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Business model innovation dynamics in legacy newspapers: Strategizing at critical junctures
Jönköping University, Jönköping International Business School, JIBS, Business Administration. Jönköping University, Jönköping International Business School, JIBS, Media Management and Transformation Centre (MMTC).
2015 (English)Conference paper (Refereed)
Abstract [en]

Relevance of the research

A doomed atmosphere has dominated the traditional newspapers environment in the last years. However, legacy newspapers’ economics have experienced similar situations in the past (Conboy, 2010; Nerone, 2013), having succeeded before in managing significant changes in their business models (BMs). Paradoxically, legacy newspapers are perceived today as locked-in in an obsolete dominant BM.

Business literature has described the questions posed by the Internet technology revolution to current newspapers’ economics but has failed to provide relevant cues for the development of new BMs. In this paper I analyze previous BM changes in the industry to (1) better understand the current situation that newspaper companies are in and (2) suggest potential lines of action to manage their business challenges today.

Theoretical grounding and rationale for selection

In an ever changing environment, companies which manage to create value over extended periods of time successfully adapt and renew their BMs (Achtenhagen, Melin, & Naldi, 2013). A BM describes the rationale of how an organization creates, delivers, and captures value (Osterwalder & Pigneur, 2010). The paper defines BM innovation as a modification in the logic of profit generation (Magretta, 2002) and is operationalized as changes in the variables taking part in the profit formula (Johnson, Christensen & Kagermann, 2008).

Path dependency has been referred as a plausible theoretical explanation to the currently locked-in dominant BM in legacy newspapers (Koch, 2008, 2011; Ryfe & Kemmelmeier, 2011; Djerf-Pierre & Weibull, 2011; Rothman & Koch, 2013; Rothman, Wenzel & Wagner, 2014). Often, organizations and inter-organizational networks and industries are immersed in “dynamics that seem to run by and large beyond the control of agents”, usually in a change resistant manner resulting of a self-reinforcing process. A path dependence perspective helps to explain how this process takes place and eventually consolidates and locks organizations and markets into a path of quasi-deterministic character. Path dependent processes have been described in relation to technology, cognitive, normative or resource-based constraints (Sydow, Schreyögg & Koch, 2009).

Newspapers’ practices interact with cognitive and cultural processes on multiple levels, resulting in complexly embedded practices, attitudes and assumptions (Ohlsson, 2012). Zukin and DiMaggio (1990) identify four kinds of embeddedness of economic action: cognitive, cultural, structural, and political embeddedness. The notion of embeddedness may offer the right lenses to understand how path dependent dynamics could result in normative practices and affect business strategies in legacy newspapers.

Research design, Method and Data

The selected case study, for a longitudinal history, is the Cumbria News Group Ltd. The firm traces its origins to 1815 and holds an extensive archive. During its existence, the firm has gone through various periods when existing BMs have been challenged. The study includes the context of changes at different levels of analysis. The case particularly focuses on supposedly historical critical junctures in the history of newspapers; (1)1830s: origins of the penny press and the modern conception of news, (2) 1960s: big pipes and normatization of objective-investigative-enterprise journalism; and (3) the current period of digital news and defimiliarization of journalism.

The available sources in their archives are brought into dialogue trying to reverse the stages by which the series of narratives have accumulated. In-depth interviews are also used in the analysis of the current period of digital news.

The case provides a thick and careful description at the different levels of contexts, appearances and defining practices as a combination of discourse and materiality, and attempts to unearth the underlying logics in the process of change (Pettigrew, 1992).

Summary of main results

Whatever their public claims, legacy newspapers have seldom experienced in the past radical and fast transformations in their BMs. Incremental change is a better description of their business historic evolution, mainly as a result of a gradual incorporation of new technologies, new revenue streams and new business practices in an interwoven fashion.

Contributions to the field’s knowledge base

The paper contributes with a better understanding of:

- The role of cognitive and cultural embeddedness in business strategies of newspapers,

- The contributions and limitations of path dependence as a theoretical framework to interpret BM dynamics in legacy newspapers,

- How -in a BM analytical mode- legacy newspapers have effectively developed and evolved in different contexts in the past.

Practical implications

Managers in the newspaper industry can use the past as a valid reference to interpret and manage the business challenges in the industry today. Key learnings include:

- Since BMs of legacy newspapers have been revised through incremental processes in which new practices do not immediately replace old ones, managers should challenge the current BM without jeopardizing current capabilities,

- Since new practices spread from successful innovative newspapers to other players in the industry by a replication process, managers should scan the industry for success stories of new practices,

- Managers would benefit from understanding that some normative practices in legacy newspapers are relatively accidental and new to the industry (e.g. quality journalism, readership maximization…)

Place, publisher, year, edition, pages
National Category
Business Administration
URN: urn:nbn:se:hj:diva-32007OAI: diva2:1037636
European Media Management Association (emma) Conference 2015, The Business School of the University of Hamburg, May 28, 2015 – May 29, 2015

Best Paper award

Available from: 2016-10-17 Created: 2016-10-17 Last updated: 2016-10-17Bibliographically approved

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Cestino, Joaquín
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