Digital transformation of media organizations : developing value propositions and organizational capabilities

Abstract

Digitalization is profoundly disrupting both the consumption and production patterns in the media industry. Although digitalization presents new opportunities for value creation, it also requires media organizations to continuously adapt their value propositions and related capabilities to navigate the evolving landscape. This dissertation aims to deepen the understanding of the dynamics of the digital transformation of media organizations with a particular focus on both the customer interface and the intraorganizational context. Specifically, the dissertation explores how incumbent media firms are developing their value propositions and organizational capabilities.

The dissertation is based on three qualitative case studies conducted in two Finnish news media firms. The data include semi-structured interviews with firm representatives and customers, as well as rich secondary data. The findings reveal key transformation drivers, provider and customer sense-making practices, and implications for value element reshaping within the value proposition development. The dissertation outlines four major phases in this development process, detailing what types of changes occur and how, with a particular focus on organizational and product-level activities and their interrelationships. The findings also suggest that organizations can build capabilities for value proposition development along four dimensions of a core capability. Furthermore, the existing capabilities, structures, and practices can simultaneously facilitate or inhibit this development. In the case of developing a distinctive sub-brand, the research shows that the main brand can contribute to capability development by providing resources, revising the product, advocating for transformation, and passing on values, but the existing capabilities, systems, and values can also impede the formation of new capabilities, constrain operations, and limit the style of the sub-brand. Overall, this dissertation highlights the phenomenon of path dependency not only within organizations but also among their customers, providing a deeper understanding of the ongoing challenge of balancing existing and new elements in value proposition development.

The findings contribute to media management research by deepening the understanding of a value proposition as both a strategic and an operational tool and ultimately linking organizational capabilities to value proposition development in a digital transformation.