies and exceptions to this monolithic economic agenda do exist among local and community newspapers and radio, where the cost of entry is generally lower. Nevertheless, in the case of radio, broadcasting stations are still controlled centrally through government licensing of the radio spectrum. The business (and sometimes antibusiness) models found among smaller independent local media outlets can be regarded as the earliest formations of self-organizing news activity and community journalism. This development of self-organizing news is further encouraged by the rising popularity of social networking services. Among the many lauded triumphs of Internet technologies is the access to tools of public inscription and distribution that have become largely costless, which consequently enables still further separation between news production and distribution technologies and the control of corporate news-reporting organizations. This observation largely explains the rationale behind News Corporation’s purchase of MySpace in 2005 and earlier the purchase of AOL by Time Warner in 2000. Changing social and technological practices have necessitated significant shifts in practice among traditional news-gathering organizations. But even with these seismic changes, the capabilities offered through news-reporting organizations lag significantly behind the expectations of writerly audiences.

Models of news-reporting organizations Figure 7.1 shows a simplified entity diagram of the key relationships in the traditional news-reporting organization. Prior to the contemporary shift in

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Figure 7.1  The traditional news-reporting organization. news production and consumption, the source of value creation lies with the journalists as a product of their labor. Value is realized particularly around their synthesizing of multiple sources for which, in turn, they are rewarded by wages provided by the news-reporting organization. The journalist’s ability to craft “the news” both benefits and is exploited by the news-reporting organization. In turn, the news-reporting organization expresses and uses the value created by the journalist as the authority and reputation of “news,” or, more specifically, their “brand.” The organization then interacts with its audience and advertisers through the intermediary of the actual media that is produced. In effect, audiences produce income for the news-reporting organization by purchasing a single instance of the news (Keng and Teng, 2009). The audience, within this traditional perspective, are associated and defined by the class of media that they consume (i.e., reader of a newspaper, a listener to radio, or a viewer of television broadcasts). Advertisers also produce income for the newsreporting organization by purchasing part of the class of media itself (e.g., newspaper columns inches or thirty seconds of air time). The model of news reporting and news consumption shown in Figure 7.1 represents a traditional business model that can be traced to the earliest periods of mass-produced newspapers. It is a significant observation that there are only three external inputs into the entity diagram, with a clear separation and mediation of these inputs from one another by the newsreporting organization. In the case of the sources employed and synthesized by journalists, there is an assumption that there is either a reward involved

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(a payment) or that a similar model of news reporting is replicated at this point, creating the journalist as a particular type of audience. The other external entities are the audience and advertisers. The nature of their relationship could be claimed as “entertained by” or “informed by” in the case of the audience and, more amorphously, “increase sales” or “increase awareness” for the advertiser. The benefits for the audience and advertisers are potentially and notably ill-defined in this model, although undoubtedly benefits do arise for both entities. However, the presence and realizations of these benefits relies on the existence of a limited and controlled number of options for accessing news and relatively weak mechanisms for testing and quantifying advertising campaigns’ success (Nel, 2010). The traditional model of news reporting is clearly threatened by the ubiquity of digital access and its capacity to draw these external entities more closely together. What remains absent from the model of the traditional news-reporting organization are the imminent threats to this model in the form of soft news and entertainment. We discuss these threats later in this chapter as antinews and nonnews that represent major challenges to the influence and impact of news reporting. Soft news and entertainment have been a long-term regular aspect of the overall mix in traditional media news presentations—serving as a counterpoint to the realities of life being authoritatively reported by journalists. The change that has occurred in parallel to the shifting business model of news reporting has been a shift in the relative importance, priority, and volume of soft news and entertainment in relation to traditional news reporting. The transitional business model (Figure 7.2) hints at this changing influence by acknowledging

Figure 7.2  The transitional news-reporting organization.

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the multiple channels and sources that can be accessed by audiences. The availability of choice in the business model is not solely a choice as regards which news-reporting organization is accessed and consumed, but also choice in terms of the authority and levity of the news—in the widest possible sense—that is being consumed. The changing contemporary media landscape is represented (Figure 7.2) as the transitional news-reporting organization. The most significant alteration from the traditional news-reporting organization (Figure 7.1) is the role and relationship of the audience and their ability to access sources as well as the introduction of the additional mediations of social media. The audience is now able to interact with other media and directly with the source of news stories, with Twitter currently being the premier example for this form of direct access. The relationship of audience to social media and other sources is also importantly defined as “access” rather than “purchase”. While many social media, such as Facebook, do utilize a newspaper-inspired advertising model and advertisers do purchase screen real estate, this is the current tendency for the most popular social media rather than being the only model (Arakj and Lang, 2010). Facebook, as the most successful advertising-supported social networking site, is also importantly not a news-reporting organization but instead only facilitates access to a medium that enables news reporting. Other social networking sites, such as Tumblr, are exploring different and sometimes more subtle revenue generation models, while the vast majority of social media in the form of personal, group, or corporate blogs are not “monetized” at all. Wikipedia, which is also claimed to be a social media, has been the focal point of many controversies concerning the veracity of its articles (Bruns, 2008), its uncritical use by students and journalists (Kittur et al., 2007), and its sometimes obscure editorial policies (e.g., wikipedia. org—the three revert rule), but it steadfastly refuses to accept advertising or to charge access fees (Giles, 2005). Where a newspaper model of advertiser support is employed, the financial barriers to entry for any social media advertiser are significantly lower than those found in the traditional model (Figure 7.1), with the value that an advertiser is able to extract from their spend being significantly higher with online tracking and reporting tools enabling high levels of accuracy and control over the many individual parameters of a campaign. The separation of the ownership of the delivery platform from the news-reporting organization also means that social media advertising is conducted in a far less-controlled environment with the removal of any potential editorial influence, nor is it premised on the authority of a newsreporting organization’s brand. The transitional news-reporting organization also creates an altered and somewhat problematic relationship between the journalist and social media.

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The relationship varies between organizations. In some it has become an additional expected task, while in others it is more of a personal initiative that blurs the divisions between public and private as well as reporting and comment. These relationships are problematic for value creation within the news-reporting organization. The presence of a masthead on a blog is a potentially weak association in an environment with so many competing voices. The danger—for the news-reporting organization—is that the blog ultimately creates value for the individual journalist’s personal brand. Weakening the audience’s relationship with the overall organization and its brand presents opportunities for a bidirectional communication with an audience that can become exclusively loyal to an individual journalist. The largely personal form of social media prioritizes the journalist as blogger over organizational reputation and presence. However, the need for the transitional news-reporting organization to create value necessitates labor. Furthermore, attempting to balance issues of value and authority within a transitional newsreporting organization raises the far more reflective question of what makes something become news.

Reporting the news and “owning” the news The following time honoured list has been called the factors of news judgement, and you can use this to help you assess the newsworthiness of a story or story idea. Timeliness, audience, impact and proximity, significance/importance, magnitude, prominence, disaster/tragedy, the odd or unusual, conflict and controversy, human interest, humour. (Lauterer, 2006: 102) News is defined as newly received or noteworthy information for communities (Hartley,1982). This definition is especially reinforced when it concerns recent or important events. The news appropriate to an audience is predominantly situated within a physical location and has a pivotal role in defining and representing a sense of community (Greenhill and Graham, 2011). Those who are closer to the specific community’s location are a key source of newsworthiness as well as being representative of the potential audience. Disruptions to the flows of everyday life; events of personal significance to many people; events that mark the progress of time; and changes to the physical, economic, political or social situation are all newsworthy in this sense. But on a cautionary note, this definition only provides indicative guidance rather than a definitive binary of what is news and what is not news. The

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presence of news-reporting organizations—introducing a type of Hawthorne effect—presents a still more complex set of influences that could be taken at an extreme to mean that the news-reporting organization determines what is news. This observation itself provides a tentative indicator for gauging the extent and scale of the continuing influence of traditional news-reporting organizations in defining the contemporary news agenda. This is an agenda that reflects the prevailing political attitudes of a perceived audience as well as those specifically of editors and owners (Castells, 2009). For example, women were generally absent from Victorian-era newspapers except as partners to men, and until recently ethnic minorities were absent from most broadcast media as a focus for news reporting except in generally negative tones of fear, accusation, and blame (Hartley, 1982). The politics of newspaper ownership in the United Kingdom is also regularly cited (Doyle, 2002) as having a significant influence on the popular opinion and political voting patterns of readers (Castells, 2009). In contrast to the problematic series of issues surrounding news itself, the news-reporting organization is only a problematic concept in the already observed sense that news reporting throughout the twentieth century increasingly coalesced around a small numbers of owners. This network of corporate control introduced a form of obscurity around the ultimate controlling ownership for any specific organization and a question mark over the degree of editorial influence that ownership could exert over news reporting. The tendency of capitalism to consolidate ownership has been balanced with increasingly visible government policies and intervention, in Europe and Australia for example (Castells, 2009) that seeks to control and regulate broadcast and print media by ensuring a sufficiently diverse population of owners. However, even this recognition of the need for a diversity of ownership is mediated by a requirement to be financially and politically safe. Digital media presents a challenge to the control previously enjoyed by a small number of owners of news-reporting organizations and to (self-)regulators whose work has previously focused on ensuring an equitable application of standards among a small group of owners. Multiple digital new channels threaten the extent and influence of mass media control enjoyed by traditional news-reporting organizations. The plethora of individual “owners” and potentially thousands of news-reporting organizations facilitated by new technologies also threatens the ability of the government to monitor standards developed in an earlier period of more clearly defined and constrained media ownership. The challenges brought by free service provision such as Twitter, Wordpress or Tumblr, for example, could never have originally figured in the definition of these standards (Kopytoff, 2011).

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News, nonnews, antinews Discussions of social media have tended to focus on the influence and impact of two inscription opportunities: to feedback and to contribute to the narrative of a story (Erdal, 2009). Both actions are generally presented as a desirable additional contribution to the traditional presentation and representation of news (Carpenter, 2010). However, we argue for the significance of a further parallel process: the emergence of nonnews and antinews as competing influences on the news-reporting organization (Figure 7.3). Nonnews competes for attention and comment with similar degrees of volume and presence within digital channels as news itself. If news is the presentation of significant events of relevance to the audience, nonnews is represented by the reporting of the mundane aspects of life and is exemplified by microblogging through Twitter and status updates on Facebook. Nonnews has the ability to distract from news and ultimately from the value-creation activities of the news-reporting organization. While the activities being reported are mundane and often microscopically detailed, they have bearing and relevance to an audience who has actively chosen to consume this channel through following, friending, or a similar action. Microblogging in this way becomes the technical achievement that has eluded mainstream news-reporting organizations—the entirely personalized, customized, and contextualized news channel. The mechanism of receiving a direct tweet from a celebrity does not require the mediation of the newsreporting organization to clarify or simplify the original statement. Twitter (or one of the many applications that provide Twitter feeds) also removes the need for the controlled—and owned—distribution channel of news-reporting organizations. Nonnews has the ability to become news when the documented outpouring of everyday life transcends the mundane with a statement or image that has meaning among a wider audience. The best example of this shift from nonnews to news is the use of Twitter by “celebrities” of varying degrees of notoriety. However, the simple use of Twitter by a celebrity does not raise the activity from the level of the mundane. News is only achieved through microblogging when extremes are reached; on Twitter, examples of this phenomenon are Stephen Fry’s high volume of tweets and his significant number of followers, the former English Premier League footballer Joey Barton’s sometimes unintentional but often offensive rants, or the referral to the last tweets of a missing or deceased person. For example, the tweets of missing schoolgirl Megan Stammers were elevated to the status of news as part of the development of this news story in the United Kingdom in September 2012, as was her subsequent “quitting”

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of the site (http://www.thesun.co.uk/sol/homepage/news/4572714/MeganStammers-is-driven-off-Twitter-by-attackers.html). News also competes for attention and consideration from the presence of antinews. The rising popularity and use of social media has enabled homemade social satire and parody to be applauded as entertainment, as well becoming a successful business model (e.g., lolcats and icanhascheezburger), and less commonly as incisive political commentary. Popular exploration of the potential of social media to offer satire and parody has enabled specialized forms of humor to emerge that challenge—in the guise of their wider mass media inspiration—the news-reporting organization’s exclusive ability to present critical commentary and self-critique. The @DaveCameroon and @Queen_UK Twitter accounts and the 6th Duke of Devonshire’s Facebook account are specific examples of innovative approaches to the creation of antinews that fully exploit the ability of social media to craft personas with an antinews intent. Antinews has the ability to become news but is always in danger of being reduced to nonnews through sheer mundanity or longevity. For example, @Queen_UK observed late on August 26, 2012 (during the United Kingdom’s last bank holiday weekend of 2012), “On the bank holiday gin.” However, much of antinews’ ability to become newsworthy rests heavily on the mistaken reporting of the parody as news and on highlighting the sometimes tenuous parameters that define news. The fact that this misreporting of antinews as news occurs regularly reinforces antinews as a competitor to news reporting within digital media. Antinews reported as news also highlights the increased pressure that news-reporting organizations are under when fewer traditionally trained or specialist journalists are working within the newsroom. The promotion of antinews to news also emphasizes the tension within the transitional news-reporting organizational model (Figure 7.2) wherein the resources of value creation for these organizations are reduced (through the reduction of journalist roles in the organization). The consequences are ultimately damaging to the organization’s reputation and support the development of personal journalist brands. The presence of antinews and nonnews represents a political and economic threat to news-reporting organizations. Nonnews and antinews introduces and highlights the potential for personal and professional information overload and the ability of the audience to consume a finite quantity of media in a single day. Hartley describes “news” as being grouped around six major topics: politics, the economy, foreign affairs, domestic news, occasional stories, and sport (Hartley, 1982: 38–9). The impact of social media and an ability to self-organize news can be seen in the shift from traditional definitions to a broadening of value in a prosumer context to include notions of reporting of the mundane as

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Figure 7.3  News versus antinews versus nonnews. (A metamodel complementing Hartley’s 6 major news type model.) well as satirical or humorous representations through social media updates. These shifting relationships introduce the significant relationship between co-creation of content and value creation within news-reporting organizations.

Co-creation and journalism Co-creation is an increasingly significant concept for business. Co-creation ­occurs when the customer becomes involved with the business in the shared creation of value (Payne et al., 2008: 83). Co-creation exists in a variety of forms, determined, in part, by the type of business and the extent to which it is applied across an organization’s activities. The potential and ability for co-creation is not consistently experienced across organizations, with the ­ ­extent of workflow digitization strongly influencing where and when co-creation can be e ­ xplored. The ability to cocreate is also linked to parameters such as the expected consumption experience, the scale of consumption, the d ­ egree to which an ­organization’s products or services are consumed over a period of time, and the visibility with which the consumption occurs (Figure 7.4). These complex interlinkage issues has resulted in news reporting becoming engaged with varying interpretations of co-creation, while, for example, medical treatment or supermarket items see little direct influence from this approach. The significance for news reporting in moving from traditional to digital forms has also been in the movement from the realm of a mass-produced consumer item to a digital artifact with the capacity to become highly specialized and customized. Acknowledging the influence of

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Figure 7.4  Challenges and opportunities for co-creation. this change necessitates still clearer articulation of the distinction between news creation and news reporting and represents a significant challenge to the profession of journalism. Co-creation also introduces a distinction between the digital news-reporting organization and self-organizing digital news. As with the majority of professions with significant levels of digitized workflow, questions and threats are also raised around the credentials and legitimacy of those employed by the profession. The “do-it-yourself” ability that is provided by access to digital tools of inscription and distribution mechanisms threatens the role and authority of a number of professions. This change can be identified in the fields of higher and adult education, graphic design, and musicianship. In all of these examples, the ability to access the tools of the profession does not automatically equate with professional ability, even if this is sometimes the popular assumption. The threat to professions that have become overly tied to traditional tools and business models is made more complex by the institutional protection provided to these professionals. This protection is synthesized in the news-reporting organization through the interchange between value creation and wage payment (Figures 7.1 and 7.2). The relationship results in skilled and knowledgable individuals being offered security, opportunities, and career progression in return for the value that is created, the profit that is produced, and the capacity for the organization to be a locus for hegemonic power. As a result, a form of negotiated tension is ever present and highlighted by individuals who rise to the height of their profession. Ultimately, as employees, they are financially rewarded and enjoy a degree of fame (at least within their profession) but without any real power, which remains vested with their employer.

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Figure 7.5  Self-organizing digital news.

Without the umbrella of a profession and all of its benefits, self-organizing digital news in contrast entirely benefits from co-creation. This model of selforganizing news reporting benefits from multiple digital channels that allow anyone to publicly inscribe (Figure 7.5). There is a shift in the locus of hegemonic power that enables self-organizing news reporting, with an expanded range of potential news stories to redefine what constitutes news and a relocation of authority and reputation to the social media itself. A variety of social and organizational filters are also consequently removed that do not restrict news reporting to being only those actions, statements, or events that occur in the presence or awareness of an organization’s camera or journalist. The phonehacking scandal that identified illegal practice and the systematic invasion of privacy within mainstream UK newspapers can be explained, in part, by this observation. The practice of accessing the voicemail boxes of celebrities and newsworthy individuals is one example of the many attempts by traditional news-reporting organizations to look beyond the public sphere and garner private insights—insights that appear temptingly accessible through digital technologies. These illegal and ethically questionable efforts balanced the risk of reputational damage—and a consequent loss of institutional authority that itself goes to the heart of a news-reporting organization’s ability to create value—with the need to “break” news and triumph over competitors. These arguments could be taken further to suggest that what occurred was a harbinger of current practice brought about by practices of co-creation. The breakdown of the divisions that previously constituted separate spheres of the public and private are now revealed and made less distinct by practices such as microblogging. “Private” (but public) Twitter statements that reveal the intimate personal thoughts of celebrities now redefine the category

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and scope of imagined and real indiscretions that may have been previously reported through traditional news journalism. For news-reporting organizations, co-creation is a balanced choice. Exploiting the availability of multiple sources and the input of a variety of voices potentially changes the emphasis of the profession from the role of reporting and composition to that of finding and reframing. Or, stated alternatively, co-creation induces a movement in professional emphasis from journalism to content management. This shift in the nature and form of reporting is not unexpected, as all professions must always address continual changes to the social and technical environment and shifting definitions in the nature of their own work. Such changes were first felt in the context of digital media by professions such as typesetting and librarianship, where the fundamental skill set and focus shifted with the earliest popularization of personal computers. Co-creation significantly contributes to the range of voices employed by the news-reporting organization and represents a shift in organizational bias and preferences that determines authority as well as the relationship to the hegemonic basis of power. Traditional journalism defined the voice of reporting, and this mediation was one basis for the authority ascribed to the news-reporting organization. Co-creation enables the celebrity who shouts loudest on Twitter to receive the greatest attention when they are reported verbatim. Our discussion so far has focused on the consideration of audience inscription and co-creation as textual. Self-organized news reporting benefits from the ability to use visual sources and further shifts hegemonic authority away from traditional and transitional news-reporting organizations.

Curation versus reporting The ability to post images and videos directly to the public Web from smartphones with relatively high resolution increases the forms and frequency by which the reporting of news is visualized. Popular and accessible visual archives such as Flickr and YouTube predate the recognition of co-creation as an important force in news reporting. Further developments that benefit visual reporting techniques include the defunct Qix.com and “direct to YouTube” features on mobile phones, which enable video to be sent directly to the Web without any intervening processing or editing. The result is that the Web becomes a direct archive for raw visual materials accessible to news-reporting organizations as required. The availability of visual materials through social media and direct from individual devices reinforces the shifting emphasis in the role of journalism to content gathering and management

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that is supported by post-hoc journalistic commentary. Gathering of visual materials is further facilitated by being tagged with geographical data that is accessible through systematic search (Friedland and Sommer, 2010). The high levels of data transparency raise privacy issues and specifically those of locational privacy, which further blur the division between the realms of public and private experience (Blumberg and Eckersley, 2009). The need to gather and manage news in many ways summarizes the role of journalism in all forms; however, the act of “journalism” is now competing with the activities of bloggers, Tweeters, and Facebookers with a degree of similarity that makes one action almost indistinguishable from another. These competing actors do not necessarily claim that they are undertaking journalism, but the plethora of competing voices significantly blurs the boundaries between what is or what is not journalism. The popular preference for the visual—exemplified by “picture” blogs on platforms such as Tumblr and Wordpress—further problematizes the boundaries of journalism with the capability for images to be digitally altered, creating a tension between the evidential aspects of an image and uncertainty regarding its authenticity. The Examiner (www.examiner. com/article/media-caught-manipulating-image) reported an example from the Syrian civil conflict in July 2012 and cites the reasons for the use of images with questionable provenance as the pressure on traditional newsreporting organizations to compete with citizen journalism because it is seen, significantly for this discussion, to be more trustworthy and reliable. With the ability to “photoshop” an image, traditional news-reporting organizations can draw upon their existing resources of image banks and feed services such as Reuters to present any image required to fit a story without having to have a representative physically present. The potential for this practice to become increasingly widespread is revealed through a 2011 video of what Fox News claimed to be part of their report on Russian election riots (http://www. youtube.com/watch?v=4FwvQYLKK98). Upon closer examination, the videos were shown to be riots from Greece that had been fueled for entirely different reasons. The increasing regularity with which these errors of reporting and judgment are revealed is almost entirely due to the presence of self-organized news reporting and is a hallmark of its inherent tension with traditional models of news reporting. Prior to the widespread availability of social media, the mechanisms for the critical examination of poor or questionable newsreporting activity was confined to relatively low circulation magazines, with arguably the exception of Private Eye in the United Kingdom. The increased frequency with which manipulated or incorrect images are identified is itself a reflection of the wide geographic distribution of individuals with sufficient knowledge and access to social media who can identify these errors. Any

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misreporting of a conflict in Africa by a European news agency can receive immediate rebuttal from those involved—a capability only seen rarely prior to the widespread adoption of social media channels by mainstream media. Comments, rebuttals, critiques, and the reporting of errors are all actions that extend the news conversation and take the privilege and ultimately the power of the “last word” away from the news-reporting organization. Each of these critical actions then has a consequence for the authority of the newsreporting organization and the controlled medium they employ—and enjoy. For the traditional news-reporting organization, the source of and capability for value creation is founded upon the construction of the organization as an authoritative voice; with this effaced, the able to create value is compromised. Significantly, too many errors and rebuttals are not reported as news but rather are taken up by individuals, in the terms that we have employed here, as antinews. This further complexity reveals that the tension and discussion is not simply one of a binary relationship that positions citizen journalism against traditional media outlets. The continuum of news reporting is multidimensional and incorporates traditional media outlets, digital news-reporting organizations, and citizen journalists acting individually or collectively.

Models for funding The result of the challenge to traditional news-reporting organizations brought by self-organized news-reporting activity coupled with the traditional organization’s own erosion of their authority through the reduction of professional journalists creating value, and arguably poor journalistic practice has direct consequences for the organizational ability to create value and generate sales. Poynter’s blog summarizes the issue thus: “For every $US 25 lost in print advertising only $US 1 is recovered as a digitally based ad.” (http://www.poynter.org/latest-news/business-news/the-biz-blog/187577/ newspapers-print-ad-losses-are-larger-than-digital-ad-gains-by-a-ratio-of-25to-1). The move to social media use for news reporting is not a just process of changing to a new medium but should be regarded as a systemic change in the form and nature of news reporting. This change problematizes the foundational business model for traditional news reporting and its ability to create value. The individual inclination to pay for print is similarly reduced with the embedded attitude toward freeness and access engendered by the underlying philosophy of the Web. Consequently, the presentation of pay walls—used as an alternative source of revenue for print newspapers’

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online presence—involves a calculation of value by the potential subscriber in which they must balance the potential authority and legitimacy of the content presented by a specific news brand against the real likelihood that an equivalent story or set of news reports will be freely available elsewhere. In this way, the previous practices of news-gathering organizations actively work against business models built for digital media. The concepts of syndication and newsfeeds from aggregation services rely on a traditional news-reporting perspective in which each organization works within specific, discrete, and relatively well-defined geographic territories. Reading a newspaper report from New Zealand would previously have required that the story was of sufficient merit to a UK audience to appear in that territory (through a traditional newsreporting organization’s output). The intermediary and editorial role is no longer required to read the article, although the editorial decision regarding the worth of the story may itself still have value. The authority of one newsreporting organization in relation to another territory is similarly questionable in comparison to a locally based organization that potentially offers its content freely. Reading news stories from New Zealand is not determined by the authority or reputation of the news-reporting organization but instead largely by criteria such as findability, search-engine optimization, and keyword matches. In the same manner, the value produced by aggregation by traditional news reporting is minimized as increased findability reduces each story to a discrete entity accessible through a specific search-engine query. Aggregation then becomes reduced to a menu of relevant links to other stories connected through a programmatic and automated identification of similarity. The individual labor of retrieving multiple news sources is reduced to a set of bookmarks and, for more sophisticated users, a personal feed aggregator. Both actions undertake and complete a task that could formerly only be reasonably undertaken in a newsroom. The challenge of becoming a digital news-reporting organization centers on retaining the ability to create value while continuing to generate income through some form of sales (Figure 7.6). While not generally identified as a news-reporting organization, the example of the humor magazine and website Cracked is instructive. As a specific niche publication and one often regarded as a “rip-off” of the better known Mad Magazine, Cracked was obliged to face the need to evolve earlier than more generalized newspapers and magazines. Declining sales coupled with management and organizational change all had an impact, with the ultimate result that the print magazine is now no longer produced. Cracked.com, however, continues with a different editorial policy than its former print parent. Three key observations can be made of Cracked.com that reveal the potential for digital news-reporting organizations. As this is a magazine aimed at a youth market, its style of communication

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reflects changing preferences and tastes. Cracked.com effectively speaks to a generation who has grown up with ubiquitous computing and text communication in terms that they understand. The website has made the “list of” its defining feature to the extent that all of its main articles are presented in this format. The result are articles such as “7 Creepy Video Game Easter Eggs You Wish You’d Never Found” and “6 Insane Discoveries That Science Can’t Explain,” and, in a moment of possibly ironic self-reflection, “The 25 Most Popular Cracked Articles of 2011.” The magazine links into key concepts of co-creation by, for example, embedding a Facebook stream that points to more lists created by readers and takes co-creation to the logical conclusion by encouraging writers to contribute to Cracked.com. By fully engaging in social media, Cracked.com is also represented through other channels such as Stumbleupon, where individual feature lists are promoted by readers. Significantly, and in contrast to the former print version, Cracked.com is free to access. There are no subscriptions as the magazine is advertising supported. These three observations from Cracked.com mirror the relationships between journalists, audience, and advertisers for the digital news-reporting organization (Figure 7.6). Value is being created through the synthesis of sources from the Web and elsewhere, and in return, Cracked.com’s writers are being paid (http://www.cracked.com/write-for-cracked/). The authority and

Figure 7.6  The digital news-reporting organization.

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reputation of Cracked.com is built upon a clearly defined and tightly focused style of representing content through lists. The audience accesses the magazine freely, and advertisers are prepared to pay for access to this large audience base, which Alexa consistently calculates to be between the 800th and 1000th most visited website in the world (http://www.alexa.com/siteinfo/ cracked.com). While these changes were forced upon Cracked in order to ensure its continuity, the pressures experienced by the humor magazine throughout the decade from 2000 are the same pressures now being experienced by all news-reporting organizations. A potentially radical change of the order experienced at Cracked may appear unpalatable to newspapers with established traditions, but this reluctance should be only founded on the understanding of their “tradition” as the consolidation and representation of value. However, if this tradition does not express contemporary value, its benefits may be illusory and ultimately present significant barriers to change.

Conclusion This chapter identifies the ways in which news-reporting organizations have previously and can continue to create value in light of the challenges of social media technologies. We have argued that, with the popularizing of digital channels and user-generated content, the practices of traditional news-reporting organizations are being threatened. This threat comes from the direct challenge posed by social media to the process of value creation in these traditional business models. The result is an increasing separation between news—in its broadest sense—and the news-reporting organization. Traditional news organizations not only reported and presented the news but also contributed significantly to what was defined as news, but without direct control over the popular (social) media channels, this monopoly on “news” is lost. To appreciate the impact of the change undergone by news organizations, it is important to recognize the significance of the changing media landscape and the increasing separation of news from news-reporting organizations. These shifts have meant that traditional news organizations no longer have exclusive collective control over the authoritative reporting and presentation of news. Through the shifting importance of audience-created and nontraditional content—what we have described as nonnews and antinews—a disruption to traditional value creation in news reporting has occurred. We have identified the importance of alternative forms of “voices” in the form of nonnews and antinews as newly competing influences on the news-reporting organization. This often user-generated reporting has not previously been regarded as competition to the value-creation capabilities of

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news-reporting organizations. But in this light, it is worth considering the dual tendency of social media to influence and impact—abilities that are generally presented as a desirable additional contribution to the traditional presentation and representation of news. However, simultaneously, social media removes the need for the controlled—and owned—distribution channel of newsreporting organizations. The documentation of a model for the digital news-reporting organization (Figure 7.6) shows that the complexity brought by the existence of writerly audiences is not simply a binary relationship that positions citizen journalism against traditional news-reporting organizations. The continuum of news reporting continues to incorporate traditional media outlets, along with digital news-reporting organizations and citizen journalists acting either individually or collectively. The significance for news reporting in moving from traditional to digital forms has also been in a movement away from a mass-produced consumer item to a digital artifact with the capacity to be highly specialized and customized. Acknowledging the significance of this change necessitates further articulation of the distinction between news creation and news reporting and represents a significant challenge to the profession of journalism. Co-creation abilities and activities present a definitional distinction between the digital newsreporting organization and self-organizing digital news. Co-creation in the form of tagging and audience comment as well as images and videos expands the range of ways in which the reporting of news is presented, but at the same time it blurs the boundaries of what is or what is not journalism. The challenge in becoming a digital news-reporting organization remains centered on the ability to create value in order to generate income. For the news-reporting organization—in whatever form it takes—the ability to create value remains firmly anchored in its ability to efficiently synthesize diverse sources of complex data and to construct legitimacy and authority around the brand. How this value creation is achieved will increasingly be very different from the age of Victorian newspapers or the television news broadcasts of the mid-twentieth century.

References Akhavan-Majid, R. and Wolf, G. (1991). “American mass media and the myth of libertarianism: Toward an ‘elite power group’ theory.” Critical Studies in Media Communication, 8 (2): 139–51. Arakj, R. Y. and Lang, K. R. (2010). “Adoption and diffusion of business practice innovations: An evolutionary analysis.” International Journal of Electronic Commerce, 14 (1): 145–68.

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Bruns, A. (2008). Blogs, Wikipedia, Second Life and Beyond: from Production to Prousage. New York: Peter Lang Publishing Ltd. Carpenter, S. (2010). “A study of content diversity in online citizen journalism and online newspaper articles.” New Media & Society, 12 (7): 1064–84. Castells, M. (2009). Communication Power. Oxford, UK: Oxford University Press. Doyle, G. (2002). Media Ownership: The Economics and Politics of Convergence and Concentration in the UK and European Media. London: Sage Publications Limited. Erdal, I. J. (2009). “Repurposing of content in multi-platform news production.” Journalism Practice, 3 (2): 178–95. Giles, G. (2005). “Internet encyclopaedias go head to head.” Nature, 438 (7070): 900–01. Greenhill, A. and Graham, G. (2011). The Role of Local News in University Public Engagement Report. Pilot Project for the National Coordinating Centre for Public Engagement. http://www.cresc.ac.uk/sites/default/files/Research_ Report_version_4.doc. Grewal, D., Janakiraman, R., Kalyanam, K., Kanan, P. K., Ratchford, B., Song, R., and Tolerico, S. (2010). “Strategic online and offline retailing pricing: A review and research agenda.” Journal of Interactive Marketing, 24 (2): 138–54. Hartley, J. (1982). Understanding News. London: Methuen. Hume, B. and Gill, L. (2013). “The changing face of e-commerce—survival of the fittest.” The Guardian, February 26. http://www.guardian.co.uk/media-network/ media-network-blog/2013/feb/26/changing-face-ecommerce-online-retail. Keng, C. J. and Ting, H. Y. (2009). “The acceptance of blogs: Using a consumer experiential value process.” Internet Research, 19 (5): 479–95. Kittur, A., Bongwon, S., Pendleton, B. A., and Chi, E. (2007). “He says, she says: Conflict and coordination in Wikipedia.” Computer Human Interaction Proceedings, Online Representations of Self, 453–62, April 28 to May 3, San Jose, CA. Kopytoff, V. G. (2011). “Blogs wane as the young drift to sites like twitter.” New York Times, February 20. http://www.nytimes.com/2011/02/21/technology/ internet/21blog.html. Lauterer, J. (2006). Community Journalism: Relentlessly Local. Chapel Hill, NC: University of North Carolina Press. Mahdian, M. and Tomak, K. (2008). “Pay-per-action model for on-line advertising.” International Journal of Electronic Commerce, 13 (2): 113–25. Nel, F. (2010). “Where else is the money? A study of innovation in online business models at newspapers in Britain’s 66 Cities.” Journalism Practice, 4 (3): 360–72. Payne, F. A., Storbacka, K., and Frow, P. (2008). “Managing the co-creation of value.” Journal of the Academy of Marketing Science, 36: 83–96. Shaw, D., Hamm, B., and Knott, D. (2000). “Technical change agenda challenge and social melding: Mass media studies and the four ages of place, class, mass and space.” Journalism Studies, 1 (1): 57–79. Shedden, D. (2004). “New media timeline.” Poynter. http://www.poynter.org/ uncategorized/28725/new-media-timeline-1980/. Wikipedia.org—the three revert rule, en.wikipedia.org/wiki/Wikipedia:Threerevert#The_three-revert_rule-revert

8 News consumption and cross-media synergies Gary Graham and Anita Greenhill

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he rapid growth in Internet-based e-commerce has given business an unprecedented strategic opportunity for easy and vast access to customers. According to the Office for National Statistics (ONS), third-quarter 2013 e-commerce sales reached £561.5 million, marking a 5.2 percent rise from 2006’s £557.3 million (ONS, 2014). Addis (2005) found that the use of online interactive technologies also enabled firms to deliver content in the virtual environment. Increased modes of interactivity as well as the new methods of online distribution have provided both opportunities and threats to firms in the digital age. News firms are having now to compete in both digital and physical channel markets. Multichannel strategy refers to “the firm simultaneously competing for business in both markets and support (or any combination of these) through two or more synchronized channels” (ibid: 6). This technically allows a business more market opportunities to interact with customers—in addition, each channel can help promote the other channel (complementary). Cross-media synergy is a central strategic concept in the rapidly emerging digital landscape. When synergy is achieved, two or more distribution channels are interdependently working together and complementing each other to achieve a strategic objective that could not be achieved independently. This consideration of a range of channels working jointly together, providing both with promotional and sales opportunities, creates a complex strategic environment. Synergy between channels can make a significant contribution to both sales and marketing performance if companies look to exploiting the links they have forged. Disney provides a well-established example of a company benefiting from synergy—from Film Studio to its Children’s Television channel

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(where it further plays and promotes its films) to the Disney Store (in the street and online) where consumers, young and old, have the opportunity to buy all the merchandise and DVDs/CDs they have seen on the television/Web or in the cinema (Keller, 2010). Tarkianen et al. (2009) note that an improvement in sales performance (from synergy) is strategically important because it provides an important means for modifying managerial behavior and aligning multichannel relations with the operational goals of the firm. Coelho and Easingwood (2008) suggest that establishing interdependence enables the firm to capitalize on potential synergies between the two, therefore yielding an advantage over those firms focusing only on online or printed segments. The integration of e-commerce with print distribution is a challenging undertaking that can create operational problems for management. Cannibalization occurs when there are alternative paths for products to reach the end consumer. There is confusion over prices and value offerings. When a firm develops its own online capability, it also potentially threatens to cannibalize sales from its own physical operations. Companion newspaper websites usually provide in-depth feature articles and cover news stories for “free,” often twenty-four hours after the physical copy has been sold to consumers. The failure to develop cooperative relations between channels could lower the profits of all parties (Ruiliang, 2010). If such conflict lowers the profits of all parties, the firm will use their online channel for information and sales support only. In this way, the actual sale is left to its traditional physical retail operation. In this chapter, we sought to answer the question whether news firms with synergy were surviving better.

Building synergy Sharma and Gassenheimer (2009) found that the coordination of activities across distribution channels allows the firm to optimize the gains from its interdependent relations. Strategic alignment implies that all those executives involved in managing the news operation fully understand the performance outcomes originating in each channel. One obvious problem faced by traditional channel firms is that the market presence/identity of the Internet channel may not be that apparent and may be hard to measure. Local news firms may lack important operational competencies that are needed to optimize their synergy benefits. For instance, traditional firms may lack the Web development skills or interactive marketing skills needed to create and sustain competitive advantages in their online markets. There is a need for greater strategic resources, leadership, and capability development that encompasses the

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need for changes in channel tasks, resource allocation, sales goals, pricing, customer demarcations, and promotional assistance.

The synergy model In investigating the phenomena of synergy, we accessed the UK Newspaper Society (NS) database (which consists of 1,200 newspaper titles). This database provided twelve print/online synergy variables, and these are presented in Table 8.1.

Online service presence criteria We used eight online variables to build the synergy model. These were listed as follows:

Table 8.1  Variable identification Construct

Item label and description

Relevant literature

Print activity

Bus Years: number of years in circulation Price: cover price of the newspaper Issues: number of printed issues per week Classadlin: cost of classified advertising lineage rates Popmn: population of the newspaper community

Franklin, 2008; Picard, 2006; Meyer, 2008; Mitchell, Mintel, 2007.

Online presence Convergence tools

Howe, 2006, 2008; Convergto: multimedia platform for Li Bernhoff, 2008. distributing news Dailyunique: number of unique daily users Mobile: number of mobile users Classadon: cost of online advertising lineage rates Diged: specifically designed online news product

Co-creation

UGC: different types of user-generated content

Deuze and Neuberger, 2007.

Paywalls

Paywalls: paid subscriptions to access online content

Greenslade, 2010.

Interactivity

Interactivetool: number of Web 2.0

Keng and Ting, 2009.

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i Convergence tools: Deuze and Neuberger (2007) note that the

Internet is driving convergence (in the news media) with daily unique users accessing news products across a converged media platform. An online digital edition is a converged product output specially customized for the reader; it is enhanced with annotations and metadata tags to increase the usability and value of the text (Howe, 2008). ii Co-creation: Vargo and Lusch (2006) define co-creation relations

as “the participation of the consumer in the creation of the core product/service itself” (48). The economic logic behind co-creation is that businesses now have unprecedented opportunities for user participation and (re)engagement with their audiences. iii Paywalls: A paywall blocks access to a web page (content) with

a window requiring payment. The logic is that consumers will be prepared to make a payment to have full access to the content of a specific online story, a particular journalist’s work, or video footage. iv Interactivity: Through the rapid development of Web 2.0/social media,

journalists now have at their disposal a much wider range of interactive technologies with which they interact with their readers. This drive toward greater interactivity is being made by consumers who are increasingly using social networking and blogging services to get their news.

Control variable Table 8.2 presents a summary of the regional population served by the sample. The sample mean for population is 1.63 million. Within this sample, 60 percent are urban-based newspapers while 40 percent are rural operations. The MEN (Trinity Mirror), which circulates in the Greater Manchester region (of the United Kingdom), has, at 10.7 million, the highest population in the sample, while the Halifax Evening Chronicle (Johnston Press) circulates in the Calderdale area and has the lowest population at 0.10 million. Population will have a strong mediating effect on the level of newspaper circulation (the highest circulations tend to be found in heavily populated urban regions), thereby resulting in heteroscedasticity.1 Therefore, we used (natural) log transformation to control for the mediating effects of population. Heteroscedasticity refers to the situation in which the error term in a regression model does not have constant variance.

1

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131

Table 8.2 Newspaper populations Holding company

Titles

Characteristics

Regional scope

Trinity mirror

25

Total population: 27.6m High: 10.7m (Manchester Evening News) Low: 0.61m (Daily Post) North Wales

Greater Manchester, Merseyside, West Yorkshire, North Wales.

Johnstone Press

27

Total population: 14.26m High: 4.4m (Yorkshire Post) Low: 0.10m (Halifax Evening Courier)

Scotland, Lancashire, West Yorkshire, Hampshire, Cambridgeshire

Newsquest

22

Total population: 16.04m High: 4.3m (Herald, Scotland) Low: 0.233m (Bolton News)

Scotland, Sussex, Lancashire, West, North Yorkshire

ncjmedia ltd

 2

Total population: 4m High: 2.6m (The Journal Newcastle) Low: 1.4m (Evening Chronicle)

North-East England

DMGT

20

Total population: 8.857m High: 1.2m (Nottingham Evening Post) Low: 0.270m (Plymouth Morning News)

West/East Midlands, SouthEast England

S & B Media

 4

Total population: 1.4m High: 0.994m (Surrey Advertiser) Low: 0.676m (Reading Evening Post)

South-East England

Dependent variable Circulation measures the average number of copies sold per day combined with the number of online subscribers. Here, the dependent variable was measured using longitudinal data reporting the average rate of circulation change for the available data period (2001 to 2009). There is a negative rate of circulation change in our sample, which has declined on average by 28.5 percent. Hair et al. (2008) advocate testing residual values to determine normality. We found the dependent variable not to be normally distributed. By using (natural) log transformations, extra scores can be kept in the data set, and the relative ranking of scores remains, yet the skewedness and error variance present in the variable(s) can be reduced. Data are more likely to

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Figure 8.1  Testing for outliers in the newspaper data set. be representative of the population as a whole if outliers are not removed; therefore, we kept the outliers in our data set. Further transforming a variable may reduce the likelihood that the value for the case will be characterized as an outlier. The rate of circulation change in the sample is primarily negative. Using Hair et al.’s (2008) procedure for dealing with a negatively skewed distribution, we added a constant to bring the minimum value of the distribution to 1.0, applied the transformation, and then reflected again to restore the original order of the variable. We conducted a normality test based on a procedure outlined in Hair et al. (2008). This was completed on the transformed dependent variable by plotting a normal probability curve of deviance values. Figure 8.1 shows an almost perfect linear trend, thereby confirming that the deviance values are normally distributed. The “p-value” of 0.13 is “large” (greater than 0.10); therefore we assume that the data are normal (come from a normal distribution). Structured equation modeling (SEM) was used to build a synergy model from the data we had collected on the variables identified in the literature (Table 8.1) as influencing channel performance. AMOS 16 was employed for this purpose (Arbuckle, 2006). First, we used SEM as the most efficient and least problematic means of testing for synergy effects. This is due to the ability of SEM to simultaneously estimate multiple equations and to include latent variables, thereby controlling for measurement errors and avoiding

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problems with under- or overestimation of the effects of synergy on the rate of circulation change. Second, rather than testing a saturated model where “everything is related to everything,” we performed formal tests of synergy in an SEM environment. For example, in our framework, online service presence (OSP) is expected to influence circulation change but only through its effects on synergy activities. We assessed model fit using four indices: the c2 test; the comparative fit index (CFI); the Tucker-Lewis index (TLI); and the root mean-square error of approximation index (RMSEA). Discussion of these indices may be found in Gerbing and Anderson (1992) and Hu and Bentler (1999). Satisfactory model fits are indicated by nonsignificant c2 tests; RMSEA values less than or equal to 0.08; and TLU, NNFI, and CFI values greater than or equal to 0.90.

Advancing our synergy model The results are presented as follows. First, we explore key characteristics such as the averages and ranges of the data set as they relate to the main print and online variables. Second, a model is constructed and we then test it to assess whether there is valid and significant link between cross channel management and performance.

Key sample characteristics Table 8.3 provides descriptive statistics of the newspapers involved in our study. The size of the UK male readership (denoted in the table by the variable Readermen) ranges from a maximum of 579,315 to a minimum of 17,381, and for females it ranges from 611,035 to 14,800 (Readerwomen). The average male readership for a newspaper is 88,617, while for females this is 88,693. From the bar charts (Figure 8.2) it can be seen that the average cost of a newspaper is 42p (denoted by the variable price). Newspapers have a long history of operations averaging 124 years (BusYears). Finally, there are on average six newspaper editions produced per week (Issues). There were missing values but only in respect to online presence variables. This reflects the fact that companion websites were only established in 2002 (Onlineest). Due to wide differences in online funding by newspapers there is subsequently much greater variance in the quality/quantity of data available on companion websites (Nel, 2010).

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

 97

 96

 95

BusYears

PaperCharac

Price

Area

Issues

Ownership

TurnoverCo

Totalassets

ROCE

PBIT

ReaderMen

ReaderWomen

AB

C1

C2

DE

ClassAdlin

Displaypt

Displayon

N

5

4

3

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Missing

.74

2.46

1.19

6991.00

6003.00

5582.00

4545.00

14880.00

17381.00

-6313.00

-.91

190000.00

502100.00

1.00

1.00

1.00

1.50

1.00

11.00

Minimum

Table 8.3 Sample characteristics of NS newspapers

27.60

91.60

35.80

357899.00

262838.00

343000.00

271201.00

611035.00

579315.00

306400.00

31.84

1900000.00

1791000.00

2.00

6.00

2.00

80.00

2.00

193.00

Maximum

5.4205

17.9437

7.0623

50270.4200

39610.5800

47074.1800

39958.0000

88693.0200

88617.9600

69859.7400

6.3870

1.1306E6

1.1590E6

1.0600

5.4200

1.4000

42.4500

1.6200

113.7200

Mean

(Continued)

4.31396

14.32701

5.55740

66625.60125

52843.88421

71822.35738

58435.38885

1.26537E5

1.18391E5

74465.80887

6.96817

4.31078E5

4.29482E5

.23868

1.46460

.49237

11.38591

.48783

28.94023

Std. Deviation

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Content is King

97

98

97

99

98

97

98

97

100

100

100

100

100

Classadon

Dailyunique

Monthlyuniq

MobileIntacc

Onlineest

Ratioonoff

Interactivetool1

UGCsubmec

Convergto

Diged

Paywalls

SecNoCat

Valid N (listwise)

N

Table 8.3 (Continued)

0

0

0

0

3

2

3

2

1

3

2

3

Missing

6.00

1.00

1.00

2.00

.00

2.00

.04

1995.00

1.00

40.00

1361.00

.35

Minimum

24.00

2.00

2.00

5.00

5.00

9.00

2.92

2008.00

8744.00

2010.00

87444.00

10.74

Maximum

12.5400

1.0800

1.3400

3.0400

2.0800

5.4000

.2976

2002.4800

1094.8400

283.6194

11267.5600

2.1979

Mean

4.11555

.27266

.47610

.82780

1.15190

1.53083

.44447

3.89374

1617.93648

349.47831

16115.53160

1.88028

Std. Deviation

News consumption and cross-media synergies 135

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News consumption and cross-media synergies

137

Figure 8.2  Bar charts of three print characteristics. We constructed the synergy model using print supply channel characteristics (PSCC) and online service presence (OSP). Based on our results for the first two resultant factors, a theoretical measurement model was developed using the AMOS software program. The results are presented in Figure 8.3. Relevant statistics (c2  5.891, df  8, a  0.659, CFI  1.000, RMSEA  0.000) confirm the model cannot be rejected and that all the standardized regression loadings shown are statistically significant. More specifically, the correlation of 0.42 between the OSP and PSCC constructs is found to be significant (a   0.016), confirming that we could identify a certain level of positive synergy between the conventional print channel and online service provision for the NS sample. The next step was to test the influence synergy was having on channel performance. As circulations had fallen dramatically for the sample over the last decade, we were particularly interested in whether synergy did in fact mean that the better performing firms were declining less. In Figure 8.4, we present the results; as before, default outputs from AMOS 2 (c  11.356, df  8, a = 0.182, CFI  0.992, RMSEA  0.065) show that

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Content is King

0.06

e3

e2

e1 0.33

0.16

BusYears

0.20

Price 0.58

Issues 0.40

0.45

PSCC

0.42*

OSP 1.00

0.20

0.99

0.04

0.98

1.00 Dailyunique

MobileIntacc

Convergto

e5

e6

e8

Notes: *p < 0.05. PSCC = Printed supply chain characteristic OSP = Online service presence

Figure 8.3  Constructing the synergy model.

the model can be regarded as being technically sound. And, once again, all regression loadings involving indicator (observed) variables in the model were determined to be statistically significant. Correspondingly, the standardized loading of 1.06 for the arc linking LC (the latent construct representing the logcirc indicator) to PSCC is shown to be significant at the 1 percent level (a   0.098) and, in the case of the loading 0.22, for the arc between the OSP and LC constructs, significant at 5 percent (a  0.518). While PSCC and OSP can, respectively, be seen to have positively affected the circulation rate in the analysis, it can be deduced that the impact of synergy on circulation performance is not that strong. The model shows that synergy is generally weak in the NS sample and that, while there is some positive influence on the decline in circulations, this is not indeed sufficient to reverse the decline in circulations. This indicates that the difference between highly integrated firms and nonintegrated firms

News consumption and cross-media synergies

e1

139

e3 .17

.45 BusYears

Issues .41 .00

.67

r1

PSCC 1.06**

e4

.14 .38

Logcirc

LC

.35* .22* .00 OSP

1.00

r2 .20

.99

.04

.98

1.00 Dailyunique

MobileIntacc

Convergto

e5

e6

e8

Notes: *p < 0.05; **p < 0.01 PSCC = Print supply chain characteristics OSP = Online service presence LC = Log circulation rate latent construct

Figure 8.4  Testing the influence of synergy on channel performance.

is not that strong, and this may in fact reflect the speed of digital change confronting the industry and the inability of news firms to deal with strategic change and declining circulations.

Discussion of the model findings Cross-media synergy has been found to be effective in market development across a range of settings, for instance, in the work of Coelho and Easingwood (2008) on financial services. However, we cannot strongly confirm this is the case with the UK regional news media sector through our SEM results. It is apparent that while there is cross-media synergy between printed and online operations, the mediating effect is stronger between the print channel and positive performance (circulation change) than it is with its digital presence. There is some complementarity between both channels, but this is only a partial integration, and the model is quite close to one channel substituting the other.

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Conclusion This chapter investigated whether the online channel was complementing or cannibalizing the printed market for news products. We explored the various relationships between cross-media synergy activities and newspaper channel performance. Using data supplied by the Newspaper Society, we built and tested a model of the influence of synergy on total channel performance. However, our results only provided partial support for the positive influence of synergy on the growth of circulation/online readership. Clearly there are major strategic challenges facing the news industry if they are to compensate financially: a rapid decline of the printed product and growth in the online market. Print channels are still dominant in the strategic planning of the NS sample, and only through considerable investment in digital capabilities will this synergy be truly complementary and provide a strategic path forward for the industry in the long run. Whether local newspapers have the resources to do this remains questionable. There is resistance among newspapers, which still culturally perceive online services as inferior in quality to their physical products. As well as understanding the process of multichannel evolution, the news executive therefore needs to be able to design more adaptive channel structures that fully consider changes in channel tasks, resource allocation, sales goals, customer demarcations, pricing, and promotional assistance. The resource commitments needed to build a “hybrid” capability fighting on both physical and online fronts is strategically very challenging for the news media industry. If this is to be achieved, there is a need for much greater vision and leadership from the newspaper industry, as well as a radical change of culture and status and of the resource and capability development attached to their online market development so that it is more equitable to their print operations. The main strategic risks remain the different scale of operations, as the online is much smaller than the printed value chain and there still remain doubts over the new digital operations models concerning their feasibility, vulnerability, and acceptability.

References Addis, M. (2005). “New technologies and cultural consumption—edutainment is born!” European Journal of Marketing, 39 (7/8): 729–37. Arbuckle, J. L. (2006). AMOS User’s Guide 7.0. Spring House, PA: Amos Development Corporation. Coelho, F. and Easingwood, C. (2008). “An exploratory study into the drivers of channel change.” European Journal of Marketing, 42 (9/10): 1005–22.

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Deuze, M. and Neuberger, C. (2007). “Preparing for a participatory news.” Journalism Practice, 1 (3): 322–38. Gerbing, D. and Anderson, J. (1992). “Monte Carlo evaluations of goodness of fit indices for structural equation models.” Sociological Methods and Research, 21 (2): 132–60. Hair, J., Anderson, R., Tatham, R., and Black, W. (2008). Multivariate Data Analysis. New Jersey: Prentice-Hall. Howe, J. (2008). Crowdsourcing: Why the Power of the Crowd is Driving the Future of Business. New York: Crown. Hu, L. and Bentler, P. M. (1999). “Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives.” Structural Equation Modeling, 6 (1): 1–55. Nel, F. (2010). “Where else is the money? A study of innovation in online business models at newspapers in Britain’s 66 cities.” Journalism Practice, 4 (3): 360–72. Office for National Statistics (2014). Monitoring e-commerce. http://www.ons. gov.uk/ons/dcp171766_373496.pdf (accessed November 1, 2014). Ruiliang, Y. (2010). “Product brand differentiation and dual-channel store performances of a multi-channel retailer.” European Journal of Marketing, 44 (5): 672–92. Sharma, D. and Gassenheimer, J. B. (2009). “Internet channel and perceived cannibalization. Scale development and validation in a personal selling context.” European Journal of Marketing, 43 (7/8): 1076–91. Tarkiainen, A., Ellonen, H. K., and Kuivalainen, D. (2009). “Complementing consumer magazine brands with internet extensions.” Internet Research, 19 (4): 408–24. Vargo, S. L. and Lusch, L. S. (2006). “Service dominant logic: What it is, what it is not, what it might be.” In Vargo, S. L. and Lusch, L. S. (eds). The Service Dominant Logic of Marketing: Dialog, Debate and Directions, 43–56. New York: M. E. Sharp.

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PART THREE

Experimenting with the audience

144

9 Changing media policy environments and the production of news Mikko Sihvonen and Seamus Simpson

T

he ways in which news is gathered, produced, disseminated, and consumed have undergone nothing short of a transformation within the last thirty years. Understanding how and why these changes have occurred and their implications requires an investigation at close quarters of the business of journalism, which is the core objective of this volume. However, it also requires, we argue, a clear understanding of the media policy context within which news has evolved in recent decades. Accordingly, this chapter sets out and explains the broader context within which much of the changes in the production of news through private and public means have taken place. We consider the implications of recent changes in news production for a wealth of actors and interests within and beyond the commercial sphere. The chapter provides some recommendations whose implementation might secure and develop what we argue continues to be—and will in the future remain—one of the most significant aspects of the public interest in media environments. A key ingredient in any analysis of recent changes in news provision and consumption is the evolution and role of communication technologies and their application in the news sphere. This chapter provides a critical examination of the significance of technological change in the evolution of news provision, which challenges both outright celebratory and, by contrast, dystopian perspectives on its influence. To develop our arguments, we take the cases of the United Kingdom and Finland. These countries provide a useful context for exploring changes in

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news production from a media policy perspective. In the taxonomy of Hallin and Mancini (2004), Finland represents the democratic corporatist model of media, characterized by high newspaper circulation, historically strong party affiliation on the part of the press, and the strong role of the state in media activities (including press subsidies to promote pluralism). The media landscape in the United Kingdom—and in other countries of the liberal model in Hallin and Mancini’s terms—is characterized, by contrast, by medium newspaper circulation, the political nonalignment (at least in formal terms) of the commercial press, and limited state intervention in media activities. Our analysis demonstrates that, notwithstanding significant differences between the political, social, cultural, and economic environments in which the production of news takes place in these countries, broadly similar changes have affected the production of news in both the United Kingdom and Finland. The central argument of the chapter is that, despite the news sector of media possessing its own characteristics and specificities, recent changes in news production in Finland and the United Kingdom can be accounted for in a raft of broader changes that have affected the media in these states; that is, other types of media content have been subject to similar changes. That this is the case is important in that it creates a context within which to prescribe a set of coherent policy responses that can be aimed at protecting and promoting the long-held public-interest value of news in the media environment. News is not just a business like any other in an increasingly marketized and complex media environment. Policy inaction risks obscuring to the point of ineffectiveness one of key staples of public value in media. This is ironic, since much of the new technologies now available present significant opportunities for enrichment and revitalization rather than dilution and decline.

Media convergence and the changing context of news production The process of media convergence has underpinned much of the developments in news in Finland and the United Kingdom highlighted in this and other chapters of this volume. The gradual coming together of formerly disparate parts of the communications spectrum has been enabled by the digitization of information, as well as the development of a series of innovations that have facilitated fundamental changes in the ways that information is gathered, processed, reprocessed, distributed, and consumed (Curran, Fenton, and Freedman, 2012). Media convergence has afforded a context in which formerly clear distinctions between content creators and ­consumers, broadly defined,

Changing media policy environments

147

have become blurry. Here, new understandings of the characteristics of mass communication and interpersonal communication are developing. For some, such as Castells (2013), convergence has heralded a new era of mass personal communications. Media convergence has touched on—and is strongly evident in—all the key quarters of communication systems: networks, ­ devices, applications, and services (Dwyer, 2010). New and e ­ ­stablished communications providers have aimed to take advantage of the attendant possibilities in which existing communication markets have evolved and new markets have been created. Media convergence has a number of key features, many of which are, in at least to some degree, in tension with each other. At the core of media convergence is multimediality and information richness. Media content embodied in services is now often characterized by a combination of voice, text, and video. These are not necessarily seamlessly blended together but may appear on a single user interface. Creating seamlessness in what is presented to the user has created challenges, not least for providers of online news. Multimediality and information richness create new complexities in the information provision process. They also have created new expectations among users. Enmeshed in the latter is the feature of increased user enablement in processes of mediated communication. Its corollary, interactivity, has become a hallmark of the convergence era. However, while arguably a benefit for users, engaging with interactivity represents a significant economic cost to providers of content, not least news. This phenomenon has had a number of features. Users can now respond to, and interact with, professional providers of information and opinion, though the latter need to make themselves available for this to occur. It is also the case that users themselves can and do generate relatively high-quality media content, which has challenged professional service providers in the news sphere. The increasingly sophisticated character of mobile communication devices has meant that users are often able to capture images, sound, and video before media professionals, such as journalists. Through the exponentially growing popularity of social media sites, most famously Twitter, users can now become the first sources of information beyond (and often serving the needs of) professional providers of news information. While an advantage to news producers, all this points to a growing expectation in terms of the speed of communication in a convergent media era. While “getting there first” has always been a priority for news providers, it is now increasingly challenging in a convergence media era. In a broader societal context, the infrastructural demands of convergent media usage necessitate having in place high-speed fixed broadband and mobile communication infrastructure. For the consumer of information, speed

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in accessing and downloading information is an imperative, and there is also a growing expectation to have the latest information to hand almost instantaneously and on a twenty-four-hour basis. The latter poses yet another challenge for news providers. An interesting feature of communication in the media convergence era is the paradoxical prioritization, at one and the same time, of the international/ global and the local/personal. On the one hand, the development of increasingly high-speed communication networks with growing international reach inevitably places interest in internationality—news can be obtained from across the world, in richer formats than ever before, more quickly than ever before, at least in theory. Increased interest in developing global communication has pointed toward the possibility for enhanced human understanding and cosmopolitanism, though there is only limited evidence of this having transpired to any significant degree to date. At the same time, the growth of media with convergence characteristics has seen an increased emphasis on enriched personalization of communication. Networks, through the use of online communication and social network sites, most famously Facebook, have provided the opportunity for interpersonal and intragroup communication on an unprecedented scale. For news providers, the rise of the idea of enriched (inter-)personal and (intra-)group communication has also led to considerations of online customized information services. Digital communications platforms and applications allow user communication patterns and preferences to be established—but also shaped—like never before. This has to some extent evoked in consumers a preference for tailored information packages delivered to the desktop. It has, however, raised concerns about what would be an ironic narrowing of the information space and a concomitant decline in the propensity for discovery and the broadening of intellectual capacity through media consumption. Customization and personalization have been inaccurately conflated in the media convergence era. The public-interest implications of this are highly salient. As worrying has been a focus on the information gathering and surveillance practices that lie behind customization (Lovink, 2011). This has spawned concerns about whether the right to privacy in environments of media convergence has been effectively secured. Online information providers, for example, have the ability to gather and sell on data about their readers, the ethics of which are at least questionable. In another way, critical scholars have examined the emergence of an information economy in which capital accumulation is occurring through the commodification and exploitation of personal communication (Fuchs, 2014). Through all of these manifold, complex, and socially contested developments, it is clear that information gathering scope, information

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149

processing power, and a strong technology centeredness pervade media environments. It is important to note also the pervasive political-economic context of neoliberalism (Harvey, 2007) in which these changes have taken place and which, in the process, have been shaped strongly by it. The much discussed commercialization of media environments characterized by convergence has, in particular, led to the posing of searching questions about the continued provision of communication content and services through public means. All these characteristics and developments have involved seismic implications for the production and consumption of news and the business of journalism more broadly. The burgeoning literature in journalism studies on media convergence is testament to its impact on—and broad significance for—the sector for at least some thirty years. Most of the early responses to the changes highlighted above occurred in the United States, though they hold strong significance for Europe and beyond. Gordon (2003) has argued that, from the late 1990s onward, convergent behavior of five broad kinds has been apparent in journalism. Ownership convergence has been widely exemplified and is characterized by the acquisition by media companies of entities outside their core field of specialism. Large US media companies, such as AOL Time Warner and Belo Corporation, diversified into newspapers, television, and Internet-based commercial activities, though cross-media ownership rules are a key consideration in respect of this kind of response, depending on the jurisdiction in question. In general, the trend has been toward a relaxation of these rules. Equally in evidence has been so-called tactical convergence, related to content, marketing, and revenue development. Here, companies have collaborated for promotional reasons. A third type of convergence has been structural, where clear changes to the layout of an organization and the ways in which employees work have occurred, such as the creation of multimedia editors to cope with the challenges of producing new content. Information gathering convergence refers to changing demands on the practices of journalists in the field where, for some, a despecialization and multiskilling approach has dominated. The fifth kind of convergence noted by Gordon relates to the presentation of news, wherein new forms of storytelling have been developed for multimedia platforms and devices. Dailey, Demo, and Spillman (2005) put forward their convergence continuum model to help understand organizational responses to the challenges and opportunities presented by media convergence. They emphasize five key points in the continuum, characterized, respectively, by cross promotion, cloning, coopetition, content sharing, and full convergence. The latter context is reached where media organizations collaborate such that “hybrid teams of journalists from the partnering organisations work together to plan, report

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and produce a story, deciding along the way which parts of the story are told most effectively in print, broadcast and digital forms.” Coopetition, noted as significant elsewhere in the communication sector over the last twenty years (e.g. Humphreys and Simpson, 2005), is a noteworthy point where organizations seek to cooperate and compete simultaneously. That Dailey, Demo, and Spillman envisage a spectrum indicates the complex and often problematic nature of convergence processes, something echoed by other authors (Deuze, 2004; Kolodzy, 2006; Kawamoto, 2003). Erdal (2011) focused on broadcast multiplatform news production as an example of increasingly complex cooperative activity. Here, emphasis was placed on the importance of cross media, wherein two media platforms work with each other in integrated ways. He underlines the sweeping and extensive nature of convergence, wherein the everyday work activities of media professionals, organizational structures, the relationship between journalists and news stories, and the continued nature and significance of public-service journalism have all been affected. Fagerjord and Storsul (2007) conducted an analysis of processes of convergence that have stemmed from convergent trends in media, emphasizing networks, devices, services, markets, regulation, and rhetoric. More critical analyses of the effects of convergence on journalism have also emerged. Quinn (2004) explores what he terms the “fundamental question” of convergence, which concerns potentially different perspectives held by media owners on the one hand and professional journalists on the other. He notes the danger that the economic incentives of convergence have the potential to bring into conflict news values and business goals. Here, business perspectives emphasize potential increases in productivity, cost cutting, and cross promotion and marketing. Professional journalists, by contrast, have viewed convergence as a way to deliver better quality journalism on the one hand, but, on the other, as a possible threat to traditional professional standards. As we go on to illustrate below, developments in Finnish and UK news production reflect much of these general trends in media convergence and its specific consequences for news production.

Convergence and the production of news in Finland and the United Kingdom: Cross-media news production This section examines, through a focus on Finland and the United Kingdom, two interrelated phenomena that have been facilitated and advanced in

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contexts of increasingly convergent media: cross-media news production and networking and coopetition and syndication strategies. Their role in media organizations’ broader pursuit of cost-effectiveness is also examined, as we believe that media organizations’ changing institutional priorities have acted as a key catalyst for the implementation of these strategies, and thus understanding them fully requires their exploration in this context of the commercialization of media. Convergence has enabled media organizations to pursue synergistic advantages through exploiting content assets across as many platforms as possible, utilizing online platforms in particular. Cooperation involved in such cross-media news production activities can range from information sharing between journalists and desks in different platforms to advanced forms of integration, wherein journalists produce content for multiple platforms that may serve a range of purposes in news coverage as a whole (Erdal, 2007: 53). The key economic advantages from this are the additional use of existing content that creates economies of scale, lower transaction costs arising from reduction of the costs of the acquisition of content and other resources, and economics of scope “produced by leveraging the market recognition of established firms so that lower marketing expenses are required for new activities, by exploiting existing audience and advertiser relationships and by creating opportunities for additional revenue without the concurrent need for full resources required by independent creation and distribution” (Küng et al., 2008: 133). The rapid concentration of ownership within European media sectors, essentially facilitated by the gradual relaxation of rules and restrictions on media mergers and cross-media ownership that was associated with the triumph of the neoliberal media policy, has been a key catalyst in this process (Sampson and Lugo, 2003: 83–8; Freedman et al., 2008: 109–10; Lax, 2009: 178–80). The traditional public service–oriented policy paradigm in virtually all European countries sought to thwart tendencies toward monopoly in the media industry by adopting specialist regulatory measures over and above those contained in competition law. Since the early 1990s, however, regulators in many countries have been under increasing pressure from the commercial media lobby to liberalize media and cross-media ownership restrictions (Doyle, 2000: 1). In the United Kingdom, the Broadcasting Act 1996 permitted mergers between ITV network companies and also relaxed restrictions on cross-media ownership, allowing newspaper owners to enter the terrestrial television market (Goodwin, 1998: 148). The result was a set of mergers, and, by 2000, eleven of the sixteen companies in the ITV network were owned by just two corporations: Granada and Carlton. Following an inquiry by the competition watchdog, they were finally allowed to merge in 2004, creating

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ITV plc, which reduced the number of ITV companies to just five (Johnson and Turnock, 2005: 29). Channel 5’s takeover by Richard Desmond’s Northern & Shell publishing group in 2010 serves as another example. The takeover was partially motivated by the opportunity to cross promote Northern & Shell’s publications—the Daily Star, the Daily Express, and OK!—on television. Part of this strategy included the early cancellation of the channel’s news production agreement with Sky News and the signing of a new contract with ITN, which included changing the editorial line of the news to increase the coverage of celebrity news, while the channel’s early evening bulletin Live from Studio Five was replaced with the tabloid content oriented OK! TV spin-off (Conlan and Robinson, 2010; Foster, 2011). Likewise, Finnish media policy historically featured a commitment to promote media pluralism by preventing cross-media ownership between the press and broadcasting. This cornerstone was first challenged in 1985 when the government allowed press publishers to set up commercial independent local radio stations (Hujanen, 1996: 188). This loosening was extended to national television as the fourth terrestrial broadcasting license was awarded to a subsidiary of the Sanoma Corporation, the largest media conglomerate in the Nordic countries and owner of the biggest Finnish national broadsheet newspaper, Helsingin Sanomat, despite concerned voices over excessive concentration of Finnish media ownership. Similarly, no action was taken after MTV3 merged with the Aamulehti Group in 1998 to form a new media conglomerate, Alma Media, even though MTV3’s license was conditional on the maintenance of the existing ownership structure of the company (Hellman, 1999: 153). Together, these two companies control over 40 percent of the total circulation of Finnish newspapers (Ahva, 2010: 21). Considering the significant economic benefits arising from cross-media activities, it is not surprising that media organizations—in small markets, in particular—integrate production for different platforms in order to foster cooperation between production departments. Alma Media was one of the first Finnish large media conglomerates to utilize the synergistic opportunities of cross-media production when it allocated the production responsibility for MTV3’s daily business news bulletin to its business newspaper Kauppalehti in 1999, thereby eliminating need to employ in-house journalists to produce the news (Mediaviikko, 2009). Sanoma Corporation introduced an even closer integration of cross-media activities in 2011, when it announced the incorporation of the news desks of Helsingin Sanomat and the television news of Nelonen under a single production unit (Helsingin Sanomat, 2011). The television news broadcasts of Nelonen have been subsequently produced mainly by journalists from Helsingin Sanomat, while Helsingin Sanomat publishes excerpts of the news as podcasts on its website. It is

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noteworthy that, in the cases of both Kauppalehti and Helsingin Sanomat, the arrangement enabled these organizations to advertise their newspapers overtly in television news broadcasts without breaking the Finnish Act on Television and Radio Operations (1998), which prevents sponsorship in news and current affairs programs. Since cross-media activities benefit mainly well-established, large, and dominant players in the market, there is a tendency for cross-media operations to extend the dominance of leading players in print and broadcasting, thus serving to promote concentration of ownership and reduce media plurality. Generally, only large media companies have sufficient resources to make the necessary investments and deploy cross-media products to benefit from existing proprietary assets and brand leverage. Opportunities for new entrants are limited to a few well-funded entities, and smaller existing media companies, which lack the advantages of larger firms, must generally confine their cross-media activities to local or niche markets (Küng et al., 2008: 133–34; Thurman and Myllylahti, 2009: 705).

Convergence and the production of news in Finland and the United Kingdom: Networking, coopetition, and syndication strategies While opening up opportunities for production-cost reduction, the technological, social, and economic transformations produced by convergence have also precipitated nothing short of a crisis in the traditional business models of news delivery. Established media organizations have seen audiences and readerships decline in the face of increasing competition from new types of mostly online suppliers. New media outlets have contributed to an intense fragmentation of interests and tastes. Advertisers’ preference for online advertising has grown commensurately given its precision in audience targeting (tallying with the customization of information services), thus seriously eroding the funding basis of the so-called “old media” (Freedman, 2010: 35; Olkinuora, 2012: 18). Meanwhile, the increasing commercial orientation of media proprietors has created pressures to improve the efficiency of the production and delivery processes to satisfy investors’ demands (Picard, 2004: 61). Amidst these uncertain business conditions and increasing commercial expectations, media companies have sought further savings in production costs by forming business arrangements and strategies in which commercial rivals establish cooperative activities through alliances, partnerships, sharing arrangements, and networks. These activities are based on the view that, as

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Gordon (2003) and others highlight, competitors need not always fail for others to be successful: Cooperation may produce mutual benefits. Coopetition creates cooperation in some activities while maintaining competition in others. Unlike cross media, coopetition presents a means of achieving the benefits of synergies, typically by using existing resources that require little reconfiguration or upgrading (Küng et al., 2008: 131–2). Coopetitive strategies are most likely to develop in a stagnant market when profits are decreasing “by differentiation and niche recognition, by seeking organisational effectiveness through flexibility, adaptation and limiting expenditures, [and] by seeking to improve the positions of co-operators against a common threat or in exploring a risky opportunity” (Küng et al., 2008: 131). As the press industry has been hit hard by economic challenges, Finnish regional papers in particular have consolidated their editorial cooperation. While commercial competition with regional rivals previously suppressed cooperative tendencies, changes in media consumption habits and the economic challenges caused by recession in the 1990s acted as stimuli for these newspapers to pool resources for mutual interests (Mervola, 1999: 34). The coopetitive strategies of Finnish newspapers now include content coproduction, sharing, and syndication, as well as the establishment of joint editorial teams of correspondents for content, for which these newspapers would not have individual production resources (Ahva, 2010: 21). Väli-Suomen Media Oy, a consortium set up by five regional newspapers, represents one of the oldest and largest of such partnerships. The venture was established in 1998 to pool resources for a joint Sunday features page for the participating newspapers in order to be better able to compete with the leading national broadsheet Helsingin Sanomat. This cooperation later extended to setting up a joint Helsinki correspondence team and journalistic resources pool to produce syndicated content on foreign affairs, politics, and business news (Peltoniemi, 2008: 5–6; Nikunen, 2011: 43–4). The consortium also produced syndicated content on politics and business affairs for newspapers not formally outside its membership. A similar strategy was utilized by Alma Media in creating a joint politics desk in Helsinki for its regional newspapers and Kauppalehti in 2007. It is important to note that national borders no longer act as constraints on cooperation, as a converging technological and cultural media sphere has opened up opportunities for the international syndication of journalistic content. The Finnish left-wing political newspaper Kansan Uutiset announced its syndication agreement with the UK Guardian News & Media publishing company in January 2014. The agreement allows Kansan Uutiset to distribute content from the Guardian and Observer newspapers (Huovinen, 2014).

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While networking, coopetition, and syndication arrangements are not new to the newspaper industry, they have also recently been heavily utilized in the name of cost efficiency in broadcasting, where production costs are considerably higher than in print news. In the United Kingdom, the ITV network provides a prime example of the use of this strategy to drive down production costs. While its regional constituent members historically provided relatively extensive schedules of nonnetworked programming, this form of production was gradually centralized in the 1990s. The ITV Network Centre was created, and it took over the duties of commissioning and scheduling programming for the entire network (Bonner and Aston, 1998: 130). Fitzwalter (2008) argues that its creation was accompanied by a large-scale centralization of programming production and drastic cuts in regional production budgets, which served to reduce internal pluralism in ITV’s programming and compromised the quality of its regional programming. Today, ITV plc’s regional productions consist mainly of the mandatory provision of news and current affairs stipulated in the quotas of ITV’s broadcasting licenses, while just less than twenty hours of other nonnetworked programming is produced for ITV’s individual English regions annually (Ofcom, 2013: 25).

Convergence and the changing professional culture of media While presented by their advocates as an inevitable response to technological change in media systems, the changes highlighted above have provided an opportunity for media companies to introduce new normative and cognitive ideas to news production. These are best understood, we argue, when contextualized in the broader commercialization of the media production environment and hold significant implications for publicly provided media services. McManus (2009: 219) argues that, in any account of the evolution of journalism over the last thirty to forty years, economics should feature strongly given its fundamental link with convergence and government media policy. In this regard, there has been an increasing tendency to frame the production of news—and other media content—as exclusively a business, with the imperative for profit maximization and cost efficiency attendant. As Freedman (2010: 35) shows, news has no right to exist in this environment if it cannot pay its way in a capitalist economy. The production of news and other media content mostly takes place in relatively large commercial corporations, which are accountable to their shareholders and whose management strategies are consequently informed by economic calculus

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(see, e.g., Picard, 2004; Fitzwalter, 2008; McManus, 2009; Freedman, 2010; Nikunen, 2011). The increasing interest in stock-market investments in journalism has resulted in mounting economic efficiency requirements, which have precipitated savings through the reduction of production costs. As noted above, the increased utilization of cross-media, networking, coopetition, and syndication strategies has created a significant increase in journalistic productivity while cutting production costs without compromising the volume of content. Lewis et al.’s (2008: 38) analysis of the United Kingdom’s Sun newspaper demonstrates that editorial content published by the paper more than doubled from the mid to the late 1980s, while the average number of editorial staff of the paper increased only slightly within this period. Likewise, Finnish journalists have seen their workload escalate over the last decade, which has led to an increasing use of news-agency and public-relations material (see, e.g., Thurman and Myllylahti, 2009; Nikunen, 2011). Finnish journalists considered this overreliance on news-agency and public-relations material as the greatest threat to journalistic quality (Nikunen, 2011: 88). The evident danger here is that in seeking further savings in production costs, journalistic standards are seriously compromised. Quandt and Singer (2009: 139) warn how economically driven downsizing of newsroom staff may lead to news production that is no longer based on original investigation but on journalists increasingly repackaging second-hand material with limited opportunities for fact checking. In their analysis of the content of Taloussanomat, the first Finnish business newspaper to go exclusively online in 2007, Thurman and Myllylahti (2009: 700) found that 80 percent of its editorial content was based on news-agency material or stories published in other newspapers or on news sites. Their findings reflect the work of Lewis et al. (2008: 30), who found that 60 percent of published stories in the socalled quality press rely wholly or mainly on external sources. Thurman and Myllylahti (2009: 701) also concluded that journalists of Taloussanomat did most of their research at their desks and had little opportunities to source content outside the editorial office because of the increased workload and the faster pace of the online news environment. Such practices provide a fertile soil for uncontrolled outbreaks of sensationalist stories based on conjecture or inaccurate information, in which the media simply recycle copy already published in other outlets (for recent examples, see Kuutti and Manninen, 2013; Raatikainen, 2013). The commercialization of news, according to McManus (2009: 219), can create “action intended to boost profit that interferes with a journalist’s or news organization’s best effort to maximize public understanding of those issues and events that shape the community they claim to serve.” As Picard (2004: 61) notes, commercialized news and features are designed to appeal

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to broad audiences, to entertain, to be cost effective, and to maintain readers whose attention can be sold to advertisers. The result, he argues, “is that stories that may offend are ignored in favor of those more acceptable and entertaining to larger numbers of readers, that stories that are costly to cover are downplayed or ignored and that stories creating financial risks are ignored” (Picard, 2004: 61). This process has led to an escalating tendency to increase the entertainment function of news: tabloidization. Finnish statistical data on newspaper content demonstrate that between 1996 and 2006 there was a 10 percent increase in the proportion of entertainment-oriented news (Ahva, 2010). Another study on newspaper content revealed that the proportion of news in the categories “leisure” and “health” increased significantly between 2006 and 2010, while those in “politics” and “business” decreased (Suikkanen and Syrjälä, 2010: 41). Nikunen’s (2011: 83–4) research on the content of three Finnish newspapers supports these observations. She detected an increased use of pictures and other visual material, while the presence of “light” content also increased. The phenomenon of tabloidization includes trends such as the increased emphasis on the visual representation of stories, the shortening of story forms, the polarization of content, and the personalization of news stories (Ahva, 2010: 24).

Conclusion: News production, changing media environments and the public interest This short chapter has endeavored to illustrate that broader changes evident in media environments as a result of media convergence are reflected in, and are a significant part of, the changing ways news is produced. There is no doubt that this has resulted in some deeply concerning developments. The neoliberal agenda of commercialization, economic efficiency, and profit maximization has been reflected in strategic responses from organizations producing news output which, as illustrated, have (ironically) promoted tendencies toward market concentration in key areas. A huge increase in information volume due to the explosion of the online realm has, with equal irony, created tendencies toward homogeneity in the information content accessed by most due to information recycling and repackaging. Commercialism has promoted populism and the tabloidization of information both off-line and online. The cost and time pressures of an increasingly online, twenty-four-hour news environment have placed core professional news values under pressure. A neoliberal agenda, by definition, de-emphasizes the value of publicly provided information content and services.

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There is no doubt that, as authors such as Jenkins (2006) and Benkler (2006) emphasize, the online world has provided many opportunities to change news provision for the better. However, we argue that a blithe assumption that this will occur “automatically” from the current direction of evolution of the converging media world is unrealistic. Specifically, the widespread commercialization of media, rather than de-emphasizing the importance of publicly assisted news provision, serves to point up its intrinsic value to journalism as an activity and to society more broadly. The corollary, we argue, is that those responsible for developing media policy for the twentyfirst century should consider news as a key part of their deliberations. The strong concerns expressed about the decline in quality of news provision are well founded and echoed in much of the evidence of this chapter. Scott (2005), in his polemic on the state of US journalism, argues that there has been a reduction in important journalistic work related to investigative reporting, overseas news reporting, and journalistic watchdog activities. He sees an increase in sensationalism, the homogenization of content across different media platforms, a blurring of editorial and advertising activities, and a rise in “infotainment” at the expense of political complexity, where “never before have the ugly contradictions between capitalism and democratic journalism been so apparent” (p. 92). Analyses such as these have noted how the new digital technologies, in terms of platforms, devices, and services, have developed in a context wherein economic imperatives have assumed primacy over journalistic standards. The development of an online system of micropayment for content, for example, according to Scott, creates “a frame of market calculus over each citizen’s political interests [and] factionalises and compartmentalises information into socio-economic fiefdoms whose barriers to entry are guided by market principles” (119). Despite this, even strong critics of the state of journalism, such as McChesney (2013: 202), argue that it is possible for a “new and dramatically superior calibre of journalism” to develop as a result of the Internet, but that “for this to happen there must be major public investments, and these funds must go to the development of a diverse and independent non-profit sector.” The problems highlighted in this chapter raise the important question of relevant media policy responses to the protection and promotion of the public presence and value in news provision in the online technology-dominated environment of early twenty-first-century communication. In essence, two policy responses are worthy of strong consideration. The first concerns the provision of public subsidies for the creation of news with an intrinsic public value. A controversial topic, the evidence in this chapter and elsewhere points toward the need to mitigate the consequences of unbridled neoliberalism in those parts of the media that serve a vital public function—news provision

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is surely one of these. The second concerns the necessary public funding of a large, well-resourced, single-entity public-service media operator. In an information world of huge volume and a huge number of sources but questionable variety in terms of content and quality, a prominently positioned trustworthy and trusted source of news is as vital to democratic and social well-being as it has ever been. It is, however, the case that the world of public-service media content should not stand still. Costera Meijer (2007), for example, has argued that better quality public-service news provision can be achieved online if it is recognized that coverage of popular content does not necessarily connote an inexorable move toward triviality. Consuming popular media requires the ability to engage with multilayered, complex, and pacy narratives. These skills complement, rather than undermine, the consumption of other kinds of news. Overall, the challenge in the consideration of newsworthiness is to find an appropriate balance between the public, private, emotional, and rational aspects of human life. Mäntymäki (2010) sees the need to bring together the new collaborative and participatory potential of the online news environment while maintaining the strong professional values at the core of journalism. The latter include independence, fact checking, multiple sourcing, expert commentary, fairness, and trustworthiness. Evidence to date suggests that this is still very much a work in progress, though one well worthy of intensified and continual pursuit.

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10 News organizations and online communities: The science of how to build effective social networks Chris J. Vargo

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n Twitter alone, 750 million original pieces of content are created each year (Anderson et al., 2013). Consumers are drowning in content. As a result, a piece of news content posted at any given time may only be seen by a handful of people. Moreover, people rarely share or engage with the things they do see (Suh et al., 2010; Lerman and Galstyan, 2008; Anderson et al., 2013). What is worse is that Facebook and Twitter have begun introducing content-filtering algorithms. In a nutshell, these programs are designed to only display content that has received high interaction rates (clicks, favorites, likes, retweets, etc.). For these reasons, it is important to have an active, engaged online community that seeks news. A successful media organization can no longer simulcast content across multiple channels (i.e., Twitter, Facebook, etc.) and hope that it becomes popular. Media organizations must now actively build communities of people that are likely to engage with their content. Communities of people are immensely important. If no one follows a newspaper on Twitter, no one will see its tweets. Most organizations understand the value of having a large audience on online social media. Yet, the most followed Twitter users are musical artists, political figures, movie stars, and athletes, not news media (Vargo, 2013). Instead, news media

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appear to create social media accounts with the “build it and they will come” attitude. The thinking here is that great content will build an audience and that audience will spread the content organically. This is a passive approach to online audience building. This thinking has worked well for brands with big names like the New York Times and the Economist. But for smaller media that do not benefit from international interest, followers are harder to find. Social media services such as Twitter and Facebook no longer represent an equal playing field for distributing content. During the last five years, two forces have kept companies (the news being included here) from sharing messages from followers. First, now that Twitter and Facebook are publicly traded companies, the pressure to generate advertising revenue from the services is at an all-time high. As a result, Facebook has begun to suppress the “organic reach” of messages coming from brands and companies. This means that a mere fraction of a company’s followers will see any given message that company produces. This includes news. The thinking here is that if a company wants its message to be heard, it should be willing to pay for it. As we will later discuss, advertisements are not always a bad thing for news organizations. They can be tailored to reach the right people at the right time, but they must be done carefully. They can be irrelevant to consumers, and costs will balloon. Secondly, these social media services have begun to tweak what content is displayed to its users. With the end goal of more consumer engagement, both Twitter and Facebook filter out content that seems unpopular. The thinking here is to only show the most engaging content. After all, if every day 2 million pieces of original content are generated, options exist. These algorithms are always changing, and the only way to “beat” them is to constantly produce content that is engaged with. This is both a challenge and an opportunity. New features of social media services not only pull in the content that a user follows, but the most popular content that close friends also follow. If content is engaging, organic reach may actually be boosted. Content aside, this chapter suggests that engagement can be boosted through more active community marketing strategies. The premise here is that the more engaged users a news media has, the more engagement it will receive.

Social media as networks of connected people How do new audiences see news stories on social media? The answer is relatively simple. Audiences see content from the networks they are connected to. An individual can be connected to friends, celebrities,

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organizations, businesses, and news media on social media. Everyone posts news stories that can be consumed by a user. A vibrant online community is a network of connected actors. Assume, however, that users do not live in vibrant networks (Goel et al., 2012). Instead, they are likely to be connected to a large number of other actors but only regularly interact with a few. The term community can be defined many ways. A vibrant online community exists for journalism professors that attend a certain conference. There is a vibrant online community for each sorority at each university. There is a vibrant community around sports teams, farmers’ markets, and pick-up soccer leagues. These networks are primarily made up of consumers; everyday people. Most networks are not vibrant. The city of Atlanta, Georgia, has a million Twitter users, but it is not vibrant. Instead, small vibrant networks exist within it. As a media manager, it is important for you to discover your vibrant online communities. News organizations need to use the relevant online communities that surround them. They need to find these communities and spread their content to them. How can this be done effectively? Newspapers must cultivate networks of people that are inclined to share those messages. Which types of people tend to pass on news stories the most? Answers are found in an old social science theory: two-step flow.

Two-step flow theory Online news stories are shared millions of times a day (Anderson et al., 2013). The messages travel through complicated networks of people connected by relationships (i.e., a virtual friendship). These networks are configured differently for different people, sets of friends, and communities. As such, they play a major role in the diffusion process a news story goes through. Perhaps the most popular theory in the communications discipline that discusses this process is two-step flow. Two-step flow theory has been studied immensely. As a result, many theories have been connected to it. It came in the early era of mass communication theory at a time when the mass media had previously been thought to have an all-powerful effect. This effect was thought to have a bearing on all types of decision making. The mass media was thought to control our opinions on everything from news to consumer behaviors (Weimann, 1994). From this view, two-step flow emerged as one of the leading new models that explained how consumers were influenced (Weimann, 1994; Katz and Lazarsfeld, 1955; Lazarsfeld, Berelson, and Gaudet, 1968). The theory

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explained how the media and a select group of influential people worked within a network of communication to influence the masses. Scholars soon realized that communication processes were not as straightforward. The mass media did not simply exert their influence over all. Two-step flow theory put people back in the equation. In fact, they were now thought to play a crucial role in public opinion leadership (Katz and Lazarsfeld, 1955). Now every individual was active in how information flowed from the mass media to the public. New power was given to special individuals outside of the media (Lazarsfeld, Berelson, and Gaudet, 1968). Opinion leaders were now thought of as the ones that influenced “the masses.” Opinion leaders exist in every space, including social media. Vargo found that while the average user on Twitter had 1,876 followers (2013), only 0.1 percent of Twitter users had above 200,000 followers. These people could be considered opinion leaders according to two-step flow theory, given that so many people are tuned in to their messages and the news stories they share. Taking Twitter as an example, two-step flow appears to exist. The most popular online content does not get spread from one Twitter account like a beacon of light (Goel et al., 2012). Instead, many popular members in smaller communities (e.g., those with many connections) act as foot soldiers. They spread the content. This does not mean that the media are unimportant. Even opinion leaders only have two sources of information: other people and the news. Opinion leaders still take direction from the mass media. In fact, in many cases, opinion leaders can be popular journalists. The two-step flow argument appeared in popular nonfiction with Malcolm Gladwell’s The Tipping Point (2002). Gladwell vividly described a group of people as being similar to Paul Revere for their ability to disseminate information quickly and efficiently. He claims that these people have a “set of social gifts” that separates them from everyday people. In using terminology such as “influentials,” “connectors,” “mavens,” and “salesmen,” these people have the ability to influence tons of people around them. Borrowing from the book title, these people can provide a certain advantage that tips the scale of public opinion. Gladwell provides examples of people throughout history who had exceptionally large social networks. When they chose to spread an idea, a product, or even a restaurant recommendation, their influence was exceptional. Gladwell argues that just one influential can start a momentous cascade of word of mouth. Just a few of these people combined can provide enough of a social cascade to spread an idea to the point of full adoption in a community. Imagine the popular users on social media (i.e., music artists, political figures, movie stars, and athletes). Are these Gladwell’s influentials? Can

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they tip the scales of public opinion? Can they drive traffic to news content? The inherent public notoriety they possess enables them to have exponential amounts of connections with the public. These people talk to large audiences and engage in a great deal of conversation. They could help messages catch on in society. However, we know that most celebrities do not engage in the sharing of news, especially regional news. They are scandal averse and are generally concerned with their own doings. Other scholars have slightly different views of opinion leaders. The focus here is not on the special set of “social gifts” that some possess, but instead on an individual’s ability to be an expert in a particular area (Weimann, 1991; Weimann, 1994). Opinion leaders can also be those that ordinary people turn to for information and advice. Opinion leaders thus start to sound less like celebrities on Twitter and more like bloggers or active members of communities. In this way, the true “opinion leaders” or influentials that can help a news organization are not David Beckham or Paul Scholes. Instead, they could be the journalists that exist within news organizations. News organizations should not underestimate the power these people have to become experts: experts in the topic areas they cover or in the happenings of a community. These opinion leaders can ultimately drive traffic to that news organization. Encouraging journalists not to act like a celebrity on Twitter but instead as a constant, reliable source of quality information makes them valuable. If a journalist writes about local entertainment, the local economy or even the local weather, people will seek their information. How should they behave? ●

Of course, they should link to their own news content, but also curate local content from around the Web.

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They should respond and interact with relevant messages from concerned citizens.

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They should follow engaged citizens and the leaders of the community they serve.

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They should “follow back” concerned and active citizens.

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They should become an opinion leader in an area of consumer interest.

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They should seek engagement and encourage followers to contribute thoughts, opinions, and content.

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They should attend education on social media best practices (e.g., Hootsuite Academy or lectures at universities).

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A third type of opinion leader? Both definitions of opinion leaders make sense. Some are connected to many (i.e., celebrities), others are experts in particular domains (i.e., journalists). Moreover, two-step flow makes sense; people accept information from trusted opinion leaders. Regardless of the definition, does either type of opinion leader really make content go viral online? There is little doubt in the research on opinion leaders that some are more connected than others. We all have friends who seem to know everyone. We can observe that celebrities on Twitter have millions of followers, while many noncelebrity users have less than 500 (Vargo, 2013). However, researchers have begun to refute Gladwell’s claims that connectors, or mavens, have the great amount of social influence that they claim. More specifically, they refute the claim that simply because a person is connected to many others in a social network, that person must exert a great influence on his or her connections. Weimann acknowledges that two-step flow does not do a good job of explaining the complex relationships opinion leaders have with others (Weimann, 1994). To better explain how opinion leaders are influenced, Weimann suggests a multistep flow model. This model would allow information to flow in multiple directions, to and from different actors in the two-step model (i.e., mass media, opinion leaders, and the public). While he still believes that opinion leaders are more influential than others, he recognizes that everyone must play some role in the diffusion of information, whether large or small. Rosen offers a similar critique of two-step flow in his comparison of information to water. When a French sociologist Gabriel Tarde described how fashion spread in France at the turn of the last century, he used the metaphor of a water tower. Fashion . . . originated in the highest social class and flowed downward through a “waterfall of imitation. . . .” Others who have studied this over the years have used terms such as “trickle-down” and the “two-step flow” model to describe the process. These concepts are not necessarily wrong – in fact, I believe that they are important components of the process – but these terms immediately suggest that the source is in some way more important than the receiving end of the information. . . . The water metaphor also assumes that information flows in only one direction, ignoring the fact that there’s often a dialogue between people who spread the word about a product and those who are on the receiving end of the information. While I recognize that some hierarchy always exists in the way information spread, there is not as much as some people may think.

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If I were forced to use a water metaphor, I would say that buzz is more like underground water, it may trickle any which way: down, sideways, or even up”. (Rosen, 2009: 129) This metaphor of underground water flowing in many directions closely resembles a network of individuals. They all have the ability to communicate and influence each other. This multidirectional approach can, once again, be thought of as a network. Combining the disciplines of word of mouth, opinion leaders, and network analysis, recent research better shows how people interact with others in social networks. Rosen points out that one of the primary problems two-step flow has in explaining how things become popular is its implied hierarchy. Opinion leaders are at the top. He notes that in two-step flow, “a publisher is somehow more important than the bookstore, which is somehow above the reader” (Rosen, 2009: 129). We can readily notice in everyday life that information does not solely flow in a vertical fashion (i.e., from the powerful to the masses) but in every which way. Moreover, Gladwell asserts that influentials bring people together. While this may be true in off-line relationships, the influence and connective power of “mavens” on online social networking services does not appear to be especially great. Anderson et al. showed that the connective power of average users, not mavens, drives social cascades on Twitter. In a study of 1 billion tweets, four types of messages were tracked: petitions, news, pictures, and videos (Goel et al., 2012). The researchers attempted to define two types of diffusion: (1) viral diffusion, which results from extremely large amounts of friend-to-friend sharing; and (2) broadcast diffusion, in which a single user or small handful of users generates a large amount of diffusion. Viral diffusion follows the thinking of Watts and Dodds (2007). Broadcast diffusion more closely follows the thinking of two-step flow theory (Weimann, 1994). The study, while still in review, shows that the majority of the largest cascades occurred virally (i.e., from person-to-person sharing). In the newly derived measurement structural virality, the authors measure the number of people contributing to a social cascade. Their evidence shows that across all four domains, as cascades grow, so does the structural virality, or the number of people involved in the diffusion process. The authors note that large cascades can occur from broadcasts. While those cascades could be rather large on average, they were not as large as viral cascades. Instead, it appears that popularity comes from person-to-person sharing. In this model of diffusion, messages catch on if many “easily influenced” people share information with each other (Watts and Dodds, 2007). Each person spreads the message a little bit. Very few people exhibit viral behavior.

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Watts and Dodds refute the idea that “influentials” (i.e., a minority of individuals who influence an exceptional number of their peers) drive the formation of public opinion (2007). Watts and Dodds modeled the patterns of cascades (2007). They define cascades as the process whereby something, typically information or knowledge, is successively passed on to others. Cascades vary in how widely they are spread (i.e., the amount of diffusion they receive). Watts and Dodds argue that cascades are more complicated than is understood by the opinion leader research. They refute the idea that influentials are vital to the formation of public opinion (2007). The researchers supply evidence in the form of computerized social networks. In simulated models, Watts and Dodds built a network of 10,000 individuals. Each individual was given an influence threshold (i.e., a tolerance level that must be satisfied before that individual would pass along a message). The researchers tested the “influential” hypothesis by setting different levels of connectedness for certain actors in the network. Some were central to the network and were well connected. Others were isolated in the network and had few connections. Inspired by Gladwell’s The Tipping Point, a small percent of the total actors had many connections, and the rest had relatively few. After the networks were configured, one person was picked at random as a starting point. Then, based on the acceptance thresholds, people either did or did not pass on the message. If they did pass on the information, the people they were connected to then received that information. Those people then decided whether or not to pass on the information based on their threshold, and so on. After repeating the experiment a thousand different ways, the researchers found that the largest cascades began with average actors. Under most of the social conditions that the researchers considered, they found that large cascades were not started by influentials. Instead, the drivers of widespread diffusion were easily influenced individuals. The researchers note that, under the majority of all scenarios, influentials were only modestly more important than average individuals. Anderson has also shown that the largest social cascades do not occur when a single person introduces content, but when many people introduce content (2013). Anderson, too, observed the viral diffusion method on Twitter. He shows that for a viral video, typically each person that introduces the content garners a few additional adoptions. While some adoptions are greater than others, no one adoption can account for a large amount of diffusion (2013). This thinking is not new in marketing. In evaluating word-of-mouth (WOM) campaigns, Rosen concludes that volume does not matter as

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much as dispersion (2009). He cites that the most effective campaigns have “buzz” that spreads across as many groups of a network as possible. In what he calls “seeding,” he recommends that marketers strategically reach across the entire population of people they intend to reach, not just to a few popular people. He cites the tendency that popular people have to be connected with each other as a reason why this strategy could be ineffective. Overlap can occur, while other areas of a given network may be missed completely. Another study finds the number of “followers” (i.e., the number of people subscribed to a person’s Twitter feed) is not a great predictor of how influential a user is on Twitter (Quercia et al., 2011). While the study did find that the largest cascades came from users with a large amount of followers, the researchers could not predict which users would generate diffusion. Using evidence available to them through the Twitter application program interface (API), the researchers could not reliably predict when large cascades would occur. They therefore suggested that marketers target a large number of potential influencers, thereby capturing average effects. They suggest that targeting a small number of influentials would likely be ineffective. Cha et al. echo these findings in the study aptly named “million follower fallacy” (2010). The researchers found that users with large amounts of followers were not consistently influential (Cha et al., 2010). The most followed users were observed as being particularly unsuccessful at spawning large amounts of retweets. Instead, the authors suggest that retweets are driven by the content value of a tweet. Even more complexities exist that could confound approaches to identify influentials. Researchers have found that popularity on Twitter may be based on moods, not more traditional measurements of influence (Quercia et al., 2011). In an analysis of the most influential users on Twitter, researchers found that popularity and influence cannot be reliably traced back to “the graph properties of the network.” Measurements of such graph properties (e.g., who replies to whom, which relationships are mutual) are indicative of opinion leadership as conceived in WOM and two-step flow models (Weimann, 1994; Godes and Mayzlin, 2009). However, Quercia et al. found that these properties fail to predict whether a person will be influential. Through simple measurements of personality, the researchers note that language differences exist among people on Twitter. More specifically, they note that the most influential users on Twitter tend to express negative sentiment. While the researchers admit the language analysis was exploratory, they conclude that personality plays a larger role in influence.

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Conclusions Go for everyday readers, not celebrities The findings here suggest that news media should pay little attention to celebrities and the like. When a celebrity posts a news story, it does garner a little more attention than when an average user shares it. But the difference is nowhere near proportional to the millions of followers celebrities have. Celebrities do have a lot of followers on social media platforms. Regardless of their apparent fame, they fail to garner attention relative to the number of users that follow them. The most popular users on Twitter are not necessarily significantly better at passing on news stories. Everyday people pass on stories to their friends, and while they are not quite as effective as celebrities, they do it much more often. With this thought in mind, media managers need to find their everyday audiences on social media platforms. This can be done through very calculated advertising campaigns on the social media service in question. Media managers should target users that ●●

Live in the correct geographic area

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Are active (post 3+ messages a week)

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Are engaged (have liked or shared content from news media)

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Have a certain threshold of followers (Vargo, 2013, suggests 500 for Twitter)

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Posts about topics your news outlet covers

In running calculated, mini campaigns with budgets of less than $100, followers can be gained. This can be done two ways. First, news stories can be “injected” into a user’s news feed. Here, relevance is key. The idea is that if the news story is relevant to the user, they may click on it, engage with it, and ultimately follow the brand. This may appear invasive, but if the story is topically and geographically relevant, the user will likely find the story interesting. After all, a relevant news story would surely be more interesting than an advertisement for a company. By serving them a relevant story and then asking them to like a Facebook page in the process, a news media can grow its base in a smart way. If the story is not relevant, the advertisement may be found annoying. Secondly, Twitter and Facebook offer promoted “who to follow” spaces where a company can promote its Twitter account. Here, a news media can target relevant customers

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and encourage them to follow the media based solely on the brand name. Relevance here plays a role, in that a user should be reached when they are viewing content similar to what the sponsored media in question also produces. Drawing from the beginning of this chapter, the end goal is not to find as many users as possible. The goal is to find active and engaged ones. There is no need to solely advertise to influentials (i.e., celebrities and users with millions of followers), but adding users with few friends is not likely to push the needle either. Remember what the literature says about virality. The most popular content on the Internet comes from tons of easily influenced individuals sharing content with their friends. As such, the value of adding one more “like” on Facebook or “follower” on Twitter is not just in that person. The value added is in fact that entire network to which that person is connected. When a user starts following your content, they are much more likely to share it. When they share it, it is likely that a handful of their friends will visit it as well. This is how content spreads across the Internet.

Do not be afraid of advertising marketplaces All social media platforms have advertising marketplaces that can reach a media’s readers in more straightforward ways. On Twitter, Facebook, and Snapchat, the marketplace allows for user targeting along several dimensions, including demographics, geographics, interests, and more. The list of targeting options is always growing. The initial investment of a paid advertisement for a campaign sounds expensive and perhaps counterintuitive. Media marketing budgets are razor thin. Media are also . . . media. Surely they are the ones that should benefit from advertising, not vice versa. While these points are indeed valid, advertising on social media is done in the format of a marketplace. This means that advertising prices are determined on a supply and demand basis. The negative aspect to this is that at certain times, and for certain users (i.e., people with certain likes and interests), advertising may be expensive. The positive side to this is that at other times, when demand is low, the advertising will be very affordable. Moreover, different pricing models for marketplaces exist. For instance, instead of paying for each time a news story is injected into a consumer’s news feed, there are options to pay only when people click or perform a specific action (i.e., like a Facebook page, install an application, or enroll in a digital newspaper subscription). These types of payment options for advertising are called cost per click (CPC) and cost per action (CPA), respectively. While they can come with a premium price tag, media managers

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can have complete control over whom they are reaching and what they want to pay for.

Let journalists dedicate time to “Own” specific topics on social media Discussion in the opinion leader literature reveals an opportunity. Journalists do not need to recruit celebrities on Twitter to have a successful, faithful following. They do not have to blog every facet of their everyday lives, either. Instead, journalists can become opinion leaders through the quality and focus of information they share. Creating separate accounts for journalists turns them from organizations into individuals with specific interests. Individual journalists can own a beat or niche topic area on a social media platform. In that space, the journalist can offer temporal updates on stories and events that fit a specific focus. Two-step flow suggests that journalists and bloggers alike can become opinion leaders by posting on these topics consistently and reliably. Again, this type of reporting can (and likely should) be more time sensitive in focus but professional in nature. Journalists wary of posting what they ate for lunch can rest easy. Rather, journalists can cover topics in which they are invested. These topics can be as specific as the journalist’s expertise, such as the local weather. Or they can be as broad as health and wellness or the national economy. However, the broader the topic is, the more competition exists. The more “niche” or specific a topic, the less competition and thus the increased likelihood that said journalist can own a part of that discussion. Successful examples include topics such as airline safety, big-data marketing, or even the England and Wales Cricket Board. For local journalism, topic focuses can include community events in Leeds, organic food in Sussex, or healthcare in Bristol. By owning a topic, journalists can garner attention beyond the media they represent. This adds value not only in the additional traffic they drive, but also in the reputation they bring to the media organization they represent.

The power of one The overall takeaway of this chapter is to not underestimate the power of the average consumer. Each consumer comes with an additional network of connected users. While any one network may not be particularly powerful, many small networks combined make things go viral. Again, remember that

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the most viral stories on the Internet come from mass cascades of easily influenced individuals (Watts and Dodds, 2007; Goel et al., 2012). Your media organization must have enough “seeds” (i.e., followers or friends) across the entire network you want to reach. Only then can you be assured that your message is reaching that entire network. To reach an entire population, many average consumers must be listening to you across that entire population. When developing a social media marketing strategy, make sure you are reaching for people that are not only interested in your stories but also individuals that cover the complete spectrum of your target audience. Reach across all relevant geographies and demographics.

References Anderson, A., Goel, S., Hofman, J., and Watts, D. (2013). “The structural virality of online diffusion.” Working Paper at Microsoft Research. http://www. jakehofman.com/inprint/twiral.pdf. Cha, M., Haddadi, H., Benevenuto, F., and Gummadi, K. (2010). “Measuring user influence in Twitter: The million follower fallacy.” Proceedings of the International AAAI Conference on Weblogs and Social Media, 2010. Gladwell, M. (2002). The Tipping Point: How Little Things Can Make a Big Difference. Boston, MA: Back Bay Books. Godes, D. and Mayzlin, D. (2004). “Using online conversations to study word-of-mouth communication.” Marketing Science, 23 (4): 545–60. Godes, D. and Mayzlin, D. (2009). “Firm-created word-of-mouth communication: Evidence from a field test.” Marketing Science, 28 (4): 721–39. Goel, S., Watts, D., and Goldstein, D. (2012). “The structure of online diffusion networks.” Proceedings of the 13th ACM Conference on Electronic Commerce, 623–38. Katz, E. and Lazarsfeld, P. (1955). Personal Influence; The Part Played by People in the Flow of Mass Communications. Glencoe, IL: Free Press. Lazarsfeld, P., Berelson, B., and Gaudet, H. (1968). The People’s Choice: How the Voter Makes Up His Mind in a Presidential Campaign. New York: Columbia University Press. Lerman, K. and Galstyan, A. (2008). “Analysis of Social Voting Patterns on Digg.” Proceedings of the first workshop on online social networks (WOSP’08). Quercia, D., Ellis, J., Capra, L., and Crowcroft, J. (2011). “In the mood for being influential on Twitter.” Proceedings of IEEE SocialCom’11, 2011. Rosen, E. (2009). The Anatomy of Buzz Revisited: Real-life Lessons in Word-ofMouth Marketing. New York: Doubleday. Suh, B., Hong, L., Pirolli, P., and Chi, E. H. (2010). “Want to be retweeted? Large scale analytics on factors impacting retweet in twitter network.” In Proceedings of the IEEE International Conference on Social Computing, 177–84.

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Vargo, C. (2013). “How many followers do people and news media have on Twitter?” [Web log comment on March 3]. Retrieved from http://www. chrisjvargo.com/?p=1765. Watts, D. J. and Dodds, P. (2007). “Influentials, networks, and public opinion formation.” Journal of Consumer Research, 34 (4): 441–58. Weimann, G. (1991). “The influentials: Back to the concept of opinion leaders?” Public Opinion Quarterly, 55 (2): 267–79. Weimann, G. (1994). The Influentials: People Who Influence People. Albany, NY: SUNY Press.

11 News media strategic visions and speculative futures Paul Jones, Chris Vargo, Gary Graham, and Anita Greenhill

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he French philosopher Gaston Berger (1957), well known as the father of French forecasting, pointed out that if current events reflect decisions of the past, future events will be the result of decisions of the present. Although this mental attitude enables one to prepare for the future, it is not always in the minds of people and institutions. The ability to survive in a world of accelerating change and challenge calls for even greater creativity in our thinking and for more effective strategic planning and foresight. “Mankind [sic] has always had tremendous concern about the future” (Orwell, 1982). That concern is even greater today for the news media industry as the rate of change accelerates, technological innovations are crowding in on it, breaks with the past are multiplying, and an impression of chaos is taking over from the well regulated order of the industry. These trends of technological change in the news media industry are anticipated to accelerate with the rapid advance of the digital economy (e.g., the Internet of things, the cloud computing paradigm, and big data) and the advance of futuristic urban logistics and smart city designs. Imaginative/qualitative approaches to forecasting, foresight, and futurism may be nothing new. But we are currently observing a movement toward more creative and imaginative involvement in “future hunting,” whether related to technology, firm innovation, smart city design, or digitally enhanced news firms. Creative prototyping is embedded in the ideology and subjunctive boundaries of science fiction (SF). Prototypes set out to do many of the same things SF does but in a more concrete way, by introducing real physical

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objects or real sets of rules and scenarios that require the participation (direct or indirect, voluntary or involuntary) of users beyond just their day-to-day emotional and intellectual engagement. In this way, prototyping can “test” objects, tools, or storylines. SF has (in general) been a fixed text until very recently, and though readers have enjoyed many different readings and interpretations, the author has not been able to adapt or react to their responses. Fictional prototyping further allows the inventor or storyteller to adapt scenarios as they evolve and as the users or participants give their reactions. However, the design of prototypes is challenging as they require the developer to be both a scientific and technological expert—in this case, to have critical and tacit knowledge and understanding of the news media sector as well as the skills to be able to write compelling fiction. Imaginative speculations about the future cannot be counted on to offer consistently accurate forecasts. Prototypes, however, can provide “an arena for the exploration of ideas unavailable elsewhere,” as Thomas Hine writes in Facing Tomorrow: What the Future Has Been, What the Future Can Be. Historians, scientists, and others who have seriously addressed the future usually have preferred to call on reason and the scientific method, rather than pure artistic creativity or pure imagination, as their tools of choice. “Imagination” critics suggest it is the play of children—“Don’t let your imagination run away with you!”—not the serious thought of adults. But in doing so they discount the powerful use of the imagination that characterizes the best of speculative, creative, counterfactual representations of the future. Fictional prototyping enables forecasters and futurists to have a creative and imaginative dialogue with a breadth of stakeholders. Dry theory or survey instruments are less potent tools of engagement than that of sharing “visions” and future creative “imagery.” Prototyping enables everyday citizens to have a say in their future, including the future of their news supply. Creative prototyping could be claimed to be an emerging foresight technique that attempts to analyze the future as a multiple reality. The aim of this chapter is therefore not focused on the new age or utopic culmination. Instead, we set out to demonstrate that prototyping is something that could be strategically visionary, and that prototypes can be used to shape future conversations from all members of society about the news media industry, something that is guided more by logic and intuition than by ideology. The ability of the developer ultimately relies on their tacit knowledge about science, technology, people, institutions, narrative structures, the creative process, and proper presenting and critiquing skills. The problem with relying on tacit knowledge for foresight is that one vision is going to be infected with unexamined biases and may confirm what you want to know rather than

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challenging and transforming your vision of the future. The main check against such bias is the scientific expertise of the other participants (for instance, reviewers, colleagues, co-authors, and SF writers) involved in the prototype development process, who can check the validity of the original scientific principles under examination.

Establishing links between SF and fictional prototyping The thing that makes SF uncomfortable for the disciplines of strategic foresight and futurism is its “subversiveness”—its attack on reality and fact. SF suggests illogical, counterfactual possibilities. A future based on such possibilities may threaten logical people who have thought of the future as something that can be rationally determined. In this chapter, we are driven to answer this question: Can SF really offer anything important and fresh to current debates on the long-term future viability of the news industry? In the recent past, we took hints from visionaries such as George Orwell— mostly from the book 1984. We tried to ignore the now silly pneumatic tubes that sent stories spinning through the Ministry of Truth, a representation of the University of London’s Senate House Library at war time. Instead, we focused on Orwell’s conception of news as propaganda. We became cautious of the potential for news to be written and rewritten by the cynical masters. 1984 also showed us problems with burnt-out and disaffected journalists. There were also lessons in Orwell’s ideas about the impoverishment of language as a form of censorship and control. Contemporary newsroom workers often identified, not happily, with Winston Smith. Reporters in Orwell’s vision were not tasked with discovering truths but with delivering products at the demand of the powers that be. We have also taken notice of Neil Postman, who argued in Amusing Ourselves To Death (1985) that our world is less that of Orwell and more that of Aldous Huxley’s Brave New World (1969): A world filled with distractions from and suppressions of truth, progress, and advancement; a world not of “no” but equally not of too much “yes”; not a world so filled with hate, but a world in which we are overcome by petty passions. As Postman put it, “Huxley feared we would become a trivial culture, preoccupied with some equivalent of the feelies, the orgy porgy, and the centrifugal bumble puppy.” These two insights were both ahead of their time and represent in a varied form the issues that we face today. While not rewriting history, governments of all types are expanding their surveillance of citizens. In

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the United States, we see a nation divided on which news and information issues are the most important and to whom. Division on issues has had its part in the parliamentary bipartisan gridlock, with neither party willing to focus on agreeing. As a result, the news industry has begun to fragment into appeasing smaller groups of audiences with specific agendas. Novels are not the only forecaster of the future. Comic-strip and comic-book depictions and SF speculations can also serve as a barometer. In these outlets, we can examine the cultural context in which the presence of news and reporters exists, and we can examine the futuristic technologies in which the news is transmitted and received. Imagined twists on society could change everything about the news. What would happen if we lived in a world in which one man could fly or swing from spider webs? Or, less magically, a beautiful woman reporter could and does become involved in international intrigue? Accepting these questions as partly ludicrous is a must. Yet asking these questions and learning how the news might change is another practice of brainstorming toward innovation. Looking back at three comic-strip news reporters—Superman, Spiderman, and Brenda Starr—we see a trend we would not have expected in the newsroom of the 1940s. The adventurous reporters and their newspapers have succumbed to change. Brenda Starr, who had inspired so many adventurous women to take up reporting, left the United States for India in 2009. When she returned to the United States, she found that her paper—where she had begun work in 1940—had become a free paper. And to her shock, the paper had a blogger on the payroll. The owners of her beloved Flash had become involved in various scandals and were in disrepute. It was too much, for even a hardened international reporter. In January 2011, she left the profession. We last see her walking out the door holding a black orchid—a sign from her mysterious lover. Superman, who as Clark Kent had been in the news business since 1940s, has also had enough of the news, or at least enough of the Daily Planet. In October 2012, Kent left the paper in a huff with unclear intent for the future. He has been rumored to be working on a blog, a Drudge-like news site, or a Deadliest Catch–like reality show, or even to be joining the Huffington Post. Like many aging male journalists, his job dissatisfaction has affected all parts of his life. His marriage to Lois Lane came to an end and he was last seen— according to one storyline—in the romantic company of Wonder Woman. Spiderman, as Peter Parker, has faced even more drastic change. The news photographer left the Daily Bugle and joined a think tank, Horizon Labs. Despite starring in popular movies, joining the New Avengers, and changing his job, trouble of the kind only found in comics overtook Parker. The Web slinger’s mind was installed in the body of his long-time nemesis, Doctor

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Octopus. Doc Ock is of no mind to stay in the low-paying business of news photography. While there are signs at the time of this writing that Parker will somehow return to his body in the near future, his interest in the news as a profession remains in limbo.

The dystopic future These comic-strip representations of newspapers and news reporters reflect the reality of news in our society today. Our heroes and their day jobs are going the way of the papers themselves. Comics obviously do more than reflect facets of reality. They depict heroes and forecast possible futures. As comic strips mature into comix or graphic novels, we begin see the futuristic heroes of journalism. Be warned, these depictions are bleak or dystopic; not bleak as regards journalism itself, but as regards the future of society, government, and the human condition. Still, despite the departure from Star Trek’s optimistic SF view of the future, we still see strong nods toward an optimistic future for journalism. As we will see, journalism itself, in lieu of other heroes, becomes the hero. Future “newies” are depicted as a group of people who become solely interested in discovering and uncovering truth. We see journalists that do so through technological reporting advances that have not yet become technological reality. In this vein, we hope here to hedge our bets on the literature’s complete abandonment of utopian society and focus more on how these journalistic heroes are able to report news in the bleakest of conditions. One dubious future can be seen in the evolution of Hunter S. Thompson. Fiction has painted him in transition from a conventional journalist, to a New Journalist, to a gonzo, to self-mythologizing reporter, to a movie subject, to an alternative life as the drug-addled international opportunist Uncle Duke in Doonesbury. Finally, in Transmetropolitan, Thompson’s character is celebrated in the form of “Spider Jerusalem,” a journalist bent on exposing the corruption of a now completely dystopic United States. At each stage of his representation, Thompson and his avatars become more ironic, more active and open in their drug use, more profane, and less tolerant of corruption. At each stage of performance, Warren Ellis and his representations of Thompson are larger than life. Thompson is transformed into a legend of the gonzo style of journalism. Throwing away journalistic norms such as detachment and objectivity, Spider Jerusalem reports with personality, emotion, and agenda. His unfiltered style of narrating stories as he lives through them makes him some type of celebrity. His audience and market value are that which Clark Kent or Peter Parker could only dream of. Kent,

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Parker, and even Starr were company men and women for the most of their careers. Jerusalem shows open contempt for oppression of any sort, whether it be by the villainous government or his editors. In Transmetropolitan, Jerusalem to a large degree picks his own assignments. He acts as a nearly free agent, even when on a specified job. His voice and actions are celebrated for their inherent spin. His reporting is engaged to the point of endangering his person. Moreover, Jerusalem does not get paid to write stories like a journalist does today. His income comes from subscriptions to his feed, which is a live stream of consciousness. This stream is then syndicated by his editor, who acts as a broker for Jerusalem. Constant reportage comes in the highly personal, highly gonzo, highly obscene, and often just plain high-on-drugs form. But what shines through in Jerusalem’s completely over-the-top reporting is his personal dedication to the truth. Here, the society Jerusalem lives in has been altered so that truth is a commodity. His readers follow his feed for this truth and for his personality. So what might we take from Ellis’s Spider Jerusalem example? Should we return to the days of journalistic exploits, when the likes of relentless self-promoters such as Henry Morton Stanley and Lowell Thomas were celebrated? Society today shows that there is very much a place for a star reporter—part fact uncoverer, part personality, part brand, part textual stylist, and part adventurer. The path to High Adventure will, we hope, be more that of Thomas than Thompson. Exploits, drama, or drugs aside, we can be sure that Thompson/Jerusalem points to a kind of personal branding through a personality-driven spin. This may work in the future for a certain kind of journalist. There may well be the few who are able to sell their feeds, just as Lowell Thomas sold his newsreels as cinema entertainments. At the time of writing, media outlets such as YouTube have begun to implement paid channels for exclusive content. These channels incorporate inexpensive and easy to subscribe payment options. If the barriers for consumers to use these paid streams continue to drop, journalists may begin to find it economically feasible to support themselves via these routes. Can you imagine paying one dollar a month to access exclusive reporting from a journalist who reports on issues you care about, with the style and tone that suits you? Or you may already be paying, as specialty blogs like Andrew Sullivan’s derive income from a core set of subscribers. Other bloggers and online news sources such as Talking Points Memo do quite well on advertising sales, just like newspapers of old. Recall Chapter 3 and its discussion of new media types. Does the vision in Transmetropolitan follow a more aggressively evolved version of vertical

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media? Imagine news that not only reports to users given their interests and social communities, but imagine news outlets that adopt fierce personalities to complement their readers. Jerusalem is not just another Fox News, reporting with a bias to its constituents. He is an attack force fighting for change. His audience’s internal anger about injustice matches his external actions in his reporting. Is it possible that vertical media will continue to adapt themselves until they are external fighters for the goals of their audience? Other sources aside from fictional comics depict journalism as mixes of entertainment and personality. Art Spiegelman’s groundbreaking Maus: A Survivor’s Tale, subtitled My Father Bleeds History, sparked a period of innovation for graphic novelists. Maus slowly transformed from an insert stuck inside a Raw, a comix magazine, in 1980 to a two-volume hardback that won the 1992 Pulitzer Prize. Spiegelman’s ambitious, deep, and historical account of the Holocaust came into being largely from interviewing and from transcribing his father’s personal accounts. Well researched and artful, the books challenged and influenced young illustrators to include personal accounts. Serious stories, personal and deep, began to appear in a new section of bookstores, called “graphic novels.” Some illustrators even became journalists and in doing so became their own incarnation of Spider Jerusalem: news seekers with personal adventures. More accounts of storytelling and drawing with consequence has resulted. We have even begun to see writing without direct organizational or corporate support. Joe Sacco has been touted by many as the first of the first in the new “comics journalism” movement. His books on Palestine (1993, 1996, 2001, 2009) and the Bosnian war (1998, 2000, 2003, 2005, 2009) have given comics a new purpose. Sacco’s claim to journalism is made overt and direct in the title of his 2012 book Journalism. Sacco, while an editor at Fantagraphics, created a graphic magazine that was perhaps too new for the time. Centrifugal Bumble-Puppy directly referenced Huxley and Postman with its title. During its brief eight-issue life in 1987 and 1988, this new kind of magazine was designed to have a social focus. Yet Sacco ironically proclaimed on the cover of the first issue that Centrifugal Bumble-Puppy was “A VERY FUNNY MAGAZINE.” Engaged and serious, this kind of comedic style owes as much Spiegelman as to Huxley. Reaching back into time, we see that Sacco and Spiegelman are fulfilling Horace’s instruction to poets: Be both sweet and useful. For journalism, we might say “educate and entertain.” In one way, the fusion of comics and journalism gives us a world of narrative and personalized infographics. Here, visual imagination meets experience, data, and memorable storytelling;

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a complicated mix but a palpable one, and not just a Centrifugal BumblePuppy. “Within thirty years, we will have the technological means to create superhuman intelligence. Shortly after, the human era will be ended.” —The Coming Technological Singularity by Vernor Vinge (1993) (now predicted to be achieved by 2030). Writing without graphics can also be both visual and memorable. Since Jules Verne, speculative fiction (or science fiction) has been the genre in which adventure and engineering were mixed. The result is a variety of futures. Not all speculative fiction writers, however, predict the future world with astounding accuracy. Orwell’s pneumatic tubes in the Ministry of Truth vanished and were replaced with copper and then optical fiber. But certain predictions stick. We grasp onto these imaginaries and mold the visual metaphor into our daily lives. If we do not obsess over the inaccurate technical details concerning Orwell’s monitoring devices, we see some bold predictions: his rewritten histories, his manufactured news, his distractions for the masses, and of course the management of language. All of these things, to varying degrees, have been issues of our modern world. The idea of modern hackers using and liberating hidden information, like the real-life “Anonymous”, can first be found in Vernor Vinge’s True Names (1987). Set in Vinge’s near future, hackers living quite common lives in very usual places have access to an alternative world of avatars, databases, and networks through their home-built computer systems. Once in that world, they have access to counter power. Here the hackers have a means for resistance to the “Great Adversary,” their corrupt government. This influential work forecasted the cyberpunk movement. True Names also influenced the creators of our current technology infrastructure. Vinge’s vision was celebrated in a republication, True Names: And the Opening of the Cyberspace Frontier (2001), with essays of appreciation by leaders in supercomputing, artificial intelligence, virtual reality, and free software; and by cryptographers and other writers. Regardless of the massive bits of freed information, in the end they did not free Vinge’s protagonist, Mr. Slippery (the Edward Snowden of this story?). However, the information set free by Mr. Slippery freed the minds of inventors and network policy makers for decades to come. A general trend can be seen from these illustrations. As information becomes digitized, its barrier to access is decreased. When security mechanisms are digital and not physical, they can be circumvented by clever code and ingenuity. This makes renegade computer scientists into information providers like journalists have been at one level. We break to the current moment and see

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that groups like Anonymous take often private information and share it with the public. When an individual or a company does not abide by Anonymous’s moral code, they may be subject to an attack. Using the tools of computational know-how and unauthorized access to computer databases, Anonymous has performed detective work and identified members of otherwise hidden groups. There is no reason to think that this kind of vigilante journalism will not increase, as more and more groups employ computer-savvy generations to obtain information. Teens, graffiti artists, rogue journalists, and others who live outside the dystopic cultures of control may seem like near twists on investigative journalism. However, we can relate because at least they appear to uphold the four pillars of journalism: drinking, cursing, cynicism, and gossip. Vinge also forecasted unauthorized access to databases. In his very first effort, Bookworm, Run (1966), he depicts the networked brain of a chimpanzee. Norman, the chimp and hero, is to become connected to a wireless network, which is designed to provide Norman with much greater intelligence and direction. Through a glitch in the computer network’s security system, Norman is given access to America’s most sensitive databases. Like Adam confronting the tree of knowledge, Norman realizes that he can ask for everything in the database. Like Adam, he is driven by curiosity and by a thirst for knowledge. Once more, like Adam, he finds himself changed to the wrong side of power. While Norman was no news chimp, his feed was both his news source and his archive. Norman’s feed and Mr. Slippery’s databases turned into a “Network of A Million Lies” in Vinge’s Hugo-winning novel A Fire Upon the Deep (1993). In this story, Vigne’s focus turned to the first Internet discussion forum, USENET. Shortly after its creation, USENET became a place for gossip, fiery opinion, insider slang, and occasional revelations. While still celebrating the virtues of the polyvocal feed, A Fire upon the Deep provides a critique of crowd-created and crowd-sourced news. Somewhere within the “Network of A Million Lies” lies just enough truth. Vinge does not just depict USENET as a collection of discussion boards and newsgroups with participants. Here he foresees the problems of current incarnations of gossipy and mud-slinging networks. The result is error, distortions, and factual deviation. Vinge’s depiction forecasts the disparity we can observe on contemporary news-site commentaries and on opinion-fueled sites like Reddit. In M.T. Anderson’s young adult novel Feed (2002), the information flow has become not vox populi, like USENET, but a required source of distraction and control. Consider it as a Centrifugal Bumble-Puppy with a bite. Disconnection from the feed results in death. People mine data for the government. In what sounds like a digital marketer’s dream, individual preferences are recorded and uploaded to the powers that be. Every action is monitored, deciphered,

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and evaluated so potential consumer behaviors can be exploited. People in the world of feed can communicate in a near direct telepathic way using m-chat, but even those communications are later data mined by corporations seeking profits. The feed is searchable, centrally controlled, disempowering, and unavoidable. One of the protagonists here is the only human without an implanted feed. He is depicted as a professor of the history of programming languages. He wears a backpack and accesses the feed through his glasses. And he is largely misunderstood. Not just because he is not wired into the feed, but also because he is the father of one of the main characters in this decidedly young adult novel. In Vinge’s next Hugo-winning novel, Rainbows End (2006), access to the feed is not by way of embedded devices but through smart clothes. The world is seen through contact lenses connected to the feed called virtual retinal displays or VRDs. The feed is not just data or video or text but an ongoing augmented reality. In addition to auditory and visual encounters with the feed, characters in Rainbows End can experience haptic feedback from their experiences in the augmented reality. Things are networked. Virtual and physical become the same. The news and the world itself are no longer just things to be accessed and shared but new worlds to be experienced. Bodies have new lives—the protagonist, Robert Gu, is a former poet and English teacher brought back from Alzheimer’s disease. Virtual reality gaming is both a way to pass time but also a way of living. Libraries have become power centers. And the novel’s sinister presence has as its avatar a rabbit or a disembodied voice. There is no separation between the feed and the lived world. What is it to say that news media could not be more experiential or a part of reality? While this prediction may still be far from landing, it is no secret that interactive news is the future of online media presentation. Static news representations are giving way to the dynamic customization of content. If we remain on this continuum, we may find that we end up in a completely immersive reality, the ultimate customization. We may find news as a portal to experiencing things beyond our perception, similar to the way Vinge forecasts news as a temporary transportation of reality that is all encompassing and pervasive. Rainbows End also describes beings/avatars like the Blanks of the television of world of 1980s TV cult Max Headroom. In this story, the Blanks come in the form of people who choose laptops, keyboards, and old-school computer programming to create and modify the games of life that others are experiencing as well as the worlds in which they are living. Like the Blanks—who are people who have either fallen off the information nets or taken themselves off deliberately in the Max Headroom world—the rogues

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in Rainbows End operate outside the main feeds, games, and worlds. Unlike the Blanks, who are merely seeking personal freedoms, the characters in Rainbows End have the will to change the world, not by reporting on the world, but by building and forming an augmented world. There are others who offer differing takes on augmented realities. Tim Maughan depicts the intersection of the real world with virtual interfaces. His novel “Paintwork” (2011) weaves differing visions together. Like the world of Rainbows End, Maughan’s augmented world is viewed through lightweight glasses that overlay the virtually constructed world onto the physical world, creating a complex experience. The result is a reality that is more than real and more than virtual. Google Glass offers the beginnings of a real-life version of a vision of the future, allowing continuous recording, uploading, and sharing. We now also know that content can be overlaid onto whatever we see. Technological innovations such as Google Glass give us a clear indication that our current technologies are not far away from creating an immersive augmented reality. Maughan explores the problems that augmented worlds bring to reporters, punks on the street, celebrities, and governments, and even to the creators of the augmented reality (AR) experience. In one of his visions, “Paparazzi,” documentary maker John Smith is contracted out by a media organization to infiltrate the elite online gaming world, which exists solely in augmented reality. Smith must enter the augmented reality in order to report on the comings and goings of a celebrity, who is famous as a video game star. A documentary reporter at heart, he finds himself enslaved to the virtual version of the paparazzi, stalking the private life of the celebrity using an online avatar. In another vision, “Havana Augmented,” he describes an international gaming team that provides Google Glass–like headgear to the entire population of the capital of Cuba so that everyone can watch their own giant androids battle in the streets. Maughan illustrates what might happen in a world where news and gaming intersect. The spectacle-like device in “Havana Augmented” holds the same basic premise that simple iPhone apps such as Yelp’s Monocle do. Augmented realities are not a diversion, but they are a way for the public can enhance their world. They are a way to understand a recorded or lived event from several positions. The reporting, broadcasting, and viewership possibilities for news are immediate and immense. A feed may be used to help inform or even create a virtual world of reporting. Moreover, the augmented world can let the glasses wearer experience enhanced worlds. Real but not quite real, virtual but contextualized, augmented realities mediate reality. This mediation is not limited to games and SF; it will permeate day-to-day life. But humans, as news consumers or reporters, are not the only augmented creatures. In Maughan’s story “Paintwork,” we also see automated bugs,

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like roaches, that subvert characters. Today, research is already underway to explore the potential of augmented creatures at North Carolina State University (NCSU) and in other engineering groups. Instead of using expensive conventional hovering drones, NCSU researchers have created large cockroaches with wireless biological interfaces attached to their backs, for example. These cockroaches were modified or augmented to allow them to be guided as necessary, to carry a small microphone, and to enter hostile environments for search and rescue purposes. Now specialist US journalism schools have started drone journalism labs, designed to train reporters on how to fly, hover, or crawl their way into otherwise impenetrable places. When in search of a hidden polluted stream or an encampment, these augmented roaches could assist when reporting from difficult to assess areas. These roaches can easily slip into rooms through cracks or under a door, literally bugging the room in real time. Biorobots or augmented beetles not much larger than a quarter could become, even in the near future, a part of an investigative or crime reporter’s tool kit. As seen in the SF movie The Fifth Element (1977), there are some problems in using insects. In the movie, when an insect is sent to bug the president, it is flattened, smashed, and squashed like—well—like a bug. Any device, be it a not-very-secretive hovering Journo-drone or a creeping augmented cockroach, faces the possibility of being discovered, compromised, and/or destroyed, as we saw at Gezi Park in Istanbul in 2013 (http://vimeo.com/68156381). Content is king, but content of news—as John Berger said about art—is now ubiquitous, ephemeral, insubstantial, available, valueless, free (Ways of Seeing, 1972). More importantly, news has become mutable and unstable. Perhaps the best, and again a dystopic, interpretation of the near future of content control wars, of news and culture in a changing environment, is Cory Doctorow’s Pirate Cinema (2012). Doctorow takes on our culture’s recent fascination with news remixed as comedy. Like The Daily Show, Reddit, YouTube, and Auto-Tune, The News in Doctorow’s world—both the practice of sharing and remixing culture and news—is more extreme. The litigious reaction is also more overreaching—but not by much. Play and seriousness collide in the creation, interpretation, and unauthorized remix of popular news. Reporters can do ground work at a superhero level, as comic-strip reporters like Kent, Starr, and Parker once did; they can no longer control the transmission and forms of presentation, representation, and re-presentation of their work. Journalists, much the same as these SF writers and artists foresee, are being presented with new languages, new opportunities, and new ways to be heroic and creative. Even Huxley’s (and later Postman’s and then Sacco’s) Centrifugal Bumble-Puppy can carry the news in an effective and entertaining way. Part

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satire, part information, humor and news go together in SF. This type of humor knows no boundaries and takes no prisoners. Journalism for Cory Doctorow, Sacco, and even Ellis (with Spider Jerusalem) is at the intersection of facts and entertainment. Many ask “Where’s the money? Where is the market?” We agree with the creator of “Paintwork,” Tim Maughan: “The ties binding innovation to the market ultimately cast a dark cloud over the present.” But, as we suggest in our disruptive innovation chapter (Chapter 3), we cannot be afraid of change simply because of a bottom line or the lack of current revenue streams. In our studies here, we still see a role for investigative journalism. Journalism retains a role that is very central to balancing government and corporate misuse. This suggests that, in whatever form, journalism will exist even in the most dystopian of visions. In addition to the important role we see journalism playing in SF, we see an advent of new technologies. Augmented reality puts reporting on top of our everyday experiences. Journalists gain celebrity followings, and people pay for access to their streams of consciousness. Investigative journalism goes rogue and literally employs “bugs” to get the truth. In a world of gratification, journalism becomes entertaining. As we have mentioned, the current state of SF can paint a world that has fallen from grace. If such predictions were taken as straight facts, journalism’s future would be the least of our worries. Fortunately, even the authors themselves know that their depictions are fiction. What we can take solace in is that, even in the most disjointed future, we see a demand for journalism and its power-checking role, plus a plethora of technological innovations that will fuel the next generation of journalists. All of the theories mentioned elsewhere in this book posit that the combination of demand and disruptive innovation can keep industries alive. These two observations give us a tempered feeling of support for what will come.

Fictional prototyping Working with prototypes, especially in the context of innovation management, is not new. The relevance of prototypes in the process of innovation management, and in particular with regard to experimenting and learning from these experiments, has been emphasized earlier in this chapter. If we acknowledge that the future cannot be predicted and that we are increasingly unable to rely on past experiences, we require new approaches to deal with the evolving future. Prototyping explores the future by

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experimenting with, or engaging in experimental exploration of, something new. Furthermore, prototypes are significant for innovation since they often encompass the essential characteristics of the final products. SF stories, movies, and comics have been created for over 100 years based on science and technology facts. However, SF prototypes differ in that they utilize fictional creations solely for the development process. Regardless of the profession or industry, SF prototypes enable the future to be imagined and envisioned in a completely new manner. Furthermore, the purpose of dealing with SF prototypes is to explore the implications and/or effects of the part of science or technology they are based upon. SF prototypes can be used as design tools in the development of technology to provide a virtual reality in which a technology can be explored and, most importantly, a new perspective on the technology itself. SF prototypes can cause such an upsurge in creativity that new paths are discovered and possibilities that were never before imagined become apparent in a fictional setting. SF has not only inspired generations of scientists, but also, more specifically, SF has influenced the design of products. There is little doubt that items of modern technology, whether mobile telephones or portable computers, stem in form and function from SF. SF prototypes have enhanced the creativity of designers, engineers, scientists, artists, students, and strategic planners. Being creative, or innovative, is essential for companies to survive and prosper. SF prototyping fosters creativity by generating new ideas, broadening perspectives, and revealing other solutions to problems.

The global news prototype In this prototype, we first proposed a strategic context that formed the futuristic basis for constructing our fictional narrative (which aimed to explore the human, social, and ethical consequences of future design, product, technology, and/or city landscape trends).

Strategic context In the spirit of speculative fiction, let us set a scene for a near future of news by first establishing a strategic context: an analysis of our projected scenario for the year 2037. We then follow this with a fictional vignette synopsis in order to illustrate the social, economic, and ethical consequences of future technology within this imagined but grounded 2037 global socioeconomic market context using the frame of the speculative fiction story “In the Year

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2889” by Jules Verne and Michel Verne (1889). We have integrated literary narrative themes from the original story to take into consideration recent developments in future technology and the evolution of short-story narrative theory (the focus on strong character development, dialogue, point of view (POV) and reader “pay-off”). US firms have established and maintained intense collaboration with companies across the world. The private sector has taken the lead in addressing the pressing issues of the day. Any attempt by governments to get involved in regulating business is seen as an unnecessary intrusion. Citizens trust markets and they are willing to allow them to “work the magic.” So far, their patience and confidence in market forces has paid off. The case in point is the now routine hassle-free immigration across most nations’ borders and the dramatic increase in global food production. Traditional powerhouses such as Japan, Germany, and the United States no longer control the capabilities and resources needed to manufacture highly specialized, high-value products. Although developing countries are not yet on a par with advanced nations, they have found niches and are investing heavily in developing their industrial competencies. To exploit their comparative advantages, countries are specializing in producing what they do best and rely on other countries—halfway across the world in some cases—for everything else that they need. The interconnectedness and speed of this global market has a very clear downside as well: increased volatility. For example, a labor strike in South Korea can have huge ripple effects in a Madison, Wisconsin, manufacturing plant. As a result, firms are taking extensive precautions to keep the flow of goods both smooth and secure. Affordable and seamless supply chains are encouraging companies to invest in global manufacturing capabilities, with most large firms using a mix of offshore and near-shore plants to remain low cost and flexible. The cost of moving goods anywhere in the world is very reasonable, primarily due to new and cheaper energy sources and technologies and nonobtrusive environmental regulations. Energy costs, although relatively low, remain extremely volatile because of the continual natural and manmade disruptions in the supply of oil-based fuels. Raw materials and commodities are brought to the market from all over the world, as there are minimal trade barriers limiting their availability. The free flow of goods is, however, creating extreme volatility in commodity prices, which is a persistent problem for most firms. Therefore price, rather than access, is the key criterion for choosing a commodity item. Postponement of final product customization until the very end has led to higher value density in products being moved within the United States. Retail sales are predominantly conducted online, even for grocery vendors. With a significant

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proportion of the US population living in large and dense cities, individual delivery to residencies is the norm in most retail transactions. The collaboration between firms across national boundaries has further expanded the markets to the point that they have overlapped and blended into a single, global market, with a minimal set of regulations in place. It is said by cynics that, in this brave new world, “the only regulation is that there are no regulations.” Finally, a true global marketplace has emerged, where ideas, technology, labor, and goods are exchanged freely and quickly. The next stage involved building a scenario of the news industry in 2037 grounded in this strategic context. We present the scenario with an accompanying prototype narrative analysis to illustrate the methods by which the prototyper can utilize fictional constructs in their theoretical extrapolations of the human consequences of future technological change. The segments of story narrative are presented in italics below.

Earth Herald 2037 While the Vernes’ story is set in 2889, our story explores a nearer future. We begin on the morning of July 26, 2037, by looking at the global market space scenario through a day in the life of Ted Chang, a managing editor of world’s largest city newspaper in New York (now called Centro space): Chang, the director of the Earth Herald, recommenced his tour of twelve miles across his office. That evening, when his stock accumulator had been brought into action, it was at two hundred and fifty thousand dollars that it calculated the profits of that day—fifty thousand more than the day before. In this prototype, we see one organization dominating the control of healthy news: a world beset by social division (two classes exist: the news media rich, supplied with a healthy information diet of actionable news; and the news poor, supplied with a malnourished news diet of gossip and distractions). Through the intelligent workings of an artificial intelligence (AI) capture system (the so-called “News Media Cloud” that now floats around the Earth’s major cities)—made possible by the incredible diffusion of robotic intelligence, singularity, sensor surveillance, and implanted tracking devices—the Earth Herald exists in an environment of ubiquitous storytelling. Every morning, instead of being digitally written as was the case in the antiquity of 2014, the Earth Herald is “spoken” through machine imagery, which is then converted into conversation from story copy. A reader engages with the news through the producer-consumer engagement points located at regular two-meter points on the sidewalks.

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The key plot point in the story is actions of a renegade group of hackers who manage to break down the barriers and Chang’s autocratic control of news supply. They do this by creating an information worm hole that penetrates “the cloud.” In spite of the work of his RoboCop-style editors, who closed down the original worm hole, these holes proliferate to the extent that the cloud loses its social influence. The “worm hole” usurps the telephonic system within twenty-four hours. It is endgame for Chang. The story ends on the “morning of the day, July 27, 2037, the director of the Earth Herald resigns, and the last copy of the Earth Herald fell from his fingers into the silence of the room.” This prototype using the underpinning Verne vision sought to extend the recent evolution toward the democratic empowerment facilitated by the rise of “civic era” news media technology. One consequence could be the ability of civic activists and hackers to develop news agendas more relevant to their local communities and in which everyday citizens could have more of a role in shaping their local news agendas.

Conclusion Our culture does not develop many cross disciplinary thinkers. The persistent problem of the two cultures—science and technology versus arts and humanities—identified by C. P. Snow will continue to be a deep problem for those planning future news media models. Yet SF, art, and design have a great deal to offer in shaping future news market spaces, not just technology, computer science, and engineering. How do we break the false dichotomy between these two approaches and get them interacting? SF in its various forms (the visual, not just the literary) allows researchers to conceptually “test drive” their future news plans, incorporating the human angle on technological change. There is a deep tradition of dystopian and utopian SF exploring the problems of future news production and consumption, including “In the Year 2889” by Jules Verne and Michel Verne from 1889; our reimaging of that scenario as “Earth Herald 2037” in 2014; and “Looking Backwards: 2000– 1887” by Edward Bellamy from 1887. Prototyping could be the royal road to more joined-up thinking as it combines science fact with science fiction. Prototypes do not try and predict the future they are designed to open up insights and debate on future technological trajectories and their perceived long-term human consequences. In answering the question of what contribution SF can make to the future of news, we suggest that it enables the completion of thought experiments that create worlds and characters that explore conflicting voices of the news media futures. It enables end users and everyday citizens to be drawn into future news media planning activities. It

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provides a vehicle for the engagement and interaction of citizens in new news media model experiments, but more than a focus group, it participates in the co-creation of a new product, technology, or service. Meanwhile, prototypes have a large element of subjective as well as objective evaluation. They are designed to make the reader aware of the need for criticality and balanced evaluation as opposed to blindly accepting the future technological visions of computer firms for the news industry, those with a vested interest in hooking people into their profit-driven ventures. This brave new world being envisaged of future smart city technologies and amplified news media profiles could be the continued preserves of the elite and rich in society, as the digital divide grows and the poor and disadvantaged are starved of the tools of democracy. A countervision to that outlined in the prototype synopsis in this chapter could run along the lines of the availability on the Internet of infinite amounts of information, making professional news media obsolete, the human horsedrawn carriages of the twenty-first century. In pursuit of an audience will those journalists who survive, whether professionals or amateurs, redefine news to focus less on what we think of as reality and more on faux facts—makebelieve news about society’s sinners and celebrities that entertains but fails to edify? What reality or unreality will be the subject of the news media’s work? The novelist E. L. Doctorow (no relation to the Cory Doctorow previously cited) describes a secret of his imaginative writing craft. It is “a sentence spun from the imagination, that is, a sentence composed as a lie,” but also, he continues, “it confers on the writer a degree of perception or acuity or heightened awareness that a sentence composed with the strictest attention to fact does not.” Using the Big Bang theory of the origin of the universe as a metaphor, Doctorow attributes a little bang to writers’ imaginations. Doctorow’s description strikes the authors as an especially apt explanation of SF writing—of why the storytelling of speculative fiction, committed to the notion of extraordinary change in the world, may contain a significant measure of meaning and understanding about the potentially quite otherworldly future of news.

References Anderson, M. T. (2002). Feed. Cambridge, MA: Candlewick Press. Bellamy, E. (1887). Looking Backwards: 2000–1887. Project Gutenberg. http:// www.gutenberg.org/ebooks/624. Also Oxford Classics. Oxford University Press (September 14, 2009).

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Berger, G. (1957). “L'accélération de l'histoire et ses consequences.” In G. Berger, J. de Bourbon-Busset, and P. Massé (eds). De la Prospective. Textes fondamentaux de la prospective française, Paris: L'Harmattan, 2007. Texts collected and presented by Philippe Durance. Berger, J. (1972). Ways of Seeing. British Broadcasting Corp. Penguin Books. Doctorow, C. (2012). Pirate Cinema. New York: Tor. Hine, T. (1991). Facing Tomorrow: What the Future Has Been, What the Future Can Be. New York: Knopf. Huxley, A. (2014). Brave New World. New York: Harper & Row. Maughan, T. (2011). Paintwork. Amazon Digital Services, Inc. (Kindle Edition). Includes “Havana Augmented,” “Paparazzi,” and “Paintwork.” “Max Headroom” TV series on ABC (United States). 1987–1988. Begun as “Max Headroom: 20 Minutes into the Future” on BBC, April 5, 1985. Orwell, G. (1982). Nineteen Eighty-four: Text, Sources, Criticism. (ed.) by Irving Howe. New York: Harcourt Brace Jovanovich. Postman, N. (1985). Amusing Ourselves to Death: Public Discourse in the Age of Show Business. New York: Viking. Sacco, J. (1996). Palestine: In The Gaza Strip. Seattle, WA: Fantagraphic Books. Sacco, J. (1998). Soba: Stories From Bosnia. Montreal: Drawn and Quarterly Publications. Sacco, J. (2000). Safe Area Gorazde: The War in Eastern Bosnia. Seattle, WA: Fantagraphic Books. Sacco, J. (2001). Palestine. Seattle, WA: Fantagraphic Books. Sacco, J. (2005). War’s End: Profiles From Bosnia 1995–1996. Montreal: Drawn and Quarterly Publications. Sacco, J. (2009a). The Fixer and Other Stories. Montreal: Drawn and Quarterly Publications. Sacco, J. (2009b). Footnotes in Gaza. New York: Metropolitan Books. Sacco, J. (2012). Journalism. New York: Metropolitan Books/Henry Holt and Co. Selinger, E. (2013). “What sci-fi can teach us about the present and future of information.” The Huffington Post. Interview with Evan Selinger and Tim Maughan. January 24, 2013. http://www.huffingtonpost.com/evan-selinger/ what-scifi-can-teach-us-a_b_2534115.html (accessed April 4, 2013). Snow, C. P. (2012 reissue). The Two Cultures. Cambridge, UK: Cambridge University Press. Spiegelman, A. (1986). Maus: A Survivor’s Tale: My Father Bleeds History. New York: Pantheon Books. Verne, J. and Verne, M. (1889/2006 reissue). In the Year 2889. Rockville: Wildside Press. Also at Project Gutenberg: http://www.gutenberg.org/ files/19362/19362-h/19362-h.htm. Vinge, V. (1987). True Names . . . and Other Dangers. Wake Forest, North Carolina: Baen Books. Vinge, V. (1993). A Fire Upon The Deep. New York: Tor. Vinge, V. (2001). True Names and the Opening of the Cyberspace Frontier. Ed. James Frenkel. New York: Macmillan. Vinge, V. (2006). Rainbows End: A Novel With One Foot In The Future. New York: Tor.

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12 Digital integration of consumers into local press value chains Gary Graham, Anita Greenhill, and Maria José Hernández Serrano

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he news media, if it is to survive, will need to continue to experiment with new modes of consumer engagement. In an attempt to continue exercising their role as communicators, many traditional media outlets are redefining and developing the nature and form of their social relations. Renault (1999) refers to social relations as the notion of exchange trust, ties, and (relational) capital built up between the firm and its consumers. There is a learning process that leads actors to acquire a better knowledge of each other and then build joint trust, mutual respect, friendship, and mutual commitment. Social mechanisms are evolving rapidly as the newspaper firm realizes the need to improve their service operations in order to compete with rapidly emerging digital modes of distribution (Hill, 2005). Further, the rise of social media provides opportunities for consumers to become increasingly active and contribute to value-creation activity, much like the companies themselves (Prahalad, Ramaswamy, and Krishnan, 2000). This raises the issue of both the co-creation of value and the interdependent focus on both consumers and suppliers working jointly together to generate value. Co-creation is a form of economic strategy that emphasizes the generation and ongoing realization of mutual company-customer value.

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While the industrial era was about making a lot of goods and convincing enough buyers to consume them, the social era is about the power of communities, of collaboration, and of co-creation. Merchant (2012) writes: Here’s the simplest way to define the Social Era. The industrial era primarily honoured the institution as a construct of creating value. And the information age (inclusive of Web 1.0 and Web 2.0 phases) primarily honoured the value that data could provide to institutional value creation. It allowed for greater efficiency to do the same things that were done in the industrial era. The Social Era honours the value creation starting with the single unit of a connected human. In this framework, powerful organizations look less like an 800-pound gorilla and more like fast, fluid, flexible networks of connected individuals—like, say, a herd of 800 nimble gazelles. (1) The social era is a set of fast, fluid, flexible networks of connected individuals creating connected businesses and connected value chains/industries. Web 2.0 is a central technology of the social era, and it has provided audience members with the means to contribute to the production of news. It has had significant impact on the “feeling of connectedness” and the contested relationship of who owns the news. While on the one hand, the production and distribution of news continues to be legitimized by established news channels, on the other hand, there has also been a shift in the historical legitimization of collective evaluation and connected communities and how they are sharing their stories. As a tool, it provides a means for collective evaluation and connectivity to grow as a socially accepted source of news. These changes are most notable in the growing number of hyperlocal news sites. The commitment to hyperlocal news, such as the experiences of the niiu platform [1], demonstrates that as newspapers evolve toward service personalization, they tend to be proximal, although not exclusively, locational, because community audience members choose a specific regional news context with which they want to form an alliance (Schubert, 2011). Increasingly, news producers are turning their attention to local content as part of their business strategy (Carvajal and Avilés, 2008). Considering proximal content depends on the way in which news or a story can “connect” with community audience members, their current or future interest, their needs, and their expectations. The function of news intensifies community engagement, which in turn cements the “social glue” that facilitates community connectivity and temporal belonging (Graham and Greenhill, 2013: 9). The aims of this chapter are therefore to understand the changing role and participation of consumers in the news value chain with the advance of the Internet and social-era technologies. We build a social-era model of news consumption and production. In building the model, we develop an initial organizing framework and we extend this through co-creation theory and data collected on

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both suppliers and consumers. First, we undertook fifteen interviews at three news organizations in the United Kingdom, which explored the impact of the Internet/social era on value-chain strategy and the nature and form of their social relations with consumers. Then we accessed the PEW database to analyze the impact of community type, location, and age on local news consumption.

Initial organizing framework Figure 12.1 was developed from newspaper industry value-chain literature. Readers are increasingly accessing media other than newspapers for their news coverage. However, these Internet-enabled devices are also offering a number of potential interactive value co-creation opportunities for news media firms with consumers. In spite of their initial fear of adopting the Internet into their value-chain operations, the newspaper firm is now embracing it, such that it is increasingly being seen as having an essential part to play in the evolution of the newspaper firm in the social era. First the Internet and now social technologies provide opportunities for consumers to learn about their businesses and activities, either on their own or through the collective knowledge of consumers. Thus consumers are becoming increasingly active and contributing to value-creation activity, much like the companies themselves (Hill, 2005). This raises the issue of the co-creation of value and the interdependent focus on both consumers and news suppliers working jointly together to generate value.

Figure 12.1  Initial organizing value-chain framework.

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Theoretical Advancement Value Co-creation The new information and communication technologies, and specifically technology-based virtual environments, have been assisting changes in consumer-producer relationships and therefore in the value-creation concept (Nambisan, 2002); they change the role of customers to that of a resource of information and wealth to firms (Lengnick-Hall, 1996) and shift the perspective of exploiting customer knowledge by the firm to the perspective of knowledge co-creation with the customers (Sawhney and Prandelli, 2000). Therefore, there is a need to see the convergence of production and consumption roles (interactions) as a source of competitive advantage too (Prahalad and Ramaswamy, 2004). In the traditional systems, the market was either a locus of exchange or an aggregation of consumers. It was separate from the value-creation process and was only distinguished as a target for the firm’s offerings (Prahalad and Ramaswamy, 2004). The value-creation process was firm-centric and the interaction with the customers was to extract economic value. In contrast, in the emerging market, since the meaning of value has shifted to the experiences, the market is being challenged and shifted to become a forum for conversation and interaction between consumers, consumer communities, and firms. In this market, firms and customers are not only competitors but also collaborators: competitors in extracting the economic value and collaborators in the co-creation of value (Figure 12.2). In this context, dialogue, access, transparency, and understanding of riskbenefits (DART) are at the center of concern as the basis for the interaction between the consumer and the firm for the practice of value creation. Following this trend, the unique cocreated experiences, as the basis for value

Firm-Consumer Information (1) Interaction is the locus of co-creation of value and economic value extraction by the consumer and the firm (2) Co-creation experiences are the basis of value

The firm: Collaborator in cocreating value and competitor in extracting economic value

The market: Co-creation experiences of unique value in the context of an individual and a special event

The consumer: Collaborator in cocreating value and competitor in extracting economic value

The market is integrated to the value-creation process

Figure 12.2  Value-co-creation concepts.

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creation (Prahalad and Ramaswamy, 2004) are the experiences of a specific consumer, at a specific point in time and location, in the context of a specific event (Prahalad and Ramaswamy, 2003). It can be achieved with a purposeful interaction of an individual consumer with a network of companies and consumer communities that enable a personalized experience. Priem (2007) supports these arguments and claims that, if the companies focus on improving customer benefits in their strategies, by increasing consumer payments in the whole value system they can create value. In fact, firms within different industries have already started establishing virtual customer communities wherein the customers can share knowledge or participate in value-creation activities (Nambisan, 2002). This also provides the companies with the possibility of customization. Customization on the Web gives more choices to the customers because of the focus of the firms on the features of their products; therefore, it tends to the suit the company’s supply chain rather than the consumer’s unique desires and preferences (Prahalad and Ramaswamy, 2004). The concept of value and the process of its creation are rapidly shifting from a “product” and “firm-centric” view to “personalized” consumer experiences. Consumers are becoming more informed, networked, empowered, and active and are also cocreating value through interactions with firms. The meaning of value shifts to the experiences, and the market is becoming a forum for conversation and interaction between consumers, consumer communities, and the firm (Prahalad and Ramaswamy, 2004). Therefore, the most important concern for firms becomes creating an environment within which individual customers can generate their own unique personalized experience, and as a consequence, in contrast to the traditional systems, the experiences will not be commoditized any more. In order to advance the initial value-chain framework, we conducted a primary investigation into the influence of community types, location, and age on news consumption, and then we investigated the role and participation of consumers in the value-creation strategy of local news suppliers.

Research method (1)—PEW database— community types and news consumption Using the PEW database, we explored patterns of news consumption by community type, location, and age.1 The data we analyzed (using simple Further information on the database is available at http://www.pewinternet.org/datasets/january2011-local-news.

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percentages and charts) had been obtained through telephone interviewing using stratified regional random sampling and random digital dialing conducted by PEW Associates. The survey was administered during January 12–25 (2011) among a regionally-representative sample of 2,251 adults aged eighteen and older on landline and cell phones. They confirmed that the survey had an overall margin of sampling error of plus or minus 2 percentage points.

Research method (2)—Description of the interview method The field research was conducted in the United Kingdom from May to August 2013. A total of fifteen in-depth interviews were accomplished, each averaging sixty minutes. Five women and ten men composed the sample. An effort was made to include professionals from diverse functions, including news, features, digital operations, advertising, editorial, marketing, and sales. They reported an average of seventeen years’ working experience (from five to thirty-six years) and six years with the current organization (from three months to thirteen years). The entire sample claimed to have management responsibilities, with six occupying the highest position in their units.

Results—Community type, location, age, and news consumption All consumers in the urban, rural, and suburban location types are considered by PEW (presented in Figure 12.3) to be engaged with local and national news (with the same percentages, around 70 percent), while rural consumers have much more closer interest in local news (76 percent). Figure 12.4 indicates which local news issues are followed most closely by particular age groups; for example, the younger cohort source news topics that are most related to leisure and nightlife, while late adults and elder consumers seem more interested in local crime, followed by community events and tax issues. Topics such as local housing or local traffic are the least considered by all consumers. Figure 12.5 shows which news sources consumers rely on most for their coverage of local news topics. Interestingly, the trust of consumers in online or purely social sources of local news is very low, less than 10 percent. Rural news consumers seem more reliant on print sources for their news

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Figure 12.3  Percentages by age and location in the following of the news (international, national, and local). Table drawn from data supplied by the PEW database (http://www.pewinternet.org/datasets/january-2011-local-news/).

Figure 12.4  Percentages by age in the following of the local news in different topics. Table drawn from data supplied by the PEW database. (http://www.pewinternet.org/ datasets/january-2011-local-news/). consumption, confirming the informative authority of the traditional news media. For news linked to community events and leisure places there are no significant differences in relation to the trust of an online and/or social media source when compared to traditional sources, although percentages for both are very low. Figure 12.5 also indicated that consumers still perceive traditional news media sources to be the more credible, and therefore they are the more widely used by the community. Primarily the television is drawn upon as a reference source. For elderly people (the over sixty-fives), the television

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Figure 12.5  Sources of local news relied upon. Table drawn from data supplied by the PEW database. (http://www.pewinternet.org/datasets/january-2011-localnews/). and print newspapers are the media that are used most; the use of online media news sources is generally low in comparison, except the use of search engines, which, surprisingly, is as high as the radio and word of mouth to source news. Younger people dominate the use of social media as a source for information about a topic. In particular, there is a high use of Twitter for news consumers who are aged less than thirty years old. For them the use of search engines is as frequent as watching television news or sourcing a topic using word-of-mouth sources. Both print and online newspapers also equally inform them. Figure 12.6 helps illustrate the use of the media by location. All three community types use television as a news source. Interestingly, however, for rural consumers word of mouth is more frequently the source of news than printed newspapers, and for urban and suburban consumers the use of search engines and social media sources, such as Twitter, is higher than the use of print newspapers. Importantly, the online versions of traditional media (newspapers, radio, television) are rarely used by news consumers of the study (around 20 percent). Suburban residents are more likely than any of the other groups to actively participate in the local news environment, followed by residents of large cities

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Figure 12.6  Percentages by age in the following of the local news in different sources. Table drawn from data supplied by the PEW database. (http://www. pewinternet.org/datasets/january-2011-local-news/).

Figure 12.7  Active participation in the news. Table drawn from data supplied by the PEW database. (http://www.pewinternet.org/datasets/january-2011-localnews/). (Figure 12.7). About half of suburban residents (53 percent) have participated in some way in sharing or creating local news or information, and 45 percent of large-city residents have taken some action that classifies them as local news participators. In comparison, about one-third of small-city or rural residents have participated in one of these activities.

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In summary, the PEW data indicated that people who live in large cities rely on a wider combination of platforms for information than others and are more likely to get local news and information via a range of digital activities, including Internet searches, Twitter, blogs, and the websites of local television stations and newspapers. Urbanites were also those least tied to their communities in terms of how long they lived in the community and how many people they know. They were the least interested of all groups in information about local taxes. At the same time, those who live in large cities, along with suburban residents, are the most likely to be digital news participators who e-mail local stories to others, post material on social networking sites, comment on news stories online, or contribute to online discussions on message boards. Also along with suburbanites, they are more likely to get news via mobile devices. Additionally, they are the most likely to rely on local television news for information about breaking news, weather, crime, politics, and traffic. Those who live in suburban communities are more likely than others to rely on local radio as a platform (perhaps because of relatively longer commuting times); they are more interested than others in news and information about arts and cultural events; and they are particularly interested in local restaurants, traffic, and taxes. Like urbanites, they are heavy digital participators who comment and share the news. These suburban residents rely mainly on the Internet for information about local restaurants, businesses, and jobs. They look to television news for weather and breaking news. They are the most likely group to participate in news co-creation. Those who live in rural communities are generally less interested in almost all local topics than those in other communities; the one exception is taxes. They are also more reliant on traditional platforms such as newspapers and television for most of the topics we queried. And they are less likely than others to say it is easier now to keep up with local information. They are the least likely group to participate in news co-creation. In spite of the differences in community type, younger people dominate the use of social media and online news sources whatever their community, with the older generations still preferring traditional sources of news coverage. The PEW dataset shows that urban populations tended to be much younger than those of other types of communities. One-third of urban residents were aged between eighteen and twenty-nine years of age, compared with two in ten or fewer in each of the other types of communities. We also discovered that more than four in ten large-city residents are Generation Y (ages eighteen to thirty-four), which is significantly higher than the proportion of young adults living in other types of communities.

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Interview results—News Chronicle News Chronicle is a multimedia business within Gamma Media Group (GMG) Regional Media. GMG is a major UK media business with interests in national newspapers, magazines, radio, and Internet businesses. It publishes one daily metropolitan newspaper—The Chronicle—in tandem with its online edition, Chronicle News website and City Online; it also includes city television station Channel X—available free on air and online and on digital, cable, and satellite—the free daily Metro, and a number (twenty, both free and paid for) of local weekly newspapers as well as their associated websites. In terms of readership, the Chronicle News is one of the biggest regional newspapers in the United Kingdom (175,000 copies per day). It is also claimed to be the first fully converged regional news desk. In other words, it integrates a range of media to address all parts of its community of readers and advertisers.

Internet/social era influence on News Chronicle value chain At the beginning of their emergence, social-era technologies and their application were ignored by the newspaper industry. Instead of being threatened by the Internet’s growth, the news industry embraces and explores its strengths. In spite of the initial erosion of value in the newspaper, social technologies are now embraced by News Chronicle, and alongside the printed newspapers, it has the City Online and Chronicle News websites. Today, the company attempts to create value by instantly putting the breaking news online and referring its readers to its range of other available media, where they can obtain more in-depth reporting services. Journalists from each part of the business, including the print newspapers, online websites, and Channel X, work together on a converged news desk to ensure the content is distributed at the time and through the medium that is most suited to readers, users, and viewers—whether through print, the Web, or local television news. Although the presentation of the same piece of news is different in each form of the available media, such innovation supports News Chronicle’s convergence objectives. Because advertising is the most important activity in the newspapers, and the Internet potentially offers low-cost alternatives to newspaper advertising such as the Monster and Totaljobs websites, classified advertising has been

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eroded. In the face of such competition, GMG developed Fish4 (an online shared service) with the aim of trying to compensate for the dramatic drop in advertising revenues. In general, to counter such value erosion the company essentially relies on the brand and focuses on developing its nonprint activities alongside its core newspaper brands, with continued investment in social technologies and its television station. It has attempted to shift the reputation of the brand from a newspaper company toward that of a multimedia business. Furthermore, all advertising sales functions are brought together under the banner of Chronicle News Media Sales, with responsibility for commercial revenues across all media platforms. Therefore, in one single transaction with the company, advertisers can advertise in a range of media. The Internet can create value by enabling the company to deal with advertisers online. The Internet cuts out many stages of production today. For example, there is no photography department in the company; this job is being performed through advanced digital techniques, and photographs are taken by journalists or readers and instantly sent to the company via e-mail. In order to address the issue of rapidly declining circulation (in 2006), News Chronicle launched their hybrid distribution model (half paid for/half free). Employing this model, the company follows two objectives. Although the circulation revenue is decreased, because higher circulation is offered to the advertisers, the advertising revenue as the main revenue source potentially increases. Moreover, because newspaper readership among the young generation is in a radical decline, by offering the free newspaper in the city center, where 180,000 people work, the company hopes to create value through a higher readership profile and therefore to increase the overall audiences of the converged media. The company has dramatically restructured itself in the last decade by reducing costs and changing the company’s infrastructure in terms of cutting the headcounts, facilitating “a more efficient production process”, and eliminating or outsourcing some of the departments that are not part of its core value chain (photography).

Involvement and consumer participation in value-creation opportunities The company utilizes social-era technologies as a means by which it interacts with its customers, exchanges information, recognizes potential consumers’ interests, and addresses these interests through the variety of media it

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comprises. Furthermore, it runs several surveys online and applies the information collected, customizes the content and even advertisements, and promotes them through different available channels. In spite of running several experiments with digital printing technology, which would facilitate the possibility of printed newspaper customization, the company has no plan to deploy such technology in the short term. News Chronicle had definite plans to build their digital income: Our plan is to see digital income increasing from 5 to 50% of total income by 2020. We expect this to come not only from increases in classified and display advertising but also from sales of subscriptions to print and tablet application bundles. We expect significant rises in digital content for mobile devices. Smart phone incomes will come from advertising revenues, taskoriented ecommerce environments and micropayments. It was the firm’s strategic view there was a need to move their value-creation strategy “from attention to trust”. The creation of attention, which has been a pillar of the printed newspaper value chain, has lost its relevance, they felt, because reports of new events are often faster distributed via new platforms such as Twitter than through traditional media channels. However, trust can be understood as a scarce resource. While distributing information is much easier via the Web, it also creates costs particularly when checking content and verifying the abundance of information. Ultimately it aimed to transform itself into a “trusted data hub”. “Successful media companies of the future have to build an infrastructure that turns them into reliable data hubs, able to analyze even very large and complex datasets internally and to build stories on their ‘insights’ ” (Lorenz et al., 2011).

Interview results—Evening Post The Evening Post publishes three daily newspapers (the Evening Post, Metro, and Western Daily Post) and a range of weekly papers, in addition to the websites for each newspaper. The circulation of their newspapers is in serious decline. However, by embracing the Internet company records show that thisismy.co.uk is now the third most viewed website in region Y, coming in behind Google and eBay. The company closely operates with the local communities and aims to transform itself into a dynamic, integrated, local media company as it moves from printed product (the United Press) to a multimedia service business (United News & Media).

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Internet/social-era influence on Evening Post value chain Advertising is the main source of revenue for the company. With new entrants entering the online market, the printed advertising revenue is in decline; hence, the company operates online too, and by adding up the online advertising revenue, tries to compensate for the decline in printed advertising revenue. However, the online model of advertising is quite young (almost fifteen years old) while printed advertising has been around for a century. In spite of the decline, the share of printed advertising revenue in comparison to that online is still considerable. (£39 million printed advertising revenue/£2million online advertising revenue). By launching online versions, the cost of production is significantly reduced. This is through cutting the staff (from £15m), cutting printing (paper cost per year from £3.5million), eliminating press, and removing the distribution. Even selling the advertising is performed over the Internet. Therefore, since the cost of online newspapers in comparison to printing the newspapers is inherently low (almost £700,000 per year), online versions of newspapers can potentially create value.

Involvement and consumer participation in value-creation opportunities Even if the company obtains a piece of information from consumers, it is not normally utilized unless it meets stringent editorial and legal requirements. In contrast, there is a greater level of freedom on the Internet. Therefore, communication and interactivity over the Internet is more practical and possible than genuine product co-creation; hence, serving the consumers and customizing the online content is more sensible. As an example, the company ran a successful virtual campaign with local community groups and residents in order to prevent the closure of a local hospital. Evening Post are expanding into mobile technology and tablets and has begun distributing news in Google Drives, as well trying to more effectively harness social-era tools as it tries to develop an online brand identity for superior and high-quality news media products. However, the monetization of these technological experiments is still very much in its infancy: “seems to be just breaking even at its best”. The firm was also beginning to develop a series of hyperlocal free newspaper experiments in six zoned areas of the city, with local residents

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being the chief reporters supplying news content for publication in a weekly free neighborhood newspaper. It was felt by all the executives that we interviewed that they were still very much in the experimental stage of utilizing technology to change the nature and involvement of consumers with their products, and then building some form of monetized activity/business model from it.

Interview results—Earth Herald The Daily Post and the Echo are two regional papers published by the Earth Herald. The Earth Herald publishes almost sixty brands and a variety of weekly titles across North Wales and the North West of England.

Internet/social-era influence on Earth Herald value chain The online newspaper version reduces the cost of printing and thus decreases the need for highly paid specialists. Also, in terms of interaction with the advertisers, it reduces the time and cost of transactions in selling the advertisement space. This is because it allows the advertisers to buy their advertisements online with all online facilities, including sending their material to the newspaper company online, performing enquiries online, checking the prepared sample online, and even paying online. The deployment of the Internet has greatly evolved the infrastructure of the company, because the online versions of newspapers require new resources, including new skills and arrangements. Therefore, the printed newspaper business model is being reengineered to simultaneously meet the needs of the online version, printed newspapers, television, and also business development requirements (an innovation issue). In this context, the new infrastructure incurs some costs, such as staffing levels. For instance, it makes some of the staff obsolete and calls for some new specialists. Therefore, there might be some balancing required in terms of training the current employees or replacing them with some newcomers from outside the company. In total, however, there are fewer headcounts working in the new structure. Most of the purchasing, accountancy, and financial activities of the company are centralized and performed by the central office and online.

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Involvement and consumer participation in value-creation opportunities Earth Herald is also experimenting with its news reporting models as a way to leverage greater market presence. It has created a dedicated crime-reporting lab within its operations. This is a user-driven experiment in online criminal justice reporting. The aim is to build brand identity with younger age groups in their reader community and also to cut the costs of crime reporting. Our question was simple: Could a digital platform for reporting crime improve one community’s understanding and raise the level of conversation about homicide? To answer this question, the newspaper is training up journalism students and local residents in crime reporting through use of the newspaper’s digital platform. The platform they have developed tracks every criminal case in the city region from “crime to conviction”, using primary source documents, social networking, and original reporting to build one of the nation’s most comprehensive public resources on violent crime. Local residents are encouraged to supply as much data as possible on the cases (including the identification of suspects). The experiment was modeled on the Homicide Watch platform operating in the United States. The virtual crime platform is designed to guide young reporters through the steps of crime reporting, prompting them to gather data and to record and publish their activities, building a comprehensive resource that far exceeds what traditional crime reporters do. The experiment is primarily designed to encourage users to submit material to help with convictions and crime detection. This is an experiment that fully embodies the civic participation ideology, designed to catalyze, on the one hand, the development of a userdriven copy that is cocreated with young or student journalists; and, on the other, to expand the market reach (brand identity) of the newspaper in the Z region.

A model of social-era news production and consumption The original concept of value chain is all about the creation, processing, and communication of information (Porter and Millar, 1985). By identifying the elements of newspapers’ value chain, the impacts of the social era over each element have been recognized. This recognition has been shown by the analysis of the activities performed in three newspaper companies as the case

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Figure 12.8  Social-era news production/consumption model. studies under research. The results show that the social era has impacted enormously upon the newspapers’ primary activities in the value chain. Not only it has eroded value, but also has potentially created value. The hybrid model (Figure 12.8) is a combination of communicative logic and social logic. This is a community- and user-driven model of news production/consumption. It illustrates a blend of traditional news practices with community audience news practices. The combination both broadens contribution by widening the ability to make contributions and reinstates a socially responsible news production ethos. By combining communicative logic with social logic, we illustrate how merging traditional news practices with community audience news practices, such as locally relevant content, can be integrated into news production. The combination both broadens the contribution by widening the journalists’ ability to make contributions and reinstates social responsibility as an embedded news production ethos, therefore strengthening technology-injected news increases credibility and makes news production community relevant. The model of analysis presented here shows important theoretical extensions to the original framework because it highlights how different types of community have very distinctive demands for print/digital products. The newspaper value-chain manager has to adapt their distribution strategy to meet the consumption patterns of these different types of communities. The position becomes more complex as consumers no longer solely depend on news entities to tell their stories. Instead, community members now have a wide range of online elements, such as blogs, websites, and social media, to

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disseminate their stories. The news media outlets are in the process of having to redesign their supply chain as they are no longer a mass media product supplier but rather a niche service provider. However, redefining the value chain to fully integrate distinct community types and demographic variables such as age is a relatively new and evolving construct. In terms of the contribution of social-era technology in the development of social relations between the newspaper and consumers, the potential strengths and advantages of these technologies are that they facilitate and accelerate the direct and instant communication and interaction between newspaper companies and consumers. However, the value is still perceived by the newspapers as accruing not from building social collaboration with customers but more from the intensity of competition between newspapers, such that, if they do not interact more, they fear consumers will migrate toward their rivals.

Model limitations This is a user-driven model embedded in co-creation theory, and it focuses on the benefits to the news firm of greater consumer involvement and participation; for example, enhanced brand loyalty (differentiation), lower production costs, and niche services. However, while consumers have embraced social technology, the news supplier has not fully harnessed the economic potential of the social era. Our interview results indicate that although the newspaper industry is moving toward cocreating value with its consumers through Internet mechanisms such as blogs, discussion forums, virtual campaigns, and user-generated content submission facilities, it is still the news supplier who dominates the social relationship, and in reality there is a limited amount of content creation. For instance, none of the three firms had more than 20 percent of their editorial content supplied by users. The content contribution of consumers is tailored to the newspaper’s value proposition and according to their market demand. However, recent research by Nel (2013) supports our position that the “news industry is being pressed to change its approach to co-created content and further that co-creation is a central component of any future value chain model” (1).

Conclusions In the initial organizing framework of value creation, product-centric managers focus on cost, efficiency, quality, and product variety as the sources of

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competitive advantage. From the readings, conceptual work, and empirical data derived from this investigation, we have theoretically advanced the framework into a model of news production/consumption in the social era. The model was not designed to solve all issues currently being faced by news producers and in particular to solve economic issues such as falling profit margins; however, we are confident it will extend existing theory and act as a tool to illustrate the relationship of news production to social responsibility in the social era and the uptake of Web 2.0. By combining communicative logic with social logic, we illustrate how combining traditional news practices with community audience news practices, such as locally relevant content, can be integrated into news value-chain planning. Although our interview findings showed that social relations are at the stage of customization, with the involvement and participation of consumers still largely controlled by the news supplier, it is co-creation and the expansion of experience space that is the future of news innovation. The industry will be pressed to change if it is to survive (Nel, 2013). The whole strategic ideology of the news industry needs to change radically, moving toward more consumer involvement and participation throughout the news value chain, if these firms are to survive, because the financial logic of the industry is increasingly being rewritten, unfortunately not by them but by their communities of news consumers. As the different experiments reported in this chapter (and book) play out, there will likely be a period when many different business models emerge. The shape of the dominant model is still unknown, but it will look very different from the one we follow today. The social era challenges news organizations to extend the level of their direct engagement with audiences as participants in the processes of gathering, selecting, editing, producing, and communicating news. [1] Niiu was the first experience of an individual, customizable, printed newspaper. Published in Berlin, Germany, from November 2009 until January 2011, it consisted of a daily newspaper with a range of news stories from newspapers and online resources, selected and composed according to each reader’s individual preferences.

References Carvajal, M. and Avilés, J. G. (2008). “From newspapers to multimedia groups.” Journalism Practice, 2 (3): 453–62. Graham, G. and Greenhill, A. (2013). “Exploring interaction: Print and online news media synergies.” Internet Research, 23 (1): 89–108. Hill, J. (2005). “Tomorrow’s world is digital,” British Journalism Review, 16 (2): 60–4.

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Lengnick-Hall, C. A. (1996). “Customer contributions to quality: A different view of the customer-oriented firm.” Academy of Management Review, 21 (3): 791–824. Lorenz, M., Kayser-Bril, N., and McGhee, G. (2011). “Voices: News organizations must become hubs of trusted data in a market seeking (and valuing) trust.” Nieman Lab. http://www.niemanlab.org/2011/03/voices-news-organizationsmust-become-hubs-of-trusted-data-in-an-market-seeking-and-valuing-trust/. March 11, 2011 (accessed May 21, 2014). Merchant, N. (2012). “Traditional strategy is dead. Welcome to the social era.” http://nilofermerchant.com/2012/09/12/traditional-strategy-is-dead-welcometo-the-socialera/ (accessed May 21, 2013). Nambisan, S. (2002). “Designing virtual customer environments for new products: Toward a theory.” Academy of Management Review, 27 (3): 392–413. Nel, F. (2013). “Pressed to change.” http://www.nemode.ac.uk/wp-content/ uploads/2012/12/Nel-PresstoChange-NEMODEcasestudy-April2013.pdf (accessed September 5, 2014). Porter, M. E. and Millar, V. E. (1985). “How information gives you competitive advantage.” Harvard Business Review, 63 (4): 149–60. Prahalad, C. K. and Ramaswamy, V. (2003). “The new frontier of experience innovation.” MIT Sloan Management Review, 44 (4): 11–18. Prahalad, C. K. and Ramaswamy, V. (2004). “Co-creation experiences: The next practice in value.” Journal of Interactive Marketing, 18 (3): 5–14. Prahalad, C. K., Ramaswamy, V., and Krishnan, M. S. (2000). “Consumer centicity.” Information Week, 781: 67–71. http://www.informationweek. com/781/prahalad.htm. (accessed March 15, 2005). Priem, R. L. (2007). “A consumer perspective on value creation.” Academy of Management Review, 32 (1): 219–35. Renault, M. (1999). “Économie et coordination des comportements: Communication et interaction.” Revue Européenne des Sciences Sociales, 37 (114): 265–82. Sawhney, M. and Prandelli, E. (2000). “Communities of creation: Managing distributed innovation in turbulent markets.” California Management Review, 42 (44): 24–54. Schubert, B. (2011). American Journalism After ‘The Age of Mechanical Reproduction’: The Transition from Print to the Digital Age and its Cultural Implications. GRIN: Verlag.

13 The economics of paywalls John Hill

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aywalls, as generally understood, are a direct reaction on the part of established newspaper publishers to the loss of readership occasioned by the emergence of online publishers offering easy access to news items on a rolling basis (Preston, 2011). The new publishers, by utilizing the Internet, avoided the very large setting-up costs that had for so long provided a barrier to entry for intending competitors in the newspaper field. The Internet is substantially cost free, to the extent that distribution, or rather making the product available, has none of the costs sustained by newspapers, magazines, radio, and television in broadcasting their news. Under the slogan “News Wants To Be Free,” many online publishers set out to use news items that were first published in the traditional media, either directly or as rewrites, thereby avoiding the costs of having to pay journalists— a not insubstantial cost, especially for a fledgling business. Unsure how to respond, many newspaper publishers launched their own websites starting in about 1995, hoping to persuade visitors to purchase the newspaper to access more detail on the limited number of stories on the site. At the same time as traditional publishers, especially newspapers, were losing readership, they were losing advertising revenues to Internet organizations that were capturing large amounts of the extremely lucrative property, car, and private classified categories, leaving many publishers in serious financial difficulty. This dual assault required publishers to reduce costs drastically and to seek to stem all avoidable losses, including their free Internet sites. Attention turned to the unrestricted use by online publishers of material from traditional publishers, especially newspapers, who employed the journalists whose output was being used without payment. It has been estimated that some 15 percent of a newspaper’s turnover was needed to pay for and maintain an editorial staff. It was galling for newspaper managers to see that they were

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subsidizing their competition. Hoping that online advertising could be made to yield sufficient revenue to make newspapers’ news sites self-supporting, they persevered, only to have to admit defeat in the early years of the first decade of the new century. By 2010, it was clear to a number of newspapers that they would have to charge for content if they wished to survive. What followed for the next few years was a period of experimentation, in which newspaper managers tried various combinations of free and paidfor content. The first venture to be recorded was in March 2002, when the Times Online site started to charge for access to the crossword. The Financial Times followed in May of that year by setting a charge for some, but not all, of its content. The Telegraph offered advertisement-free versions or a news alert service. The Times Online became the first newspaper to charge for all news, and even then this was to overseas subscribers only. These moves were made some seven years after the Wall Street Journal had first begun to charge for its digital content (Chiou and Tucker, 2013). Those newspapers that experienced the greatest degrees of initial success were those that were concentrated on the business information field, particularly the Financial Times in the United Kingdom and the Wall Street Journal in the United States. It was becoming clearer that those newspapers that were to be able to make a success of charging for content were to be those that could focus on a defined community of interest among their readerships.

The burgeoning inventory By the end of the second Internet bubble in 2008, the number of news sites had multiplied as “me-too’s” joined the fray. The advertising capacity that they brought to the market resulted in a steep decrease in CPMs (cost per thousand views); not only was there less advertising, but it was fetching a much lower price, a double blow for newspaper managements anxious to maintain profitability (Graybeal and Hayes, 2011). With the collapse of advertising revenue and the economic recession that hit the industry hard in 2008 and 2009, it was apparent by the beginning of 2010 that it was now critically necessary that some form of paid-content model needed to be introduced. By April, Robert Thompson of News Corporation served notice that a move would be made on the free and open Web, and this was confirmed later by Rupert Murdoch when he announced that both the Times and the Sunday Times would erect paywalls in June 2010, and that at the same time he would prevent the unlicensed use of their content by other online news providers. So far, we have examined the situation as it affects national newspapers; the position of regional newspapers, which is the focus of attention of this report,

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is considerably different for three main reasons. The first is the question of small scale, the second is the lack of expertise, and the third is the incidence of administrative cost.

Small scale Regional newspapers, both evening and weekly, are designed to appeal to defined geographical areas, in contrast to national newspapers, which have either the whole, or a substantial part, of the nation in which to sell their products. As we noted earlier in this report, those newspapers who enjoyed success in the early days of paywalls had well-defined communities of interest—in the cases of the Financial Times and the Wall Street Journal it was the financial sector—so it is possible that those newspapers with distinct interest groups will find it less difficult to make a success of paywalls. From this perspective, it would appear that weekly newspapers, which serve small tight-knit communities, will be more likely to succeed than will evening newspapers, which serve large areas that usually consist of a combination of ill-defined districts. Most regional newspapers in Britain have offered free access to their content for some considerable time in an attempt to persuade viewers to purchase the print edition. As can be seen from newspaper circulation figures, this was not effective, as newspaper sales have continued to fall. This meant that it was becoming increasingly difficult to replace lost paid-for copies with meaningful website viewers, and as a result the advertising-funded model was now impossible to make viable. While payment for access (paywalls) was possible for large national newspapers, there is considerable doubt that it can be made to work for regional newspapers of both types, simply on the grounds of scale (Kendrick, 2013). The basic question that needs to be answered concerns a local newspaper’s ability to generate sufficient newsworthy content to attract an audience to its website sufficiently often to justify a charge. We already know from figures published by PEW (2010) that for all US newspapers, core loyalists (which are defined as heavy users who visit the news site about two or three times a day on approximately eighteen days in a month) represent 85 percent of page traffic, and incidental loyalists represent 27 percent of page traffic and 3 percent of visitors. The remainder, fly-bys, represent 41 percent of the total visitors and 1 percent of page views. When asked the reasons why they accessed the sites, core loyalist respondents claimed that their visits were driven by “local and breaking news.” The incidental loyalists were “driven by a desire to see specific content,” and the fly-bys visited for a specific purpose and rarely or never returned.

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From the above, it is clear that the main attractor for local newspaper news sites is likely to be mainly local news. While there may be some breaking stories, they are not liable to be frequent, so it is the local element that will justify page traffic in the majority of cases. Weekly newspapers’ content is almost totally local, and there is rarely a need for rolling content to facilitate breaking news; things simply do not move that fast at a very local level. For evening newspapers, the situation is somewhat different; they do have regional, as compared to local, concerns, and there is likely to be a larger element of breaking news than with the weekly newspaper. The evening newspaper, with its larger circulation, stands a better chance of operating a successful paywall operation than does a local weekly, but even then there is most certainly no guarantee of success.

Lack of expertise Newspapers are extremely professional in the finding, encapsulating, and presenting news; what they do not have is expertise in marketing this online news. While they have had experience in the past of providing free access to their stories, they do not have a store of knowledge regarding the monetization of access. This means that they must give active consideration to either importing expertise in the shape of additional staff, or employing the services of a third-party organization that will carry out the work on their behalf. There are three parts to the monetization process: The first is the marketing of the concept, the second is the establishment of registration processes, and the third is the accounting of subscriptions. The second and third parts of this process will be dealt with in the following section. The tradition in local newspapers has been to limit marketing activities to making the product available; this has not been the case with national newspapers, where there has been an active effort to build circulation numbers by advertising and otherwise promoting the product. This has not been thought to be necessary in the case of local newspapers. To successfully establish a paywall, it is necessary to provide potential subscribers with a reason for buying. Why should they subscribe when all they have to do is wait for the newspaper to be printed? For a weekly newspaper, this would be a maximum of six days, while for an evening newspaper it could be a minimum of one day. However, this assumes that the subscriber lives within the newspaper’s circulation area; if they do not, then the online version may be their only alternative. It is also an option for people who have moved to another area but wish to keep abreast of events in their home town. At one time, many weekly newspapers provided a scheme to post copies of their

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newspaper to exiles. Since the large increases in postal charges, this practice has largely fallen into disuse, leaving an opportunity for online versions. As evening newspapers publish very little of the parish pump news that means a great deal to distant readers, they are more reliant upon viewers who wish to be kept up to date on what are effectively regional matters concerning the city in which the newspaper is based. To what extent these will be exiles is difficult to establish without extensive research. What is becoming increasingly clear is the need for regional newspapers to establish a defined marketing policy for the paywall venture, and for this they will be required to use the services of marketing professionals.

Administrative cost In the foregoing section, it was noted that the paywall project has three elements. The second and third, registration and the garnering of payment, are each separate and, while interconnected and sequential, are likely to be handled by different parts of the newspaper organization. The names and addresses of subscribers have to be recorded, as have the start and finish dates of their subscriptions and the details of the person authorized to have access to the website (where the subscription is a gift). Because it is important that the renewal date is signaled sufficiently early for action to be taken by the marketing department, it is practically certain that this will have to be a computer application, either proprietary or specially designed. As many of these systems have been designed to meet the needs of national newspapers, they are, in the main, too complex for the needs of regional newspapers and may need extensive modification. It is likely that separate staffs will be needed to administer the registration and recordkeeping processes and the accounting necessary to keep track of payments, although in the latter case this may be seen to be an additional responsibility of the accounts department. The registration process will probably be a task allocated to the marketing department, as it will involve contact with those readers who wish to subscribe.

Business models The most likely model for both evening and regional morning newspapers will closely resemble that adopted by national newspapers, in which online content is offered on a rolling basis, being updated as new information becomes available. This assumes that there is a sufficient number of breaking stories in

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which subscribers will be interested. An alternative will be for newspapers to offer in-depth background material for which there may not be sufficient page space in the print edition; this facility could be offered by e-mail to prospective readers, provided that a sufficient amount of detail on their interests is held by the marketing department. Weekly newspapers rarely have a breaking story that would justify a rolling online news site; indeed, it will carry few news items that will not be carried in full in the next print edition. Where it can succeed is in the “This Is . . .” type of directory website, which presents contact details for local clubs and societies. While much of the information it contains may well be replicated in many print editions throughout the year, there are some associations, for example sports clubs, who have closed seasons when there will not be weekly reports and, as a consequence, no contact details. In general, it is likely that weekly newspapers can only adopt a passive role with regard to paywalls, whereas an evening newspaper will have the facility to adopt a more proactive stance inasmuch as they will be more likely to have a larger quotient of active news stories. It is apparent that virtually all regional and local newspapers have restrictions on the types of paywalls or other methods of monetization they can adopt. Unless they have access to a continuous stream of breaking news stories or a source of specialized information (as with the Financial Times), it will be difficult, if not impossible, to attract and hold the attention of the heavy users (core loyalists) from whom most can be gained in terms of revenue and for whom there is a lower administration cost, in that they tend to sign up on a longer-term basis than do either of the other categories (incidental loyalists or fly-bys).

The disappearing tail If the usage figures quoted above hold good for the British market, then without a strong core loyalist sector, there is only some chance that paywalls can be made to be profitable for evening and morning regional newspapers and a practically nonexistent chance for weekly newspapers, because there is simply not enough attractive content to encourage visitors. PEW (2010) defined all three categories as follows: 1 Core loyalists: Frequency of visits 18 days each month, 2–3 times

each week day. They are typically driven by search for local or breaking news.

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2 Incidental loyalists: Frequency 1–3 days each month. Driven by a desire

to see some specific content for news, ads, classifieds, and so on. 3 Fly-bys: On average will visit one day each month. Driven by a search

for a specific story. As many regional newspaper organizations are not yet fully immersed in the development of charging for access, it is important to have some idea of just how many would pay. PEW (2010) published a survey on the viability of charging for online content. Its conclusions were that only 16.5 percent of people would be “extremely, very, or somewhat” likely to pay. It is important to note that it does not seem that the question was asked either of existing readers, or that it concerned their usual newspaper, which might have a very direct effect upon their responses. However, when this question was asked of another sample by the PEW Project of their favorite site, the results showed that 15 percent would continue to use the site. It would appear that 15 percent could be used in preliminary calculations of possible paywall take-up. For an evening newspaper with a circulation of 100,000, the possible number of users would be 15,000. For a weekly newspaper with a circulation of 40,000, the figure is likely to be 6,000. If, for the purposes of this exercise, we discount core loyalists and assume that the audience will be made up of incidentals and fly-bys in the ratio of 34 percent and 66 percent (the same proportion as in the American Press Institute (API) research), then the evening newspaper will have approximately 5,000 incidentals and 10,000 fly-bys. Using the PEW figures on page views, this will give an evening newspaper two page views per month or 0.5 views per week. The weekly newspaper will have one page view per month or 0.25 views each week. This translates into the equivalent of 7,500 views for the evening newspaper and 1,500 for the weekly newspaper. To know how viable these numbers will be, it is necessary to estimate possible price ranges. Because of the complex nature of the various offerings made by different newspapers, it has been thought safer to compare only the pay-per-view prices charged for online content. The median price charged in eight European countries is £1.29, with both Germany and the United Kingdom charging almost exactly this level. Italy, at £4.30, is the most expensive and Spain, at £0.17, is the cheapest. As expected day passes have a slightly less expensive median price of £0.89 for all the sample countries, but more expensive charges of £1.89 for Germany and £1.91 for the United Kingdom. If we assume that weekly newspapers charge £1.25 for a day pass (approximately one third less than the UK median) and have 1,500 viewers making visits in any week, then the gross revenue take will be £97,500 in a

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year. However, there are likely to be costs associated with micropayments, which will further erode the revenue. These could be as high as 35 percent of the gross revenue. The figures for an evening newspaper should be better inasmuch as, whereas the weekly newspaper has been assumed to reduce its day pass charge by one third of the median, the fact that the evening newspaper has a larger amount of local and breaking news will make it possible to reduce the median figure by 20 percent to £1.43. This means that the annualized revenue could be £390,000. It must be emphasized that these figures are based on estimates of possible usage and pricing; however, they may be sufficiently accurate to provide an indication that weekly newspaper online revenues are likely to be a fraction of those of evening newspapers. It is important to realize that the revenues discussed above are for specific items of content and do not include access to a facsimile newspaper, as was suggested for the “exiles” mentioned earlier, nor for archive material, for which newspapers usually have higher charges. An interesting sidelight on this area is provided by the daily Irish News (circulation 45,600) in Belfast. When a paywall was erected by the management at a charge of £5.00 for one week’s access, £15.00 for one month, and £150.00 for a year’s subscription, the newspaper had 1,215 customers, which represents 2.7 percent of their circulation. Of these, 320 were annual subscriptions, yielding £48,000; 370 were monthly, giving a total of £5,550; and the remainder were weekly, giving a revenue level of £2,625. Were the monthly and weekly subscribers to continue with their current subscriptions, then the Irish News would have an annual online revenue level of just over £251,000.

Conclusions A paywall blocks access to a web page (content) with a window requiring payment. The logic is that readers will pay for a particular online story, a specific journalist’s work, or video footage. When the New York Times introduced a paywall in March 2011, the “Old Grey Lady” became another major newspaper preventing Internet users from accessing their web-page content without a paid subscription. Paywalls have been one of the strategies the newspaper industry applies in order to compensate for the decline in advertising revenue, which decreased by 37 percent from 2001 to 2011 (Newspaper Association of America, 2012). Attracting a large audience and converting news website visitors into paying subscribers before running dry on financial resources is, for many companies, now a matter of survival.

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References Chiou, L. and Tucker, C. (2013). “Paywalls and the demand for news.” Information Economics and Policy, 25 (2): 61–9. Cook, J. and Attari, S. (2012). “Paying for what was free: Lessons from the New York Times paywall.” Cyberpsychology, Behaviour and Social Networking, 15 (12): 1–6. Graybeal, M. and Hayes, J. (2011). “A modified news micropayment model for newspapers on the social web.” The International Journal on Media Management, 13: 129–48. Kendrick, L. (2013). “Beyond Paywalls, New Ways to Charge for News.” http:// ajr.org/2013/12/16/beyond-paywalls-new-ways-charge-news/ (accessed September 7, 2014). Newspaper Association of America (2012). “Trends and Numbers: Quarterly Advertising Expenditures.” http://www.statista.com/chart/596/advertisingrevenue-of-us-newspapers/ (accessed October 2, 2012). PEW (2010). “The Economics of Online News.” http://www.pewinternet.org/files/ old-media/Files/Reports/2010/The-economics-of-online-news.pdf (accessed May 22, 2014). Preston, P. (2011). “A paywall that pays? Only in America.” The Guardian, London. (accessed October 22, 2013).

14 Concluding thoughts on the future of the news industry Gary Graham and Anita Greenhill

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he news industry is undoubtedly in flux, and it is facing an ongoing challenge to keep up to date, relevant, and abreast of the speed of the social and economic change that is currently occurring in local communities. The book is divided up into four parts: Part 1 covered issues related to the media community (Chapters 2 to 4); Part 2 concerns finding value in a world of disruptive innovation (Chapters 5 to 8); Part 3 includes chapters linked to experimenting with the audience (Chapters 9 to 11); and the final part (Chapters 12 to 14) focuses on ongoing strategies in the news industry. This change is intensifying with the rapid innovation in social media and future technology and the multiple means by which news is currently being consumed in the twenty-first century. In this final chapter, we offer some concluding thoughts and observations about the local news industry, both that of today and, more importantly, of tomorrow. First, we review the concept of market chaotics and the digital and commercial turbulence that is confronting the news firm. Then, we summarize the market realities and discuss the challenges facing the news industry if it is to successfully adjust and make the necessary strategic changes needed for survival.

“Chaotics” and the age of news media turbulence The world is more technologically interconnected than ever before. National economies are now all intimately linked, interconnected, and interdependent.

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Commerce is conducted in cyberspace, increasingly with machines talking with machines and communication virtually organized by information networks linked to Internet, mobile, and satellite devices. This new interconnected stage confers wonderful benefits in bringing down costs and speeding up the production and distribution of goods and services. But it also comes with a substantially higher level of risk and uncertainty for producers. The news industry has clearly entered what Caslione terms an “age of turbulence.” Moreover, it is in a state of heightened turbulence, which is always unpredictable and often undetectable. When turbulence is not detected or addressed properly, it creates chaos for businesses, governments, and all of us alike. Turbulence, with its consequent chaos, risk, and uncertainty, is now the normal condition confronting the news industry, including its economies, markets, and companies. Many of the news companies around the world today were ill prepared to succeed in an environment of continuous, unpredictable turbulence. Opportunity occurs when a company is responsive, robust, and resilient, and the firm has transformed or otherwise prepared its operational and business models to absorb such periods of turbulence and chaos. Those news business leaders and their companies who embrace and respond to this fast-changing pace of innovation and more technologically driven news industry will have implemented new systems to detect turbulence as far as possible, including its value-creating opportunities. There is a need to instill new strategic behaviors within organizations and their business models in order to minimize or pre-empt ill effects on their businesses. Such companies can then take away competitors’ business, gain market share, or even acquire at bargain prices those competitors that have been weakened and made vulnerable by their inability to withstand the turbulence and its consequent chaos.

What is the current normality for the news media? To answer this question, one needs to look at the strategic changes being implemented by the firm in its adaption from (traditional) “mass media” to (digital-age) “niche-driven” orientation. The weekly newspapers have clearly weathered this period of digital turbulence better than the evening newspapers. Beyond the initial shakeup, they have carved out a distinct niche for themselves, with many continuing to operate strongly. In contrast, it is the local evening papers that continue to neglect to create or successfully identify the future niche from which they aim to compete.

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Historically, evening newspapers sold content to everyone based on a highvolume, low-cost circulation strategy. They long dominated the distribution of local news content. Their model, however, has fractured, and they are now searching to find an appropriate market niche. We suggest that, due to the turbulence of contemporary news media and marketplace diversification, they will need first to rebuild then protect their quality niche if they are to survive. Going forward, the news media needs to be deeply aware of how the underlying content economy works. How do they define products in a marketplace of niches? Newspapers' previous dominance was a matter of geography and to some degree of demographics, but this was not because of their product. News media companies of the future must operate using a different business model that necessarily addresses the endless waves of disruptive new technology and staggering competition while exploiting the “social capital” they have built up over generations of community news monopolization. This book has argued that local newspapers need to return to their original role at the heart of their local communities, speaking and listening to their readers. We believe there is a strong future for those local papers, which enjoy high levels of trust among their readers. When times were good, the newspaper chiefs squeezed profits, made unwise acquisitions, built up debts, and failed to invest appropriately in their future growth. There was no need to make long-run forecasts or scan horizon for threats. Year-on-year cuts, pay freezes, and increased workloads have created low morale among newspaper staff, not just in the United States and the United Kingdom, but across the globe. The transition to digital has been fraught with danger—and it appears that in this period, professional journalism, community journalism, and investigative journalism have become the casualties. There is a real danger that local, campaigning newspapers will wither away. We believe that the model is not broken beyond repair; local papers need to rediscover their local roots, so that local advertisers know they are reaching their market and readers can see that reporters are working on their patch as a societal “watchdog” and friend.

Market realities This book has reported a variety of key marketing realities confronting the local newspaper market. Although arguably online growth is potentially achievable for a “trusted” and branded distribution operation of the local newspaper, print remains the main revenue driver for newspaper publishers. The percentage of

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revenues generated through either online or print varies by country, but in the United Kingdom and United States, PWC (2013) estimated that between 80 percent and 97 percent were still being generated in 2012 from print sales, and advertising was down from 99 percent to 90 percent in 2003, with the balance being generated online. Advertising is declining for both national and local newspapers, leading to major cost-reduction and cost-restructuring initiatives. The issues faced by local newspapers are a “mixed” picture internationally. Both in the United States and the United Kingdom, for instance, this segment is seen as being at great risk. One source recently predicted that half of the 20,000 jobs in the local newspaper industry in the United Kingdom would be lost in the next five years. In Canada and India, though, the local newspaper market is particularly large and robust and still relatively healthy.

Can newspapers survive? The answer is, potentially, yes. New technologies such as enhanced Web services, holograms, 3D printing, smart phones, tablets, news applications, and rich site summary (RSS) offer newspaper publishers new opportunities to reach various target audiences. However, a number of those interviewed in this book suggest that finding innovative solutions with revenue models that are profitable still remains challenging. New technologies are the key to attracting younger audiences, who are harder to reach through newsprint, while we also acknowledge the need to retain mature audiences as a more staple revenue stream. Engaging with emerging technologies helps meet the demand for more targeted news and services, whenever and wherever the customers demand. When it comes to content, as one US newspaper publisher told us, “whether it is in print, online or in mobile, we have to be able to deliver it.” In addition to the ability to provide ubiquitous twenty-four-hour news content, new technologies offer opportunities for publishers to monetize content in new and seemingly expanding ways. In some cases, more radical strategic moves have been implemented, as evidenced by the Seattle Post-Intelligencer, which recently produced its last print edition and it is now an Internet-only news source. Other publishers are experimenting by producing hard copies only on high selling days or when major events occur, and then having onlineonly copies when demand tends to drop (mid-week). While deriving revenue from paid Web content remains a struggle, consumers have demonstrated a willingness to pay for sport and financial news content on tablet devices such as Apple’s iPhone and Amazon’s Kindle.

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The main strategic failings have occurred because the news industry has relied on the technological companies to set their digital agenda. They have adopted what Miles and Snow term a defensive strategic position of reacting to market change, largely driven by that of players in the ICT sector. An “endgame” strategy of harvesting and rationalization is, for many news industry firms, as good as committing strategic suicide. Despite expansion into various media channels, newspaper publishers seem to be having major operational difficulties in integrating the variety of news-channel platforms to achieve optimum distribution performance. Most of the participants in this book agreed that the various news channels available have to be integrated both from a brand and content perspective in order to satisfy their customers. Product market verticals offer the opportunity to reach a specific target audience using these various news media channels. As well as reaching the audience efficiently, adopting this approach enables advertisers to gain knowledge of their target audiences, and, “advertisers are willing to pay more for delivering high quality and targeted audiences” (Chapter 12). In addition to advertising, tapping into news media channels as vertical sites can be monetized through subscription fees and transactional income. Paid online content is a source of debate within the industry, and publishers struggle to determine what, if anything, readers will pay to view behind a “walled garden.” Smaller newspapers may not have the scale to create competitive verticals, but consortia and partnerships between these smaller news providers offer potential solutions. Although digital platforms offer the potential to offset decreasing traditional newspaper revenues, the print model still remains the dominant focus in most countries. The proportion of revenues being obtained from digital platforms compared to physical revenues remains very small almost everywhere, from around 2 percent in India to around 15 percent in a best-case scenario in the United States, and it is not expected to reach more than 20 percent or so in the coming five years. A number of publishers in our analysis described the difficulties they were having in demonstrating a profitable business case for the use of new technologies. Experimental modeling is taking place, but there is no best-practice template available for a financially viable digital value chain. While the newspaper industry is working hard to prevent a disastrous “end-game” from being played out, it is poorly organized to agree on and institute fundamental positive changes from within. An increasing demand for specialized, targeted, and relevant information is driving a move from focusing on “mass markets” to “niche” audiences. “Niche” is used throughout the book in a broad sense; it is applied not only to topic-specific preferences but also to the application of a more locationspecific focus. A key example, particularly evident in North America, has been

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the development of “hyper-local” or “local-local” newspapers and associated websites. The large Gannett newspaper group in the United States, which owns USA Today as well as 90 regional and local titles, has been focusing on developing sites addressing hyperlocal content at the neighborhood and suburban level, including catering to the interests of special communities. These newspapers often use collections of mobile (citizen) journalists on the teams of local papers, such as the Fort Myers News-Press in Florida. Hyperlocal community papers have also performed well in Canada in recent years, as their 100 percent local market reach makes them highly attractive to advertisers. In fact, several North American publishers have indicated to us that adopting a niche approach produced more revenue from advertising than the subscription revenues for either niche or mass-market products. The sites associated with these titles also enable the publishers to reap the benefits of hyperlocal search advertising, using postal codes, for example. In India, newspaper publishers still use traditional models to reach niche audiences. They are realizing the benefits of targeted advertising for newer consumer segments by launching special supplements. While developing profitable business models for digital platforms is a challenge, there have been some notable successes. Many have involved the reorganization of publishers’ business models by differentiating between various “niche” target audiences and developing innovative concepts, often in collaboration with advertisers. In Australia, early movement into the online arena resulted in newspaper brands owning top classifieds and other information verticals online. Newspaper websites in the United States have leveraged their local brand and loyal audiences to attract more unique visitors than many prominent website-only properties. Meanwhile, one of the newspaper websites in Spain has become the country's most visited online diary. In April 2013, the Newspaper Association of America released its industry revenue profile for 2012, which reported that circulation revenue grew by 5 percent for dailies, making it the first year of circulation growth in ten years. Digital-only circulation revenue reportedly grew by 275 percent. Such findings corroborate a growing belief that digital subscriptions could be important in securing the long-term survival of newspapers. But there is an alternative thesis, postulated in the early chapters of this work, that the future is not closed access but greater access and will involve consumer participation in content generation and distribution. News organizations have been imposing paywalls at an accelerating pace in the United States since the New York Times imposed its metered paywall (in 2011). However, regional newspapers have struggled to sustain their paywall policies. In the fall of 2013, the Dallas Morning News dismantled the general paywall that it had also erected, claiming that it had not generated enough

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subscribers prepared to pay for content. Many question, however, whether the paywall is an old-world product based on the print business model, one that does not work well with the younger generations, who are clearly not used to buying subscriptions for newspapers and magazines. This book suggests that newspapers need to better gauge the ages, interests, and geographies of their readers in order to determine what kind of news products it should be supplying. They need to provide premium content especially dedicated to building a long-term relationship with the younger generations, if they are indeed to have a future. With any niche product, the newspaper needs to find ways to satisfy its identified audience and then determine sustainable price points with niche payment options. This new trend, again associated with the practices of the New York Times, is called “Paywall 2.0” (Kendrick, 2013).

Building brands and niches through civic participation The accelerated pace of the news cycle, the ability of ordinary Internet users to create and publish digital content, and the willingness of individuals to challenge media narratives are combining with the breakdown of financial models that historically financed professional international media to produce seismic shifts in the structure of local news reporting. As Clay Shirky notes in his essay “Newspapers and Thinking the Unthinkable”: “That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place.” At this moment of uncertainty and confusion, different groups are experimenting with a wealth of new models designed to produce local news, adapting to one or more of the changes outlined above. Communities need information to make decisions and to take action: to provide assistance to neighbors in need, to purchase an environmentally sustainable product and shun a wasteful one, to choose leaders appropriate to them on local and global scales. Communities are also rich repositories of information and knowledge, and they often develop their own innovative tools and practices for information sharing. Existing ways and means to inform communities are changing rapidly, and new ecosystems are emerging where old distinctions like writer/audience and journalist/amateur have collapsed.

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One particular view of the future of the news media is grounded in the concept of “civic participation” as defined by MIT’s Ethan Zuckerman. According to this concept, there is a need for the local news media to better understand these new ecosystems, to build tools and systems that help communities collect and share information and connect that information to action. To do this requires a change in philosophy by the local news media in order to work closely with communities to understand their needs and strengths, and to develop useful tools together using collaborative design principles. The Boston Globe’s “68 Blocks” project provides an example of the initial steps taken by a newspaper to open its “content” shaping to local community participation. We particularly focus on tools that can help amplify the voices of communities often excluded from the digital public sphere and connect them with new audiences, as well as on systems that help us understand media ecologies, augment civic participation, and foster digital inclusion. (Globe interview, May 21, 2013) MIT are pioneering technologies with the Knight foundation and the Globe such as “civic crowdfunding,” which is designed as an initiative to collect data and advance social research into the use of online crowdfunding platforms to fund and provide local services to communities. Similarly the “co-design” toolkit experiment is designed to jointly involve communities in the design process in order to develop media products that are more responsive to a community's needs, more suited to accessibility and usability concerns, and easier to adopt. Many of these emerging projects hope to generate subscriber or member bases willing to pay for quality coverage independent of undue corporate or foundation influence. However, these projects are, at a deeper level, also designed to engage with users who are not just interested in a story—they feel they are part of the story, actively helping to amplify reports from the ground rather than passively consuming news. Generating this form of revenue stream, or revenues from “online” or “off-line” advertising, requires building an audience. The challenge of doing this may prove the steepest challenge for the new generation of “community-issue” news projects. Reporting local news by letting users become part of the reporting and amplification process might represent a chance to bridge interest gaps that otherwise threaten to encourage parochialism. Gans (2010) questions the recent academic excitement over the participatory and democratic potential of Internet-age newspapers. His research on the “digital divide” suggests that access to the Internet and all it

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has to offer is not random or dynamic. In a similar vein, this research confirms that newspapers cannot simply provide online products that solely “mirror” their printed versions.

Final thoughts The quest for a sustained economic model to support local news media operations, whether commercial or nonprofit, remains elusive. A new day in which newspaper executives act boldly and in concert to save their industry is hard to imagine; they are risk averse and, by nature, too independent. Yet the power of the institutions they represent, institutions that can provide accountability and in-depth public service journalism, is profoundly important. Many of the economic models being tried are promising, but as of yet they do not have a financially convincing track record, one sufficient to demonstrate that funding can be found to sustain them in the long term. Other ideas are being imagined, researched, discussed, and debated; some will surely be tested in real time. While nothing before us or on the horizon promises to replicate precisely the depth and sweep of the daily newspaper, the search must continue. The absence of a definitive answer means the reality for now is that serious journalism will survive under a “dark cloud,” with much uncertainty, both on the pages of the struggling local newspaper and in an online world of experimental economic models. While the news media space continues to grow, students undertaking creative/commercial courses in universities often lack the distinctive knowledge of the operation and structure of the industries in which they hope to be employed. Courses typically emphasize the practicalities of news production or are more academically focused, providing a critique of media theory. Hence, little attention is paid to issues of business practice and administration. This book has sought to address this gap and to provide its readers with the relevant theories, conceptual tools, and factual information necessary to gain an understanding of, and the insight to be able to engage critically with, the realities of managing, working, and progressing within the news media sector. Specifically, this book aimed to give readers a theoretical and practical understanding of the specific characteristics of the media sector in terms of how it is currently being organized, the nature of companies within it, their business models, and the major challenges they face in the current media environment. We have aimed with this book to provide our readership with the academic and practical skills to secure administrative and business orientated roles in creative and cultural organizations, while sensitizing them to the specific

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characteristics of work in those sectors and major ongoing developments that impact on them. In order to engage with the themes of employability and relevance, we attempted to adopt a critical intuitive ideology, which is grounded in real-life cases and the practicalities of actual, real-life media functions, companies, and markets. Underpinning the book’s development was a conscious effort to provide a sufficient degree of critical realism that would compensate for the diet of technological hype and strategic voyeurism currently being proposed by many scholars, as they strive to offer “quick fix” survival strategies for the sector.

References Boston Globe (2013). “68 Blocks: Life, Death, Hope.” http://www.bostonglobe. com (accessed January 20, 2014). Gans, H. J. (Spring 2010). “News & the news media in the digital age: Implications for democracy.” Daedalus, 139 (2): 8–17. Kendrick, L. (2013). “Beyond Paywalls, New Ways to Charge for News.” http:// ajr.org/2013/12/16/beyond-paywalls-new-ways-charge-news/ (accessed September 7, 2014). PWC (2013). “Global Entertainment and Media Outlook.” http://www.pwc.com/ outlook (accessed December 23, 2013). Shirky, C. (2009). “Newspapers and Thinking the Unthinkable.” http://www.shirky. com/weblog/2009/03/newspapers-and-thinking-the-unthinkable/ (accessed May 21, 2013). Zuckerman, E. (2014). “News in the Age of Participatory Media.” http://www. ethanzuckerman.com/blog/news-in-the-age-of-participatory-media/ (accessed January 10, 2014).

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Index advertisers’ defection, and leadership and strategic management 82 advertising marketplaces  173–4 Alma Media  152, 154 Anderson, M.T. Feed 185–6 Annan Committee on the Future of Broadcasting  19 antinews 115 AOL 108 AOL Time Warner  149 Associated Press  47 augmented reality  187–9 Auto-Tune 188 Bellamy, Edward “Looking Backwards: 2000–1887” 193 Belo Corporation  149 Berger, John  188 Boston Globe 235 box-out 103 brand building and niches, through civic participation  234–6 branded content  50 branded content studio  50 broadcast diffusion  169 Broadcasting Act (1996) (UK)  151 Carlton 151 Car Talk 61 cascades, social  169–71 Centrifugal Bumble-Puppy (graphic magazine)  183 Channel  5 151 Channel X  209 chimney-fire news  81 Chronicle News 209

City Online website  209 civic crowdfunding  235 civic participation  14, 214, 234–6 CNN 47 co-creation  10, 116–19, 125, 130, 199, 200, 201, 208, 217 collective action  64, 66 Collier’s 42 comic-strip news reporters and science fiction  180–1 commercialization, of news  156–7 community as nation  18 commitment to  86 connected 21 definition of  17 delivering 43–4 learning from  47–9 location-based 18 types of  18 virtual  20, 203 community audience leadership and media identification  32–3 community engagement and disruptive technologies  39–41, 49–50 delivering community and  43–4 disruptive consumer trends and  42–3 mass media rise and fall and  41–2 media’s new roles and  45–7 tactics 47–9 vertical and horizontal community and  44–5 consumer surplus  96 consumer trends, disruptive  42–3 convergence  80–2, 130, 146–57 coopetition  150, 154 networking, syndication and  153–5

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core loyalists  221, 224 cost per action (CPA)  173 cost per click (CPC)  173 Cracked 122 cracked.com 122–4 credibility, as connected phenomenon 21–2 cross media  150 contents and media professionals 33 cross-media synergies  127–8 building of  128–9 model 129 advancement of  133 control variable  130–1 dependent variable  131–3 findings 139 online service presence criteria 129–30 sample characteristics  133–9 cultural jamming  61 curation vs. reporting  119–21 current normality, of news media 229–30 customer matrix and value activities 96–9 customization, on Web  203 Daily Express 152 Daily Post 213 Daily Show, The 188 Daily Star 152 Dallas Morning News 233 Darwin, Charles  74 decentralized media environment  56, 59–60, 63 democratic corporatist model (Finland) 146 Desmond, Richard  152 dialogue, access, transparency, and understanding of risk-benefits (DART) 202 differentiation 73 diffusion, types of  169 digital disruptors  43 digital integration of consumers, into local value chains  199–201 Earth Herald and  213

Internet/social era influence on value chain  213 involvement and consumer participation in value creation opportunities and  214 Evening Post and  211 Internet/social era influence on value chain  212 involvement and consumer participation in value creation opportunities and  212–13 framework 201 News Chronicle and  209 Internet/social era influence on value chain  209–10 involvement and consumer participation in value creation opportunities and  210–11 research method  203–4 results 204–8 social era news production and consumption model and  214–16 limitations 216 value co-creation  202–3 Disney 127–8 disruptive innovation and technologies  6–7, 26, see also individual entries in history  10–11 distributed credibility  21, 32 Doctorow, Cory  189 Pirate Cinema 190 Doctorow, E. L.  194 drone journalism labs  188 Earth Herald 213 Internet/social era influence on value chain  213 involvement and consumer participation in value creation opportunities 214 Echo 213 Economist 164 electronic publications, newspaper-owned 105 Ellis, Warren  181, 182, 189 evening newspapers  86–7

Index Evening Post  211 Internet/social era influence on value chain  212 involvement and consumer participation in value creation opportunities 212–13 examiner.com 120 Facebook  46, 47, 48, 111, 123, 148, 163 fictional prototyping  178, 189–90 Fifth Element, The 188 Financial Times  220, 221, 224 Finland cross-media news production in  152–3 networking, coopetition, and syndication strategies in  154 Finnish Act on Television and Radio Operations (1998)  153 Fish4 210 Flickr 119 fly-bys  221, 224, 225 Fort Myers News-Press 233 Fox News  120 Gamma Media Group (GMG) Regional Media  209, 210 gemeinschaft (community)  85 General Magazine, The 42 gesellschaft (society)  85 Gladwell, Malcolm The Tipping Point  166, 170 global news prototype  190 Earth Herald 2037 192–3 strategic context  190–2 Google 46 Granada 151 Guardian 154 Halifax Evening Chronicle (Johnston Press)  130 Hartley’s news type model  115–16 Helsingin Sanomat  152, 154 Hine, Thomas Facing Tomorrow 178 hisisY.co.uk website  211 Homicide Watch 214

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horizontal media  44–5, 47–8, 60 Huffington Post 50 hurry-up generation  80 Huxley, Aldous Brave New World 179 hybrid distribution model, of News Chronicle 210 hybrid news  59, 62 hybrid programs  61–2 hyperlocal news  200, 233 incidental loyalists  221, 224, 225 influential hypothesis  170 information gathering convergence 149 informative authority  32 interactivity, significance of  130 interactivity and content specialization 55 Internet  16, 18, see also individual entries Internet publications and value activities 104–5 investigative journalism  189 Irish News 226 ITV network  151–2, 155 Johnston Press  5 journalism, value of  7 Kansan Uutiset 154 Kauppalehti  152, 153, 154 Kiva 5 Knight Ridder  39, 40 leadership and strategic management 73 advertisers’ defection and  82 content quality and  78–9 convergence and  80–2 cost cutting for survival and  82–4 evening newspapers and  86–7 influence area  76 local media types and  75–6 niche boundaries and  85–6 niche strategy and  84 strategic criteria  79–80 strategy types  77–8

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success and failure and  74–5 liberal model (United Kingdom)  146 Life 42 life politics  54, 58, 59, 63 Little Angels 61 local and global news combination, and Web 2.0  30–1 localized press  19 Look 42 machine bureaucracies  74, 93 Mad Magazine 122 Madison, James  16 magazines structure and value activities 103 market chaotics and age of media turbulence 228–9 Marshall, Alfred  74 Maslow’s Hierarchy of Needs  90–1 mass media, rise and fall of  41–2 Maughan, Tim “Paintwork”  187–8, 189 media policy changing environments and news production  145–6 convergence and  146–50 and changing media professional culture 155–7 and news production in Finland and United Kingdom  150–5 MEN (Trinity Mirror)  130 Metro 209 Meyer’s model  16 microblogging 114 microscopic media  9 mobility barriers  78–9 monetization process  222 multichannel strategy  127 multistep flow model  168–9 Murdoch, Rupert  46, 220 MySpace  46, 47, 108 Nelonen  152, 153 Netflix 50 news, definition of  112 news  114, 115 News Chronicle  209 Internet/social era influence on value chain  209–10

involvement and consumer participation in value creation opportunities 210–11 news circulation  31 news content, history of  15–17 news conversation  31 News Corporation  108, 220 newsfeeds  122, 172, 173, see also individual entries newsmakers and social responsibility 20–8 news media strategic visions and speculative futures 177–9 dystopic future and  181–9 establishing links between science fiction and fictional prototyping and  179–81 fictional prototyping and  189–90 global news prototype  190 Earth Herald 2037 192–3 strategic context  190–2 Newspaper Association of America 233 newspaper flow diagram and value activities 99–103 news reporting and news owning 112–13 news reporting organizations models 108–12 Newspaper Society (NS), United Kingdom  85, 129, 140 New York Times  40, 41, 45, 48, 50, 63, 164, 226, 233 niche boundaries  85–6 niche media  63–5 niche strategy  84 niiu  22, 217 nonnews 114 North Carolina State University (NCSU) 188 Northern & Shell  152 Observer 154 Office for National Statistics (ONS) 127 OK! 152

Index online service presence (OSP)  133, 137, 138 opinion leaders  166–71, 174 Oprah! 61 Orwell, George  184 1984 181 overall cost leadership  73 ownership convergence  149 Paywall 2.0  234 paywalls  130, 219–20, 224–6 administrative cost  223 burgeoning inventory and  220–1 business models  223–4 lack of expertise and  222–3 small scale  221–2 perceived price (PP)  96–9 perceived use value (PUV)  96–9 PEW  203–8, 221, 224, 225 politics and entertainment, convergence of  53–4 digital technologies and entertainment styles and 54–7 from national consensus to personal relevance and connection 59–62 new socio-political environment and 57–9 organizing personal concerns  62–5 postbroadcast media environment  59, 60, 61, 63, 64 Postman, Neil Amusing Ourselves To Death 179 print and digital publishing  81 print supply channel characteristics (PSCC)  137, 138 Private Eye (magazine)  120 prospectors 74 prototyping 177–8 public space  19 Qix.com 119 radio and value activities  104 Reddit  185, 188 reflexive modernity and governmentality 59

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REI 5 Reuters 120 Rich Site Summary (RSS)  25 Sacco, Joe  189 Journalism 183 Sanoma Corporation  152 Saturday Evening Post 42 science fiction (SF)  177–8 establishing links with fictional prototyping 179–81 Seattle Post-Intelligencer 231 segmentation categories, in media industry 83–4 self-actualization  11, 54, 58–60, 62, 63, 90, 91 self-aggregation 4 self-organizing digital news  107–8, 118 co-creation and  116–19 curation vs. reporting and  119–21 models for funding and  121–4 news, nonnews, and antinews and 114–16 news reporting and news owning and  112–13 news reporting organizations models and  108–12 Shaw The Rise and Fall of American Mass Media 41 Shirky, Clay “Newspapers and Thinking the Unthinkable” 234 Silver, Nate  48 Sky News  152 Smith, John  187 Snow, C. P.  193 social cohesion  56, 60 social era  9–10, 200 social era news production and consumption model  214–16 limitations of  216 social media  163–4 as networks of connected people 164–5 opinion leaders  168–71 two-step theory  165–7 social relations, meaning of  199 soft media  53, 54, 64, 110

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Spiegelman, Art Maus 183 sponsored content 50 sponsored publications  104 stand-alone publications  104 Starbucks 5 structural convergence  149 structural virality  169 structured equation modeling (SEM)  132–3, 139 Stumbleupon 123 Sullivan, Andrew  182 Sun 156 Sunday Times 220 syndication 122 tabloidization 157 tactical convergence  149 Talking Points Memo  182 Taloussanomat 156 Tarde, Gabriel  168 Telegraph 220 television, significance of  56, 103–4 Thompson, Hunter S.  13, 181 Thompson, Robert  220 Time Magazine 23 Times 220 Times Online site  220 Time Warner  108 traditional news reporting organization  109–10, 111 transitional business model  110–11 Transmetropolitan (film)  181–2 Trinity Mirror  5 Tumblr  111, 113, 120 Twitter  44, 45–8, 111, 113, 114, 147, 163, 166, 169, 206 two-step theory  165–7, 174 United Kingdom cross-media news production in  151–2 networking, coopetition, and syndication strategies in  154, 155

Index UK Guardian News & Media publishing company  154 USA Today 233 Väli-Suomen Media Oy  154 value activities  89 cost and  93–4 customer matrix  96–9 internet publications  104–5 magazines structure and  103 measurement of  91–3 newspaper flow diagram and 99–103 newspapers evaluation and 90–1 radio and  104 television and  103–4 valuable, rare, non-inimitable and non-substitutable (VRIN) and 95–6 value chains and  94–5 value chain  7, 33, 94–5, 199–216 Verne, Jules  184 “In the Year 2889”  190–1 Verne, Michel “In the Year 2889”  190–1 vertical media  182–3 and horizontal media  44–5 vigilante journalism  185 Vinge, Vernor Bookworm, Run 185 A Fire Upon the Deep 185 Rainbows End 186–7 True Names 184 viral diffusion  169, 170 Wall Street Journal  50, 220, 221 Web 2.0  16, 21–8, 107, 130, 200, 217 community news production 17–20 news ecosystem  27–33 Wikipedia 111 Wordpress  113, 120 YouTube  48, 119, 182, 188