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Digital technology changes the business relations of the newspaper industry

28.09.2009
The newspaper industry is undergoing a digital transformation. This transition does not only involve the introduction of a new technique but also a radical change of the business relations of the newspaper. This is revealed in a new thesis from the University of Gothenburg, Sweden.

A decrease in sales and advertising income are pressing the newspapers to expand in digital technology. Internet, mobile services, e-paper and phenomena such as YouTube are challenging the traditional ways of producing and distributing media content.

In order for digital development to move forward the newspaper industry needs the knowledge of how digital innovations change their vale networks and business relations. This is revealed in Maria Åkesson's dissertation in informatics "Digital Innovation in the Value Networks of Newspapers".

- Digital innovation is not only a shift in technology. It radically alters the prerequisites for making money in the media industry. The changes affect how the industry creates new values, their business models and relations, says Maria Åkesson.

Wider networks require new business models
The value networks of newspapers have traditionally consisted of other newspapers, readers and advertisers. New digital products and services have widened the relations of the newspaper and changed their possibilities of doing business. Newspapers have not been engaged with for example telecom providers until the opportunity of offering mobile news services emerged.
The thesis presents a model that can be used as a basis and analytical tool to further explore value networks in digital innovation. According to Maria Åkesson the model is useful for newspapers when entering the digital era.

Traditional ways of doing business are challenged as a result of the digitalization of media. Old business models rest on newspapers having control over production, distribution and content. Digital innovation has changed the processes and structures within the business landscape. It has been difficult for the newspaper industry to create business models and value networks that render profit possible in digital media.

- Business models and the way of conducting business have not really changed in the newspaper industry since its beginning, says Maria Åkesson. Both readers and advertisers abandon the papers for digital media. The newspaper industry has not yet managed to form the value networks that are required to be strong within the area. This is a global trend that is obvious mainly in the American newspaper industry.

Maria Åkesson shows that digital innovation turns value networks into more open and flexible structures at the same time as driving forces strive in the opposite direction as soon as digital innovations become established. The thesis shows that individual organisations exist in several parallel value networks with different structures and different business strategies.

The thesis was successfully defended on December 25.
Title of the thesis: "Digital Innovation in the Value Networks of Newspapers".
Link to thesis: http://hdl.handle.net/2077/20887

Helena Aaberg | idw
Further information:
http://hdl.handle.net/2077/20887
http://www.ait.gu.se/aktuellt/nyheter/fulltext/Digital_teknik_forandrar_affarsrelationerna_i_tidningsindustrin.cid895147

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