UK Newspaper Industry

UK Newspaper Industry



UK Newspaper Industry

This shows system for a newspaper. The size of readership and level of advertising revenues directly impact on the profitability of newspaper firm operations.

 

Figure 1. A conceptual model of the regional newspaper industry.

There are a number of external influences: stories are community sourced from the general public, police, courts and local government (though this view has been revised to include the increasing amount of local news content sourcing from interest groups and public relations professionals); regulatory agencies; investors; advertisers; print manufacturers; ink suppliers; paper suppliers; distributors; trade associations and retailers.

The thick double headed arrow highlights the potential for value co-creation activities between a firm, consumer and a blogging community. Our model proposes a dynamic participative relationship between journalists, consumers and bloggers.

The Internet is clearly driving many convergences in media and devices. Newspapers are increasingly being produced and distributed in multimedia formats (e.g. including television, online, mobile and printed forms) and this is leading to a relaxing of the rigid structuring of their missions, routines, practices and relationships

Economies of Scale

These economies mean that there are declines in unit costs as the absolute volume per period increases. Scale economies can be present in nearly every function of the newspaper business: purchasing of newsprint, printing, distribution of single copies, servicing a newsstand network, selling of subscriptions, and utilization of home delivery systems.

Product Differentiation

These differences are seen in established newspapers, which have brand identification (with political parties, for example) and customer loyalties, which must be overcome by an entrant.

Capital Requirements

Capital required covering start-up losses.

Switching Costs

This barrier involves costs of changing from one product to another. This is an interesting concept even in the newspaper business where the financial costs of changing from one newspaper to another are low but the psychic costs might be high. Newspaper reading is a habit; the reader gets used to the layout of his or her newspaper, so used to it that he or she feels uncomfortable with another newspaper and gets easily lost when reading it.

This is why established newspapers should only make small changes when redesigning their papers.

Access to Distribution Channels In newspapers this involves the ease of access to newsstands and to home delivery systems.

Advantages Independent of Scale Porter includes in this source of barriers a number of advantages of already established firms. The Financial Times known for its pink paper, tried to prevent the regional London newspaper Evening Standard from introducing a pink business section, but failed. Thus the Financial Times did not manage to keep pink paper as an advantage.

Government Policy Porter includes in this last major source of entry barriers licensing requirements and other types of regulations and control.

Types of Entry

Considering the structure of the newspaper industry there are two main types of entrants: new companies entering die newspaper business and established newspaper companies expanding their businesses.

The first type of entry is illustrated by a company or new publication entering the newspaper market for the first time, such as the example ...