Business Models, Strategies, Issues and Trends
10 Microeconomic concepts – creating a framework for new business models
Summary News organizations have followed the same basic business procedures and methods for decades. Changing social trends resulted in some alterations – afternoon newspapers no longer fit urban lifestyles and the content of sections for women has changed dramatically. But all in all, commercial operations within the news industry have stuck to established models. That all must change now. The ongoing transition of news production from print and broadcast distribution to digital platforms, which has made old business models obsolete, means that new ways of generating revenue must be created. In this chapter, we look at microeconomic concepts that could be adapted to the news business. Editorial staffers at news organizations traditionally have had little involvement with the commercial processes of their employers, despite their critical role in producing the core product. This was by design. While this might seem incom- prehensible in almost any other business or industry, the news business prides itself on not being like other businesses. News providers, with a few exceptions such as Britain’s license-funded BBC, depend on generating profits for their survival. But they are also an unofficial public service, a watchdog representing the interests of ordinary citizens, free from the influence of governments, corporations and the rich and powerful. They are expected to maintain vigilance over some of the very advertisers whose expenditures keep news organizations commercially viable. To deal with this inherent conflict of interest, news organizations have worked under a carefully constructed system that separates the editorial side of the business Quinn...
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