1.
UNIVERSITY OF CENTRAL LANCASHIRE
HOW NEWSPAPER COMPANIES ARE SELLING
AND DISTRIBUTING DIGITAL CONTENT
A PROPOSED TYPOLOGY
Dilyan Damyanov
September 24, 2012
MA Journalism Leadership
Supervisor: Francois Nel
This dissertation is submitted in part fulfilment of the requirements of the MA in
Journalism Leadership in the School of Journalism, Media and Communications at the
University of Central Lancashire.

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Abstract
Newspapers are facing a tough time to maintain the viability of a dual business model that
has proven lucrative in the past but is beginning to fail as publications move online. New
ways to monetise content are being sought. A review of the literature on content
monetisation revealed a gap with regard to the different content monetisation types. In
particular, work in the area seemed to look at the issue in too broad terms and there was a
lack of narrow-focussed exploration of the various types of content sale/distribution. This
research looked at two case studies of daily newspapers in South Africa and in the UK and
tried to identify the types and propose a typology of content sale/distribution. Distribution
was regarded as an alternative to sale on the assumption that if content can be delivered to a
client, it can be monetised. Forty three-dimensional types of content sale/distribution were
identified. The three dimensions of each type include the channel which is used to deliver
the content, the sort of customer that receives the content (retail or wholesale) and the
bundling options (bundled vs unbundled). The types were analysed and their viability was
weighed. As many as 17 out of the 40 types were found to be not viable. For the remaining
23, there were various options to monetise content, including direct sales revenue and
indirect advertising revenue; and some types of content distribution had the possibility to
use content for purely promotional purposes. Recommendations were made as to how
further research could build on the results presented in this dissertation and expand and
improve the proposed typology.
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Table of Contents
1. Introduction .................................................................................................................... 1
1.1 “The media is dying” and other tales of terror -- is journalism doomed? .................... 1
1.2 What is backing up the claims? ................................................................................ 2
1.3 A global emergency .................................................................................................. 5
1.4 Who are the culprits?................................................................................................ 5
1.5 Is there a way out? ................................................................................................... 8
2. Literature review .......................................................................................................... 10
2.1 Business models .................................................................................................... 10
2.2 The dual business model of newspapers ................................................................ 15
2.3 Content monetisation.............................................................................................. 18
3. Goals of the research................................................................................................... 22
4. Methodology ................................................................................................................ 25
4.1 Approach ................................................................................................................ 25
4.2 Research design .................................................................................................... 27
4.3 Limitations .............................................................................................................. 28
5. Case studies ................................................................................................................ 30
5.1 Business Day ......................................................................................................... 31
5.1.1 Online offering ................................................................................................. 32
5.1.2 Mobile offering ................................................................................................. 34
5.1.3 Social media .................................................................................................... 36
5.1.4 E-edition and syndication ................................................................................. 36
5.2 Daily Post ............................................................................................................... 40
5.2.1 Online offering ................................................................................................. 41
5.2.2 Mobile offering ................................................................................................. 42
5.2.3 Social media .................................................................................................... 42
5.2.4 E-edition and syndication ................................................................................. 43
6. Discussion of findings and a typology proposal ............................................................ 47
7. Conclusion ................................................................................................................... 67
8. Bibliography ................................................................................................................. 70
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List of Tables
1. TABLE 1 – Business model definitions……………………………………………………...13
2. TABLE 2 – Types of content sale/distribution………………………………………………65
List of Charts
1. CHART 1: Business Day – Channels, customers & bundling options…………………...38
2. CHART 2: Daily Post – Channels, customers and bundling options……………………..44
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1. Introduction
1.1 “The media is dying” and other tales of terror -- is journalism
doomed?
Over the past years, there has been no lack of worriers proclaiming the imminent death of
media, journalism, newspapers, investigative reporting, local news or all of the above.
The Media is Dying (@themediaisdying), a Twitter account, has been bombarding its
followers (25,337 as of writing this) with stories about newspapers shutting down or laying
off staff, among others, since 18 November 2008. As of 12 July 2012, it had 6,922 tweets
of gloom and doom.
The Newspaper Death Watch, a website, has been “chronicling the decline of newspapers”
since March 2007. Its owner, Paul Gillin, had predicted that the “near-total collapse of the
American newspaper industry as we know it is inevitable” almost a year before he started
the blog (Gillin, 2006).
The Washington Post writer Ian Shapira implied that news websites such as Gawker, the
Huffington Post and the Daily Beast were at least partly responsible for the demise of
original journalism (Shapira, 2009).
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Kevin Toolis, a documentary filmmaker, was quoted in a Guardian article, saying that
investigative reporting was “dying a death” at the hands of financial pressures (Halliday,
2010). He was not the first one to express that sentiment: more than a year earlier Laura
Frank had lamented the decline of investigative journalism in an original report for the
Public Broadcasting Service‟s Expose documentary series (Frank, 2009).
In a piece for the Comment is Free section of the Guardian‟s website, Henry Porter
mourned the death of local newspapers (Porter, 2009).
Philip Meyer (2004) predicted that the last newspaper in the United States will be printed
somewhere in the first quarter of 2043.
These are just a handful of examples of what has, over the past several years, become a
weekly, if not daily, fixture of media commentary, blogging and research.
1.2 What is backing up the claims?
There has been plenty of bad news to support such a downbeat mood among media industry
observers and practitioners.
The 2012 Economic Report of the President (ERP), prepared annually by the US Council of
Economic Advisors (CEA), cited data from professional social network LinkedIn indicating
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that newspapers were the fastest-shrinking industry in the United States in terms of jobs
between 2007 and 2011 (Krueger et al, 2012). The sector had lost 24.8% of its jobs,
LinkedIn said. Between 2007 and 2011 the United States entered and emerged from a
recession; but job decline in the newspaper industry remained steadily steep throughout the
period, even when the economy picked up (Nicholson, 2012).
Paper Cuts, a blog that tracks layoffs across US newspapers, estimated that the industry
shed almost 16,000 jobs in 2008, almost 15,000 in 2009, almost 3,000 in 2010 and more
than 4,000 in 2011. By 12 July 2012 the website‟s counter for the year indicated more than
1,170 people had been laid off that far into the year (Paper Cuts, 2008-12). From when the
website started in June 2007 to the end of 2011, Paper Cuts has collected a list of 204 US
newspapers that have closed or stopped publishing a newsprint edition.
In December 2011, the University of Southern California Annenberg School for
Communication and Journalism predicted that “[m]ost US print newspapers will be gone in
five years” (USC, 2011). The report added it was likely that only four large daily
newspapers would survive in print: The New York Times, USA Today, the Washington
Post and the Wall Street Journal. Gillin (2011) noted at the time of the publication of the
report that there were still more than 1,400 metropolitan dailies that published a print
edition in the United States.
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Perry (2012) estimated that, on an inflation-adjusted basis, print newspaper advertising
revenue in 2011, at $20.7 billion, was the lowest since 1951, having slumped from a peak
of $63.5 billion in 2000.
The 2012 State of the News Media report of the Pew Research Centre‟s Project for
Excellence in Journalism noted that classified ad revenue -- long a pillar of newspaper
companies‟ revenue models -- had lost almost three-quarters of its value in 2011 since a
peak in 2000 (Edmonds et al, 2012). According to the same report, operating profit margins
at US listed news media companies fell almost 50% over the same period. The average
operating profit margin of publicly traded US news media firms -- calculated as earnings
before interest, tax, depreciation and amortisation (EBITDA) divided by total revenue --
narrowed to 14.9% in 2011 from 28.3% in 2000. Coupled with the sharp decline in
revenues, that resulted in an even steeper deterioration in net profits, Pew said.
Stock prices at the end of 2011 were down year-on-year for all nine companies tracked by
that measure in the Pew report: The Washington Post, Gannett, E.W. Scripps, New York
Times, A.H. Belo, Media General, Journal Communications, McClatchy and Lee
Enterprises.
Circulation did not fare much better. According to Pew, daily newspaper circulation fell to
43.4 million in 2010, down 30% from 62.3 million in 1990.
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1.3 A global emergency
As recently as in 2011, a special report on the newspaper industry in The Economist argued
that while the sector was having troubles in the western world and other rich countries, such
as Japan, newspapers were booming in emerging markets (The Economist, 2011).
According to the report, there were no signs of a crisis in the world‟s fastest-growing
newspaper market, India. Even at the time of publication of the report, there was
disagreement from local Indian media observer quarters; and more recently Indian
newspapers have been warned that what is happening at titles such as The Financial Times
in the UK and The New York Times in the USA, was “the writing on the wall” for them
(Rangaswami, 2011; 2012). And Mayank Pareek, COO (Marketing & Sales) of automaker
Maruti Suzuki India, told the 6th International News Media Association (INMA) South
Asia conference that his company had slashed its print advertisement from 67% to 23%
after a strategic analysis revealed that print was not delivering the maximum worth for the
brand (Hasan, 2012).
Over in South Africa, print advertising revenues have followed a similar downward trend as
in America (Patricios, 2012). The problem is global.
1.4 Who are the culprits?
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What did cause such malaise? It seems like the newspaper industry was caught in a perfect
storm of cyclical and structural factors.
The 2008 financial crisis, followed by a recession in the United States and elsewhere,
certainly had its effect on advertising spending overall. However, eMarketer, a publisher of
research and analysis on digital media and marketing, estimated that US major media ad
spending rose to $153 billion in 2010 from $147.2 billion in 2009, and projected further
sustained growth through 2015 (Perrin, 2011). Meanwhile, newspaper ad spending was
projected to fall to $19.8 billion in 2015 from $24.8 billion in 2009, eMarketer said.
New competitors, such as blogs and social media, have been blamed for weakening
newspapers. In 2009 Tom Curly, the chief executive of the Associated Press news agency,
said blogs were diverting revenues away from original content creators; and media
conglomerate News Corp‟s CEO Rupert Murdoch blamed bloggers for threatening the
survival of newspapers (Yarow, 2010). In 2011 Bob Woodward, an investigative reporter
known for his work on the Watergate scandal in the 1970s, told students at the Poynter
Institute in Florida that the tombstone of internet giant Google‟s CEO Eric Schmidt should
read: “I killed newspapers” (Greenslade, 2011). The relationship between blogs and
newspapers has been called parasitic and websites such as the Huffington Post have been
blamed for declining newspaper readership (Alterman, 2008).
The Pew Research Centre‟s Project for Excellence in Journalism 2012 State of the News
Media report noted that while ad revenue dropped sharply from 2000 to 2011, circulation
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revenue remained flat (Edmonds et al, 2012). The report judged that to be a sign that
newspapers were having a revenue problem rather than an audience problem. That lack of
growth in circulation revenue should be considered no problem is indicative of how dire the
straits are for newspapers in the advertising business. The same competitors that are taking
away readers from newspapers -- search engines, blogs, social media -- are also taking
away a large chunk of ad revenues. According to eMarketer‟s estimates, online ad spending
was poised to grow from $22.7 billion in 2009 to $44.5 billion in 2015 (Perrin, 2011).
If wider economic worries and fierce new competition for the attention of readers and
advertisers were not enough, the newspaper industry also had to face the collapse of the
dual business model that had supported it for so long. Traditionally, newspapers have
thrived on selling content to audiences in exchange for attention, and then selling the
audiences‟ attention to advertisers in exchange for money. On the revenue side of the
model, it continues to work very well -- firms like Google, Facebook and the Huffington
Post work the same way. But on the cost side of things, newspapers are facing a burden that
their new competitors do not have to worry about: printing and distribution costs.
According to Vogel (2010), newspaper production and distribution costs can reach as high
as 52% of revenues. Business Insider calculated the New York Times‟ delivery costs at
$644 million a year: almost half of its total costs (Carlson, 2009). And the article quoted a
knowledgeable source who claimed those estimates were so low, they were “not even in the
ballpark”.
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But newspapers cannot simply abandon their print production and go online. In a report
outlining the search for new business models in the newspaper industry, the Pew Research
Centre‟s Project for Excellence in Journalism interviewed 13 companies and found that --
while print advertising revenue was, on average, declining at seven times the rate at which
online ad revenue was growing -- print ad revenues were still about 11 times those
generated from digital advertising (Rosenstiel et al, 2012).
Furthermore, many of newspapers‟ fiercest new competitors -- search engines like Google
and social media websites like Facebook -- do not have nearly the same cost for producing
the content that lands them an audience to sell to advertisers. They aggregate third-party
content (including from newspapers) or rely on user-generated content (UGC) that is
available free of charge.
The trifecta of economic woes, fresh competition and an unsustainable business is enough
to justify the alarmist mood of the past few years. It has also spurred a lively debate of what
can be done to save newspapers and journalism (WAN, 2007, to name just one of the most
respected and long-standing periodical publications that deal with the issue.)
1.5 Is there a way out?
As the literature review below will show, there are various proposals about what can be
done to revamp the ailing newspaper business model and they include a variety of
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suggested new sources of revenue beyond traditional circulation and advertising revenues.
It will also show that newspaper executives and strategists believe that the core value a
newspaper creates is good content, and not, for instance, a good platform for carrying
advertisements. However, there is a gap in the literature on newspaper business and
revenue models when it comes to describing the actual ways in which content can be, and is
being, monetised. In particular, no detailed description could be found of the ways
newspapers can sell/distribute or are already selling/distributing content directly to users in
exchange for money or attention.
The aim of this research is to suggest such a description by identifying ways in which
content is currently being sold/distributed by newspapers and attempting to create a
typology for classification. The future of the newspaper businesses is likely to include a
wide variety of revenue sources and content sales are unlikely to disappear. Indeed, the
report cited above (Pew, 2011) suggests that circulation revenue is stable and here to stay.
Any strategist plotting the launch of a new newspaper now or in the near future will have to
consider content as both a cost item and a revenue generator. Some first steps have already
been taken and this contribution aims to move the discussion forward towards building a
body of literature that can improve the understanding of potential new business models for
newspaper companies and be useful to the newspaper entrepreneurs of the future.
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2. Literature review
The literature review in this section starts with an overview of relevant work on business
models in general and then moves on to provide an overview of literature dealing with the
dualism of the traditional newspaper model in terms of product and customer. Then, the
literature on content monetisation is briefly reviewed, leading up to the three research
questions of this dissertation.
2.1 Business models
Picard (2011), in trying to map out the business models for digital media, defined a
business model as “the underlying business logic of an enterprise”, including what its
competencies are, how it creates value, how it differentiates itself from its competitors, how
its operations are run, what its relationships are and how it makes money. He was following
in the tradition of a number of researchers who have taken up the study of business models
in the context of the internet in the late 1990s and early 2000s. Although the term had been
in use since 1960 (Osterwalder, 2004), it was not until its study was taken to the realm of
online business that it achieved widespread popularity.
Linder and Cantrell (2000) defined a business model as the core logic an organisation uses
to create value. In a similar vein, Petrovic et al (2001) defined a business model as the
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value-creation logic of a business system. Magretta (2002) likened a business model to a
story that explains how the business works and how its various pieces fit together.
Trombly (2000), Hawkins (2001), Rappa (2001), and Afuah and Tucci (2002) focused their
definitions on the ultimate goal of a business to make money and be financially sustainable.
Slywotzky (1996) combined value and profit in a definition that saw business models as
systems for making a profit by delivering utility to customers.
Many authors attempted to define business models by way of describing a set of
actors/roles and relationships/transactions within a network (Timmers, 1998; Amit and
Zott, 2001; Applegate, 2000; Weill and Vitale, 2001). Tapscott et al (2000) took a similar
approach, though they called the emerging system a “b-web” (business web), rather than a
“business model”.
Researchers in the last, and most numerous, group in various degrees defined business
models by way of their components, or elements. Other authors provided a concise
definition, but, in addition, also offered a detailed description of the components of a
business model. Table 1 on page 13 summarises what various researchers have identified as
the elements of a business model, either explicitly or as derived from their definitions.
It should be noted that although many authors separated product from value (Slywotzky,
1996; Hamel, 2000; Rayport and Jaworski, 2001; Stähler, 2002; Afuah and Tucci, 2002),
many others did not (Mahadevan, 2000; Alt and Zimmermann, 2001; Amit and Zott, 2001;
Weill and Vitale, 2001; Eisenmann, 2002; Fetscherin and Knolmayer, 2004).
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Building on work by Mahadevan (2000), Afuah and Tucci (2001), Amit and Zott (2001),
Rayport and Jaworski (2001) and Eisenmann (2002), Fetscherin and Knolmayer (2004)
identified five elements of a conceptual business model for content delivery: product,
consumer, revenue, pricing and delivery (cf last column of Table 1). The pair argued that
product, consumer and revenue had been identified as parts of a business model by the
majority of authors they were citing. (They identified Rayport and Jaworski‟s (2001) value
proposition as part of the consumer component.) They disagreed with Mahadevan (2000),
Eisenmann (2002) and Rayport and Jaworski (2001) who reckoned pricing should be part
of the revenue component; and cited Varian (2002) who had highlighted the importance of
the pricing of information goods. Siding with Varian (2002), Fetscherin and Knolmayer
(2004) isolated pricing as a stand-alone component of a business model. (This was also in
line with what Afuah and Tucci (2002) had suggested.) Finally, they bundled most of the
other components proposed by the various authors under the term delivery.
The researchers then conducted an empirical study to test the impact of each component on
profit. They sent questionnaires to 75 newspaper and magazine companies that offered a
free or subscription-based online archive or paid downloads of articles and got 24
responses. On a scale of 1 to 3 -- with 1 being “not important”, 2 being “important” and 3
being “very important” -- respondents rated the product as the single most important driver
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Slywotzk Hamel, 2000 Mahade Alt & Amit & Rayport Weill & Eisenmann, Stähler, Afuah & Fetscherin
y, 1996 van, Zimmermann, Zott, 2001 & Vitale, 2002 2002 Tucci, 2002 &
Component
2000 2001 Jaworski, 2001 Knolmayer,
2001 2004
Customer How a Customer To whom Consumer
company segments: does the firm
selects its which sell
customers customer
segments are
targeted and
what the
value
proposition is
for each
segement
Product How a Core strategy: Mission: overall Content: Online Strategic What does What does Scope: what Product
company business mission; vision and exchanged offering objective and the firm sell the firm sell products are
defines product and strategic goals; goods and value offered to what
and market scope; value information proposition: customers
differentiat segments, in proposition, incl. target
es its which the product features customer;
offerings company product
competes; offering;
differentiation unique and
from competitors valuable
position
targeted by
the firm
Value How the Customer Value Value Value Customer value
company benefits: what stream proposition proposition:
creates benefits are being for the what value
utility for offered to the customer does the
customers customer firm create
Core Strategic Core Capabilities
competence resources: core competencies
s competencies;
strategic assets;
core processes
Partners Value network: Logistical
suppliers, partners stream
and coalitions that
complement and
amplify the firm's
resources
Outsourcing How a Company When does
company boundaries: what the firm rely
defines the does the firm do on partners
tasks it and what does it
will outsource to the
perform value network
in-house
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and the
ones it will
outsource
Resources How a Configuration: Governance Resource Connected
company how of system activites: what
configures competencies, transactions: does the firm
its assets and the flow of need to do in
resources processes are resources order to offer
combined to and value and when;
support a strategy information how are they
connected
Marketing How the Customer Channels: Delivery
channels company interface: how the how the firm
goes to firm goes to reaches
market market; customer target
information and customer
insight; what the segments
firm charges the
customer for
Structure Structure: the Structure: Architecture: Implementation:
role of agents the links how and organisational
invloved; and between through structure,
processes: the transaction what systems, people
structure of the stakeholders configuration and
business model does the environment
firm create
value
Revenue How the Revenue Revenues Revenue Sources of How does the Revenue Revenue Revenue
company stream model revenue firm collect model: how sources
makes revenues does the
profits firm make
money
Legal issues Affect all
aspects of the
business model
Technology Enabler and IT What
constraint infrastructure technologies
does the firm
employ
Critical What the
success firm must do
factors well to
flourish
Sustainabilit How do costs How to keep
y increase with making money
growth
Prices Pricing Pricing
TABLE 1 – Business model definitions.Partially based on Fetscherin and Knolmayer (2004) and Osterwalder (2004).
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for profit (with a mean score of 2.9). Revenue and pricing were both rated with a mean
score of 2.1, while consumer and delivery received mean scores of below 2.0.
2.2 The dual business model of newspapers
According to industry representatives, the product was the single most important driver for
profit. (Perhaps it is no coincidence that the largest number of authors in the table -- 11 if
we count Mahadevan‟s (2000) value stream -- have identified it as a key component of a
business model.) But what is the product that a newspaper company is providing?
Reddaway (1963) argued that a newspaper business is producing two different products --
copies (ie content) and advertising space -- and that it is selling it to two different customer
groups -- readers and advertisers.
Lindstädt and Budzinski (2011) -- citing also Anderson and Gabszewicz (2006), Dewenter
and Haucap (2009), and Evans (2010), among others -- echoed that sentiment and, although
without differentiating between two separate products, recognised that media firms whose
revenues come fully or partly from advertising are selling to the same two distinct customer
groups.
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Bisco (2007) envisioned what a media company would look like in 2020 and predicted it
would have “settled comfortably into the role of supplying news and information to local
consumers, and marketing solutions for advertisers”.
Picard (2008) indicated that, from a business model perspective, the main function of a
newspaper is to be a delivery system for advertisements. He put the share of advertising in
an average US newspaper company‟s income at 75-85% and argued that contemporary
newspapers were “completely dependent” on that revenue stream. He also outlined the
growing threat posed by the internet as an advertising platform that was taking over
newspapers‟ primary advertising sales growth driver: classifieds.
In a recent report, eMarketer, the research outfit, forecast that in 2012 spending on online
advertising will for the first time exceed the amount spent on print advertising in
newspapers and magazines.This should not have come as a surprise to newspaper
publishers, who have been aware about the trend for more than a decade and have been
investing heavily in building up online offerings to try and capture a share of the online
market.
Chyi and Sylvie (2000) conducted a series of in-depth interviews with 14 US online
newspapers of various sizes and geographic distribution, and asked them how they felt
about their market, product, revenue and competition in that (then) new environment.
Respondents were unanimous that advertising would be the main revenue driver for online
newspapers. Very few of the participating companies thought subscriptions (ie content
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sales) would work online, with some having tried such an approach and scrapped it, and
others saying they had no plans to charge for content online. Partially, the decision to offer
free content was due to concerns that a small subscription base could hurt advertising
prospects. There was also doubt a subscription-based model would work for most
newspapers, because the same content was freely available through other sources online.
However, when asked about their product, the interviewees focused exclusively on the
content their newspapers were producing and putting online, rather than on the service they
were providing to advertisers; and in terms of competition many could not name even one
direct competitor -- defining that as a company that provided exactly the same content as
they do, not as a company that offered a similar outlet for advertising. Quality news and
information, and specialised local coverage were cited as the biggest competitive
advantages online newspapers had.
Trying to predict what the future of newspapers would look like in 2020, Jarvis (2007)
warned that newspapers were facing a threat in the online advertising market by companies
such as Google, which he said were outcompeting newspapers for online ad revenues by
offering a better service to advertisers. At the same time, he added, the likes of Google did
not have the costs that newspapers had for producing content, instead using third-party
content to reach an audience and expose it to advertisements.
The literature reviewed so far reveals a contradiction that becomes obvious when
newspapers and those who study them discuss three of the five key business model
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components identified by Fetscherin and Knolmayer (2004): revenue, consumer and
product. There are two distinct customer groups -- readers and advertisers. Online, revenues
are expected to come from the latter group, but effort is being primarily put into serving the
former; and when discussing the product, there is a focus on “content”, again putting the
needs of readers before those of advertisers. This situation is not new, but the contradiction
was easy to ignore. In the second half of the 20th century, newspaper companies enjoyed
high profitability (Picard, 2008) on the back of what some have called a “virtual monopoly
[...] over the mass distribution of written news” (Jensen, 2010). But faced with both
declining readerships and fleeing advertisers (Kirchhoff, 2009), newspaper companies can
no longer ignore it.
Newspapers nowadays are also facing another big dilemma, trying to juggle between a
declining print product and an online offering that is not growing fast enough to offset the
decline in print. At the same time, print production and distribution account for a large
chunk of the costs of traditional, general-interest newspapers. Kirchhoff (2009) put it at
30% and Picard (2011) estimated it much higher: at two-thirds of expenses. This research
will be concentrating on online/digital content, but it is useful to remember the context:
newspapers are still predominantly a print business.
2.3 Content monetisation
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In the literature that looks at online content revenue/monetisation, the selling of content is
usually just one option of a larger set of models that also include advertising and other
alternatives.
Gallaugher et al (2001) listed seven revenue streams for online content providers: 1)
advertising, 2) subscription, 3) online sales of print publications, 4) syndication, 5) pay-per-
view sales of digital content, 6) sales of non-content merchandise and services, and 7)
affiliate programmes.
Stahl et al (2004) identified three main types of paid information goods online: 1) bundles,
2) single digital article and 3) rebundles, or packages of digital articles that are provided in
a specific way.
Clemons (2009) predicted that advertising will not be able to support online businesses and
proposed three alternative models: 1) selling real things (e-commerce), 2) selling virtual
things and 3) selling access. Clemons‟s research was looking at the wider online industry,
but the second and third model could be applied specifically to online newspaper content.
Sankaran and Raghunathan (2009) listed three content monetisation models: 1) advertising,
2) subscription and 3) content aggregation.
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Publishers online can: sell content; give content free and sell advertising on the back of the
resulting traffic; or opt for some sort of combination between the two (Groenveld and Sethi,
2010).
There are those, like Jarvis (2007), who believe advertising should be the dominant revenue
source. However, online advertising revenues have so far proved insufficient to cover the
costs or creating content in many cases (Kirchhoff, 2009; Dutta, 2012). A potential solution
could be to cut the cost of creating content by aggregating third-party content or using user-
generated content (UGC).
On the other hand, trying to sell content online is seen as a very tall order indeed. As
Groenveld and Sethi (2010) noted, consumers are used to getting most of their content free
and are hard to be persuaded to start paying. Dutta (2012) echoed that sentiment.
Newspaper companies have historically viewed content creation as their primary activity.
Many still find it difficult to think about the product produced by a newspaper as anything
else but content, despite the fact that they have grown dependent on advertisers for
revenues.The review of relevant literature demonstrated that content is recognised as an
integral part of newspaper companies‟ business models and content sales are largely
expected to be part of the revenue mix of a newspaper publisher. But there is a gap in the
literature in that content selling seems to be under-researched.
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This research cannot hope to fill that gap, but will try to look at what might eventually do.
The overarching research question, the broad aim of this research, is to try and map out
how content is being sold by newspaper companies online. Content, as seen in the literature
review, is widely recognised as the main product of a newspaper company and -- to many --
the most crucial element of a newspaper company‟s business model.
The two most widespread revenue models for monetising content are to sell it or to give it
free of charge and sell advertising inventory. There are three more key components of a
business model in Fetscherin and Knolmayer‟s (2004) aggregated definition: consumer,
pricing and delivery. The questions this research is hoping to answer break down along the
same lines:
-- with regard to consumers:
RQ1: Is content being sold wholesale, to be re-used, or to end-customers, to be consumed?
-- with regard to pricing:
RQ2: Is content being sold in a bundle or unbundled?
-- with regard to delivery:
RQ3: What are the channels that media companies are using to sell content online?
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3. Goals of the research
The overarching research question is what media companies are doing in terms of content
sales in the digital space. The answer is bound to be multifaceted. Two possible dimensions
in which it can lie have been identified by reviewing the relevant literature: 1) aggregation
vs disaggregation (Gallaugher et al, 2001; Stahl et al, 2004; Sankaran and Raghunathan,
2009; Picard, 2011) and 2) retail vs wholesale (Gallaugher et al, 2001). These two
dimensions correspond to two of the core elements of business models, as defined by
Fetscherin and Knolmayer (2004) -- pricing and customer. The third core element --
product -- has been identified as content. For the purposes of this research content is
defined in the broadest possible terms -- text and images have long been a staple of the
newspaper industry, and video, audio and interactive content are proving effective means to
tell stories online. One more dimension -- 4) the channels used to sell content -- is covering
the fourth core business model element, delivery. The final element, the revenue model, can
be twofold -- content sales in exchange for money or advertising revenue on the back of
free content.
As the literature review has shown, advertising is the dominant revenue source in the
newspaper industry. In the name of bolstering it amid turbulent financial times some
newspapers are tempted to give away content just so they have a larger audience they can
sell to advertisers. Paywalls and other attempts to sell content are frequently frowned upon,
if not universally, then by a large and noisy enough group of industry watchers to give
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pause to anyone who might consider them. This makes researching the actual ways in
which content is being sold more challenging: newspapers may turn out simply to not sell
that much content in the first place. However, “free” content is not simply being handed
out: newspapers are expecting in return to get consumers‟ attention, which can then be re-
sold to advertisers. Acknowledging the challenges of researching the tiny universe of paid-
for online newspaper content, this research will view attention as an alternative “currency”
through which content is being “purchased” by readers. In the case studies that follow, the
three dimensions of the main research question will be examined for content that is both
sold in exchange for money and for content that is being given away free of monetary
charge in exchange for attention, which is then “converted” into advertising money.
As in many other multi-currency transactions, the seller, ie newspapers, carries the risk of
fluctuations in exchange rates. One option to mitigate such risk is to switch the currency in
which the product is being sold, ie in this case -- from “attention” to “money”. This is not
without its own risks -- for instance, customers may refuse to pay in the new currency -- but
at least one of the newspapers in the case studies is planning to do just that by going behind
a paywall. Others have done so before, most notably in recent memory The Times in the
UK.
By looking at “free” as well as paid-for content, this research will be able to shed a light not
only on how newspapers are selling content online but also on whether they have the
necessary “infrastructure” in place to do so.
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This research will be taking a global perspective, looking for answers in the practices of
British and South African newspapers. Among the newspapers studied, there will be a mix
of national and regional dailies, as well as general-interest and business newspapers.
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4. Methodology
4.1 Approach
This research is interested in how newspaper companies are selling content online and will
be taking a qualitative approach to answer that question. Though definitions of the case
study approach in research vary (Gerring, 2004), many researchers highlighted the
qualitative nature of case studies (Yin, 1994). Indeed, a case study may allow for
quantitative data to be sampled (Scholz and Tietje, 2001); but it is predominantly seen as a
qualitative approach. In fact, Yin (1994) used the term case study to denote qualitative
research.
As such, case studies have been criticised for lacking the power to generalise (Lee, 1989,
cited in Gable, 1994). However, other researchers have disagreed and attempted to define
case studies through their ultimate purpose to allow generalisation (Gerring, 2004).
A case study seeks to describe and interpret unique individuals or situations in a narrative
fashion (Cohen et al, 2000). It is concerned with complexity (ibid.) and context (Hartley,
2004). It wants to represent reality and provide a sense of „being there‟ (Cohen et al, 2000).
This corresponds to the explorative and interpretational observation of natural settings that
characterised qualitative research in Reichardt and Cook‟s (1979) view.
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The main foci of a case study may be unique cases of individuals or situations, or of
bounded phenomena and systems, such as roles, organisations or communities (Cohen et al,
2000). In Reichardt and Cook‟s (1979) definition, qualitative research focuses on
understanding from the standpoint of the respondent.
The case study approach emphasises the in-depth portrayal, analysis and interpretation of
unique and complex individuals or situations. It is subjective and descriptive and wants to
understand the specificity of the object under study (Cohen et al, 2000). This echoes
Reichardt and Cook‟s (1979) definition of qualitative research, which also emphasises
understanding.
Case study research is empathic and some of its data collection methods require that the
researcher is a participant-observer (Cohen et al, 2000). This portrayal of the researcher
matches Reichardt and Cook‟s (1979) view of the qualitative researcher as a subjective
insider who is close to the object of the study.
Generally, qualitative research is thought of as being inductive (CSU, 1993-2012).
However, although case studies fall largely onto one side of the quantitative/qualitative
divide, it can be either deductive or inductive.
Case studies can be used deductively in the falsification of theories: a single case that
contradicts a theory can give ground for the theory to be rejected. In other words, research
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may start off with the formulation of a theory, which can then be disproved by
demonstrating a single case that contradicts it.
Case studies can also be seen as an inductive method. In inductive case study research, one
or a few cases may be used as a basis for generalisation; ie if something is true in one or a
few cases, it may also be true in many or all similar cases. Siding with Gerring (2004), this
research will be hoping to use the case study approach inductively and make
generalisations of the type “if one newspaper is selling content in a certain way, then all
newspapers conceivably can”.
Case study research‟s strongest suit is that it allows objects to be studied in their natural
context, which helps understand their complexity and facilitates the gaining of insights into
emerging topics (Benbasat et al, 1987, cited in Gable, 1994).
4.2 Research design
A couple of case studies were used to shed light on the ways various newspapers are
selling/distributing content online. Two newspapers were studied -- the Daily Post in the
UK and Business Day in South Africa. The pair represent local and national coverage, as
well as general-interest and specialty business coverage.
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In the first stage of building each case study, the author looked at the newspapers‟ websites
and audited their homepages, an individual story page, “About Us” pages, the various
category pages (eg, National, Markets, Sport, Politics, Opinion, etc), the footers of the
pages and the widgets in the pages‟ sidebars. This audit allowed for a list of the various
obvious ways in which the companies are selling content online to be compiled. The results
were broken down along the three dimensions of the research questions -- consumer types,
pricing options and delivery channels. The annual financial reports of those companies that
publish them were scanned for relevant facts as well.
In the second stage of building the case studies, the author sent personalised questionnaires
to editors from the studied newspapers asking them to confirm the findings in stage one and
add relevant information that might have been missed in the first stage. Additional
questions were sent to the participants via email and one of them was interviewed with
follow-up questions via Skype.
The data from the two stages was used to create a “profile” of each of the studied
newspapers, detailing the ways in which it sells and distributes digital content.
4.3 Limitations
Kerlinger (1986) listed the lack of controllability of variables, the lack of power to
randomise and the risk of misinterpreting the data among the case study method‟s
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weaknesses. These are valid points, but they are outweighed by the advantages of using the
-- arguably -- ultimate qualitative approach in trying to answer research questions that are
interested in the how.
From a practical standpoint, the author was not able -- due to time and resource constraints
-- to observe a greater number of newspapers, limiting the research to just two.
Still, the newspapers that were studied represent both local and national, as well as general-
interest and specialist coverage, and provide a global perspective, being based on two
different continents.
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5. Case studies
The case studies below use findings from the audit of the newspapers‟ homepages,
individual story pages, “About Us” pages, the various category pages (eg, National,
Markets, Sport, Politics, Opinion, etc), the footers of the pages and the widgets in the
pages‟ sidebars. The annual financial reports of the publishing companies were also audited
but revealed no relevant data. The audits identified 13 channels that seemed to be in use at
Business Day (website, RSS feeds, newsletters, podcasts, Facebook, Twitter, Google+,
LinkedIn, mobile site, iPhone app, iPad app, SMS alerts and e- edition) and 5 that seemed
to be used by the Daily Post (website, RSS feeds, newsletters, Facebook and
Twitter).Personalised questionnaires were constructed with a two-fold purpose. On one
hand, the participating editors were asked to confirm whether these channels were indeed in
use and to identify further channels that their newspapers might be using. On the other
hand, the editors were asked about what types of customers (wholesale or retail) are being
reached via these channels and whether they were used to distribute individual pieces of
content or bundles of content. Additional follow-up questions were sent to both editors via
email and one editor was interviewed via Skype. The questionnaires and subsequent
follow-up questions revealed that some of the channels identified in the audit phase were
not being used at Business Day, while the Daily Post was using several channels that the
audit failed to unveil. Additionally, both editors confirmed the sale of content via file
transfer protocol (ftp) or similar syndication technology.
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Another round of audits followed, this time aiming to check whether the channels (now
confirmed) were:
-- displaying a direct link to a revenue stream (paid content), or
-- displaying an indirect link to a revenue stream (advertisements shown alongside the
content), or
-- displaying no link to a revenue stream and were being used for promotion purposes only.
5.1 Business Day
Business Day is a national daily South African newspaper that is published in print from
Monday to Friday and maintains a seven-days-a-week online offering. It covers all major
national and international news stories and pays special attention to South Africa‟s business
and economy.
The newspaper is using a variety of channels to deliver content to customers. These can be
bundled into three large groups: 1) online offering via website and related functionalities
(such as RSS feeds, newsletters and podcasts), 2) mobile offering via a mobile site,
applications, SMS alerts, etc, and 3) social media. An electronic edition of the print product
is also being offered and can be read online or downloaded to computers and other devices.
Finally, Business Day content is being sold on a wholesale basis through syndication.
(Damyanov, audit, 2012a; Matthewson, questionnaire, 2012).
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A questionnaire, filled out by Steve Matthewson (Managing Editor News) also revealed
that:
-- Business Day is charging for content delivered via some of these channels and has plans
to start charging for others in the near future;
-- the newspaper‟s digital content offering consists almost entirely of bundles of content on
some occasions and individual pieces of content on just one;
-- Business Day has both retail and wholesale clients (Matthewson, questionnaire, 2012).
The questionnaire also revealed that two of the channels identified at the audit stage were
not being used by the newspaper -- Google+ and LinkedIn (ibid.)
A detailed discussion of what the newspaper is doing in terms of content monetisation via
the various channels follows below.
5.1.1 Online offering
Business Day maintains a public website (http://www.bdlive.co.za/), which it uses to
deliver bundles of content to retail customers. At the time of writing, the content is offered
free of charge, but some of it requires a free registration to the website. However, Business
Day has plans to start charging for at least some of it (Matthewson, questionnaire, 2012).
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This channel is indirectly linked to a revenue stream, as ads are being displayed alongside
the content (Damyanov, audit, 2012b). In the future, when the content goes behind a
paywall, there will be a direct link to revenues from paying customers, but Business Day is
also hoping to retain the indirect revenue from advertisements and hopes the detailed
information it will have about paying subscribers will make them an even more attractive
audience to advertisers (Matthewson, interview, 2012a).
Through a separate, password-protected, website, Business Day is selling bundles of
content to wholesale clients. The newspaper plans to put in place a wholesale content sale
policy and system to sell individual pieces of content. At present, it is selling unbundled
video content on an occasional basis (Matthewson, questionnaire, 2012). This channel has a
direct link to a revenue stream, as clients are paying for it (Damyanov, audit, 2012b). This
is not about to change.
Business Day is delivering bundled content to both retail and wholesale customers free of
charge via RSS feeds and plans to introduce charges in the future. The newspaper views
RSS as one of the potential future distribution services it uses to supply specific content
types to corporate customers. The RSS feed itself would continue to provide headlines free
of charge, but registration is already required to read the full articles and in future payment
would be required to read full articles (Matthewson, questionnaire, 2012). This channel has
no link to a revenue stream, but serves to feed traffic to the website (Damyanov, audit,
2012b); and this will not change in the future.
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Newsletters are used to service retail customers only and in future they are only likely to be
used to promote content on a retail basis. Even when the newspaper starts charging for
content, the newsletters are likely to remain free (Matthewson, questionnaire, 2012).
Newsletters are sponsored (Matthewson, interview, 2012b), providing an indirect link
between content and a revenue stream.
Video podcasts, served on an individual basis, are free for registered retail clients. Business
Day has not so far made them available on a wholesale basis, but may consider doing so in
future (Matthewson, questionnaire, 2012). Sometimes, sponsor pre-rolls are shown to
consumers (Matthewson, interview, 2012b), linking content indirectly to a revenue stream.
5.1.2 Mobile offering
Business Day maintains a dedicated mobile site, which is a scaled-down version of the
main website. Content bundles are being offered to retail users free of charge, but there are
plans to start requiring payment (Matthewson, questionnaire, 2012). The website has an
indirect link to a revenue stream from ads displayed alongside the content (Damyanov,
audit, 2012b).
An iPhone app and a similar, but not identical, iPad app are being used to deliver content
bundles free of charge to retail customers. At the moment, registration is not required on
iPhone, iPad or the mobile site, but only because of technical limitations (Matthewson,
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questionnaire, 2012). Ads, displayed in-app provide an indirect link to a revenue stream
(Damyanov, audit, 2012b). The newspaper plans to begin charging for content on a multi-
platform subscription basis, so paying subscribers will be able to access the same content
on any platform (mobile, desktop, etc). Eventually registration will be required on all
platforms in order to sample content and payment will be required to access the full range
of bundled content (Matthewson, questionnaire, 2012).
Business Day does not rule out the possibility of also launching other apps on iPhone and
other mobile devices that deliver specialist bundled content in specific verticals. An
Android app is in the planning -- it is being scoped and is due to launch in the next six
months (ibid.)
The newspaper has no immediate plans to use mobile apps to sell content on a wholesale
basis, but is not ruling out the possibility of doing so. The planned wholesale content sale
policy and system will be able to accommodate the possibility of Business Day supplying
content on a wholesale basis to apps managed by corporate customers and even the
possibility of the newspaper developing apps and offering them on a white label basis to
corporate customers (ibid.)
Registered retail customers can subscribe to free news alerts via SMS (Matthewson,
questionnaire, 2012). There is no link between content distributed this way and a revenue
stream (Damyanov, audit, 2012b).
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5.1.3 Social media
Business Day is using a Facebook page and a Twitter account to deliver content to
customers (Matthewson, questionnaire, 2012). None of those can be monetised via content
sales at the moment, as the platform holders do not allow publishers to ask money from
people visiting their Facebook or Twitter pages.
Facebook apps can be used to deliver content to customers free of charge or in exchange for
payment. Business Day is not using such an app and has no immediate plans to launch one.
Facebook will continue to be merely a means for engagement and for promoting content,
for the foreseeable future, including the phase in which the newspaper begins charging for
content on a retail basis (Matthewson, questionnaire, 2012).
Twitter, too, is primarily used for interaction and to drive traffic. When Business Day starts
charging for access, it may play a role in helping convert free registered users into paying
subscribers (Matthewson, questionnaire, 2012). There is no link to a revenue stream via this
channel (Damyanov, audit, 2012b).
5.1.4 E-edition and syndication
An e-edition of the print product is being offered via a third-party distributor to subscribers
who wish to consume the print edition as a complete product, but who are generally outside
of Business Day‟s main distribution area (Matthewson, questionnaire, 2012). This channel
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is directly linked to a stream of subscription revenues; and content in the e-edition shares
pages with ads, providing an additional indirect link to a revenue stream (Damyanov, audit,
2012b).
Wholesale customers are also paying for Business Day content delivered to them through
ftp (Matthewson, questionnaire, 2012). There is a direct link to a revenue stream from
paying customers (Damyanov, audit, 2012b).
Business Day is using 12 channels to deliver content to customers: website, RSS feeds,
newsletters, podcasts, mobile site, iPhone app, iPad app, SMS alerts, Facebook page,
Twitter, e-edition, syndication (ftp). (See Chart 1.)
One channel -- syndication -- is used exclusively for serving content to wholesale clients.
Seven channels -- newsletters, podcasts, mobile site, iPhone app, iPad app, SMS alerts and
e-edition -- are used to deliver content exclusively to retail customers. Four channels --
website, RSS feeds, Facebook page and Twitter -- are used to distribute content to both
wholesale and retail customers. Overall, Business Day is reaching its wholesale customers
through five channels -- (special password-protected) website, RSS feeds, Facebook page,
Twitter and syndication -- and its retail customers through 11 channels -- (public) website,
RSS feeds, newsletters, podcasts, mobile site, iPhone app, iPad app, SMS alerts, Facebook
page, Twitter and e-edition.
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Almost exclusively, content is being offered as a bundle -- either the entirety of content
produced by the newspaper or a specific subset of it. The exception are the podcasts, which
are being provided on a piece-by-piece basis.
CHART 1: Business Day – Channels, customers & bundling options.Wholesale channels are displayed
vertically at the left-hand side of the chart and retail channels are displayed horizontally at the lower end. Red
indicates channels that are used to sell content, yellow indicates free channels and blue indicates channels that
are free at present but are planned to go behind a paywall. A large bubble means that the channel is being
used to deliver a bundle of content and a small bubble means that the channel is being used to deliver
individual pieces of content.
At the moment content is being delivered free of charge via 10 channels -- (public) website,
RSS feeds, newsletters, podcasts, mobile site, iPhone app, iPad app, SMS alerts, Facebook
page and Twitter -- and payment is required for content being delivered via three channels -
- (special password-protected) website, e-edition and syndication. Nine channels -- RSS
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feeds, newsletters, podcasts, mobile site, iPhone app, iPad app, SMS alerts, Facebook page
and Twitter -- are currently only being used to deliver content free of charge, two channels
-- e-edition and syndication -- are only being used to deliver paid content and one channel -
- the website, of which there is a public and a password-protected version -- is used for both
free and paid content. There are plans to begin charging for content delivered via five of the
now free channels -- (public) website, RSS feeds, mobile site, iPhone app and iPad app.
This will shift the balance in favour of paid content, which will be distributed via seven
channels -- website, RSS feeds, mobile site, iPhone app, iPad app, e-edition and
syndication -- versus five channels that will be left exclusively for the distribution of free
content -- newsletters, podcasts, SMS alerts, Facebook page and Twitter. In future there are
not planned to be channels that will be used for delivering both free and paid content.
Content that is being sold by Business Day at the moment, is predominantly offered to
wholesales customers via the (password-protected) website and syndication; and only the e-
edition is a channel used to sell digital content to retail clients. In future, though, there will
be more paid-content channels for retail customers -- six: website, RSS feeds, mobile site,
iPhone app, iPad app and e-edition -- than for wholesale clients -- three: website, RSS feeds
and syndication.
Three of the channels -- (the password-protected) website, the e-edition and ftp -- have a
direct link to a revenue stream from paying customers. The e-edition also has an indirect
link to a revenue stream from advertising. Six other channels -- (the public) website,
newsletters, podcasts, mobile site, iPhone app and iPad app -- also have an indirect link to
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an ad revenue stream. Four channels -- RSS feeds, SMS alerts, Facebook page and Twitter -
- have no link to a revenue stream.
5.2 Daily Post
The Daily Post is a general-interest regional newspaper circulating in North and Mid
Wales. According to Trinity Mirror plc, which owns it, the Daily Post is the newspaper that
reaches the largest audience in North Wales, even beating national newspapers.
Compared with the national Business Day, the Daily Post is using almost all of the same
online channels and more social media channels, but has a more limited mobile offering. It
also has an e-edition and is selling content through syndication (Damyanov, audit, 2012c;
Gow, questionnaire, 2012).
Aside from the paid e-version of the print product and the syndication deals, the Daily Post
is charging for a very little portion of its content. The newspaper does not have plans to
change that.
The grouping used in the Business Day case can be used here as well, although some of the
groups (eg, Mobile offering) are much smaller, even as others (eg, Social media) are larger:
1) online offering via website and related functionalities (such as RSS feeds and
newsletters), 2) mobile offering via a mobile site, and 3) social media.
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A questionnaire, filled out by Alison Gow (Editor) also revealed that:
-- the Daily Post is not charging for content delivered via most of the channels it uses;
-- the newspaper‟s digital content offering consists almost entirely of bundles of content on
some occasions and individual pieces of content on just one;
-- the Daily Post has both retail and wholesale clients (Gow, questionnaire, 2012).
The questionnaire also revealed that six more channels (not identified at the audit stage)
were being used by the newspaper -- mostly social media (ibid.)
Following is a detailed discussion of what the newspaper is doing in terms of content sales
and distribution via the various channels.
5.2.1 Online offering
The Daily Post maintains a public website (http://www.dailypost.co.uk/), which it uses to
deliver bundles of content to retail customers. The content is offered free of charge, but
some of it requires a free registration to the website (Gow, questionnaire, 2012). This
channel is indirectly linked to a revenue stream, as ads are being displayed alongside the
content (Damyanov, audit, 2012d).
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Sometimes, wholesale customers such as TV stations, will pick up a story from the website
and buy the re-use rights (Gow, questionnaire, 2012). This gives the website a direct link to
a revenue stream as well.
The Daily Post is delivering bundled content to retail customers free of charge via RSS
feeds (Gow, questionnaire, 2012). This channel has no link to a revenue stream, but serves
to feed traffic to the website (Damyanov, audit, 2012d).
Newsletters are used to service retail customers and are available free of charge after
registration (Gow, questionnaire, 2012). At the time of writing, the newsletters were not
carrying advertisements, but the editor interviewed for this case study revealed that they
have had in the past (Gow, interview, 2012b).
5.2.2 Mobile offering
The Daily Post maintains a dedicated mobile site. Content bundles are being offered to
retail users free of charge (Gow, questionnaire, 2012). The mobile site is not running ads
that could link content indirectly to revenue (Gow, interview, 2012b), though it could.
The newspaper is not making use of phone apps or SMS alerts (Gow, questionnaire, 2012).
5.2.3 Social media
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The Daily Post is heavily using social accounts to deliver content to customers -- Facebook,
Twitter, LinkedIn, Pinterest (Gow, questionnaire, 2012). None of those can be monetised
via content sales at the moment, as the platform holders do not allow publishers to ask
money from people visiting their social media pages.
Facebook apps can be used to deliver content to customers free of charge or in exchange for
payment. The Daily Post is not using such an app (Gow, questionnaire, 2012). Even so, the
Facebook offering is fairly robust, incorporating brand pages, reporter profile pages and
marketing pages associated with distinct initiatives (ibid.)
There is no link to a revenue stream via these channels (Damyanov, audit, 2012d).
5.2.4 E-edition and syndication
There is a page-turner e-edition for subscribers. It is one of the digital tools of which
advertisers are very supportive. Often, if a special supplement is being put together with a
sponsor, the sponsor will ask for a page-turning e-edition to be created as well (Gow,
interview, 2012a). Sponsorship and ads in the e-editions create an indirect link to a revenue
stream; and subscriptions provide a direct one (Damyanov, audit, 2012d). The Daily Post is
not selling e-editions of individual issues (Gow, interview, 2012a).
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Daily Post
CHART 2: Daily Post – Channels, customers and bundling options. Wholesale channels are displayed
vertically at the left-hand side of the chart and retail channels are displayed horizontally at the lower end. Red
indicates channels that are used to sell content and blue indicates free channels. A large bubble means that the
channel is being used to deliver a bundle of content and a small bubble means that the channel is being used
to deliver individual pieces of content.
Wholesale customers are also paying for Daily Post content delivered to them through ftp
(Gow, questionnaire, 2012). There is a direct link to a revenue stream from paying
customers (Damyanov, audit, 2012d).
The Daily Post is using 10 channels to deliver content to customers: website, RSS feeds,
newsletters, mobile site, Pinterest, LinkedIn, Facebook pages, Twitter, e-edition and
syndication (ftp). (See Chart 2.)
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As in the case of Business Day, one channel -- syndication -- is used exclusively for serving
content to wholesale clients. Eight channels -- RSS feeds, newsletters, mobile site,
Pinterest, LinkedIn, Facebook pages, Twitter and e-edition -- are used to deliver content
exclusively to retail customers. Just one channel -- the website -- is used to distribute
content to both wholesale and retail customers. Overall, the Daily Post is reaching its
wholesale customers through two channels -- website and syndication -- and its retail
customers through nine channels -- website, RSS feeds, newsletters, mobile site, Pinterest,
LinkedIn, Facebook pages, Twitter and e-edition.
Similarly to Business Day, almost exclusively, content is being offered as a bundle -- either
the entirety of content produced by the newspaper or a specific subset of it. The exception
is the website, from where wholesale customers pick up individual stories.
Content is being delivered free of charge via eight channels -- website, RSS feeds,
newsletters, mobile site, Pinterest, LinkedIn, Facebook pages and Twitter -- and payment is
required for content being delivered via three channels -- website, e-edition and
syndication. Seven channels -- RSS feeds, newsletters, mobile site, Pinterest, LinkedIn,
Facebook pages and Twitter -- are currently only being used to deliver content free of
charge, two channels -- e-edition and syndication -- are only being used to deliver paid
content and one channel -- the website -- is used for both free and paid content. The latter
two mirror the situation over at Business Day, however the Daily Post has no plans to begin
charging for content delivered via any of the now free channels.
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Content that is being sold by the Daily Post is offered to wholesale customers via two
channels -- website and syndication; and only the e-edition is a channel used to sell digital
content to retail clients.
Two of the channels -- e-editions and ftp -- have a direct link to a revenue stream from
paying customers. The e-edition also has an indirect link to a revenue stream from
advertising. One other channel -- the website -- also has an indirect link to an ad revenue
stream. Six channels -- RSS feeds, mobile site, Facebook pages, Twitter, LinkedIn and
Pinterest -- have no link to a revenue stream.
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6. Discussion of findings and a typology proposal
A typology of ways to distribute and/or sell digital content emerges in the form of a large
number of combinations of channels being used to deliver bundles or individual pieces of
content to either retail or wholesale customers. As many as 40 types of content
sale/distribution can be identified in this way. The current section looks at the various
combinations and uses examples from the two case studies -- Business Day and the Daily
Post -- as well as other media outlets to make generalisations about whether certain types
are viable of purely theoretical. The main focus of this dissertation is the newspaper
industry, but with newspapers increasingly becoming multimedia outlets and competing
online on an equal footing with TV stations, radio stations, magazines and pure-play online
publications, examples from other sectors of journalism are also used as relevant.
6.1 Channel: website; Content: bundled; Customers: retail
This setup could encompass the website in its entirety or specific sections, such as Sports or
Politics, or various content packages centered around a central topic. However, this
distinction is only meaningful in cases when the publisher is charging for the content; and
in both cases studied the website is being used to deliver content to retail customers free of
charge. One of the newspapers -- Business Day -- plans to introduce charges for the content
on its website but it does not plan to sell a variety of packages, opting instead for a single
charge for the entirety of the content among multiple platforms.
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Other newspapers, such as The Times in the UK, charge for a single day‟s access, which
gives the purchaser the right to consume a specific bundle of content that is available on the
day for which the subscription is valid (Reynolds, 2010).
At the time of writing, the content on both studied websites is indirectly linked to a revenue
stream from advertisements. This will not change even after the Business Day content goes
behind a paywall. Indeed, it is hoped that the newspaper will be able to sell a much more
niche and easy-to-target audience to advertisers (Matthewson, interview, 2012a, 2012b).
Although not applied by either of the studied newspapers, examples such as The Times are
evidence that this type of content delivery can be linked directly to a revenue stream.
6.2 Channel: website; Content: unbundled; Customers: retail
As in the case of various packages being offered alongside the entirety of the content, the
distinction between bundled and unbundled delivery of content via a website is only
applicable when money changes hands. For instance, the majority of the content may be
offered free of charge, but certain articles may require payment to be accessed; or there
may be one price for a subscription to all of the content and a separate price for individual
pieces of it. In both cases studied this setup is not applicable at the moment, since the
websites are free. Business Day plans to start charging for content but even then it will be
charging a single fee for access to the whole of its content and will not be selling it on a
piece-by-piece basis to retail customers.
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Alacra, a US company that sells research, profiles and other content via an online store, is
an example of a content provider charging for individual pieces of content (Alacra, 2012),
providing a direct link for this type of content sale/distribution to revenue.
6.3 Channel: website; Content: bundled; Customers: wholesale
This type of content delivery is similar to 6.1, the difference being that customers in this
case have the right to re-use and re-sell the content. Usually, content is being sold on a
wholesale basis, rather than given away; and that is the case in one of the case studies --
Business Day is selling content to wholesale customers via a special, password-protected
website. This provides a direct link to a revenue stream. However, in other cases, media
outlets are distributing content that is free to consume and re-use: with promotional
purposes. For instance, Al-Jazeera, a Qatar-based news broadcaster, is distributing video
footage under a Creative Commons licence, under the terms of which users are free to re-
use the content, even for commercial purposes, provided they attribute the content to the
network (Townend, 2009). In January 2011 it offered a bundle of its content covering
unrest in Egypt under a CC licence (Hopkins, 2011).
6.4 Channel: website; Content: unbundled; Customers: wholesale
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This type of content delivery is similar to 6.2, the difference being -- as in 6.3 -- that
customers have the right to re-use and re-sell the content. One of the studied newspapers --
the Daily Post -- is selling content in this way. The link between content and revenue
stream is direct, but the Al-Jazeera example from 6.3 of giving content away on a
wholesale basis for promotional purposes is also applicable here. (Another way to look at it
is this: since bundling is a pricing issue, and “free” is the same amount of price, regardless
of the volume, questions of bundling vs unbundling become irrelevant whenever money
does not change hands.)
6.5 Channel: RSS feeds; Content: bundled; Customers: retail
Similarly to the website channel, bundled distribution of content via RSS feeds can apply to
the entirety of a newspaper‟s content, or to specific packages, such as Culture or Business.
The channel is in use at both of the studied newspapers for the purpose of delivering
content bundles to retail customers. RSS feeds can provide a direct link between content
and a revenue stream. For instance, customers may pay a fee to receive a full feed of
content. However, at both studied newspapers, the channel is being used only for
promotional purposes and to feed traffic to the website. At Business Day, RSS has been
identified as a technology that will be used to serve paying customers in future; but even
then it will not provide a direct link to a revenue stream, but will be just a delivery vehicle
for content.
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Others though are using RSS feeds for direct content sales. For example, a firm called RSS
Bazaar was providing exactly this service (Hrastnik, 2005). Its website is no longer active,
shedding doubt over the viability of its business model centered around aggregating feeds
from various publishers and selling them to customers; however, the bundled distribution of
paid content to retail customers has been proven to be technically feasible.
6.6 Channel: RSS feeds; Content: unbundled; Customers: retail
As their name suggests, RSS feeds are continuous streams of content and thus, by nature, a
bundle option. It is technically possible to set up a specific RSS feed with the purpose of
only sending one piece of content over it, but that seems highly impractical, rendering this
type not viable.
6.7 Channel: RSS feeds; Content: bundled; Customers: wholesale
This type is similar to 6.5, the difference being that users receive the right to re-use or re-
sell the content. Of the two studied newspapers, Business Day has plans to use RSS feeds
to deliver content to paying wholesale customers. However, the channel can also be used to
distribute content for re-use under a Creative Commons licence, similarly to the Al-Jazeera
example in 6.3.
6.8 Channel: RSS feeds; Content: unbundled; Customers: wholesale
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This is not a viable type (cf 6.6).
6.9 Channel: newsletter; Content: bundled; Customers: retail
Newsletters are packages of content focused on a specific topic or event. Both of the
studied newspapers are using them to deliver content to retail customers free of charge.
Business Day, which plans to introduce a paywall around its content soon, plans to
continue using them as a free promotional tool. Interestingly, both studied newspapers only
allow registered users to subscribe to newsletters. The registration process aims to give
publishers more data about their audience, which makes it more attractive to advertisers as
they can target their ads better. Both Business Day and the Daily Post seem to think the
utility of a newsletter is high enough for customers to become willing to share their data;
which is in contrast with the website that is open to everyone. Newsletters can (and do)
feature advertisements, which provide an indirect link between the content in them and a
revenue stream when the service is free of charge. It is also not uncommon for news outlets
to sell subscriptions to newsletters, making the link between content and money a direct
one. For instance, Platts, a news provider specialised in the commodity markets, is selling
subscriptions to a slew of newsletters tailored for different audiences (Platts, 2012).
6.10 Channel: newsletter; Content: unbundled; Customers: retail
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Similarly to RSS feeds, newsletters are by definition bundles of content. Although it is
technically possible, it seems impractical to use the channel for distribution of individual
pieces of content.
6.11 Channel: newsletter; Content: bundled; Customers: wholesale
A wholesale customer receives the right to re-use and re-sell the content. It is feasible for
content to be delivered to wholesale customers using this channel; however it is an unlikely
practice. Other channels make content more easily re-useable and re-sellable. (Indeed, it
has already been noted that the newspapers in both case studies seem to rate very highly the
utility that newsletters provide to retail customers, cf 6.9.) It is more realistic to assume
that newsletters may be used as promotion tools to highlight content capabilities to
potential wholesale customers, much in the way Business Day and the Daily Post are
already doing for retail clients.
6.12 Channel: newsletter; Content: unbundled; Customers: wholesale
This is not a viable type (cf 6.10).
6.13 Channel: podcast; Content: bundled; Customers: retail
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Podcast bundles can be audio or video content that is distributed via, eg, a subscription
through Apple‟s iTunes store or directly through the publisher‟s website, or other
platforms. None of the studied newspapers is using podcasts to distribute packages of
content, but other news outlets do. For example, The Economist, a weekly news magazine,
sells audio editions of each issue (The Economist, 2012). Apart from the direct link
between content and revenue stream provided by the sale of podcast subscriptions,
advertisements may be embedded within audio or video files, creating an indirect link to ad
revenue. One of the editors who were interviewed for the case studies said that although the
newspaper was not using podcasts, other papers in the group were; and they were
sometimes using podcasts to carry ads (Gow, interview, 2012a).
6.14 Channel: podcast; Content: unbundled; Customers: retail
Access to individual podcasts can be offered to retail clients free of charge or after
payment. One of the studied newspapers -- Business Day -- is giving registered users free
access to video podcasts that do not form a specific package but are available on a piece-
by-piece basis. Sometimes, they include pre-rolls with advertising messages, linking the
content indirectly to a stream of ad revenue. Direct sales of individual podcasts are also
possible, for example Fox News Radio is selling individual episodes of The O‟Reilly
Factor show (Fox News Radio, 2012).
6.15 Channel: podcast; Content: bundled; Customers: wholesale
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This type is similar to 6.13, the difference being that wholesale customers get the right to
re-use the content, potentially including re-sale. None of the studied newspapers is selling
or distributing content in this way, but other companies do. For instance, Brightcove is a
US firm that sells video content packages on a wholesale basis (Brightcove, 2012), linking
content directly to a revenue stream. Other firms, such as video-sharing site YouTube,
allow the re-use of content free of charge, but include ads that are visible on re-users‟
websites and in their applications, earning the company ad revenue even when the content
is consumed away from its platform.
6.16 Channel: podcast; Content: unbundled; Customers: wholesale
This type shares similarities with 6.14 in that video or audio content is being offered on an
individual basis and with 6.15 in that users are allowed to re-use it. It is not in use at either
of the two studied newspapers, but the YouTube example from 6.15 is applicable here as
well.
6.17 Channel: social media; Content: bundled; Customers: retail
Social media have become powerful platforms to engage audiences and build interaction
between them and the brand; and many newspaper companies have embraced them. The
two studied publications both have a social media presence. Business Day is on Facebook
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and Twitter and the Daily Post boasts a multitude of Facebook pages and is also on Twitter,
LinkedIn and Pinterest. However, neither newspaper is using platform-specific apps that
(on some social networks) allow publishers to charge for content; instead opting for purely
promotional activities. Other newspapers have built very robust app offerings. One such is
the Guardian, which is not charging for the consumption of content through its app, but
says it has caused a dramatic shift in referral traffic to its website (Belam, 2012).
To the best of the author‟s knowledge at the time of writing, no news organisation is selling
content via a Facebook app. There are other companies, however, especially in gaming, that
are selling content (virtual goods) through their Facebook apps. One such company is
Zynga, the maker of the FarmVille app.
6.18 Channel: social media; Content: unbundled; Customers: retail
As noted above, the distinction between bundled and unbundled options only makes sense
when content is being sold. Newspapers seem to have so far shied away from selling
content through social networks. Companies like Zynga do sell individual items via in-app
purchases; and there appear to be no practical hurdles for a newspaper app to charge fees
for access to individual pieces of content.
6.19 Channel: social media; Content: bundled; Customers: wholesale
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