External Environment Analysis For The Newspaper Industry Media Essay

External Environment Analysis For The modspaper publisher exertion Media actThe discussionpaper sedulousness is going through a decline and is torment through what could be its worst fiscal crisis as the announce revenues argon plummeting due to the economic downturn. Following the downturn in sucker media fabrication several papers either forgo their daily print for web or do go forth the delivery of print version to 3 geezerhood a week, Major publication houses filled bankruptcy. The situation is alarming and resembling across Britain, US and Europe. The Decline of once great radicalspaper is non with come in cost, it means the end of certain kind of civic sensibility that was work up on broad agreement to a greater extent or less what is all-important(prenominal) and what is not. Is it the end of the wordpaper Industry?The industry is in the midst of reconstruction buffeted by deep recession. That is battering crucial advertise revenue, social organizationd challenges as consumer turns to poverty-stricken news and information on web. Before year 2000 theme industry was a cash cow and multitude working as journalist never worried about look foring for another job. But hence internet posed threats to the problem pretense and forced industry to cut down on cost, profit margins and reduce work force. According to American Society of news editors employment in newsroom has fallen by 15% in extreme two years. Advertising has been shifting from print media to new media resulting decline in profits. Paid Circulation has declined while advertising revenue which desexs people of the newspapers in bonk has also declined. The handed-down use of newspaper being delivered at foundation is changing.Introduction of internet2.1 Effect of internetTechnology has not broadened the audience for news and has enabled well informed people to be fill in split up informed. Newspapers even have more readers then ever just now difficulty is th at fewer of them are paying. Consumer feels like a fool paying because they arouse fair selection of useful information free online. With the increasing online readership advertising brought a rising tide of revenue for aggregators, search engines there by affecting the revenue of newspapers.2.2 Industry ReactionBusiness model which newspaper industry was following is not viable with intervention of technology. It was found on 3 revenue sources newsstand sales, subscription and advertising and like a shot it relies only on advertising. total heat Luce co-founder of sequence found this notion of relying on ad revenue is morally abhorrent and Economically self defeating. Internet has broken newspapers monopoly of production and distribution. This turn has do situation which resulted a melodic line that is smaller, less profitable, competitive but also efficient and innovative. Every newspaper is trying to come up with caper models and Strategies to handle issues like declin ing revenues and expansion of media choice to consumer.Industry cultivateThe news industry has to fight back with reinvention and origination. They guide to signalize performer that may be critical determinants of threats and opportunity that industry is facing or may face in future.3.1 Industry Cost Cutting rudimentary to Survival?Bill gates said who can afford to do professional work for nothing. After Newspaper industry identified that their business model is disintegrating and is unbundling advertisement and content then they tried to make for it by putting their content onto free websites. Some publications drastically cut their print editions and focus on their ad supported websites. Newspaper Industry is now on the verge of being hanged and further rounds of cost cutting would not stave off the hangman. If they want to survive then they have to come up with cost effective revenue model. Some newspapers like financial times, Wall way Journal came up with business model to deplume certain content or certain user but they were ineffectual to dictate there terms to the buyer as their micro fee model was unable to please buyers. Given that there were m whatever options filmable to buyers and most of them free, the power of the buyers was high. One of the reasons for seller not having power was that they were not focusing on their core product which was content. Newspapers were unable to sell as they didnt had power and due to that aggregators were make money by knelling readers past ads. News folks say that aggregators are Parasites that profit from their work. Newspaper managed to survive by careful combination of free and paid for content than by new technology.3.2 Declining Advertising Revenues, Recession, and InternetWarren Buffet said that It is hard to make money buying business that is in permanent decline. But people can make money if they capitalize on opportunity and identify threats to act accordingly. The news Market is likely to rema in unstable, favouring different supplier at different point in political, economical and Technological cycle. sheath An American website aggregate news and option polls, it became essential reading during last year presidential race. Its popularity plunged 75% and rivals woolly readers. In Britain journalist have more competition from government rather than local crowd. British government have created newsletter that carry advertisings and also annual budget for differentiate owned website is far more then countrys national newspaper.Newspapers have to trust about innovations as sociologically there has been a transition in audience. The share of youth having no news at all increase from 25% to 34%, they now prefer their iPhone, PDAs and aggregators for news. Publishers and editors are thinking of reinvention and innovation that allow for work, one example is NRC-Next a daily magazine which aimed in a flash at lost generation of rich young readers. They made it look and fe el cooler so that reader feel that this is better. According to Pedersen VG Netts MD they try to identify sexiest story of the day no matter how important it is in newspaper terms.VG Nett came up with innovative idea of co-operative news media. They had employ phone line-2200 where anyone can transfer photos automatically from cell phone to their Server.News industry has economical factors that affect its growth. One major factor is advertising only revenue model. Other factors such as aggregator making money and online advertising revenue fall in 2008 due to recession, ill fortune of current micro payment system. Internet littered with failed micropayment companies like digicash, cyber cash and also some successful micropayment systems such as PayPal, iTunes. If newspapers can come up with easy methods of micro payments then they can earn apprise for most of the content.The future lies in technology and media integration. To compete with potential entrants and substitutes like aggregators, search engines, bloggers newspapers contract to adapt digital technologies and come up with business model to provide public spare-time activity journalism and still get revenue. Spread of digital technology has enabled ordinary people to file pictures and taradiddle news directly. Now first photo of any big showcase comes first on net from an ordinary person not a journalist.3.3 Searching for New Business ModelsThe Players within the Strategic classify need to adapt technology and internet based business model but at the same time they have to compete within the group and face the industry rivalry. They need to understand consumer behaviour to identify the take audience and also differentiate their product from the rest. Business strategies are varying in industry as guardians strategy is to become international translator of liberal opinion so it is investing in stories of international interest like Iraq. While Daily wants to build a reputation of famous perso n newspaper. Strategies can be based on consumer or product. Financial time attempted to fuse subscription model by making certain typecast of user pay on the other hand Wall Street Journal charges certain type of content for their e-papers. Some have schema of presenting days sexiest news no matter how important it is in journalism terms. But still newspaper industry need to figure out micro payment model which is easy and works well for consumer.3.4 Industry StructureEven in diminished state newspapers attracts rich businessmen who believe that there is money to be made after all. Boundaries between Products and customer segments are blurred in strategic group so can be a potential threat for players in the group. The nurse of core product i.e. content is not that important now because newspapers are focusing on advertising. The intensity of competition is so high that if any newspaper doesnt adapt technology correctly and doesnt come up with business model that is cost effecti ve is out of the game. The bargaining power in the value chain is so low that newspapers have to work on low profit margins to thrive in price war. Professor Charlie Backett argues that it matters olive-sized whether which newspaper get more online readers, it is irrelevant economically. According to calculation made by digital deliverances crosbie it takes 16 online readers to make up for one lost print reader.Industry Proposal and recommendationsTo safeguard from chill winds of market newspapers need to combine digital media attend with traditional media to create a co-creation experience for consumer. Newspapers should come up with business models that provide interactive services and is based on efficient micropayment model. Also they should promote public interest co-operative model of journalism i.e. use professional journalism, citizen journalism and community feedback to its best. If we think about world with no professional journalism then the situation will be very alarm ing, how internet aggregator and bloggers will get their content. We may have to save newspapers from bleeding red ink for saving select journalism to service community. Making newspapers non profitable and tax free may help in keeping it alive. May be a structure that can help newspapers to share revenues with aggregator will help. What we are visual perception is shift in the structure of media institution which understands importance of much more participatory media. In current scenario newspaper represent both a problem and necessity to society and now it depends upon media houses that how they take advantage of migration of traditional platform like newspaper to digital medium and also to hold print media.Future of Newspaper IndustryIn future newspaper will definitely move towards digital technology and will challenge print version. May be future will lie in digital notebooks, kindles, digital readers with integrated advertising and micropayment model in it.Revenues from news papers digital products will help combat the erosion of traditional newspaper revenues.