Reinventing the business model of the newspaper industry

Abstract: In developing this thesis, we made an analysis of the newspaper industry in the United States, using The Wall Street Journal as a case study. This research project includes information and analysis on the evolution of Dow, Jones & Company (parent company of the newspaper) and its direct link to the Wall Street Journal from its initial days and along way this thesis highlights the changes that have been implemented between the 19th and the 21st centuries. This research addresses the troubled business model of the newspaper industry, asking why has it broken, how it broke, and essentially how can it be reinvented? Our main research questions are: How did the old business model become damaged? How has The Wall Street Journal avoided the crisis? How are The Wall Street Journal's competitors responding to business model disruption? How can e-business models be adapted to assist the newspaper industry in reinventing its business model? Along the way, research questions were refined based on readings and interviews as greater insight and understanding were obtained about the newspaper industry, its traditional business model, its present predicament, and the various viewpoints as to the current state of the industry, the future direction of the industry, and the e-business model of the WSJ. A qualitative analysis of the business practices of the WSJ and its competitors and trends within the industry has led to the understanding that while yes, the business model of the industry is definitely broken, this is not necessarily true for every news organization in the U.S. market, the region primarily focused on in this paper. The rationale for using the case study approach is because The Wall Street Journal represents a unique and revelatory case in the newspaper industry. In the US market, the WSJ is one of the only newspapers that has a profitable e-business model. Using analytical generalization, a previously developed theory is used as a template with which to compare the empirical results of this case study. We use the Financial Times as a second example in this thesis because it occupies a similar niche in the newspaper industry as the WSJ appeals to a similar customer segment. Although this case study focuses on the US market, we have also included information on newspapers in other markets such as Norway and the UK because The Wall Street Journal is an international newspaper, operating in a global marketplace, and to demonstrate how firms outside the US market have been changing and adapting their business model. Information on the Financial Times has been included because it is one of the WSJ's closest competitors not just internationally, but also in the US market. In terms of our research questions, we discovered that the current business model for US-based newspapers dates back to the 18th century and up until the mid-1990s, had barely changed. And that a combination of factors have contributed to the destruction of the traditional model of the newspaper industry including business model disrupters, changing consumer habits and audience fragmentation. Among the conclusions draw from the research include, that in the 21st century, the business model of the newspaper industry will continuously face disruption due to changes in consumer habits and preferences as well as technology. Organizations need to adopt a framework that includes continuous innovation, simple rules, and more flexible processes applicable to its current customer segment and potential customer segment in order to ensure that they are able to remain competitive in this ever changing and shifting environment. Individual firms perhaps need to engage in creating disruption themselves and avoid complacency.