The purpose of this study is to analyse how the digital environment affects the ecosystem of news media
in the United States. We explore how the business operations of news organizations, especially newspapers,
are changing. This report offers a comparative perspective on new business models and forms
of revenue that can be utilized by the Finnish news media to develop their own business and editorial
practices. The study reveals the wide differences in approach of individual newspaper publishers; those
who want to learn from the US media industry need to individually determine which approaches are
most appropriate for them.
In this study, we utilize well data to shape a picture of the overall business environment in US newspapers.
This is combined with qualitative interview data collected in the US in the spring and summer of
2017 from media managers, researchers, industry representatives and media analysts (N=35).
For the US media companies, like their counterparts in Finland and elsewhere, the last years have
been challenging in economic terms. The amount of publications is decreasing, as is also the overall
circulation. Newspapers are facing the rapid loss of advertisement revenues and losing the battle against
Google and Facebook when it comes to digital advertising revenues. However, the audience is relatively
well equipped for consuming digital media content even if the internet penetration in households in the
US is still lower than, for example, Finland. The reader revenues are increasingly significant.
We conclude that competition and changes in technology and media consumption have made the
traditional, relatively straightforward business model focusing on creating revenue streams through
audiences and advertisers outdated. Today, business model innovation is more focused on building and
nurturing value-creating relationships with readers, advertisers, partners, and intermediaries. When
these relationships are effective, they become the basis for revenue-producing activities. Contemporary
news business models and activities require knowledge and competences that are often absent
from traditional news industry workforces. These competences include, for example, digital content
production, web design, digital marketing and sales, social media content coordination, digital account
management, web analytics analysis, as well as relationship management and engagement facilitation
for readers, advertisers, and other customers.
Expanding a business model to include new activities and revenue creation through content syndication,
newsletters, event production and management, branded merchandise, creative services, web
hosting and SEO, and package delivery also require acquiring personnel with skills and abilities not
present in most news providers today. They require an entrepreneurial attitude and the creation of individual
business models and value-creating strategies for each activity.
New structures and working arrangements are needed in newsrooms and more interaction with
those engaged in relationship management and digital customer management is required. Most publishers,
in the US and elsewhere, are still struggling to adapt to the digital age. For legacy media rooted
deeply in a stable ecosystem of actors, routines, habits and norms, the upheaval is often felt as a threat.
The leap from print to digital publication, as well as integration of content, audience and producers, is a
challenge for newspaper companies.
Operating in the digital environment is forcing the companies to make significant investments in
technology, software, systems and personnel. News organizations such as the New York Times and
Washington Post, which have led these developments, perceive those investments as central to their
strategies and future growth. Many smaller news organizations seem to think that they must follow
the national news organizations without developing their own business models and strategy or without
regards to whether they will be equally useful. Thus, innovation (or often, imitation) seems to be the goal
rather than the means to a goal.
Changing media consumption practices and shifting revenue streams require news providers to
think more strategically about their relationships with multiple stakeholder groups and, most importantly,
adopt a broader approach to business models. Our review of the US newspaper business reveals
that it is struggling with creating functioning business models and is still finding its way in the digital
environment. We conclude that newspaper publishers in other countries should not look to the US to
provide answers to their challenges, but rather use the experience from the US to help clarify their strategies
and avoid many of the weaknesses in the US approaches.
The US experience shows the unwillingness or inability of many established newspaper firms to consider
value creation and business relationships in the broader way that digital competitors and emerging
news providers are embracing. The need to embrace those perspectives and to alter operations grows
stronger every day, and newspaper publishers seeking lessons from the US should try to avoid the damaging
conservatism and surmount the hurdles that US publishers are having difficulty overcoming. The
newspaper industry is in a situation where individual innovations and changes are often not enough,
but rather the companies should think about refashioning their operations and the newspaper model
itself. There is no universal solution, but the examples provided in this study may serve as inspiration
for finding new ways of value creation in newspaper publishing.