Evaluating the effects of customization and market environment on online newspaper business success

Master's Thesis in Media Management

Winter

1391

Study of Hamshahri, Jam Jam and Khorasan Online Newspapers

Summary

The subject literature in the field of online newspapers includes very few empirical studies in the world. Despite the belief of many experts, this online business has not been successful in profitability as expected. Considering the various income generation approaches that have been proposed or used so far, in this research, an attempt has been made to measure the impact of the customization strategy (instead of producing standard or special products and services) and the market environment on this business. In the meantime, we have done a case study of three online newspapers Hamshahri, Jam Jam and Khorasan. Since the number of managers and people involved in this field was very small, there was no need for sampling and a standard survey questionnaire was distributed among the senior managers and the editorial board of these three newspapers. Also, in order to adjust the results of the surveys, interviews were conducted with some senior managers.

This research is a descriptive-survey type. After collecting the data and performing statistical analysis such as the Kolmogorov-Smirnov test in order to check the normality of the research data and calculate the correlation coefficient between the research variables, the hypotheses were tested using the partial least squares method. The results of the research showed that the success of their business has a significant relationship with the customization variables and the market environment and is influenced by them. 1 Introduction The growing use of the Internet makes the competition more intense for newspaper publishers and at the same time can strengthen them. Publishers of newspapers are witnessing that their readers are decreasing day by day. These publishers are not able to attract a significant number of new and young readers to compensate for the natural decline of their older readers. In addition, because of this, the situation is even worse, and these publishers lose their share in the media advertising market (Coven [1], 2001). In the Internet news market, newspaper publishers are witnessing new and stronger competition from foreign newspaper publishers and other media organizations. A large amount of these competitors provide online news for free to the reader. The same companies or other companies use Internet technology to create electronic markets to compete with newspapers in the advertising markets of job groups. Newspaper publishers, in this way, are threatened and limited in both of their main businesses, both in selling news and in reaching the audience. At the same time, Internet technology enables newspaper publishers to innovate in creating their products and target new audiences. They can use the Internet as a marketing channel to reach potential audiences who do not even read printed newspapers. With this method, it is possible to reach foreign audiences who were not able to reach them before due to the high cost of sending printed newspapers. This technology can help them strengthen their relationship with their existing readers (by collecting customer information and sending instant and categorized news). The rapid expansion of the Internet along with the evolution of information technologies has changed the nature of many industries. The huge volume of information exchange resulting from the use of information systems allows any company to know the needs of its customers better and apply this knowledge in product design and marketing planning. For physical products (such as computers and televisions), mass customization and timely response to market needs are required to remain competitive. In the case of digital products (such as news services and other Internet content producers, ICP), customized services that provide adjusted content to various customers based on their interests are practical and vital.

2-1  Problem statement

Technological innovation is one of the most fundamental drivers that determine and maintain the market economy. Internet technology became economically available to everyone in the mid-90s. Soon after, e-commerce took off. A huge wave of companies formed to pursue their business through the Internet. Traditional media companies have played a significant role in the online world since the advent of the Internet. The efforts of online traditional media have been considered in two ways, defensive[2] and offensive[3].  From an offensive point of view, the Internet appears to be a reinforcing stimulus to generate additional revenue and profitability. Unlike online-only players, these traditional newspapers started their online business with ready-made customers and relied on their well-known brand name. From a defensive point of view, the Internet is considered as a threat to the traditional media and actually forces them to join the online community in order to continue to survive and operate in their business. Traditional newspapers inevitably entered this field and used various strategies to increase their income and profitability. But with all these cases, the traditional newspapers that entered the online arena faced failure, especially from an economic point of view. Based on some studies, it can be claimed that in the United States, the newspapers that launched an online version in addition to the print version have not had much more profit than the newspapers that did not (Colo [4] and Vogt [5], 2003). In any case, these traditional newspapers are the ones who should be active in this turbulent market, where every aspect of it is changing, and this change is neither coherent nor predictable, and by adopting appropriate strategies, they can continue their existence in the competitive market and be able to achieve the profitability that is the long-standing desire of online activists.

Previous studies show They show that the competitive advantages in the fluidity of the environment depend on the capacity of the organization in innovation and adaptability. Specialization in core capabilities has increased the importance of developing capability-based business models in knowledge-based and technology-based industries such as media. This issue becomes doubly important when the turbulence and dynamics of business in the media industry become wider every day.

Although the business models And many work and income logics have been presented, the existing literature in the field of online newspapers includes relatively few empirical researches about the factors affecting the business success of online newspapers. In addition, in practice, we can see that all the literature of online newspapers is almost attention-grabbing. They have done very little about the impact of the market environment on business success.

The extensive use of the Internet and information technologies has revolutionized the nature of many industries by facilitating the collection, analysis and distribution of information. This evolution in information processing makes timely response and product customization the main concern in marketing and strategic planning. This issue is especially significant in industries that provide digital content to their customers. Due to the digital nature of the products of these industries, it will be possible to provide completely customized services through the Internet. However, in order to customize products, every company needs to identify its customers well and provide customized services and products based on their tastes. In this research, it is tried to evaluate the success of online newspaper business by using customization strategy instead of providing standard services. In addition, we have aimed to measure the impact of various other factors besides customization, such as the market environment, revenue logic, and the importance of business goals that are directly or indirectly related to the success of online newspaper business.