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Different business models for news industry

August 14, 2009

News Products and News Delivery: Look to the Past for a Future

By Denise Scammon

Technology is intermingled with social change. Printing technology, specifically movable type, has had a powerful effect on society. As society became more literate, the printed, published word became an effective means of communication. As publishing became quick, cheap and portable, communication became easier, even among people separated by great distances. Technological advances were developed in electronic formats — the Internet, CDs, DVDs, e-mail — in order to make communication even quicker, cheaper and more portable. As the revenue stream used to support one of the biggest communicators of all times — the newspaper — shrinks due, in part, to the economic recession, people are wondering how the newspaper industry will survive. By looking to the past, perhaps we can determine what technology is needed for the survival of the newspaper.

What changes have technology and society created in the news industry?

Technology has dramatically changed the newspaper industry and the societies in which newspapers are published. The original intention of early newspapers, such as the Acta Diurna in 59 B.C., remains true today, several thousand years later, and that intention is to inform readers of political and social events (acta, 2009). Unfortunately, the general public was not literate in most early societies and this meant that newspapers and publications were printed in  small quantities and read by a small section of society. According to Volti, “The effects of a written language were minimal when the written language was understood only by a small segment of the population” (2009, p. 210).
The printing industry offers an excellent example of how technology interacted with, and changed, society.  As the technology used for printing evolved, going from the movable woodblocks of the Chinese in 1040 A.D. to movable copper type of the Koreans in 1392 A.D. to the Gutenberg printing press in 1447 A.D., printing became more economical, less time consuming and more readily available to the general public (Volti, 2009, pp. 210-211). With these technological advances in
printing, what once took hours to produce, now took workers much less time. This ability to mass produce printed products is one of the leading factors in the increasing literacy and knowledge among the general public.
Of the early printed products, most were books, including religious tracts such as the Bible. Early newspapers sometimes ceased publication after one issue due to governmental control. From the Acta Diurna to the Notizie Scritte the first monthly newspaper in 1556 (newspaper, 2008), to the Relation, the first weekly newspaper in 1605 (Weber, 2006), workers in the newspaper industry utilized the technology available during those periods of time to publish their papers. Volti stated, “These early newspapers were unimpressive, usually consisting of no more than four pages of hard-to-read type” (2009, p. 217). Jump ahead a couple hundred years to the invention of a steam-powered printing press. Friedrich Koenig of Germany designed such a printing press in 1814 that was so revolutionary, that the publisher of a London newspaper asked for the new press to be “secretly installed … [because the] publisher wanted to avoid labor problems that might arise from workers who used the hand-operated presses” (Karwatka, 2007). Prior to Koenig’s press, the available press technology was only able to produce 200 pages per hour, but the steam-powered press could print “1,200 pages per hour, six times faster than the rate with the hand presses. But the management could not convince the workers to make the change” (Karwatka, 2007). Fast forward to the 1960s, when the America Newspaper Guild conducted a 25-day strike against the New York Times to prevent new technology – typesetting and lithography – from forcing newspaper workers out of jobs (Tracy, 2004, p. 452).
Workers fear for their jobs in the newspaper industry as technology and society interact to create news gathering and delivery tools that are more portable, easier to use, and economical. The printing press has given way to the Internet and digital tools. Guilds and unions continue to be wary of new technology, but only to save jobs, not necessarily in the best interest of technology. If workers had been successful in preventing the steam-powered press from being introduced in the newspaper
industry, that loss of technology would have been huge. Technology, once discovered, can’t be undiscovered. The appearance of two new technologies – television and radio – attracted newspaper readers and the newspaper industry saw a decline in its audience. In the 1970s, linotype workers revolted against the use of computers and in  publicized reports, workers at a newspaper in Washington, D.C. became known as Luddites, a group opposed to technological change. Those workers were trying to protect their jobs by demonstrating their unhappiness with the new tools (McPherson, 2006, p.38). In the 1980s, news gatherers took advantage of the Internet and digital tools, although the proliferation of news gathering tools means that reporters and journalists are required to be fluent in accessing information and databases via computers, faxes, and mobile devices. Today, workers in the news industry have access to seminars and online webinars from organizations such as the Newspaper Association of America and Poynter Institute which offer training in the new digital media. Rather than fight the advancing technology, news industry workers are now embracing the new tools. Becoming fluent in multimedia tools is a smart move for reporters and journalists, but these same tools mean that news is available online for free, which means the news industry needs to find a new business model to support its product – news.

Why Are Newspapers Looking for New Methods of Delivery?

Newspapers are facing an economic crunch which has forced newspaper companies with a lot of debt to either layoff a large number of staff or close their doors completely. Smaller newspapers don’t have huge debt and remain profitable. According to Isaacson, author of “How to Save Your Newspaper,”

Newspapers and magazines traditionally have had three revenue sources: newsstand sales, subscriptions and advertising. The new business model relies only on the last of these. That makes for a wobbly stool even when the one leg is strong. When it weakens — as countless publishers have seen happen as a result of the recession — the stool can’t possibly stand (2009).

All newspapers, regardless of their size or debt, are affected by recession as advertisers become more fiscally conservative and readers cut back on newspaper subscriptions. Once advertisers and subscribers change their spending habits due to a recession, it may be difficult to bring them back to the newspaper at the level they were at prior to the recession. For that reason, it is important to find technology that allows newspapers to deliver their product — journalism and news — while remaining profitable.

What Ideas Give Hope of Finding New Delivery Methods?

There have been many ideas bounced around regarding ways to support journalism and news. One such idea relates to newspaper Web sites and the idea of charging for access to read the news online. Some newspapers have already tried charging for access to their online news and found that readers don’t want to pay for something they can get somewhere else for free. “If big newspapers would charge the advertisers, not the readers, they could still turn things around” (McDonough & Bauer, 2009). Presently, advertisers are charged a lower rate for publishing an online advertisement than for that same ad to run in the print version. Newspapers need to charge online advertising rates that support the online version of their news product. I think newspapers, which will soon become known as news agencies due to the multiple news delivery platforms, need to charge advertisers an advertising rate comparable to subscription rates to make up for the revenue lost due to the recession. “The business model sees multiple-platform publishing as a way to increase productivity among staff and – equally importantly – as a way to grab as large a share of the advertising pie as possible” (Quinn, 2005, p. 32).

The idea of a subscription to online news sites does not have to shut out readers who are willing to donate to a “keep journalism free” fund. Non-profits like PBS and NPR have such donations funding their journalism and news. Readers who make donations to support the news site can be thanked with discounts at advertisers’ businesses. It’s true that the ease with which an online visitor gets through the subscription process makes a difference in whether or not that reader actually completes the subscription process. Some online forms don’t work correctly; clicking on a button doesn’t move to the next screen. Some subscription forms are complicated and take too much time. Some subscription forms are hidden behind several levels of clicking rather than on each page. Changes to online news sites, in addition to subscription functionality, should take advantage of the latest technologies and make the user experience easy and convenient. “There’s still much that many newspapers can do to improve their Web sites: adding Twitter feeds, social networking applications, Google map mashups (maps over-laid with data), on-demand mobile information and, of course, more video” (Farhi, 2008).

How Have Technology and Social Change Affected the News Industry?

Some businesses are using technology for profit that newspapers should be able to use, too. Isaacson (2009) noted that Internet Service Providers are able to charge monthly rates for Internet access, which, in a round-about way, means ISPs are making money on access to newspaper sites. Isaacson also wrote,

Thus we have a world in which phone companies have accustomed kids to paying up to 20 cents when they send a text message but it seems technologically and psychologically impossible to get people to pay 10 cents for a magazine, newspaper or newscast (2009).

The solution to charging for online news may be in using technology that makes micro-payments quick and easy, such as the technology used for iTunes and E-ZPass. Isaacson concluded,

Under a micropayment system, a newspaper might decide to charge a nickel for an article or a dime for that day’s full edition or $2 for a month’s worth of Web access. Some surfers would balk, but I suspect most would merrily click through if it were cheap and easy enough (2009).

Prior to the printed word, people relied on memory and oral transmission to communicate. Printing created a revolution in the way people communicate. The social effects of printing may not have been apparent immediately, but history reveals that printing affects whether or not a language survives, has practical purposes for recording transactions and communications between governments, and spiritual purposes, such as the printing of Bibles and religious tracts. The printing revolution relied on interrelated technologies, which ultimately led to mass production of books and newspapers.

The Internet has revolutionized communication and newspapers, and while it may offer more options for delivering the news, the news industry still needs to find a way to support its products and services. Unfortunately, a big chunk of revenue was lost when Classified advertising shifted over to the Internet. According to Farhi in “Don’t blame the journalism,”

The real revelation of the Internet is not what it has done to newspaper readership . . . but how it has sapped newspapers’ economic lifeblood. The most serious erosion has occurred in classified advertising . . . Craigslist and eBay and dozens of other low-cost and no-cost classified sites began gobbling newspapers’ market share a few years ago. What they didn’t wipe out, the tanking economy did (2008).

Mensing (2007) explained that “Syndication, single-copy sales and a variety of miscellaneous sources provide relatively small contributions to overall revenue for most newspapers.” Newspapers need to look at the manner in which they gather news and report it, and the manner in which the news is delivered, for economic savings and survival.

Newspaper delivery uses multiple forms of technology. There’s the paper version. There’s the online version. Recent technological advances have brought news to mobile devices such as cell phones and Kindles. In the research paper, “Convergence and divergence in media: Different perspectives,” Appelgren (2004) described the multiple methods in which news may be gathered and reported in the future,

In the media content production companies of the future, reporters work on written content as well as with audio and images for multiple publishing in all conceivable publishing channels. Convergence in content production also involves editorial system technologies and the professional role of the reporters (p. 240).

After reading about how technology is reciprocally connected to social change in Volti’s book “Society and Technological Change” (2009), the idea of borrowing technology being used in one industry for use in another industry and the futuristic qualities of nanotechnology, the future of the newspaper industry has possibilities. Perhaps the technology that will revolutionize the news industry is already here and we know it as the hologram.

Is Holography the Best Solution?

Looking at the hologram as a possible form of newspaper delivery fits the belief that a new business model for the news industry can be found by looking at history because holograms have been around for over 50 years. Before going any further in describing how newspapers may be delivered as holograms in the future, it is important to note that the term “hologram” might mean different things to different people, depending on how much they know about the science of holography. As the word “hologram” is used in this essay, it is meant to be used as a form of technology that allows news to be viewed anywhere, as a projected image. It’s possible that the correct term is actually “spectral imagery,” but for purposes of general knowledge, holograms are correct. Nanotechnology would allow for the miniaturization of the hologram device or projector to be small and convenient.

A simple definition of hologram technology comes from researchers within the Photonics and Sensors Group at the University of Cambridge, Department of Engineering:

Holograms are efficient: they work by routing light to the places where you want it, and away from the places you don’t. Video projectors based on this holographic technology require only a very few components, which means they can be made very small – and the smaller you make holograms, the better the image that results. So a projector could be integrated into a laptop, a PDA, or even a mobile phone (Lawrence, Buckley, Cable & Mash, 2004).

Hologram projectors haven’t been widely used because of limitations in technology. For naysayers, history has shown repeatedly that technology can be improved upon. Social needs have been the impetus for many technological advances. Volti (2009) also noted that there’s a difference between inventors and entrepreneurs. Perhaps news delivery via holograms is available, but just hasn’t been marketed adequately.

An actual holographic newspaper may seem too much like science fiction, but the same could be said about many inventions, such as the phone, the computer, and television. “Dennis Gabor is considered the Father of Holography and Holographic Technologies” and he wrote a paper on the subject in 1948 of which “The most interesting thing about all this is that laser light had not even been invented yet, when he wrote his paper,” noted Winslow (2007) in his essay “Holographic Projection Technologies of the Future: Killer Applications” for the Holographic Think Tank. Once inventions become mainstreamed and ingrained in society, modifications occur to accommodate the way the inventions can be most useful. Holographic newspapers would undergo the same types of modifications until they too become outdated and are then surpassed by a new technology that cannot even be comprehended today.

Social change affects the technology we need in our lives, simply to maintain the standard of living to which we have become accustomed. There will always be positive and negative consequences of technology, such as the automobile which positively reduces the amount of time it takes to travel long distances, but negatively impacts the environment. Holographic products have their own positive and negative consequences. Researchers at the Holographic Think Tank stated that holographic technology would “positively curb pollution . . . due to less travel, but this would be negatively counterbalanced by high energy requirements from many coal-fired plants which put out a good amount of Greenhouse gasses including CO2” (2007). Time — and usage — are needed to discover the positive and negative effects of any technology, including holography.

We might not know what the future holds for newspapers, but by studying its past, and the technologies that have brought it to where it is today, perhaps we can move toward a new business model that will make profitability a sure thing. Maybe the technology that next revolutionizes the news industry will be new. Maybe the technology is available now, but serving a different purpose. Maybe the technology is sitting on a dusty shelf somewhere. Discoveries have been made by studying the effects of technological changes in the news industry, stretching from the early newspaper Acta Diurna to today’s hundreds of online news sites. Workers are fearful of technology that makes their jobs obsolete. Guilds and unions have formed to protect newspaper workers, but not in the interest of technology or the newspaper owners. Preferences for one type of newspaper delivery over another – paper versus online versus mobile device – are based on personal likes and dislikes, but it will be economical reasons that decide which methods will survive after this recession. Farhi (2008) made a valid point when he stated that news agencies needed to look at their online product separately from their print product and that readers of the two products have different preferences, “Online readers tend to dart in and out, spending far less time on a newspaper site than a subscriber spends with a paper.” Figuring out how readers use the print product and tracking visitors on the Web site are important statistics for advertisers. These statistics are one reason for the difficulty in coming up with a one-size-fits-all business model for the news industry. Which brings us back to the way in which the news industry can move forward. Not only can newspapers use hologram technology to deliver its product — journalism and news — advertisers can use hologram technology for marketing their products and services. This joint use seems to point toward a beneficial technology for newspapers and advertisers to continue to work together in the future.

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  1. August 14, 2009 10:35 am

    References
    Acta. (2009). In Columbia Electronic Encyclopedia (6th ed.). Retrieved August 17, 2009, from Academic Search Premier database.

    Appelgren, E. (2004). Proceedings of ICCC/IFIP International Conference on Electronic Publishing 2004: Building Digital Bridges: Linking Cultures, Commerce and Science. Brazil. Retrieved August 12, 2009, from http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.127.3208&rep=rep1&type=pdf

    Farhi, P. (2008, October). Don’t Blame the Journalism. American Journalism Review, 30(5), 14-15. Retrieved August 12, 2009, from Academic Search Premier database. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=34909039&site=ehost-live

    Isaacson, W. (2009). How to save your newspaper. Time. Retrieved July 11, 2009, from http://www.time.com/time/business/article/0,8599,1877191,00.html

    Karwatka, D. (2007, March). Friedrich Koenig and his Steam-Powered Printing Press. Tech Directions, 66(8), 10-10. Retrieved August 17, 2009, from Academic Search Premier database.

    McPherson, J. B. (2006). Journalism at the end of the American century, 1965-present. Westport, Conn.: Praeger Publishers. http://books.google.com/books?id=icY_SPvVBO0C&lpg=PA38&ots=Mp1pL5NTk6dq=linotype%20workers%20versus%20computers&pg=PA38#v=onepage& q=&f=false

    Mensing, D. (2007). Online revenue business model has changed little since 1996. Newspaper Research Journal, 28(2), 22-37. Retrieved August 13, 2009, from Academic Search Premier database. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=25413614&site=ehost-live

    Newspaper. (2008). In The Columbia Encyclopedia (6th ed.). Retrieved August 17, 2009 from Encyclopedia.com: http://www.encyclopedia.com/topic/newspaper.aspx

    Physorg.com. (2004). Ground-breaking holographic technology will power a new generation of pocket-sized digital video projectors. Scientific American. Retrieved July 11, 2009, from http://www.physorg.com/news2516.html

    Quinn, S. (2005, February). Convergence’s fundamental question. Journalism Studies, 6(1), 29-38. Retrieved August 12, 2009, http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=15751779&site=ehost-live

    Tracy, J. (2004, November). The News About the Newsworkers: press coverage of the 1965 American Newspaper Guild strike against The New York Times. Journalism Studies, 5(4), 451-467. Retrieved August 17, 2009, from (doi:10.1080/14616700412331296392).

    Volti, R. (2009). Society and technological change. New York: Worth Publishers.

    Weber, J. (2006, August). Strassburg, 1605: The Origins of the Newspaper in Europe. German History, 24(3), 387-412. Retrieved August 17, 2009, from (doi:10.1191/0266355406gh380oa).

    Winslow, L. (2007). Holographic Projection Technologies of the Future: Killer Applications. Retrieved July 11, 2009, from http://www.worldthinktank.net/pdfs/holographictechnologies.pdf

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