Business model innovation opportunities when news has become a public good

Abstract

This dissertation explores business model opportunities for news when information is freely accessible. It asks: How have news agencies responded to the declining commercial value of news in their strategies and business models? What, if any, are the critical elements of sustainable business models to produce news that has become a public good? The root causes of European news agency industry transformation are first analysed through the changes new technologies have brought to competitive forces. Successful new business models in European national news agencies are then examined through case studies of selected agencies. Finally, survey-based statistical methods combined with interviews and qualitative analyses are used to test empirically whether the news is a socalled anti-rival good, meaning that news is a good that increases in value when used by others. Three emerging opportunities for new business model innovations are analysed in depth: resource-based diversification, platform business models, and user contributions.

The findings show that incumbent firms’ resources or capabilities have been used successfully for related business diversification, either into new services to media customers or into new, more profitable markets, such as corporations and institutions. A specific diversification category is innovating platform business models using resources built for news operations as “incumbent advantages” in platform strategies, including platform launches. Multisided platforms enable the development of profitable business models that employ the same resources as general news services. Using the news to subsidize a platform may allow news services to be produced sustainably, even at a loss. The findings also suggest that incumbent firms benefit from, for example, existing owner and client relationships and an established trusted brand. The analyses of user contributions show that, on average, the news may even lose value due to contributions by other users. However, intercorrelations reveal interesting opportunities for value creation, as value perceptions vary substantially, and value shifts depend on the types of value the news story creates for the user. A deep understanding of what values news creates and how they are interlinked is called for in digital news service design.