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A COMPARATIVE STUDY OF THE BUSINESS MODELS OF TRADITIONAL AND INTERNET-BASED NEWSPAPER FIRMS IN NIGERIA AND CANADA
A Ph.D THESIS SUBMITTED TO THE DEPARTMENT OF MASS COMMUNICATION, UNIVERSITY OF NIGERIA, NSUKKA
OKOROM, EMMANUEL MORGAN
PG/Ph.D./11/58531
JULY 2018 i
TITLE PAGE
A COMPARATIVE STUDY OF THE BUSINESS MODELS OF TRADITIONAL AND INTERNET-BASED NEWSPAPER FIRMS IN NIGERIA AND CANADA
OKOROM, EMMANUEL MORGAN
PG/Ph.D/11/58531
A THESIS INTERNAL DEFENCE PRESENTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF A DOCTOR OF PHILOSOPHY DEGREE (PhD) IN MASS COMMUNICATION, DEPARTMENT OF MASS COMMUNICATION, UNIVERSITY OF NIGERIA, NSUKKA
SUPERVISOR:
PROFESSOR NNANYELUGO M. OKORO
JULY 2018
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AUTHOR’S DECLARATION
I declare that this work was carried out in accordance with the regulations of the University of Nigeria, Nsukka, and is original except where indicated by the specific references in the text. No part of this thesis has been submitted as part of an academic award. The thesis has not been presented to any other educational institution in Nigeria or overseas.
All views expressed in this thesis are those of the author and does not represent those of the
University.
Signed ………………………… Date ……………………
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CERTIFICATION
This thesis: ―A Comparative Study of the Business Models of Traditional and Internet-Based
Newspaper Firms in Nigeria and Canada,‖ by Okorom, Emmanuel Morgan (Reg. No:
PG/Ph.D/11/58531) meets the regulations governing the award of the degree of Doctor of
Philosophy (PhD) (Mass Communication) of the University of Nigeria and it is approved for its contribution to knowledge. It is certified that this work is an original work by the author
(Okorom, Emmanuel Morgan) and has not been published elsewhere.
______Professor Nnanyelugo M. Okoro Date Supervisor
______Dr. Ifeanyi L. Anorue Date Head of Department
______Prof. Christian Onyeji Date Dean, Faculty of Arts
______Prof (Mrs) Osadebe Date Dean, School of Post Graduate Studies
______Examiner Date
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DEDICATION
This work is dedicated to the memory my parents, late Chief Faustine Okorom, (F.O.) who spoke to me from heaven concerning this project and my dearest mother, late Mrs Cyrina
Adanma Okorom, who believed in me.
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ACKNOWLEDGEMENTS
Undertaking a project of this magnitude and steering it to a successful conclusion, despite seemingly insurmountable odds, certainly require divine assistance and direction. Therefore, I thank God Almighty for the strength, love, direction and resources made available to me through his grace. Specifically, I appreciate my God for journey mercies for the countless times I flew from Canada to Nigeria, beginning from my coursework to the end of this programme.
I owe a debt of gratitude to my supervisor, Professor Nnanyelugo Okoro, for his dedication, wisdom and direction throughout the duration of this study. I thank all the lecturers at the Department of Mass Communications, University of Nigeria, Nsukka who offered very constructive criticisms to my work. Specifically, I thank the former head of the department of Mass communication, Dr Greg Ezeah and the current head of Department, Dr Anorue, who both contributed immensely to the success of this project. I thank all my field assistants, both in Nigeria and Canada, especially Andrew Ngene, Jeff Halliday and Perfecta Clark, who helped in the distribution and recovery of the survey documents and the coordination of the interviews.
I am indebted to my friend and classmate, Dr Christian Odoemelam, who proofread every line of my work and offered invaluable advice and direction throughout the period of my study. I will like to acknowledge the support and assistance offered by my friend and former roommate at Nkrumah Hall, Professor Uchenna Anyanwu, who insisted that I complete this programme. I recognize, with joy and thanksgiving, the love, support and encouragement given by my friends and brothers especially Professor Patrick Egbule, Chief (Barrister) Marcel Onuoha and my erudite friend and poet, Christopher Nwachukwu.
This project would not have been consummated without the support of my wife, soulmate, confidante and greatest strength, Ifeoma Anelechi Okorom, who made so much sacrifice to encourage me. I would not have done it without you. I thank God for my children Mela, Obi, Dera and Ada especially Mela (my pumpkin) and Obi (Obidaddy) who would never comprehend why daddy is holed up in the study all day and would not play with them. I sincerely thank God for my immediate and wonderful family: Ralph and family, Chudy and family, Don and family, Robert, Lilian, Faustina, Dora, Caro, Ngo, Mary, Martha and Elizabeth. I say thank you all for the support, love and prayers.
OKOROM, EMMANUEL MORGAN Department of Mass Communication University of Nigeria, Nsukka. July 2018
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TABLE OF CONTENTS
Title page i Author‘s declaration ii Certification iii Dedication iv Acknowledgements v Table of Contents vi List of Figures ix List of Tables xi Abstract xii CHAPTER ONE: INTRODUCTION 1.1 Background of the study 1 1.2 Statement of the Problem 5 1.3 Objectives of the Study 6 1.4 Research Questions 6 1.5 Research Hypotheses 7 1.6 Significance of the Study 8 1.7 Scope of the Study 8 1.8 Operational Definition of Terms References CHAPTER TWO: LITERATURE REVIEW 2.0 Focus of the Review 13 2.1.1 Historical overview of technological disruption in the newspaper industry 14 2.1.2. The concept of Disruptive Innovation. 17 2.1.3. Drivers of disruption in the newspaper industry. 19 2.1.4. Disruptive innovation and business matrix. 21 2.1.5. Disruptive technology in the Nigerian newspaper industry. 23 vii
2.1.6. Disruptive technology and Canada‘s media landscape 23 2.1.7. Re-inventing the business models for newspapers in Nigeria and Canada 27 2.1.8. Measures introduced by Nigerian Newspapers to survive the disruption 33 2.9. Comparing Nigeria and Canada‘s newspaper ecosystems 38 2.2 Theoretical Framework 40 References CHAPTER THREE: RESEARCH METHODOLOGY 3.1 Research Design 46 3.2 Population of the Study 47 3.3 Sample size determination 49 3.4.1 Sampling Technique 50 3.4.2 Sampling of Journalist in Canada 51 3.5 Description of Instruments for data collection 52 3.6 Validity of research instruments 57 3.7 Reliability of Research Instruments. 57 3.7.1 Reliability of Instrument (Questionnaire) 54 3.8 Method of data presentation and analysis 55 References CHAPTER FOUR: DATA ANALYSIS AND PRESNTATION 4.0 Analysis of quantitative data from survey (Questionnaire) 57 4.1 Data Analysis 57 4.2 Psychographic characteristics of respondents 61 4.3 Analysis of Qualitative data 90 4.4.1. Research question 1 100 4.4 Discussion of Findings 100 4.4.2. Research question 2 102 4.4.3. Research question 3 104 4.4.4. Research question 4 107 4.5 Summary of Findings 108 References
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CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS 5.1 Summary 112 5.2 Conclusion 112 5.3 Recommendations 113 Bibliography 115 Appendix 1 122 Appendix 2 125
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LIST OF FIGURES Figure 1: Sex of respondents 57 Figure 2: Age of respondents 58 Figure 3: Respondents‘ marital status 59 Figure 4: Respondents‘ educational qualifications 60 Figure 5: Respondents‘ knowledge of Business Model 61 Figure 6: Main Source of Revenue of Traditional Newspapers 62 Figure 7: Business Model of Newspaper Industries 63 Figure 8: Reasons why Newspaper Business Model is damaged 64 Figure 9: Whether newspapers Business models differ from others 65 Figure 10: Illustrating Impact of IT Business Model of Newspaper Production 66 Figure 11: Reason for the impact of IT on newspaper organizations 67 Figure 12: Whether media techs have Cannibalized Newspaper Business Model 68 Figure 13: Whether New media technologies have Better Business Formula 69 Figure 14: Whether news online should be Free 70 Figure 15: Factors Leading to Breakdown of Newspaper Business Model 71 Figure 16: Whether Respondents have ever paid For News 72 Figure 17: Whether business models of Internet based newspaper firms affect Traditional newspapers 73 Figure 18: Illustrating Whether Internet based online news and newspaper industry operate different business models 74 Figure 19: Illustrating How Internet based news firms Differ from conventional newspaper industry 75 Figure 20: Illustrating Whether Conventional newspapers can reinvent old business models to survive 76 Figure 21: Whether there are Business Model Options available to traditional newspaper industry 77 Figure 22: Suggested Business Model options available to Traditional Newspaper industry-78 Figure: 23 Illustrating Whether there are Better Revenue generating formula for newspaper industries 79 Figure 24: Illustrating Preferable Formats for Future Newspaper publishing 80 Figure 25: Whether there are possibilities for newspaper industries to overcome current business model crises 81 Figure 26: Illustrating Suggested options for overcoming current business model crises in Newspaper industry 86 Figure 27: Illustrating whether newspaper industries have potentials to respond to Disruptors 27 Figure 28: Illustrating How the Newspaper Industry can respond to Business Disruptors 84
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LIST OF TABLES Table 1: Distribution of Respondents‘ Sex 57 Table 2: Distribution of Respondents‘ Age 58 Table 3: Respondents‘ Marital status 59 Table 4: Respondents‘ Educational Qualifications 60 Table 5: Respondents‘ knowledge of Business Model 61 Table 6: Main Source of Revenue Traditional Newspapers 62 Table 7: Business Model of Newspaper Industries 63 Table 8: Reasons why Newspaper Business Model is Damaged 64 Table 9: Whether newspapers Business Models Differ from others 65 Table 10: Impact of IT Business Model on Newspaper Production 66 Table 11: Reason for the impact of IT on newspaper organisations 67 Table: 12: Whether media techs have Cannibalized Newspaper Business Model 68 Table 13: Whether New media technologies have Better Business Formula 69 Table 14: Whether news online should be Free 70 Table 15: Factors Leading to Breakdown of Newspaper Business Model 71 Table 16: Whether respondents have ever paid for News 72 Table 17: Whether business models of Internet based newspaper firms affect Traditional newspapers 73 Table 18: Whether Internet based online news and newspaper industry operate different business models 74 Table 19: How Internet based news firms differ from conventional newspaper industry 75 Table 20: Whether Conventional newspapers can reinvent old business models to survive 76 Table 21: Whether there are Business Model Options available to traditional newspaper industry 77 Table 22: Suggested Business Model options available to Traditional Newspaper Industry 78 Table 23: Whether there are Better Revenue generating formula for newspaper industries 79 Table 24: Preferable Formats for Future Newspaper publishing Table 25: Whether there are possibilities for newspaper industries to overcome current business 80 Table 26: Suggested options for overcoming current business model crises in Newspaper model crises industry 82 Table 27: Whether newspaper industries have potentials to respond to Disruptors 83 Table 28: How Newspaper industry can respond to Business Disruptors 84 Table 29: Analysis of Variance of the emergence of new technologies and the impeding of existing business models 85 Table 30: Multiple Comparisons of the emergence of new technologies and the impeding of existing business models 86 xi
Table 31: T-test of reinventing the business model of newspapers and the emergence of new media 87
Table 32: Summary statistics of T-test of reinventing the business model of newspapers and the emerge 87
Table 33: Revenue source of newspaper traditional business model and online based news business model. 87 Table 34: Cross tabulation of traditional business model and online news business model 88 Table 35: t-test of resourceful newspaper business model options and online based business model options. 89 Table 36: Summary statistics of t-test f resourceful newspaper business model options and online based 89
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ABSTRACT Long-established organisations and institutions have recently been derailed by a number of interlinked technology-driven changes, starting with the Internet and moving swiftly through tablets, smartphones, and the social media. These technological changes introduced by the Internet appear to disrupt the economic base and traditional revenue models of the newspaper industry as many potential readers are finding alternative sources of news online. The perception of the internet as the ―mother of all disruptions‖ stems from the perspective that it combines disruptive technologies of many component markets. Consequently, the newspaper business across the world is facing numerous challenges ranging from the changing times, changes in socio-cultural traits in different societies, demographic changes which inform new audience taste for news. While extant literature by scholars in both Nigeria and Canada have addressed the disruptive challenges posed by digitisation and the Internet on the revenue formula of the newspaper industry, only few have attempted a comparative, cross-national investigation into the nature, history, degree, scope and impact of the disruption in the industry. Given this gap, this study seeks to undertake a comparative, cross-national study of the newspaper crisis, not only because Nigeria and Canada represent different continents of the world but also to validate and or debunk the position by some scholars that while newspapers in America and Europe are in decline, those in Africa are enjoying a boom. The study is situated within the Disruptive Innovation Theory by Clayton Christensen (1997) and the Creative Destruction Theory by Joseph Schumpeter (1942). It adopted the mixed research design, collected and analysed both qualitative and quantitative data from the survey and in-depth interviews. The population of the study included 1430 respondents, comprising all print media journalists ascertained through membership of the Nigeria Union of Journalists (NUJ) in Lagos, Abuja, Enugu and Portharcourt, and 27 journalists purposively selected from newspaper organizations in Canada for the in-depth interviews. The total sample size for the survey was 405 ascertained through Australian calculator technique and 21 for the in-depth interviews. The questionnaire, with a reliability coefficient of .80; and the interview schedule served as instruments for data collection. The convergence model of triangulation design was employed in analysing the data. In this model, quantitative data and qualitative data were analysed, separately. They were finally compared before interpretation of both sets of data were made. Findings showed that: (i) The emergence of new technologies significantly impacted (F=20.152, df=356, P= <.05) on the growth of existing business models of the newspaper. (ii) Reinventing the business model of the newspaper industry and sustaining its growth is not dependent (t=141, df=233, P= >.070) on linking it to the emergence of new media. (iii) No statistically significant difference (X2=.139.00, df=359, p.>05) between revenue source of legacy newspaper‘s traditional business model and online-based news business model. (iv) T.test did not reveal any statistically significant dependence (t=.999, df=319, P= >.037) of business model options available to the newspaper industry to resource itself based on online business model options. On the other hand, the newspaper industry in Canada was quick to adjust to the internet as a more visible platform with revenue generating power than their Nigerian counterparts. On the flip side, newspaper organizations in Canada felt the impact of the disruption more than their Nigerian counterparts. This can be attributed to the size of the industry in Canada and the fact that the Canadian media operate a more developed market than Nigeria. In addition, the lack of transparency in the reporting of the operations of media organizations in Nigeria and the absence of an audit bureau that monitors and reports the number of newspapers sold in the country is an embarrassment to the industry. This study concludes that the traditional business models for legacy newspaper organizations, which was based chiefly on advertising, is no longer sustainable and that Internet technologies, which have admitted an army of competitors into the media landscape, have upended the revenue model thereby igniting a frenzied search for a sustainable new model. i 1
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
The newspaper industry, no doubt, used to be a highly profitable institution and the toast and envy of investors across the globe owing to its money-making business models (Akesson, 2009; Picard,
2006). Rupert Murdoch, chairman of News Corporation and owner of the Wall Street Journal, in a moment of forgetful excitement, once referred to the profits coming from his stable of newspapers as
―rivers of gold.‖ This was the pre-digital time when the industry enjoyed stability and superior monopoly in the production and distribution of news. The centuries-old business models of the newspaper industry which rested heavily on advertising sales and circulation (Alexander et al, 2004) had proved extremely successful until the late 1990s when the internet became a popular medium for communication. The internet, viewed as the ―mother of all disruptions‖ (Isenberg, 1999), enabled a lot of technologies which challenge and threaten the traditional revenue models of the so-called legacy news organisations. The perception of the internet as the ―mother of all disruptions‖ stems from the perspective that it combines disruptive technologies of many component markets. Sterling (2008) notes that firms offering a variety of disruptive innovations are successfully undercutting newspaper‘s traditional business model which has enabled the industry to thrive financially while investing in gathering and presenting news and information. Kung (2015) takes a similar position when she laments that the extent of disruption in the legacy news is sobering. The number of advertising channels has increased and newspapers‘ pricing power in advertising sales has decreased These technological changes introduced by the internet appear to diminish the traditional revenue models of the media industry. The presence of new media, particularly the internet, has presented a challenge to conventional media, especially the printed newspaper. 2
In Nigeria, prior to the early1990s when the internet became a popular medium for communication, the newspaper business enjoyed a high degree of robustness and viability, with daily circulation peaking at two million copies (Igwe, 2004). Although Aliagan (2015) argues that the depression in the newspaper sector predated the onset of the Internet and new media technologies especially with the introduction of the Structural Adjustment Program (SAP) in 1986 which made newsprint unaffordable and pulverized the Nigerian middle class. However, it was not until Internet technologies became widely available that the crisis in the newspaper industry became manifest. At a conference organized in Lagos in 2010 by the Advertisers Association of Nigeria (ADVAN), experts and media scholars raised alarm on the deteriorating state of the newspaper industry and warned that unless something urgent was done to address the situation, the industry may become extinct.This distress call followed a survey by ADVAN which uncovered that circulation figures for all the newspapers in Nigeria were ridiculously lower than the industry had claimed in the past. For instance, the agency noted that for the 15 newspapers surveyed, which comprised of the leading paid-for dailies in the country, all did not have a combined daily circulation of more than three hundred thousand copies (ADVAN 2010)
In Canada, a similar scenario played out as the newspaper industry, in a decade and a half, lost over 900 jobs and witnessed the closure of more than 22 newspaper businesses across the country
(CNA 2017). A report by the Public Policy Forum, a Canadian think tank, observed that the newspaper industry is at a crisis point due to the decline in traditional media and the fragmentation of the audiences due to the influence of new media.The report added that the loss of traditional advertising and the inability of the industry to offset the loss through digital advertising remained the greatest challenge.The report went further to observe that 82.4 percent of digital advertising served in the country was hosted by the duopoly of Facebook and Google while Canadian media only served 11.5 percent (PPF 2017). 3
Consequently, the newspaper business across the world is facing numerous challenges ranging from the changing times, changes in socio-cultural traits in different societies, demographical changes which inform new audience taste for news, economic challenges, as well as the impact of new technologies (Smith, 1980; Jones and Salter, 2012).
These challenges, which are robbing many newspapers of readership and revenues, have led to the
dramatic closures of many newspaper organisations and the loss of thousands of jobs by journalists.
Analysts in industrial organisations and businesses are of the view that the newspaper industry is
going through what may be its worst financial crisis since the great depression (Barthelemy et al.,
2011). More importantly, the emergence of the internet and the accompanying new media
technologies are said to be disrupting the economic base of the newspaper, as many potential
readers are finding alternative sources of news online (Daily Trust 2012; Jones & Salter, 2012,
p37). The internet has drastically altered the idea of the business model and therefore changed its
practical implications for the newspaper industry and society ( Kramer et al, 2011). It has,
however, been argued that this development is limited to only a part of the world, particularly the
United Kingdom and the United States of America, with newspapers in Asia and Africa said to be
enjoying a boom (Franklin, 2009; Benson, 2010). It is on this premise, therefore, that this study
seeks to make a comparative analysis of the disruptive impact of the internet and digitisation on the
business models of newspapers in two countries: Nigeria and Canada, using a mixed research
method which permits the juxtaposition of qualitative and quantitative data. This research method
will shed more light on the unresolved financial crisis in the industry and adequately address areas
which hitherto were not captured in previous analyses by scholars.
The newspaper industry across most of the world is facing a transformational crisis ( Sterling, 2006;
Siles et al, 2012) or what Harvard Business School professor, Clayton (1997), refers to as an
―innovation dilemma‖: this is the difficult choice between today‘s revenues and tomorrow‘s digital 4
promise. A mass of digital competitors, some serving journalistic content and others vying primarily for advertising revenue, have successfully undercut print newspapers‘ traditional business model. In
Canada, so many legacy news organisations continue to see their newsrooms shrink or close, a situation that has been referred to as ―Digital Darwinism‖ (Solis, 2015). While some have scaled back on the number of days for publication, others have eliminated whole editions and titles or transformed into online-only publications. Classified advertisement, which was once the bedrock and nearly an exclusive franchise of the industry, has been battered by the competition, leaving the newspaper industry struggling for survival. This situation, aggravated by changes in consumer behaviour, reader migration to digital news platforms and audience fragmentation, have continued to undermine the financial integrity of the industry and have ignited a frenzied search for an innovative revenue model that will restore profitability and sustainability to the industry (Kung, 2008).
Similarly, Nigeria‘s newspaper industry, as part of the world‘s press ecology, has been adversely impacted by these global trends which are incapacitating newspaper economy and constituting a threat to their survival. While it may be absurd and illogical to argue that the hardship that has enveloped newspaper business in Nigeria is a direct fallout of the migration of news readers to online platforms, it is obvious that the loss of news readers to online platforms is an aggravating factor, particularly as the depression in the Nigerian newspaper sector predated the onset of the internet and the new media technologies (Aliagan, 2015). Based on this, the media landscape (in Nigeria) is no doubt facing enormous challenges because of its invasion by ambitious ―journalists‖, ―bloggers‖, and other non-traditional skills and tactics used in news gathering, reporting and distribution. This development led the traditional media to embark on some changes that will enable them to compete favourably with the non-traditional media. The non-traditional media, as a result, embark on changes in ownership, downsizing, and more coverage of soft and sensational news (Koch, 1998). Journalists in the traditional media (newspapers, news magazines, broadcast, cable networks, and radio stations 5
across the country) no longer hide their concerns about the threat that new media pose to old media.
Kalb (1998) cited in Koch (1998) notes that, ―the technological revolutions of the last 20 years and the new business-oriented approach to news-gathering have transformed the ethics, values and standards of journalism‖ (p. 3). Consequently, the newspaper industry in Nigeria has decided to adopt certain measures geared towards cushioning the effect of the change in their business model in order to remain relevant in the marketplace.
In a related development, a study conducted by the Canadian Newspapers‘ Association (2014) observed that newspaper readership levels among youth‘s aged 18 to 25 years had dwindled even before the popularisation of the Internet. This demographic of the Canadian society, the report notes, obtain their news mostly from television. Today, however, more than 65 percent of people aged 18 to
29 years receive their news directly from the Internet and social media platforms - outpacing newspapers, television and radio (Perell, 2016). The Internet, no doubt, exacerbated the situation and brought readership and circulation statistics to dangerously low levels.
A recent study by the Pew Research Project for Excellence in Journalism (2015) reveals that newspapers have been, on average, losing advertising revenue at seven times the rate they have been growing digital revenue. It is estimated that for every $1 gained in online advertising, newspapers have lost $22 on print advertising. The decline in print advertising revenue, particularly classified advertising, means that publishers must search for alternative revenue models to compensate for lost advertising revenue since advertisement has remained the economic pillar of the industry. The search is primarily focused on digital innovations, which the industry hopes will checkmate the activities of internet-based firms like Craigslist, Kijiji, Amazon, Free Classified.com and others whose free classified business models have stolen so much advertising revenue from the news industry.
However, Aliagan (2015) claims that several researchers have discovered the challenges of the newspaper business in Nigeria, especially since the emergence of digitisation, convergence,Internet and 6
new media technologies. However, none of them has attempted to address the important issue of newspaper survival from the disruptive influence of digitisation and the Internet, including looking at measures these newspapers are introducing to cope with the hard times they are facing.
Whenever there is a technological change or innovation, there is reasonable expectation that such change will impact society directly or indirectly. (Dimmick & Rothenbuhler, 1984). The introduction of the Internet in the 1970s and the subsequent popularization of the technology in the 1990s brought such dramatic changes to society. One of the sectors impacted by internet technology is the news industry which business dynamics was altered. The Internet enabled a lot of businesses and innovations that exposed the newspaper industry to numerous competitive threats from the digital world.
Concurring, DeFillippi (2014), explains that the explosion of technology in the last few decades has caused fundamental disruptions within the newspaper industry, leading to both excitement and fear of the future. The emergence of the internet has drastically changed the idea of newspaper business model and has therefore altered its practical implication for business and society. Again, the coming of the
Internet brought newspaper managers into a state of confusion as to the right approach towards its usage (Kramar & Finch, 2011; Jones & Salter, 2012, p37).
Scholarly literature on the disruptive impact of the Internet on the business models of the newspaper industry has been conceptualised as a crisis situation. Crisis, Morin (1976 quoted in Siles et al., 2012) states, ―is the moment when, in tandem with a disruption, uncertainties arise.‖ The American
Press Institute (API, 2008) concluded that the unending crisis in the newspaper industry is a textbook example of disruptive innovation as described by Clayton Christensen, a Harvard professor, in his seminal book The Innovator’s Dilemma (Christensen, 1997). Christensen‘s management theory describes the process by which a product or service, by harnessing new technologies and establishing new business models, takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. In a further analysis, these 7
innovations can emerge in the form of ‗low-end disruptive innovation‘ that could be inferior but less expensive and appeals to customers. Thus, disruptive innovation occurs when the needs of customers are not being met by an existing technology or can be met in a better way by another technology
(Jones, 2010, p30; Christensen & Raynor, 2011).
Most scholarly discourses on the tribulations of the industry reverberate with images of
―death,‖ ―decay,‖ ―crisis,‖ and ―uncertainty,‖ all depicting the seriousness of the situation. Authors have described the current disruptive challenges to the industry as a threat to the survival of the newspaper in the future and have called for an urgent and creative solution to avoid a catastrophic extinction of the print newspaper genre. (Meyer, 2009; Blumer, 2010; Cowan & Westphal, 2010;
Curran, 2010; Mcchesney and Pickard, 2011). Anderson (1991) notes that these issues hold serious consequences for public perception of newspaper‘s vitality and future. McChesney & Pickard (2011) ;
Kumar (2014) both reflecting on the health of the industry observe that the newspaper industry faces an, ―existential crisis.‖ Some scholars and media critics, however, have been less apocalyptic in their perspective and have rather expressed optimism in their assessment of the challenges facing the industry and have dismissed the ―alarmist‖ calls by some media analysts and commentators as journalism‘s tendencies toward episodic framing (Iyengar, 1991), over-amped drama (Welles, 1991) and even a certain degree of tabloidisation (Zelizer, 2009). Pew‘s State of the News Media (2013) also notes optimistically that newspapers are ―stabilising but still threatened‖.
Notwithstanding the polarity of opinions and the discordant tunes sounded by authors and media critics on the subject, there is the undeniable truth that the newspaper industry is in dire need of reinvention both in Canada and Nigeria. It is on this backdrop, therefore, that this research seeks to find ways of ameliorating the decline in newspapers revenue generating formula, with the view of discovering new business models that would keep the industry afloat in the face of disruptive technological challenges. Also, by attempting a cross-national comparative investigation of the impact 8
of digitisation and the Internet on the newspaper economies of both Canada and Nigeria, this study places the Canadian situation at par with that of Nigeria to ascertain their points of agreement and intersection.
1.2 Statement of the Problem
The newspaper industry across the globe is faced with a transitional crisis provoked by the disruptive impact of the digital media which has upended newspapers‘ traditional business models. The industry not only feels the squeeze of competition from giant electronic firms (Craigslist, Kijiji, eBay classified) and social networking sites (Facebook, WhatsApp) but also from giant news aggregators
(Google, Yahoo, Twitter, Amazon) which provide alternative news channels to the consumer. This situation has ignited a frenzied search for new business models that will help the industry become not only profitable and sustainable but also deal with future business model disruptors.The newspaper industry has dealt with past technological disruptions. Why have the Internet and the new media technologies become an albatross? With all the resources available to the industry, why is it a challenge to monetize their products on the Internet? Is this an organizational, institutional or managerial challenge and why, in an age where news is in abundance, is the industry losing consumers to the competition?
Extant literature on the disruptive challenges posed by digitisation and the Internet on the revenue formula of the newspaper industry points to some studies by scholars in both Nigeria and Canada. They include those by Obijiofor (2003); Olukotun (2005); Kperogi (2010); Okoro and Diri (2010), Collis et al (2010); Peters (2010); Ekwo (2011); Christensen (2012); Picard (2014); Franklin (2014);
Odoemelam et al (2016), among others. Although these studies addressed the general nature of the crisis, none attempted a comparative, cross-national investigation into the nature, history, degree, scope and impact of the disruption. Ignacio Siles & Pablo Boczkowski‘s important work entitled ―Making sense of the newspaper crisis: A critical assessment of existing research and an agenda for future work‖ 9
presents a preliminary investigation into this body of work but addressed mostly the crisis in America,
Europe and Asia and only made a casual reference to Africa.
It is, therefore, imperative to undertake a comparative, cross-national study of the newspaper crisis, not only because Nigeria and Canada represent different continents of the world but also to validate and or debunk the position by some scholars that while newspapers in America and Europe are in decline, those in Africa are enjoying a boom. (Siles et al, 2012; Benson, 2010). This study, therefore, fills the research gap in a comparative, cross-national perspective with a critical focus on Nigeria and
Canada‘s newspaper industry, their troubled business models, the industry‘s search for a new revenue model and suggestions on how to reinvent the industry.
1.3 Objectives of the Study:
As a comparative, cross-national investigation on the disruptive impact of the Internet and digitisation on the business models of the newspaper industry in two countries namely, Canada and
Nigeria, this study is guided by the following objectives:
1) Identify the defining characteristics of newspaper‘s traditional business model in Nigeria
and Canada.
2) Establish the differences between the business models of the Internet-based firms from that
of the newspaper industry in Canada and Nigeria.
3) Identify the business model options that are available to the industry to reinvent newspaper
journalism in Canada and Nigeria.
4) Ascertain how the newspaper industry in Canada and Nigeria has been coping with the
challenges posed by Internet technologies to their traditional revenue model. 10
1.4 Research Questions
The following research questions guide this study:
1) What are the defining characteristics of newspapers‘ traditional business models in
Nigeria and Canada?
2) What are the differences between the business models of the Internet-based firms from that
of the newspaper industry in Nigeria and Canada?
3) What are the business model options available to the industry to reinvent newspaper
journalism in Nigeria and Canada?
4) How has the industry been coping with the disruptive challenges of Internet technologies in
Canada and Nigeria?
1.5 Research Hypotheses
The following hypotheses were tested:
i. H1: The emergence of new technologies will significantly impede the growth of existing
business models of the newspaper if the newspaper industry does not reinvent itself.
ii. H2: Reinventing the business models of the newspaper industry will sustain its growth if the
change in the traditional business model of the newspaper is linked to the emergence of new
media.
iii. H3: There is a significant difference between the revenue source of conventional
newspapers and those of online-news providers. 11
iv. H4: The business model options available to the newspaper industry to the reinvent itself
will significantly depend on online-based business models if online-based business models
continue to reveal more viability.
1.6 Significance of the Study
This study has practical, theoretical and academic relevance.
On the practical side, this study will provide managers, industry planners, owners of newspaper organisations with knowledge of the business matrix of the new media and an enhanced understanding of how to integrate new media technologies with existing conventional newspapers to maximize profit. It is a given that the stability and continued survival of the newspaper industry depend on its ability to generate enough revenue to remain competitive, profitable and attractive to investors and other stakeholders. By reviewing and identifying the issues at the heart of the current revenue crisis and offering practical and credible solutions for business model reinvention, this study will help decision makers in the industry direct their strategic initiatives towards achieving a sustainable business model.
On the theoretical level, this study will help demonstrate the link between disruptive innovation theory and the decline in the revenue generating formula as a way of helping those in the industry cope with the challenges of new technologies while remaining competitive in the market place.
Experts in industrial relations warn that disruption will remain a permanent feature of businesses in the coming decades and that understanding the dynamics of disruption will help those in the industry deal with future business model disruptors.
Academically, this study will enrich the literature on business model innovation and disruptive technologies and provide a rich knowledge base and resource for students, scholars and researchers in 12
the field of communication, business and media studies who will benefit from the pool of ideas generated from the findings in this study.
Finally, as a cross-national comparative research, this study will lead to a deeper understanding of the most critical media issues between Nigeria and Canada. It will also open new directions and useful avenues for future researches on relevant and recurring media issues between the two countries.
Hantrais & Mangen (1998) observe that a cross-national comparative research can help sharpen the focus of analysis of the subject under study and lead to the identification of gaps in Knowledge.
1.7 Scope of the Study
The newspaper industry in Nigeria and Canada with its troubled revenue model forms the locus of this study. In Nigeria, a total of 1430 journalists from forty two (42) newspaper organisations were involved in the survey and in Canada, twenty-one (21) journalists from ten (10) newspaper organisations selected from the provinces of Ontario, Manitoba and Quebec were covered. Specifically, this study focuses on the revenue crisis in the industry as opposed to the editorial and content improvement. Johnson, Christensen & Kagermann (2008) believe that the core of a successful business is its revenue model. In addition, the study examines the competitive challenges faced by the newspaper industry from Internet technologies and how complacency and cultural inertia have hindered the newspaper organisations from leveraging the many opportunities presented by the disruption.
Gilbert & Ure (2005), cited in Johnson et al (2010), note that, ―we believe newspapers, in the quest to save their old business model, have failed to capture the growth opportunities created by disruption.‖ In addition, since the research is based on exploratory mixed design, the scope of data generation is restricted to qualitative and meta-analytical data from persons in the industry and members of the public.
13
1.8 Operational Definition of Terms
Locke, Spirduso & Silverman (2007) cited in Creswell (2009) state that terms which individuals outside the field of study may not understand and those that go beyond common language should be explicated. In view of the nature of the study, the following terms call for definition:
Business model: Is a design that articulates and provides the data and other evidence that demonstrates how a business creates and delivers values to a customer. It is also a conceptual rather than financial model of a business.
Disruption: This refers to a transformation in an industry or sector often linked to technological-
based innovation in products, services and or business models. These innovations typically create
business threats and opportunities not nominally predictable from past historical experience and
thus require incumbent participants to engage in strategic behaviour and organisational practices
that represent a departure from past successful and familiar strategies.
Disruptive innovation: This describes the process by which a product or service takes root initially
in the simple applications at the bottom of a market and then relentlessly moves up market,
eventually displacing established organisatons.
Digital Disruption: This is the change that occurs when new digital technologies and business
models affect the value proposition of existing goods and services.
Crisis: This is a significant business disruption which stimulates extensive news media coverage.
The resulting public scrutiny will affect the organization‘s normal operations and could have a
political, legal, financial and governmental impact on business.
Newspaper industry: This constitutes newspaper houses and businesses where serial publications
containing news, other informative articles and advertising are published. It involves both the 14
physical property and the organisational structure involved in the collection, printing and dissemination of information often for financial gains.
Internet: This is the global system of interconnected computer networks that use the internet protocol suite to link billions of devices worldwide. It is also the network of networks that consists of millions of private, public, academic, business and government networks of local to global scope, linked by a broad array of electronic, wireless, and optical networking technologies. For the purpose of this study, the Internet involves the use of this broad network to collect, store, publish and disseminate a wide range of advertisements and news- related information to the general public.
Firm: A firm is a business organisation, such as a corporation, limited liability company or partnership that sells goods and services to make a profit. The firm is often used interchangeably with ‗business' or ‗enterprise‘.
Digitisation: This is the process of coding signals as numbers. When signals are digital, computer technology can be and is involved in all stages of production and distribution of news and media services.
Cross-national comparative research: This is a broad term that refers to the use of qualitative and quantitative research techniques to compare any issue within two different contexts. It is a research method that is adopted when countries are compared in respect to the same concepts with the intention of drawing generalizations and gaining a better understanding of the phenomena under investigation
15
References
Aborisade, P. (2010). How Technology Transforms Journalism Business through Citizen Reporters in Nigeria. Ph.D dissertation submitted to Capella University, U.S.A. Aliagan, I. (2015). Examining Survival Strategies Employed by Nigerian Newspapers against Loss of Readership and Revenues. New media and mass communication, 35 (1), 1-8. Aliagan, I. (2016). Free versus fee: The freemium factor in Nigeria‘s newspapers‘ contents on the web. Journal of Communication and Media Research. 8 (1), 1-14 Christensen, C. (1997). The innovators dilemma, Massachusetts: Harvard Business School Press. Christensen, C.; & Raynor, M. (2011). The Clayton Christensen innovation collection, Harvard Business Review, October 16, 2013. Creswell, J. (2009). Research design: qualitative, quantitative, and mixed methods approach (3rd edition). California: Sage publications. Daily Trust (2012) Kaduna newspaper vendors say online publication disrupts sales. Tuesday, April 17 Ekwo, A. (2011). The Impact of Media Convergence on Africa‘s Democracy: A Nigerian Perspective. Ph.D dissertation submitted to Walden University. Franklin, B. (2009). Evidence Gathering on the Current State of the Welsh Newspaper industry – The Future of Newspapers: A Comparative Assessment. Broadcasting Subcommitte: March 5. Hantrais, L; Mangen, S. (1998). Cross-national research methods in the social sciences: method and management of cross-national social science. Pinter, London. Iyengar, S. (1999). Is Anyone Responsible? How Television frames Political Issues. IL. University of Chicago Press. Johnson, R. & Gutierrez, A. (2010). Reinventing the Business Model of the Newspaper Industry: Electronic Business Models and the Iewspaper industry. The Wall Street Journal as a Case Study. Thesis. Blekinge Institute of Technology, School of Management. Jones, J., & Salter, L. (2012). Digital journalism, Los Angeles: Sage Publications Ltd Jones, M. (2010). ―Accurate as of the timestamp‖ Newspaper Journalism Ethics in a Time of Economic and Technological Change‖, Ph.D dissertation submitted to the University of North Carolina at Chapel Hill. Kung, L. (2015). Innovators in digital news. New York: I.B. Tauris & co Ltd. Kperogi, F. (2011). Webs of Resistance: The Citizen Online Journalism of the Nigerian Digital Diaspora. Ph.d dissertation submitted to the Georgia State University. Kolo, C. (2016). A Long-Term View on the Business Model of Newspaper Publishing: International Comparison and Quantitative Modelling for Germany as a Case in point. Westminster papers in communication and culture. 11 (1) 1-20.
Obijiofor, L. (2003). New Technologies and Journalism practice in Nigeria and Ghana. Asia pacific media educator, 14, (4), 35-56. Accessed from HTTP:/ro. Uow.edu.au/apme/voI1/iss14/4 16
Odoemelam, C.; Okorom, E & Okwudiogor, D. (2016). Domestication of Technology as an Adaptive Strategy in Managing Changes in the Communication Sphere. Presented at the 3rd Ebenezer Soola Communication Conference, University of Ibadan. 28 th – 29 th September 2016. Olukotun, A. (2005). Balancing the Public Interest with Commercial Interest in the Nigerian Media. Paper presented to World Bank Institute/Media Rights Agenda Seminar holding at Regency Exclusive Hotel, Ikeja, Lagos from October 18th – 20 th Oyebuchi, A; Anorue, L. & Obayi, P. M. (2016). Preying on Platforms: A Comparative Analysis of Social Media and Traditional Mass Media Adverts in the 2015 presidential elections campaigns in Nigeria. The Nigerian journal of communication, 13, (1). 30-47 Patel, A. (2010). The Survival of the Newspaper in the Digital Age of Communication, (B. Sc. Hons. Thesis, Undergraduate College, Leonard N. Stern School of Business, New York University) Picard, R. (2014). Twilight or New Dawn of journalism: Evidence from the Changing News Ecosystem. Journalism Studies 15, (5). 17-20 doi 10.1080/1461670x.2014.895530 Picard, R. & Cinzia, Z. (2006). Business Models of Newspaper Publishing Companies. The media future research Initiative, Report #1, May 2006. Picard, R. (2002). The economics and financing of media companies. Fordham University Press, USA. Project for Excellence in Journalism (2008). State of the News Media. HTTP:// www.state of the news media.org. /2008/narrative. Accessed October 28, 2015. Quint, R. (2001). A Historical Overview of the Effects of New Mass Media introductions on the Publishing Industry During the 20th Century. Peer- reviewed journal on the Internet.6, (9), Assessed, November, 2017. Siles, I., Boczkowski, P. (2012). Making Sense of the Newspaper Crisis: A Critical Assessment of Existing Research and an Agenda for Future Work. New media and Society. 14 (8) 1375-1394 Solis, B. (2015). The Rise of Digital Darwinism and the Fall of Business as Usual. Weblog. www.brainsolis.com/tag/digital-darwinism. Assessed October 18, 2015. Sterling, J. (2006). A Plan for US Newspaper Industry Counterattack Against Disruptive Innovators. Strategy and leadership,.36, (1), 20-26. Tran, M. (2014). Revisiting Disruption: 8 Good Questions with Clayton Christensen. American press institute. January 23. Assessed June 10, 2016. Zelizer, B. (2009). The changing faces of journalism: Tabloidisation, Technology and Truthiness, New York, Routledge.
17
CHAPTER TWO LITERATURE REVIEW 2.0 Focus of the Review
This study focuses on the notion of disruptive innovation and or technologies and the emergent crisis in the newspaper industry with comparative emphasis on Nigeria and Canada.
It investigates how the twin forces of digitisation and the internet are devaluing newspapers‘
traditional business models in both countries. It shows how the erosion of the revenue base of the
industry has provoked a frantic search for new business models that will restore profitability and
sustainability to the industry and how the industry is responding to this disruptive change.
Currently, much effort by newspaper organisations is centred on digital transformation; the
transition from ―fibre to cyber‖, from the physical mode of production and distribution to a digital
form of production and presentation. In developing the framework for the review, empirical
consideration is given to the dependent and independent variables of the study. The dependent
variables, populated by current and contested issues within the newspaper industry, consist of
declining advertising revenue, falling circulation and readership for the print newspaper,
cannibalisation of the print sector from the online counterpart and survival strategies employed by
the industry to overcome the current economic downturn ( Collis, 2010; Franklin, 2010; Siles et al,
2012).
The independent variables, on the other hand, capture those issues outside the newspaper industry which are incapacitating newspaper organisations. They consist of business model disruptors, changing consumer habits, audience fragmentation and the growing number of sources and platforms available to the public to obtain news and information ( Van der Beck, 2005; Meyer,
2009; Collis. 2010). It is expected that because of different economic, political and historical contexts, because of different journalistic logics, and because of differences between the two countries in the pervasiveness of digital networks, both countries may display differences in the 18
degree of impact and the way they respond to the crisis. Consequently, the independent and dependent variables are examined empirically based on relevant literature under the following sub- headings:
2.1.1 History of technological disruption in the newspaper industry.
2.1.2 The concept of disruptive innovation/technology.
2.1.3 Drivers of disruption in the newspaper industry
2.1.4 Disruptive innovation and the business model/matrix.
2.1.5. Disruptive innovation in the newspaper industry in Nigeria and Canada
2.1.6. Disruptive technology and Canada‘s media landscape
2.1.7. Re-inventing the business models for newspapers in Nigeria and Canada
2.1.8. Measures introduced by Nigerian Newspapers to survive the disruption
2.2. Theoretical Framework
2.1.1 Historical Overview of Technological Disruption in the Newspaper Industry
A discussion of the disruptive impact of Internet technologies on the newspaper industry would require a historical overview of the threats posed by previous media technologies to contextualise and give perspective to the subject matter. The history of the newspaper industry is in many ways the history of technological change (Pavlik, 2010). Technology and innovation are inextricably linked (Kung, 2008). Technological innovations have accompanied newspaper‘s history, from the invention of the printing press to the Internet. Although the newspaper industry has benefited from improvements in printing processes, photography, communication technologies, word processing, publishing software and electronic management systems, the introduction of every new technology has brought challenges and new competitors. Simon (2012) notes that the first was 19
radio, later TV news programmes and currently Internet news providers, of which the latter seems
to have had the most fundamental consequences so far for newspaper publishers.
Picard (2009) and Goldstein (2009) express similar sentiments when they argue that the daily
newspaper circulation has been in long-term decline relative to the total population in U.S., Britain
and Canada since the 1950s, partly due to the steady rise of new sources of news (television, cable
news channels and the internet) over the period. Longitudinal studies within newspaper companies
depict the chronological mutations of newspaper products that resulted from technological
disruptions (Akesson, 2003; SchmitzWeiss and David, 2010; Anderson, 2011). Although the
internet has been touted as the mother of all disruptions because of its disruptive impact on the
newspaper industry, it is not the first time that the industry has faced a massive technological
upheaval. Okoro & Diri (2012) reflecting on the predictions of Marshal McLuhan, the late
Canadian Professor of English, observe that there has been an unequalled surge in the introduction
of new and better information tools, which are increasingly complementing and replacing older
tools of mass information. New media delivery systems, new information processing, storage and
retrieval systems have irresistibly dominated the communication scene.
In the middle of the 19th Century when the electric telegraph began to establish its hold as a potent infrastructure and technology for news dissemination, many in the news business perceived the new technology as a threat and destabilizing force. James Gordon Bennet, the editor of the New York
Herald, wrote in1845 that ―in regards to the newspaper press, it will experience to a degree, that must in a vast number of cases be fatal, the effects of the new mode of circulating intelligence. The scissors- and-paste journalism of the country will be annihilated‖. Without a doubt, the Telegraph, in its early years, posed a threat to the hard-won control of the news by journalists who exercised a monopoly in the production and distribution of news. At the inception, newspapers were astonishingly slow- moving. They received news by post, mostly from correspondents who sent in reports, but mostly by copying stories from other newspapers as part of an exchange system. Standage (2014), in his seminal 20
work, ―The Victorian Internet: The Remarkable Story of the Telegraph and the Nineteenth Century‘s
Online-Pioneers‖, notes that ―the newspapers of the day relied heavily upon their exchanges for news, and of course the intelligence which they gave the readers was meagre, stale and unsatisfactory‖
The establishment of the ―Penny press‖ in the 1930s ushered in competition into the newspaper business. Newspapers became affordable and catered to a wider audience. Elaborate ruses involving fast boats, carrier pigeons, express trains and even semaphore systems meant that newspapers, not businessmen, started getting the news first. Newspapers boasted about the timeliness of their news, and how they have beaten other papers to it. When the telegraph was invented, it upset this rivalry and telegraphs companies would establish a new monopoly over the news. Referencing a report published by Readex Report (2012), the raw news and market information would now arrive first at the telegraph office; newspapers, as well as everyone else, would have to queue for it. This situation, viewed as a threat by early newspapers, meant that they will be dependent on telegraph companies to obtain news.
It not only threatened their economic base but meant that the democratization of the news would be undone.
However, as it turned out, the telegraph became a blessing in disguise. Telegraph could indeed deliver news more quickly and in greater quantity, but they could not distribute it quickly to thousands of people: only newspapers had the distribution networks to reach people faster. Standage observes that
―although the telegraph indeed dramatically altered the balance of power between providers of news and publishers of information, the newspaper proprietors soon realized that far from putting them out of business, it afforded them great opportunities‖.
After the introduction of the electric telegraph which initially posed a threat to the economic base of newspapers and journalists, the next new medium that tried to devalue the business model of the newspaper industry was radio. In Nigeria, the radio started with the introduction of the radio distribution system in the year 1933 in Lagos by the British colonial government under the Department of Post and Telegraphs (P&T). The radio distribution system (RDS) was a reception base for the British 21
Broadcasting Corporation and a relay station through wire systems, with loudspeakers at the listening end. It was not until 1956 when the Nigerian Broadcasting Corporation has established that commercial radio broadcast became operational in Nigeria. The deregulation of the industry led to the establishment of the Federal Radio Corporation of Nigeria (FRCN) in 1978, The Voice of Nigeria (VON) in 1990 and other radio stations under the various state governments. The first radio station to operate in Canada, known as XWA, was licensed in 1919 and by 1928 over 60 stations were in operation. Citing Peterson
(1956) quoted in Randle (2001), ―By the late twenties, radio was rapidly becoming an important competitor for advertising appropriations. The gross advertising carried by the networks jumped dramatically from 4,000,000 in 1927 to 19,000,000 in 1929.
Regarding the disruptive impact of radio on the revenue model of the newspaper industry, Zulien
(1977) notes that ―After the introduction of the electric telegraph which initially posed a competitive threat to the newspaper industry, the next new medium that impacted the economic base of the newspaper industry was radio. It is probably no coincidence that newspaper performance suffered immediately following the emergence of radio and television in the beginning of 20th century (Lucena,
2011). Stephens (2007) agrees and notes that ―radio gave news mongers back their voices, while television restored their faces‖. However, the real impact of radio on the newspaper industry remains a subject of contention among historians and media scholars.
When television made its début in the early 1940s and 1950s, it created fear and panic in the newspaper industry because of its potentials. Davies (2001) states that television would ultimately be one of the greatest competitors to newspapers in the fifty years following World war 11, especially as print journalists were slow to respond to the new medium. it presented newspapers with a new competition for both advertising revenue and consumers' time. No competitor ever gave publishers as many fretful hours as television which grew rapidly in the post-war period. It became the arch-enemy of the newspaper industry by syphoning away badly needed advertising revenues. The lack of advertising revenue, followed by television's impact on tens of millions of fascinated viewers 22
ultimately led to a decline in both newspaper readership and circulation ( Randle, 2011). Ohaja (2005), quoted in Okoro & Diri (2012), agrees with this observation and notes that when the electronic media were introduced, they had an edge over newspapers because they were presenting the same condensed report as the latter but at a faster pace and in a form that clearly matched reality. Finally, although there were similar consequences to the advent of these extraordinary technologies, the newspaper industry has faced a steeper set of challenges adjusting to the current disruptions by internet technologies and business model innovations.
2.1.2. The Concept of Disruptive Innovation.
Innovation is about change. We live in a world where media products and services are changing at a break-neck speed. The processes of production and distribution of media services, including the roles of media consumers are also changing dramatically. Media researchers have always been preoccupied with media change: their development, their political, social and economic contexts, new formats and new forms of user involvement in the production and consumption of media messages (Storsul & Gideon, 2008).
Disruptive innovation is an innovation that has a significant impact on a market and on the economic activity of firms in that market. This concept focuses on the impact of innovations as opposed to their novelty (Oslo Manual, 2005. p58). Similarly, owing to the conflicting literature on the definitions of disruptive innovation, its clarifications and attributes, Yu and Hang stated that Christensen‘s (1997) description of a disruptive innovation, along with some clarifications, in their 2010 paper: ―disruptive innovation happens in a process‖ and may be defined as innovations ―that provide different values from mainstream technologies and are initially inferior to mainstream technologies that are most important to main-stream customers‖, but later help to establish new markets or disrupt incumbent organisations by displacing existing technologies. Raynor (2011) observes that disruptive innovation in its simplest sense is a theory of innovation of how particular types of new products and services, or
‗solutions,‘ come to achieve success or dominance in markets, often at the expense of incumbent 23
providers.‖ Similarly, Conradie et al, (2013), note that the logic of the process underlying the impact of disruptive innovation can be described as follows: that a disruptive innovation has a certain dynamic that endangers incumbents.
Again, Assink (2006) defines disruptive innovation as about doing something unlike that is likely to change the game in the industry. ―A disruptive innovation is an innovation that transforms the complicated, expensive services and products into things that are so simple and affordable that you and
I can use them‖ (Christensen, 2002). In the same vein, Christensen (2013) indicates that most of the times at the beginning of an industry, the services or the products that are available are so complicated and expensive that the only people who can participate are people with a lot of money. Christensen‘s thesis posits that a disruptive technology is an innovation that transforms a product that historically was so complicated and expensive that only people with a lot of money and a lot of skill had access to owning and using it, into a product or a service that is so much more simple and affordable that a much larger population of people can now own it and use it.‖ It‘s not a breakthrough. The meaning of
Christensen‘s work is simplicity and affordability. ―A disruptive innovation describes a process by which a product or service initially begins as a simple application and then moves up market, eventually displacing established competitors.‖ ―An innovation that is disruptive allows a whole new group of consumers to have access to a product or service that was originally only accessible to those who could afford it" (Christensen, 2002, 2012).
The concept of disruptive innovation has been broadened by some authors and other scholars who classify and apply the concept in a broader sense (Danneels, 2004; Dan & Chieh, 2008).
Christensen (2006) recognizes that disruptive innovation has been improved by other authors and sees the building of theory as an ongoing process. However, it is worthy of note that the concept of disruptive innovation first started as disruptive technologies. At the inception, Christensen (1997), as well as other scholars (Sterling, 2008; Raynor, 2011) used both disruptive innovation and disruptive technologies interchangeably detonating (denoting?) the interconnectedness of both concepts. 24
However, Christensen (1997) acknowledges that it was a mistake to have replaced the word
‗technologies‘ with ‗innovations‘ judging from the fact that different kinds of innovations have different competitive effects and produce different kinds of markets. Therefore, they should be treated as distinct phenomena.
In the same vein, there are other concepts such as ‗disruptive technological innovation‘, disruptive business model‘ and ‗disruptive product innovation‘ that appears to be competing in meaning with disruptive innovation. For instance, Markides (2006) identifies a different strand of innovation which he calls business model innovation which is the discovery of a fundamentally different business model in an existing business. He opines that to qualify as an innovation, the new business model must enlarge the existing economic pie, either by attracting new customers into the market or by encouraging existing customers to consume more. Govindarajan & Kopalle (2006) identify high-end and low-end disruptive innovation. High-end disruptive innovation is innovation with higher-per unit margin than established offerings, but with different performance features that mainstream customers do not value at the time of introduction, so it serves a small niche before it disrupts the market.
To this, Christensen (1997) argues that although he agrees that all these innovations threaten the incumbent in the marketplace at their emergence, they should not be considered the same; rather they should be treated as different entities. Since disruptive innovation allows a whole new population of consumers at the bottom of a market access to a product or service that historically was meant for customers with a lot of money and skills (Christensen, 2013), this research tends to unravel the disruptive business model innovation affecting the business matrix of newspaper industry in Nigeria and Canada.
2.1.3. Drivers of Disruption in the Newspaper Industry. 25
No set of industries have experienced more disruptive change than the publishing industry especially, its floundering flagship, the newspaper industry. DeFillipi (2014) explains that the explosion of technology in the last few decades has caused fundamental disruptions within the publishing industries, leading to both excitement and fear of the future. It is therefore important for legacy news organisations to understand the drivers of disruption and devise strategies for coping with these so that threats may be turned into opportunities. The rapid increase in the use of mobile devices for personal use and work, a shift sometimes referred to as the ―consumerization of information technology‖ (Gartner, 2012) has increased the potential for digital disruption across many industries especially the media. Reflecting on the phenomenal increase in the use of mobile devices to access news, The Reuters Institute for the Study of Journalism (2016) observed that ―the second wave of disruption‖ has hit news organisations around the world, with ―potentially profound consequences for both publishers and the future of news production‖. Pew Research Center for Excellence in Journalism
(2015) refers to the surge in the use of mobile devices to access news as the ―Mobile Majority‖ and observes that at the start of 2015, 39 out of 50 news sites get more traffic from mobile devices than from desktop computers. The implication for the above statistics for newspaper organisations in
Nigeria and Canada is obvious. Statista (2016), a media research company, notes that the number of smartphone users in Nigeria is estimated at about 15.5million. And for the same period, Canada has a smartphone penetration rate of 75.8 percent.
In Nigeria, the same factors driving disruption in the newspaper industry in other parts of the world are also present as new media technologies like smartphones, tablets and other portable devices have revolutionalised the way consumers access news, share and push news among communities. The digital landscape has also changed the way agenda is set and opinions are shaped. Writing for the
Premium Times in ―The Nigerian Media: Evolution, Trends and Projections for 2018‖ Okusaga observes that, ―today in Nigeria, there are clear signs of the eclipse of traditional media as once vibrant traditional news media are struggling to fund their operations, given the dwindling circulation 26
numbers, shrinking advertising patronage and the hot contest from nimble, cost-effective, smart and widely accessible digital news platforms. Similar to the reality on the global scene, digital technologies are also fundamentally altering the nature and function of media in Nigeria. p15‖
Other drivers of disruption in the newspaper industry include the pervasiveness of social media like Facebook, YouTube, WhatsApp, Twitter and others involved in content distribution. In a recently released survey across 26 countries conducted by Reuters Institute for the study of Journalism research on the use of social media, the report notes that virtual technologies such as Facebook and other social media outlets have moved beyond being ―places of news discovery‖ to become the place people consume their news. It adds that while there still seems to be a big appetite for news, it is to social media platforms that users are increasingly turning to find it and that Facebook is the most powerful force in global news, potentially offering publishers access to vast audiences but regrettably, leaving them dependent on the whims of its algorithm. The study found Facebook was the most common source used by 44% of all those surveyed, to watch, share and comment on news thus overtaking television as young people‘s main source of news. In Nigeria, another important trend, aside from the consumption of news through social media, is the ability to employ social media to lubricate the engines of commercial promotion. For artisans and small business owners and entrepreneurs, social media is a life- saver, allowing them to advertise cheaply and efficiently.
DeFillipi (2014), writing on new challenges and opportunities in the creative industries document factors driving disruption in the publishing industry. They include the availability of hardware and software for digital content creation, digital platforms for content aggregation and distribution, participatory culture, crowdsourcing content production, collapsing industry boundaries and globalisation. Each of these factors has fuelled the disruptive patterns that are evident in the newspaper publishing industries. Additionally, the technology of the Internet, social forces driven by social media, globalisation shifts in market demand and innovation supply capabilities, the development of new portable digital devices with greater capabilities and smaller size, and the 27
decreasing costs of new information technology, all these are creating a ―tsunami‖ of disruptions within the newspaper industry.
In their framework analysis, Steglich et al (2015) have identified four key drivers of disruption in the newspaper industry and how they are connected. They include:
1. Increased content supply in the attention economy
2. Increasing power of the individual
3. Increasing role of technology in the core business
4. Traditional business model is no longer financially viable.
The first category refers to the over-abundance of information or content on the internet; from
blogs, niche publications, and content aggregators to social media platforms. The second points to
the democratization of news and the increased power conferred on the consumer as a creator and
distributor of content. Both can be broadly subsumed under the category of market participants.
While the third point alludes to the infrastructural changes in the industry, the fourth point describes
the devaluation of the traditional revenue or business model of the newspaper industry which has
been rendered invalid by disruptive market forces. Figure 1 below illustrates the disruptive forces
and how they are inter-related. 28
Figure 1. Source: NZZ. Laboratory, 2015.
2.1.4. Disruptive Innovation and Business Matrix.
Being considered the lifeblood of entrepreneurial activity, innovations have been recognized for long as a major source for creating competitive advantage, generating economic growth and technological progress (Schumpeter, 1934). However, a systematic analysis of the innovation- performance relationship in start-ups is missing (Rosenbusch et al. 2011), and a better understanding of what makes a successful innovation and innovation process is needed (Rothwell, 1992; Leifer et al.
2000; Becheikh et al 2006). This holds true especially in the case of disruptive innovations where uncertainties regarding their market potential and acceptance prevail (Assink, 2006). To this end, several researchers (Selhofer et al, 2012) have tried extensively to differentiate between
‗disruptiveness‘ and the ‗radicalness‘ of innovation. The authors, however, contend that disruptiveness 29
is a market-based dimension which refers to the extent an emerging customer segment sees added value in the innovation at the time of its introduction. While radicalness, by contrast, is a technology- based dimension and refers to the degree of novelty rather than to the impact in the market. An innovation can be ‗radical‘ in this sense without becoming disruptive.
One type of innovation that tends to be disruptive to established competitors is business-model innovation. In earlier work (Markides, 1997, 1998), called this type of innovation strategic innovation, which is a confusing term. Business-model innovation captures the essence of this type of innovation without ambiguity. Business-model innovation is the discovery of a fundamentally different business model in an existing business. For example, Amazon and Barnes and Noble compete in the book retail business in fundamentally different ways. Similarly, Charles Schwab, EasyJet, and Dell compete in their respective industries in substantially different ways from their competitors, such as Merrill Lynch,
British Airways, and HP (or IBM). In fact, the introduction of a new business model in an existing company comes without the discovery (discovery) of new products and services – the innovators
―redefine what an existing product or service is and how it is provided to the customer.‖ In case of disruptive innovations, the new model is initially centred on different key success factors and addresses different customer segments, but over time may improve in traditional criteria as well and then extend its service to the former customer segments. While this thought is fully in line with Christensen‘s model, Markides disagrees that disruptive (business model) innovations will necessarily dominate the market at one point and replace the former model. No doubt, genuinely disruptive innovations are the ones that result in the creation of entirely new markets and business models. Few companies have introduced these innovations.
Disruptive innovations appeal to customers who are unattractive to the incumbent companies.
Christensen (2012) maintains that companies that want to create new growth businesses should seek disruptive opportunities because industry leaders will not be motivated to pursue them. The successful disruptive innovators always target customers who welcome simple products and affordable (simple 30
and affordable products). The disruptive business model strategy needs to be sure that it is unattractive to every powerful incumbent (Dewald & Bowen, 2010). Robles (2015) supports the view of ( Dewald
& Bowen, 2010; Christensen,2012) when she opined that established companies in industries as diverse as airlines, media and banking are seeing their markets invaded by new and disruptive business models. The success of invaders such as EasyJet, Netflix and ING Direct in capturing market share has encouraged established corporations to respond by adopting the new business models alongside their established ones (Markides & Oyon, 2010). Raynor (2011) suggests that all disruptive innovations stem from technological or business model advantages that can scale as disruptive businesses and move upmarket in search of more-demanding customers. These advantages are what enable the extendable core. They differentiate disruption from mere price competition.
Furthermore, Christensen (2002, 2012) identifies the following as some of the initial signs of disruptive businesses: lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics. This is because companies tend to innovate faster than their customers‘ lives change, most organizations eventually end up producing products or services that are too good, too expensive, and too inconvenient for many customers. By only pursuing sustaining innovations that perpetuate what historically helped them succeed, companies unwittingly open the door to disruptive innovations. In the subsequent paragraphs, I will now detail examples of disruption in the Nigerian economy, specifically, the newspaper industry. Disruptive influences permeate most sectors of the Nigerian economy; however, my examination of the phenomenon will be limited to the newspaper industry and other servicing agencies like advertising and public relations as they relate to the newspaper economy.
2.1.5. Disruptive Technology in the Nigerian Newspaper Industry.
As earlier pointed out, disruptive innovation is not peculiar to a country, company or limited to any sector, but one that has a universal leaning. Across the world, the newspaper business is facing many challenges. These are brought about by the challenges of the changing times, changes in socio- 31
cultural traits in different societies, demographic changes which inform new audience taste for news, economic challenges, as well as the impact of new technologies (Smith, 1980; Jones & Salter, 2012).
Since Nigerian newspapers are part of the media ecology, they are not insulated from the disruption created by the emerging technologies in altering the business formula of an existing business model of the traditional newspaper industry.
In a study carried out by Aliagan (2015), on Examining Survival Strategies Employed by
Nigerian Newspapers against Loss of Readership and Revenues, the researcher sought to find out the measures adopted by Nigerian newspapers, facing decline in readership and revenues, to survive the harsh business climate and how effective these measures have been in sustaining newspaper businesses.
To ascertain this, the qualitative research paradigm was employed alongside in-depth interviews which saw 11 senior editors of seven selected Newspapers interviewed to generate data in Lagos state. At the culmination of the research, the researcher noted that the findings arising from his study generally agreed with the theories of Destructive Innovation and Creative Disruption that when a business organ reaches a cultural lock-in stage, to break even and avoid bankruptcy or total extinction, such a business must undertake some fundamental survival strategies, which conform with the postulations in other studies as cited in this work.
In the discussion of his findings, Aliagan (2015) posits that it is assumed that the newspaper industry in Nigeria presently is recording loss of readership and revenue, but the extent of the loss is unknown. However, it is considered by the majority of the respondents to be substantial as to necessitate drastic revenue drive by the newspapers. For instance, the total circulation figure quoted for
2009 when the survey by ADVAN was conducted was 295, 000 copies. The year was a non-election year, hence the slide in the figure compared to 530,000 recorded in 2007 which was an election year, and 570,000 in 2003, another election year. However, there has been a general decline from 500,000 recorded in 1999 to 295,000 recorded a decade after (Newspaper Circulation Check 2009, p.17-18). 32
This buttresses the argument that the newspaper industry in Nigeria is experiencing a depression. A further pointer to this is that no newspaper in Nigeria presently makes the list of the first 100 newspapers in the world in terms of ranking.
To corroborate the above assertion, Abati (2016) in an article entitled The Future of the Print
Media in Nigeria: Not Yet an Obituary,noted that it has not been easy managing the media, particularly the print media in any part of the world in the last two decades. Newspapers all over the world within the period have moved gradually from a season of prosperity to dwindling fortunes, and in the last decade, many have faced a chronic existential crisis, resulting in a re-thinking of the business model or the adoption of new strategies of survival or the bitter reality of bankruptcy, downsizing, mergers and acquisitions or outright disappearance from the news market. The world of the newspaper and the technology for producing it and even the nature of news has changed dramatically. Globally, advertising revenue for newspapers has dwindled as advertisers seek greater visibility and reach for their messages. Many have had to lay off staff or reinvent the identity of the newspaper by migrating from the physical print form to the digital space. By far, the greatest factor responsible for the contraction of the print media has been the rise of digital media, or social media which has changed the nature of the delivery of news, the nature of the practice and which has also significantly raised questions as to the identity of a journalist as a professional.
A consideration of the future of the print media in Nigeria is to be situated within this context. For in every sense, and even more, the global fate of the newspaper has been reproduced in Nigeria, prompting the same concerns as expressed elsewhere, whether or not the print media are likely to survive or disappear as we know them, in the face of the onslaught of Facebook, Twitter, Instagram, blogs, WhatsApp, and the ubiquitous mobile phone – all of which now deliver news in the form of fast food, in a formulaic manner, with little or no restrictions even if without the substantive thought that offers the kind of education that a newspaper is well suited to provide. Technological advancements 33
and new modes of innovation have also made the radio and the television far more interactive and expressive than cold print. Demographically, the younger population is moving more in the direction of the new media, and its many dimensions, whereas an older population continues to romanticize the unique feeling and pleasure that is derived from burying one‘s head in a newspaper and the fresh smell of print (Abati, 2016).
Again, in another study carried out by Olley & Chile (2015) on readers‘ perception of Nigerian newspapers on the internet, the researchers noted that the internet has turned out to be the greatest challenge faced by the newspaper industry. This is obvious as the internet has proven to be the most damaging in its attack on newspapers especially in the areas of the classified advertising business.
There was a time in history when the classified advert was the exclusive franchise of the newspapers industry and the marriage of newspapers and the internet is yet to translate into financial success for the older medium. However, they inferred from the findings of their study that the online publications do not have significant effects on the actual sale of hard copies, as most respondents still buy the hard copies after reading the online ones.
Aborishade (2015) supported this ongoing thought, when he observed in his study on the emerging cyber media: the beginning of a new media and the end of old media, that with the convergence and movement of traditional news media to cyberspace, the future of the old media appears to be bleak as their market share is shrinking and their business matrix is on a spontaneous decline. In the same token, Kperogi (2011), in his scholarly submission, notes that it is no doubt that the kaleidoscopic nature of informational and cultural flow in the age of globalisation through technological innovations in the media of communication have challenged the existence of the traditional mainstream media, especially with the way it has redefined its business model over time.
More so, in a related study by Obijiofor (2003) on new technologies and journalism practice in
Nigeria and Ghana, the researcher observed that the emergence of new technologies in newspaper 34
journalism – video display terminals (VDTs), pagination systems, computer graphics terminals, the
Internet, interactive multimedia systems and digital telecommunications — has dramatically altered traditional newsgathering processes and production formats. In trying to investigate the perceptions of
Singaporean and Nigerian journalists on how new technologies are transforming the journalism profession in both countries, Obijiofor (2001) noted that though the diffusion of new technologies was slow in Nigeria, the new technologies were regarded in both countries as facilitating unethical journalism practice. However, with the emergence of new technologies, which are used in news reporting and production, tradition is increasingly giving way to new methods of journalism practice.
Notable in the scholarly inquisition of Obijiofor (2003) is that 96.2% of the journalists interviewed from both Nigeria and Ghana opined that new technologies have improved rather than harmed the quality of newspapers in their countries. No journalist said that new technologies have harmed the quality of newspapers.
On the contrary, Nworah (2014), cited in Agboola (2014), on the influence of new media on conventional media in Nigeria, notes that the Internet has led to a decrease in the revenue of some of the media organisations in Nigeria, while at the same time increasing their costs, as money would have to be invested into setting up such websites, and also paying the staff that would constantly maintain them. However, if we are to go by global trends which foretell an increase in internet advertising usage and revenues, then any incidental costs will eventually be offset by the expected advertising revenues, hopefully.
This statement is in consonance with the argument of Aborishade (2012), on nontraditional skills and tactics and modern technology. The researcher did agree that the emergence of ‗bloggers‘ and ‗Internet journalists‘ no doubt, have altered the business model of traditional newspapers in Nigeria and the world in general by citing examples of individuals who used the internet to solicit for financial support from readers of their blog in order to offer them credible pieces of news that would get them gratified. 35
For instance, Chris Allbritton, former wire-service staff writer made history when he asked his readers to send him money to cover the war in Iraq (Gillmor, 2004). Amazingly, the readers responded to his request and he was mobilized to go to Iraq and cover the war to the satisfaction of the donors and he continues to receive financial support from the readers for his media work. Joshua Micah Marshall, the author of a political blog, ‗Talking Point‘ received $4,000 from his readers in 2004 to cover the US presidential primaries and his coverage was one of the best that came out of the presidential primaries in New Hampshire (Gillmor, 2004). Also, Sahara Reporter, an online news publication which reports on the sub-Sahara Africa solicits donations from the reading public to keep the website running.
Omoyele Sowore, the operator of the website, said the publication does not accept donations from any government to preserve the publication‘s editorial independence and public donations are without any string attached (Aborisade, 2010).
The new business model introduced to the media landscape by ‗bloggers‘ and other forms of online news media clearly shows that independent news producers can get paid for their creativity like the above-mentioned bloggers who were paid by their audience to cover news for them. This model clearly shows how ordinary citizens can do journalistic work for non-commercial reasons (Gillmor,
2004). This is a total departure from the practice in the traditional media where funding is by media owners and journalism is done for a commercial purpose. Therefore, for the new business model to be successful, the audience must be interested in the type of news the independent news producers offer them. It is to this end, that Aborishade (2012) observes that this mutation in a business matrix of traditional newspapers will continue provided citizen journalists do the bidding of the audience and have a good relationship with them and not just those who pay them for news coverage. Also, the new model will go a long way to help citizen journalists and other online independent news producers stay in business. 36
The foregoing studies, no doubt, have laid credence to the fact that technological innovation in the media industry across the world has affected the business model as well as the modus operandi of traditional newspapers. With Nigeria as part of the media ecology of the world, her newspaper industry is not insulated from this challenge threatening to face out traditional newspapers from the business.
2.1.6. Disruptive Technology and Canada’s Media Landscape
Canada has one of the most developed newspaper economies in North America and second only to the hyper-competitive United States newspaper market. According to the Canadian Newspapers
Association (2016), a non-partisan body that collects information on newspaper circulation and readership, Canada has about 103 daily newspapers; 90 of these papers are paid - for, while 13 papers are free publications. Circulation figures for both paid-for newspapers and free daily newspapers stand at 5.1 million copies on an average publishing day. In addition to the daily newspapers, there are about
1,060 community newspapers in Canada and 1,160 editions with total circulation figures of 20.6million copies each week and the majority of circulation is controlled, accounting for 19.7million copies weekly (CCNA, 2016). Furthermore, almost all newspapers in Canada have established an online presence as a direct response to the changing market environment. Newspapers have become major
Internet players and therefore need to compete with broadcasters, citizen journalists and online-only news providers. Referencing the European Commission newspaper report (2013), the Internet and digitisation have affected the value chain of news production, aggregation, distribution and consumption in fundamental ways.
While most newspapers have launched websites, and offer RSS feeds, blogs and apps for mobile devices, they still also need to bear the costs of their physical product. In this respect, online-only news providers have a competitive advantage. In Canada, 8 of the top 15 internet news sites belong to traditional media: The Globe and Mail, The Toronto Star, CanWest, Power Corporation, CTV, Cbc.ca,
Quebecor and Radio -Canada. The rest are controlled by CNN, BBC, Reuters, MSN, Google and 37
Yahoo. (Zamaria & Fletcher, 2008). Although the internet news sites owned by traditional news corporations in Canada enjoy significant traffic, advertising revenues derived from them are not substantial to offset the costs incurred by the print sector. Munoz, et al (2014) makes an interesting observation:
In Canada, consumers and marketers have almost completed the migration toward digital products. As readers opt for free online news and real-time reporting, advertisers are spending less money on print and more on web-based campaigns. Even though publishers have embraced ―digital first‖ strategy, which has increased their web-generated revenue, the new revenue stream has not offset the deficit in print advertising revenue. Meanwhile, total daily newspaper revenue in 2015 fell to
$1.4billion down 12.6 percent from 2014. Online advertising revenue for the overall industry was
$228million, a mere increase from the figure reported for 2014 which stood at $226million. According to IBIS world (2016), a marketing research company and industry analyst, the newspaper publishing industry, once the hallmark of the Canadian media sector, is reeling because of competition from digital platforms. Following the rising adoption of tablets and mobile devices, coupled with next-generation broadband and the app revolution, consumers are increasingly going online for their news, hurting demand for industry products.
Given that Canada has a more mature media ecosystem than Nigeria in terms of availability of infrastructure and the prevalence and availability of digital networks in the country, it is no surprise that the Canadian newspaper industry has felt the pinch of digital disruption more than Nigeria and other developing economies. A recent report by PWC‘s Global Entertainment and Media Outlook
(2013-2017) notes that Canada‘s newspaper industry will witness a decline in advertising and circulation revenues by over 20 percent over the next four years and suggests that the industry was worth 2.1 billion dollars in 2013. The report continues that the industry‘s revenue will drop to 1.7 billion dollars in 2017 and that print advertising revenue, which has provided over 80 percent of the 38
industry‘s earnings in the past, will be worst hit by the disruption. John Stackhouse, one-time editor-in- chief of Globe and Mail, one of Canada‘s national newspapers, notes with nostalgia that indeed
―advertisers used to be craven supplicants; they would plead for a way into the fat weekend paper, or call in favours to get their ad near the front of a section, or pay exorbitant rates to get their message in print. Profits from classified ad were 90 percent which is about the same as crystal meth. When
Canadian newspapers lost $480million from 2007 to 2012, 80 percent of the loss was in a classified advertisement.
The demolition of advertising models for papers was rapid‖. Various research groups predict that despite layoffs, organisational transformation, consolidated production and syndication, the newspapers publishing revenue will continue to decline. More newspapers continue to shut down operations, eliminate titles, cut down on publishing days and or, transform to online-only publications.
For instance, in January 2016, Montreal-based La Presse, one of Canada‘s oldest and largest newspapers eliminated print publication and opted for an online-only digital publication. Additionally, two more newspapers, The Guelph Mercury in Ontario and the Nanaimo Daily News in Vancouver, shut down operations in February 2016 citing dwindling revenues and ―inability of management to develop a sustainable business model‖.
Greenslade (2016), reflecting on the recent closures of newspapers note that ―the scale of the crisis is deepening. Barely a week passes without news of redundancies, closures and staff cuts due to rapidly falling advertising revenue alongside a gradual fall in circulation revenue‖.
Newspaper organisations in Canada are fighting back by introducing various remedial measures and experimenting with new business models to curb the continued erosion of their revenue base.
Gartner (2015) notes that newspapers remain in experimental mode, faced with competing consumer platforms, devices, and business models which has a chilling effect on the path to digital future. Some of the most recent measures introduced by news organisations in Canada include the following: 39
1. Paywalls. This involves a situation where subscription is required for readers to access the
website. There are two forms of paywall: Hard paywalls, where all content is blocked, and
access is only through subscription and Soft paywalls, which typically allow readers to access a
limited number of products for free.
2. Subscriptions. Different newspaper organizations are exploring different subscription models,
especially for their digital offerings, depending on readers and their habits.
The choices range from monthly, yearly, by the device, print only and so on.
3. Dedicated apps. This allows news organizations to segment content by offering apps or other
formats that focus on one topic such as financial information, sports and entertainment.
4. Content plus experience (Freemium models). Some organizations charge for content on some
platforms but offer it free to others. Typically, the information is freely available on the
organization‘s website, but tablet applications require a subscription fee.
5. Digital assets production (extended services). Some media organizations are providing
marketing, design and advertising consulting services to clients, managing their digital assets.
6. Read- now- pay- later model. This is one of the recent measures introduced by newspapers to
attract readership and boost online revenue. Known as a read-now-pay later model, it
encourages website visitors to choose and read stories of their choice for a cost of 27cents per
story and then pay at the end of the month. This model is gaining momentum in the industry and
was started by the Winnipeg Free press. In the Netherlands, Blendle, a journalism Startup,
spearheaded a similar model that aggregates articles from newspapers and magazines and sells
them on a pay-per-article basis. It has been called the ―iTunes for news‖ in various media. 40
7. Video news. Most news organizations in Canada are currently using video as a means of
reaching out to news consumers. This method is not necessarily driven by editorial. It is used
because the advertisement rates on the video are higher than they are on web advertising. The
Globe and Mail and Toronto Star, two of Canada‘s largest dailies are currently using the video
model.
8. Digital Teams. Most organizations have dedicated digital teams, usually a department within
the organization. They are made up of developers, project and product managers. These are
people who have the digital skills regardless of their professional background. Their mandate is
to create new ads, collaborate with agencies and create platform user experiences. Some
organizations have transformed themselves into digital-first products and are operating like a
―digital Startup Company‖.
2.1.7. Re-inventing the Business Models for Newspapers in Nigeria and Canada
Internet and digitisation are changing the newspaper industry at an extraordinary pace by offering technologies for e-commerce, social networking, news, entertainment and other freely available content on the web. As more content distribution moves to the web, readers are moving online to read the news and share articles. At the same time, aggressive news services have become important intermediaries in the dynamics of newspaper circulation (Karimi et al, 2015). These developments have put pressure on news organisations to reinvent their business models, expand their portfolios and seek other sustainable avenues for monetizing their products and services. They are under pressure to comprehensively reinvent their business models and value creation logic (Graham et al, 2004). There are currently no solid guidelines as to which direction new business models should evolve as news organisations are still looking for feasible e-business models for building success in the digital environment (Hoppe & Breitner, 2003). 41
What is a business model and when does an organisation require a new business model? Teece
(2010), notes that a business model articulates the logic, data and other evidence that support a value proposition for the customer, and a viable structure of revenues and costs for the enterprise delivering that value. Zott & Amit (2010), on the other hand, observe that a business model depicts the ―content, structure and governance of transactions designed as to create value through the exploitation of business opportunities‖. Magretta (2002) in her definition contends that a business model is stories that explain how enterprises work. A good business model answers Peter Drucker‘s age-old question: who is the customer? And what does the customer value? It also answers the fundamental question: How can the organisation make money from the business? ―In Reinventing Your Business model‖ by
Johnson, Christensen and Kagermann (2008), the authors explain the circumstances (when it should happen, why it should happen) under which an organisation should seek to remake their business model. Some of their key assumptions that are relevant to this study are as follows:
1. A new business model is required when there have been significant changes to the four key
elements of the existing model. These four elements are the customer value proposition (CVP),
profit formula, key resources and key processes.
2. The need to fend-off low-end disruptors.
3. The need to respond to a shifting basis of competition.
From the ongoing discussions, it is evident that the newspaper industry in Nigeria and Canada is ripe for a business model reinvention given the disruptive impact of digitization and internet technologies on their traditional business model. Picard (2003) observes that the newspaper industry has been resistant to change for 300 years but the pressure on the industry is increasing among other things from mobile telephony, content provisions and internet capabilities. Peters (2010) writes about the moribund newspaper industry and argues that the traditional business model of news organisations is no longer 42
valid and offers suggestions for a diversified revenue scheme based on government loans, advertising and donations from the public. Larry Kilman, secretary general of World Association of
Newspapers and News Publishers notes that as the ―traditional revenue model of circulation sales and advertising revenue continues to erode, the search for new sources of revenue must be accelerated by news organisations and this may include anything from product sales unrelated to journalism‖
The media landscape in Nigeria is no doubt facing enormous challenges because of its invasion by ambitious ―journalists‖and ―bloggers‖, and other non-traditional skills and tactics used in news gathering, reporting and distribution. This development led the traditional media to embark on some changes that will enable them to compete favourably with the non-traditional media. The non- traditional media have also embarked on changes in ownership, downsizing, and more coverage of soft and sensational news (Koch, 1998). Journalists in the traditional media (newspapers, news magazines, broadcast, cable networks, and radio stations across the country) no longer hide their concerns about the threat that new media pose to old media. Kalb (1998) cited in Koch (1998) notes that ―the technological revolutions of the last 20 years and the new business-oriented approach to news- gathering have transformed the ethics, values and standards of journalism‖ (p. 3). Consequently, the newspaper industry in Nigeria has decided to adopt certain measures geared towards cushioning the effect of the change in its business model in order to remain relevant in the marketplace. However, some scholars (Patel, 2010; Okoro &Diri, 2003) are optimistic that despite the current challenges to its revenue base, the newspaper industry will certainly survive based on the following:
1. The newspaper industry has transformed into a news and information business. Information has
never been more important to man. There is currently an abundance of it available and as a
result, consumers are beginning to develop specific needs from the information they consume.
Newspapers are in a fortunate position because they have the expertise and credibility to cater to
these needs and provide the kind of news being demanded. 43
2. Newspapers have a long history of adaptation. While they are not known to be very flexible and
accepting of change, they have faced the surge of the radio and television, and have continued
to survive as one of the most credible sources of information. In fact, with the surge of the
Internet, we have seen the industry take on an approach of trial and error to find a survival
formula.
3. The introduction of devices has made experiencing news more exciting in a variety of ways. It
is essential to note that consumers are no longer just reading the news but in fact, are
experiencing it. While the computer is not too exciting, it allows consumers to download
informational podcasts and videos. In contrast, e-readers provide consumers with a more
interactive experience; they recreate the experience of reading a newspaper by allowing
consumers to turn the page with their fingers and place it in their bag. Essentially, these are
devices that include all the advantages of a traditional newspaper without the disadvantages.
4. Individual decision-making is key to survival in society and newspapers are essential to this
process. They help keep individuals informed and updated with what is going on; with respect
to the community and world, and provide credible information that consumers can depend on.
This demand for good and trustworthy information is not going anywhere, and therefore there
will always be a demand for what newspapers do.
2.1.8. Measures Introduced by Nigerian Newspapers to Survive the Disruption
In the Nigerian context, Aliagan (2015) identified some of the following as the measures adopted by
Nigerian newspapers in order to keep afloat with the changing business matrix. They are:
1. Cutting operational cost: The newspapers achieve this by cutting down on staff recruitment.
Unlike the 1960s and 80s when newsrooms were thriving, there are now fewer trained journalists in newsrooms of Nigerian newspaper offices. This has brought about increased reliance on News 44
Agencies as one of the primary sources of news. The newspapers also generate online news and reviews to augment shortfalls. There are now numerous online sources of real-time news. Rather than have too many reporters they cannot sustain, many of the newspapers generate additional news from online sources. The newspapers also create the position of online editors whose responsibility, with his team, it is to generate online news content and edit where necessary and include them in the newspaper.
These newspapers use breaking stories from online media which are acknowledged in their print editions. Beyond this, there are also numerous online articles and discussion fora that the newspapers find relevant and handy to copy in each of their editions. Many Nigerian newspapers have, in this way, circumvented cost of generating news.
2. Online presence and adverts: Most Nigerian newspapers have online editions. The online presence was at first seen as status symbol. It is thus, aimed at differentiating between elite newspapers and those struggling for survival. Online news was first introduced by the defunct Post Express newspaper (Vision 2020, p.30). Since the internet became the vogue in the newspaper business,
Nigerian newspapers have followed the global trend. Newspapers include their online status as a bargain for advert values. They also generate advertisements from their online platforms, which they use to augment earning from hard copies. However, in view of its limited space and lesser cost, earning from online advertisements is far lesser than that from hard print as confirmed by a majority of the respondents. This is in tune with what obtains in other parts of the world as documented in a study by
Patel (2010).
3. Minimizing the online content: The newspapers tactically do not upload all their contents online, as a way of making the hard-prints more relevant. Most times, Nigerian newspapers upload only the lead stories and prominent contents online. Items such as reviews, feedback columns, cartoons, pull out magazines, etc, are only featured in the hard copies of the newspapers. By this tactic, the online 45
versions of the Nigerian newspaper are seen as incomplete; hence some readers who want to enjoy the full reading experience rather buy the hard copies.
4. Publishing of advert and important notices only on hard-prints: To draw interest to their hard-prints, the newspapers often choose to publish some very important advertisements and public notices only on the hard print versions of their newspapers. Such public notices and advertisements by government agencies or industrial giants relating to jobs, recruitment, calls for an interview, scholarships, etc., often do appear only on hard-prints on specific days. For instance, in the The
Guardian newspaper, Tuesdays and Thursdays are scheduled for publication of job vacancies. In the
Nation newspaper, job vacancies are published on Tuesdays. The attempt to preserve the important advertisements and public notices for only hard-prints makes the traditional newspaper relevant to individual groups of people like job-seekers and employees of some government agencies and parastatals who must read them to have necessary updates. Only short advertisements appeared to feature on the online format in all the newspapers selected.
5. Improved graphics: The era of improved printing technology has also led to greater input in the aesthetic value of the newspapers. High-quality photograph, beautiful graphic designs and excellent layout have all become part of the newspaper selling point in Nigeria currently. The attention paid to making newspapers beautiful is indeed aimed at making them more attractive to the reading public.
Towards this end, the Nigerian newspaper newsrooms have progressed from analogue page planning to computer programmes like Adobe Page Planner, CorelDraw, to In-design which is the latest page design/planning technology. Newspapers planned with these programmes are beautiful to behold, and with improved printing quality, newspapers are lush and aesthetically appealing. This has led celebrities and event managers associating with newspapers. Many of them prefer their events published on the pages of hard-print newspapers and are sometimes willing to pay advertisement rates to have them published. 46
6. Niche Publications (Pullouts and Magazines): Many Nigerian newspapers have established pull-out celebrity magazines, otherwise known as niche publications. These are sometimes included either on Wednesday papers, weekend and/or Sunday editions. The magazines, usually given alluring names, are also printed on beautiful glossy pages. They are printed in mart or gloss paper instead of newsprint and inserted into the newspaper. They contain soft content like celebrity interviews, fashion tips, home management information, among others. In This Day newspaper, the weekend magazine is called Style, in Vanguard it is Allure, in Sunday Trust, Tambari and in The Guardian, Life. Society women who are not known to be very keen readers of soft sell publications from the larger audience of these mid-week or weekend magazines. These niche publications are offered to readers for free unlike what obtains in other countries in which niche publications are sold to generate income. However, it is discovered that the cost is passed on to some personalities or organizations featured in the publications.
The Sun, The Nation and Punch do not have niche publications.
7. Public Lectures and Awards: As part of their efforts to sustain themselves or raise fund and shore up their public rating, Nigerian newspapers also organize and host public lectures and awards.
The public lectures are seen by the newspapers as an opportunity of playing a part in engendering discourses on good governance and human rights in the country or promoting certain good causes.
Awards given by the newspapers range from ‗Man of the Year‘,
‗Brand of the Year‘, ‗Best Governor of the Year‘, ‗Best Product of the Year‘, ‗Best Performing Agency of the Year‘, ‗Best Upcoming Brand of the Year,‘ etc. These awarded personages or brands are made to pay some money or grant the newspaper some financial privileges as part of the conditions for receiving the awards. Though these can best be described as unethical, the newspapers are able through these to raise money for their operations. Also, some of the times, the newspapers propose and or get involved in the organization of symposia or public discourse where a different agency or international 47
organization plays host. Their participation sometimes earns them some fee, which they use to augment their funding.
8. Social media interface: As a way of appealing to a younger generation of readers, many
Nigerian newspapers have introduced online social media interface. Many of them are on Facebook,
Twitter, Google+, etc., through which they popularize their news content. But importantly, some of them are creating chatrooms where readers can interact with one another and discuss the news and some issues of national importance. Vanguard Online Community floated by Vanguard newspaper is a typical example of the online social forum/chatrooms run by a Nigerian newspaper.
9. Mobile (online) Newspaper: Beyond the social media fora, some of the newspapers in Nigeria are also floating their newspapers on mobile platforms. The mobile platforms prompt a subscriber once there is a news update. But importantly, they direct the reader to seek the hard-print copy and buy, because the mobile platforms sometimes have restricted contents.
What is coveted in mobile prompting is the reader‘s curiosity towards the news or information piece. In some cases, the readers buy the copies of the newspaper to read the news content they find interesting.
Newspapers involved in this service use some of the mobile telecommunication networks such as Glo,
MTN, and Etisalat. For instance, The Guardian, Daily Trust, Vanguard, and Punch use the mobile prompting which news readers subscribe to at a fee for the weekly or monthly news update. These services are further promoted on the websites of the newspapers and on the hard print copy.
10. Retainers: This refers to a situation where the newspaper agrees to a signed or non-signed agreement with a certain level of government (federal, state or local) or an agency of government, or a business interest to run regular news coverage on them in exchange for advertisement placement or payment of money at the end of a certain period. It must be noted that, in this case, the news reporting style is promotional and therefore, must portray the client in good light. This study reveals that some
Nigerian newspapers have a retainer agreement with one agency, state government, business or the 48
other as agreed by some of the respondents. Though a few of the respondents deny this, the evidence - the number of advertisement patronage the newspapers acquire, the language of reporting the agencies in question corroborate this observation.
11. Content page subscription: This is a situation where a business or group with special interest subscribes to a certain number of pages of the newspaper to market brand or ideas. Some of the times, they are made to pay, or other times they do not. However, it is understood that the content of the subscribed page is strong enough to generate stronger interest for the newspapers. Sometimes, it is by a group that has a large followership that could generate more subscription for the newspaper or goodwill with a group or the public. The MTN foundation supplement in The Sun newspaper is one such example, while the Ibru Foundation supplement in Sunday Guardian and Youth Column in The
Guardian is another example.
12. Political leaning and ethnic loyalty: Some newspapers latch on to political or ethnic loyalty to break even. Whereas most newspapers in Nigeria are published from Lagos which is regarded as the hub of Nigerian press, it has emerged that certain ethnic sentiments are employed by newspaper publishers to corner the market. For example, The Nation is regarded as a pro-Western Nigeria newspaper and its content often sympathetic to the values and political aspirations of the western
Nigerians, mainly of Yoruba tribe. To this extent, a greater number of advertisements- apart from products- this newspaper gets are from southwesterners in government or private sector, and mostly concern activities of westerners. The Sun newspapers, though a tabloid has pro-Eastern Nigeria inclination, and hence derive most of its adverts from the Igbo of Eastern Nigeria. A little of this is also seen in the ‗Vanguard‘ newspaper. Daily Trust is viewed as pro-North, and hence their advertisements mostly come from the northern part of the country.
13. Columns/Columnists: Columns and columnists have always played great parts in the success of newspapers. Nigerian newspapers still make very good use of columnists to achieve this end. 49
Depending on the leanings- ideological/ political, ethnic/Nigerian, newspapers employ the services of very good columnists who write for them on specific days. Some of these columnists become the reason certain class of readers buy certain papers on specific days. Some of these powerful columnists include Funke Egbemode, (Intimate Affairs, Sunday Sun), Reuben Abati (Crossroads, Guardian on
Friday), Idowu Akinlotan (Palladium, The Nation on Sunday), Simon Kolawole (Thisday, Backpage),
Mohammed Haruna (Daily Trust, Wednesday).
14. Multimedia publishing (Online Televisions): This is a recent innovation which is already trending among Nigerian newspapers. Here, the newspaper reporters record their interviews with both audio and video devices. While the audio is transcribed and published in the newspaper, the video is uploaded on the newspaper‘s website for online streaming. Thisday online, Vanguard online and
Punchng.com are some of the online platforms that have incorporated video streaming as part of their website.
15. Supplements: Supplements are promotional features in newspapers paid for by businesses or agencies of government to a newspaper, which placed or caused them to be placed in the newspapers.
These supplements, sometimes, are sold by the newspapers at advertisement rates; sometimes at a subsidized rate - if they are regular as agreed to by a majority of the respondents. Many Nigerian newspapers occasionally secure supplement placements, and this comes often during celebrations - like
Democracy Day, 100 Days in the office of government officials, or other special events. The income generated through supplements is used to augment the earnings and funding of the newspapers.
2.9. Comparing Nigeria and Canada’s Newspaper Ecosystems
One of the critical highlights of a cross-national comparative study is the advantage it offers the researcher to compare countries applying a certain phenomenon that helps to illuminate differences and similarities between them. Consequently, Nigeria and Canada share similarities and differences in 50
their respective newspaper economies. These differences and similarities can be accounted for under the following headings:
1. Size: Canada, unarguably, has a more developed and mature newspaper economy than Nigeria.
With 103 dailies and over 1060 community newspapers, in addition to a plethora of ethnic and
specialized news publications, the newspaper landscape in Canada is almost saturated. Daily
circulation figure is estimated at about 5.1 million copies, excluding unique visitors to the
websites operated by the newspapers. Canadian newspapers employ a total of 13,280 journalists
according to Statistics Canada (2016) report with a yearly average earning for a journalist put at
$46,261 (Service Canada, 2016). There are several professional and independent institutions
monitoring and collecting data on newspaper circulation and readership in Canada. Some of
them are Newspapers Canada, the Newspaper Audience Bank (NADBANK), Canadian
Community Newspapers Association, (CCNA) and the Print Measurement Bureau (PMB),
which recently changed its name to VIVI data. Others include Canadian Media Circulation
Audit (CMCA), Canadian Advertising Rates and Data (CARD) and the Alliance for Audited
Media (AAM). On the other hand, Nigeria has one of the most vibrant newspaper organizations
in Africa. The country boasts of over 100 local and national titles some of which are
government-owned. There are also well-respected dailies, tabloids and publications which
champion ethnic interests. Due to the lack of an independent audit body, it has been difficult to
establish a reliable circulation and readership data among the Nigerian newspapers, a situation
that has been called deplorable by media scholars. The most recent data on the industry in
Nigeria was conducted in 2009 by the Advertising Association of Nigeria (ADVAN), which put
total daily circulation figures at 295,000 copies. Aliagan (2015) notes that to buttress the
argument that the newspaper industry in Nigeria is distressed, ―no newspaper in Nigeria
currently makes the list of the first 100 newspapers in the world in terms of ranking‖. Again, a 51
2014 World Trend data on the top 50 paid-for-dailies in the world did not include any Nigerian
newspaper.
2. Ownership: Apart from newspapers operated by state governments, the majority of the titles in
Nigeria are owned by individual investors who see great opportunities for profit and service in
the industry. A list of ten most popular newspapers in Nigeria The Guardian, Punch, Premium
Times, Daily Independent, Daily Trust, Leadership, Vanguard, This Day, Daily Sun, Tell - are
all privately-owned and managed by individual proprietors who, sometimes, are members of the
editorial boards of the company. There are concerns about media ownership in Nigeria which
has been widely documented (Ukonu 2005, Ohaja 2005, Okoye 2002). Tommy (2014) posits
that government-owned media are converted to government stooges, while privately-owned
media find that they are forced to pander to the wishes of their proprietors, especially in an
environment like Nigeria where political parallelism is the dominant trend in media ownership.
Similarly, in Canada, there are serious concerns about ―media concentration‖ and the fact that a
small number of companies control large media empires. There is growing concern that this
scenario will lead to a monopoly of ideas, limit options, and impact the quality of information
consumers receive but media owners argue that this is the only way media outlets can survive in
the new global economy. A report recently released by the Canadian Media concentration
Research project (CMCRP) reveals that ―in terms of who has control over Canada‘s English-
language media scrape, four companies account for more than 70% of the media landscape‖.
Winseck (2012) argues that these companies and other vertically integrated media
conglomerates have curbed the emergence of new services they perceive as a threat to their
interests.
3. Availability of digital networks: Developments in digital technology especially those
provoked by web 2.0 have made it imperative for media firms to change their methods of 52
conducting business to leverage the opportunities offered by the digital disruption. However,
this transition requires the availability of the infrastructure to enable both firms and individuals
transit to the new ways of conducting business. In terms of the pervasiveness of digital
networks, Nigeria trails behind Canada. Although internet usage is sitting in an enviable
position, skills and access to computers and other modern technologies necessary to achieve a
digital society are absent. Obijiofor et al. (2001) found that there are serious barriers to the use
of new technologies in educational and socio-economic development, such as issues of
infrastructure support, access to the technologies, training and skills development and
hierarchical social relations which determine who has access to new technologies.
2.2 Theoretical Framework
Siles et al (2010) have noted that one interesting feature of the research on the newspaper
crisis is that scholars have adopted various theoretical lenses and resources to make sense of the
crisis including the economies of advertising (An, Jin and Simon, 2006; Picard & Van Weezel,
2008); Management theory (Fortunati & Sarrica, 2010; Kurpius et al, 2010; Picard & Van Weezel,
2008); Scholarship and Organisational behaviour (Gade, 2008); Sociological and Cultural theory
(Compton & Benedetti, 2010; Usher, 2010), New Institutional theory (Lowery, 2011); Legal theory,
(Bollinger, 2010; Calvert, 2009); and, even Neuroscience (Fuller, 2010).This section, therefore,
reviews some of the theories as are considered apt for this study. They include the following;
a. Diffusion of Innovation Theory
b. Technological Determinism Theory
c. Disruptive Innovation Theory
d. Creative Destruction Theory
53
Diffusion of Innovation Theory
This theory was proposed by Lazarsfeld, Berelson & Gaudet in 1944. This theory traces the process by which a new idea or practice is communicated through certain channels over time among members of a social system. The model describes the factors that influence people‘s thoughts and actions and the process of adopting a new technology or idea (Asemah, 2011). Diffusion is the process by which an innovation is communicated through certain channels over time among members of a social system. It is a special type of communication concerned with the spread of messages that are perceived as new ideas. On the other hand, innovations can be a new product or output, a new process or way of doing something or a new idea or concept (Asemah, 2011).
Similarly, Rogers (2003) defined innovation as an idea, practice, or project that is perceived as new by an individual or another unit of adoption. An innovation may have been invented a long time ago, but if individuals perceive it as new, then it may still be an innovation for them. Therefore, the main essence of diffusion of innovation theory is to communicate to members of the social system a discovery or ideas based on research. Thus, this theory considers the mass media as a veritable tool in disseminating new ideas that will be relevant to members of the larger society through a chain of opinion leaders, early adopters and the final adopters. Rogers (2003) described the innovation-diffusion process as ―an uncertainty reduction process‖ (p.232), and he proposes attributes of innovations that help to decrease uncertainty about the innovation. Attributes of innovations include five characteristics of innovations: (1) relative advantage, (2) compatibility, (3) complexity, (4) trialability, and (5) observability. Rogers (2003) stated that ―individuals‘ perceptions of these characteristics predict the rate of adoption of innovations‖ (p.219). Also, Rogers noted that although there is a lot of diffusion research on the characteristics of the adopter categories, there is a lack of research on the effects of the perceived characteristics of innovations on the rate of adoption. To this extent, Asemah (2011) argued that some scholars have criticised this theory as the supremacy of the media have been questioned in terms of its viability in the dissemination of information. They have stipulated that the mass media 54
cannot convince people as such to an extent instead, they were of the view that interpersonal communication is combined with the mass media to give an effective result (p.163). Attitude change takes place because of inter-related variables and not because they listen to media messages. This is to say that people can decide on their own to adapt to new innovations but not because they listen to the radio or watch the television or have read the newspapers (Asemah, 2011).
The implication of this theory on the media is that media practitioners are expected to use the language that will be easily understood by the audience whenever they are disseminating new ideas and innovations to the people. This, therefore, implies that they must consider the target audience. There is also the need to combine the mass media with interpersonal communication for effective and successful diffusion. Consequently, this theory‘s relevance to this study lies in the fact these diffused innovations that were announced by the mainstream media at their arrival seem to have subverted their business models thereby threatening their existence.
Technological Determinism Theory
This theory was propounded by Marshal McLuhan in 1964. Technological determinism is a reductionist theory that presumes that a society's technology drives the development of its social structure and cultural values. The term is believed to have been coined by Thorstein Veblen (1857–
1929), an American sociologist. The first major elaboration of technological determinism came from the German philosopher and economist Karl Marx, whose theoretical framework was based upon the idea that changes in technology and production technology are the primary influence on the organization of social relations, and that social relations and cultural practices ultimately revolve around the technological and economic base of a society. Marx's position has become embedded in contemporary society, where the idea that fast-changing technologies alter human lives is all-pervasive
(Smith et al., 1994). This theory holds that the media not only alter their environment but the very message they convey. This theory states that technology, especially the media, decisively shape how individuals think, feel and act and how societies organise themselves and operate (Asemah, 2011). 55
Technological determinism seeks to show technical developments, media, or technology as a whole, as the key mover in history and social change (Kunz, 2006). Most interpretations of technological determinism share two general ideas: that the development of technology itself follows a predictable, traceable path largely beyond cultural or political influence, and that technology, in turn, has "effects" on societies that are inherent, rather than socially conditioned or produced because that society organizes itself to support and further develop a technology once it has been introduced. Strict adherents to technological determinism do not believe the influence of technology differs based on how much a technology is or can be used. Instead of considering technology as part of a larger spectrum of human activity, technological determinism sees technology as the basis for all human activity.
However, it has certain criticisms from scholars. Modern theorists of technology and society no longer consider technological determinism to be a very accurate view of the way in which we interact with technology, even though determinist assumptions and language fairly saturate the writings of many boosters of technology, the business pages of many popular magazines, and much reporting on technology. Instead, research in science and technology studies, the social construction of technology and related fields have emphasised more nuanced views that resist easy causal formulations. They emphasise that "The relationship between technology and society cannot be reduced to a simplistic cause-and-effect formula. It is, rather, an 'intertwining'", whereby technology does not determine but
"...operates and are operated upon in a complex social field" (Murphie & Potts, 2003). Prominent opposition to technologically determinist thinking has emerged within work on the social construction of technology (SCOT). SCOT research, such as that of Mackenzie & Wajcman (1997) argues that the path of innovation and its social consequences are strong, if not entirely shaped by society itself through the influence of culture, politics, economic arrangements, regulatory mechanisms and the like.
In its strongest form, verging on social determinism, "What matters is not the technology itself, but the social or economic system in which it is embedded" (Langdon, 1977). 56
Although "The deterministic model of technology is widely propagated in society" (Miller,
1997), it has also been widely questioned by scholars. Green (2001) explains that "When technology was perceived as being outside society, it made sense to talk about technology as neutral". Yet, this idea fails to take into account that culture is not fixed and society is dynamic. When "Technology is implicated in social processes, there is nothing neutral about society" (Green, 2001). This confirms one of the major problems with "technological determinism and the resulting denial of human responsibility for change. There is a loss of human involvement that shape technology and society" (Miller, 1997).
Another conflicting idea is that of technological somnambulism, a term coined by Winner in his essay "Technology as Forms of Life". Winner wonders whether or not we are simply sleepwalking through our existence with little concern or knowledge as to how we truly interact with technology. In this view, it is still possible for us to wake up and once again take control of the direction in which we are travelling (Winner 104). However, it requires society to adopt Ralph Schroeder's claim that, "users don‘t just passively consume technology, but actively transform it". Media and cultural studies theorist
Brian Winston, in response to technological determinism, developed a model for the emergence of new technologies which is centred on the Law of the suppression of radical potential. In two of his books –
Technologies of Seeing: Photography, Cinematography and Television (1997) and Media Technology and Society (1998) – Winston applied this model to show how technologies evolve over time, and how their 'invention' is mediated and controlled by society and societal factors which suppress the radical potential of a given technology. This theory is therefore relevant to this study in several ways as it tends to ascertain the effect of technological inventions or innovations on humans and the society.
The Disruptive Innovation Theory (Clayton Christenson 1997)
As the review of literature has shown, this theory is associated with the works of several scholars
(Schumpeter, 1942; Mcinsey & Foster, 1986; Henderson and Clark, 1990 See table 1 below for a timeline of the evolution of the theory). However, the works of Schumpeter (whose ideas of innovations were first horned by Karl Max) popularized the theory. Innovation is a concept with 57
multiple meanings. In the most pedestrian perspective, it means something new. In the innovation literature, however, it is often separated from an invention (Fagerberg, 2006). While an invention is a new idea or a new theoretical model, an innovation is the implementation of this invention in a market or a social setting (Godo, 2008). An innovation can be based on existing technologies and off-the-shelf products. It implies that existing knowledge is implemented in new contexts and that this opens new possibilities. One of the major contributors of theoretical insight into innovation was Joseph
Schumpeter, who was influenced by Karl Marx. Schumpeter was concerned about what caused long- term economic instability. He maintained that economic change while promoting innovation and growth, generates ―gales of creative destruction‖ (cited in Godo, 2008).
Disruptive innovation has proved to be a useful analytical tool for understanding how technological innovation has played an important role in shaping many industries in society. The term disruptive innovation as a scholarly concept has roots in the academic work and theory promulgated by
Harvard School Professor Clayton Christensen in his seminal work ―The Innovators Dilemma‖
(Christensen, 1997). Christensen coined the term to describe a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up the market, eventually displacing established competitors. These disruptive innovations, citing DeFillippi
(2014), typically create business threats and opportunities not nominally predictable from past historical experience and thus require incumbent participants to engage in strategic behaviour and organisational practices that represent a departure from past successful and familiar strategies and practices.
Typically, companies tend to innovate faster than their customers‘ needs evolve and by so doing, some companies end up producing products and services that are too sophisticated and complex that they overshoot the needs of their customers. This ironic situation, ultimately, creates a loophole that unwittingly opens the door to disruptive innovations at the bottom of the market. 58
Christensen (2013) notes that an innovation that is disruptive allows a whole new population of consumers at the bottom of the market access to products and services that were historically only accessible to consumers with a lot of money or skill. Christensen distinguishes between Sustaining innovation and disruptive innovation. While disruptive innovation is the one that changes the basis of competition in an industry, for example, mainframe computer and personal computers, sustaining innovation perpetuate the current dimensions of performance, for example, Intel developing faster and faster chip speed.
The concept of disruptive innovation shows how successful companies can be upended by new technologies that first appear as cheaper products with fewer features, but improve quickly and ultimately take over. This development is one that is common today and can be discerned in all facets of human development, especially since the emergence of technological innovation, digitization and its application to every sector of economic development. From healthcare, education, banking, transportation, communications, media, commerce to social life, the disruptive impact of innovation can be felt. However common this concept might seem to be, there is no universally accepted definition as to how distinct it is from non-disruptive (incremental) innovation.
Scholars like Selhofer et al (2012) have argued that any innovation is disruptive by its nature
(p.17). As already mentioned in this chapter, the concept of disruptive innovation and its implications for entrepreneurship and competitiveness can be dated back to Schumpeter‘s work (1942) on creative destruction.
The Creative Destruction Theory (Joseph Schumpeter 1942)
The first systematic attempt to connect inventions and economic activities and development was first made by the Austrian economist, Joseph Schumpeter, who first coined the paradoxical term, creative destruction, to denote the special form of economic growth that entrepreneurs bring to the capitalist system. He argued that it was the entrepreneur's introduction of radical innovation into the capitalist system that was the real force that sustained long-term economic growth, even as it destroyed 59
the economic value of established enterprises who may have previously enjoyed monopolistic power.
In Schumpeter‘s evaluation, the net economic benefit from the radical innovation, in spite of the destruction of existing economic value, was greater than if the radical innovation was never introduced.The life cycle of an economy is therefore explained through changes in the level of innovation activities and that competition under capitalism is not about decisions, but a race to discover new technologies and ways of doing business that expands the range of available products, change daily life and destroy existing industries. For Schumpeter (1942), creative destruction implies the ―the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.‖ The strategic stimulus to economic development in Schumpeter's analysis is innovation, defined as the commercial or industrial application of something new -a new product, process, or method of production; a new market or source of supply; a new form of commercial, business, or financial organization. Below is a timeline of the evolution of disruptive innovation theory which lists major research in the field, starting with Schumpeter‘s postulation. Below is the table showing this evolutionary trend:
60
Table 1: Disruptive innovation theory: timeline of evolution
Year Research
1942 Schumpeter: Creative Destruction in ―Capitalism, Socialism and Democracy‖. Harper & Brothers
1986 McKinsey & Richard Foster: Technology S-curve and ―Discontinuities‖. Innovation: The attacker‘s advantage. NY: Summit Books
1990 Henderson and Clark: Architectural Innovation
1991 Geoffrey Moore: Crossing the Chasm. Marketing and Selling Technology Products to Mainstream Customers. NY: Harper Business.
Clayton M. Christensen: The Innovator‘s Challenge: Understanding the 1992 Influence of Market Environment on Processes of Technology. Development of the Rigid Disk Drive Industry, Dissertation; ―Exploring the limits of the technology S-curve‖, in Production and Operation Management, 1(4), 334357
1997 Clayton M. Christensen: The Innovator‘s Dilemma; 7 papers on related issues
2001 Richard Foster and Sarah Kaplan: Creative Destruction: Why Companies That Are Built to Last Underperform the Market–and How to Successfully Transform them. NY: Doubleday
2003 Christensen: The Innovator‘s Solution Source: Yu and Hung (2010) cited in Selhofer et al (2012)p122.
61
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Gillmor, D. (2004). We the media: Grassroots journalism by the people, for the people. Sebastopol, CA. O‘Reilly Media Publications. Green, L. (2001). Technoculture, Boston. Allen & Unwin. Greenslade, R. (2016). Media Crisis Deepens: Retrieved on October 10, 2016, from www.theguardian.com. Hoppe, R. and Breitner, C. (2003). Business Model Development in Newspaper Publishing Industry: A Case Study. Los Angeles: Sage Publications. IBIS World Report. (2016). Newspaper Publishing in Canada. Retrieved on October 20, 2016, from www.ibisworld.ca. Johnson, M.W., Christensen, C. M., Kagermann, H. (2008). Reinventing Your Business Model. Harvard Business Review. 87 (12), 52-60 Jones, J., & Salter, L. (2012). Digital Journalism, Los Angeles: Sage Publications Ltd. James, T. (2014). Living the media culture. Journal of philosophy, culture and religion.4 (1),17-22 Koch, K. (1998). Journalism under fire. CQ Researcher 8, 47. Retrieved on October 28, 2011, from CQ Researcher Online. http://library.cqpress.com.library.capella.edu Kperogi, F. (2011) ―Webs of Resistance: The Citizen Online Journalism of the Nigerian Digital Diaspora,‖ PhD dissertation submitted to the Georgia State University. Kung, L. (2008). Strategic Management in the Media: Theory to Practice, London. Thousand Oaks, New Delhi, Singapore: Sage. Kunz, W. M. (2006). Culture Conglomerates: Consolidation in the Motion Picture and Television Industries. Publisher: Rowman & Littlefield Publishers, Inc.p. 2. ISBN 0742540669. Leifer, R. (2001). Radical Innovation: How Mature Companies Can Outsmart Upstarts. Leonard N. Stern, New York University, New York Markides, C. (1997). Strategic Innovation. Sloan Management Review 38(3): 9–23. Markides, C. (1998). Strategic Innovation in Established Companies. Sloan Management Review 39(3):31–42. Markides, C. (2006). Disruptive Innovation: In need of a Better Theory. The Journal of product management, vol. 23.19-25. Markides, C.C. and Oyon, D. (2010). What to do against disruptive business models (when and how to play two games at once). MIT Sloan Management Review, 51(4), p. 25-32. Mcgraw-Hill Professional, New York. Miller, S. (1997). "Futures Work – Recognising the Social Determinants of Change". Social Alternatives 1(1) 57–58. Murphie, A., & Potts, J. (2003). Culture and Technology. London: Palgrave. Obijiofor, L. (2001). Singaporean and Nigerian journalists‘ perceptions of new technologies. Australian Journalism Review, 23 (1): 131-151. Obijiofor, L. (2003). New technologies and journalism practice in Nigeria and Ghana. Asia Pacific Media Educator, 14(1), 36-56. 63
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CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Research Design
This study adopted the mixed research design with emphases on triangulation. The choice of a mixed research design is anchored on the fact that the study collected and analysed both qualitative and quantitative data. Creswell & Clark (2007) state that mixed methods focuses on collecting, analysing, and mixing both quantitative and qualitative data in a single study or series of studies. Its central premise is that the use of quantitative and qualitative approaches in combination provides a better understanding of research problems than either approach alone. It captures the best of both qualitative and quantitative approaches. Creswell (2003) notes that qualitative approach allows room to be innovative and to work more within researcher-designed frameworks and allows more creative, literary-style writing. In this study, therefore, qualitative data were obtained using in-depth interviews.
The survey design was adopted to gather quantitative data. Wimmer & Dominick (2000, p.101) observe that survey has certain well-defined advantages. First, it can be used to investigate problems in realistic settings. Second, the cost of the survey is reasonable, considering the amount of information that can be gathered. Thus, in survey research, the researcher can control expenses by selecting from four major types of survey techniques - questionnaire, telephone, personal interview and group administration. The third advantage is that a large amount of data can be collected with relative ease from a variety of people. The survey technique allows the researcher to examine many variables – demographic and lifestyle information, attitudes, motives, intentions and so on and to use different statistics to analyse the data.
The survey technique was used for this study to generate quantitative data from respondents in selected areas in Nigeria. The adoption of the survey technique as an instrument for generating 66
quantitative data emanates from the fact that it is a potent method of measuring data relating to attitudes, opinion and perception.
Similarly, interviews were adopted for this study to generate qualitative data from journalists in newspaper organisations in Canada. Kendall (2008) points out that interviews often gather more in- depth insights on participant attitudes, thoughts, and actions. Interview data are based on personal interactions which lead to negotiated and contextually based results.
3.2 Population of the Study
In this comparative study, samples were drawn from Canadian and Nigerian populations.
The population of a study, according to Ohaja (2003), refers to all those persons or things that fall
under the umbrella of the topic or that can be examined to address the research problem or meet the
research objectives. This was the total number from which the researcher drew the sample.
The study population had two aspects, the section relating to a survey aimed at generating
quantitative data and the aspect relating to interviews was designed to collect qualitative data. The
qualitative aspect emanated from the interview sessions which were conducted with journalists in
newspaper firms in Canada based on a purposive sampling technique. The objective of the
interviews was to ascertain if newspaper industries in Canada, like their counterparts in Nigeria, are
faced with similar challenges from the disruptive impact of internet technologies and digitization
which have adversely altered the business models of legacy newspapers. The interviews were also
meant to elicit the position of the respondents as to what they thought should be the panacea for the
restitution of the business matrix of the newspaper industry and the survival strategies employed by
the industry to, not only overcome the difficult times but make the transition to the new digital
environment. 67
For the quantitative sampling, respondents were purposively selected from four locations
(Lagos, Abuja, Enugu and Port Harcourt) in Nigeria. Justifying the rationale behind the purposive selection of the four named places, Osuala (2005) states that where the researcher seeks certain characteristics of the population, the purposive technique is most applicable. With this demographic characteristic, Lagos, Enugu, Portharcourt and Abuja can conveniently represent the national newspaper population and, therefore, manifest some of the desired and attributable features.
The population of the study is 1430. This comprised all print media journalists ascertained
through membership of the Nigeria Union of Journalists (NUJ) in Lagos, Abuja, Enugu and Port
Harcourt. Since this study is concerned primarily with a phenomenon in the newspaper industry and
all relevant staff of newspapers in the selected locations constituted part of the population. Also, the
assistance of the Newspapers Proprietors Association of Nigeria (NPAN) was sought to ascertain
the number of registered newspapers in Nigeria. Our search shows that there are currently forty-two
(42) newspapers registered as members. It should be noted that two of the newspapers ( Satelite and
the Tide) were owned by the Enugu and Rivers state governments respectively. Also, 20 percent of
the newspapers were national newspapers, with a wide circulation spanning the length and breadth
of Nigeria. They include The Punch, Daily Trust, Vanguard, This Day, Leadership, National
network and National Mirror. A few other newspapers, even though they were found in Lagos and
Abuja, could not be categorized as national newspapers due to their limited circulation and rate of
readership. Some of them include Verbatim, Press Gallery, the Authority, Peoples Daily etc. (See
the list of newspapers in table 1).
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Table 1: Newspapers in Lagos, Abuja, Enugu and Rivers 1.Punch 22. Daily Independent 2.Daily Trust 23. The Nation 3.Vanguard 24. Verbatim 4. Guardian 25. Union 5. Thisday 26. Tribune 6. Business Day 27. Nigerian Observer 7. Tell magazine 28. National Post 8. National Mirror 30. Leadership 9. News-Star 31. The Sun 10. Nigerian pilot 32. The Nation 12. Peoples Daily 33. The Authority 13. Telecom Digest 34. Inquirer 14. Fresh Fact 35. Sheworld 15. Newswatch 36. Press Gallery 16. New Nigerian 37. The Starlite 17. National Boardroom 38. The Tide 18. Champion 39. The Herald 19. Daily Independent 40. The Post 20. The Nation 41. The Telescope 21. Verbatim 42.The Telegraph
3.3 Sample size determination
The basic sample size for this study was 385. The sample size was calculated by means of the
Australian calculator as developed by the National Statistical Service (2014).
Below is the calculation:
Confidence level – 95% 69
Population - 1430
Proportion – 0.5
Confidence level – 0.04998
Upper – 0.54998
Lower – 0.45002
Standard Error – 0.02550
Relative Standard Error – 5.10
Sample size – 385
However, since there is no assurance of a 100 percent response rate, the National Statistical Service
(2013), as cited in Nwachukwu (2014), states that the number of individuals who would not respond to a researcher‘s survey be considered in calculating the sample population. To solve this problem,
(Cochran, 1977; Fink, 1995; Salkind, 1997; Bertlet, Kotrlik & Higgins, 2001), as cited in Odoemelam
(2015), recommended oversampling when they observed that, ―if you are mailing out surveys and questionnaires… count on increasing your sample size by 40% - 50% to account for lost emails and uncooperative subjects. Oversampling can add cost to the survey but is often necessary.
Again, that the variances of estimates are increased because the sample actually obtained is smaller than the target sample.‖ To calculate for the oversampling, therefore, the researcher assumed a response rate of 95 percent. The calculation is presented below:
N2 = Minimum sample size
------
Anticipated response rate 70
Where anticipated return rate = 95%
Where n2 = sample size adjusted to response rate.
Where minimum sample size = 385
Therefore:
N2 = Minimum sample size = 385
------
Anticipated response rate 95%
N2 = 385
------
0.95 = 405
The sample size for the study is 405 respondents.
3.4.1 Sampling Technique
The researcher adopted the multi-stage sampling design for the research work. Asemah,
Gujbawu, Ekhareafo & Okpanachi (2012) state that, ―multi-stage sampling requires the researcher to choose his samples in stages until he gets the required sample‖ (p.190). Consequently, the multi-stage sampling technique was considered essential by the researcher in simplifying the study by breaking down the population.
First, there was a purposive selection of location based on the criterion that the desired characteristics would be found in those places. In this regard, Lagos, Abuja, Enugu and Port Harcourt 71
were selected ( Ohaja, 2003; Osuala, 2005). The justification is that these states are renowned as hubs of newspaper industries and newspaper production activities.
In the second stage, by directories in these places, headquarters locations of the various newspaper organisations were identified in Lagos and Abuja, while the locations of the state offices of the newspaper organisations were identified.
In the third stage, and to reach the data sources, the field assistants worked very closely with the
NUJ leadership in Abuja and Lagos at the headquarters and with the Correspondents' Chapels in Enugu and Port Harcourt, Rivers State. Specifically, chapel chairmen ascertained chapel membership which enabled the field assistants in the instrument distribution stage.
In the fourth stage, a sample frame was used based on the list provided by the NUJ leadership and chapel chairmen in Enugu State and Port Harcourt, Rivers State. The sample frame aided in a random selection of the elements from the lists provided. This was done through a ballot selection of elements in the sample frame, without replacement, until the desired sample size was selected from the list of the sample frame.
3.4.2 Sampling of Journalist in Canada
Journalists from each of the selected newspaper organisations in Canada were purposely sampled for the interview session, owing to their wealth of knowledge on the modus operandi of the newspaper industry and the challenges facing their organizations as they struggle to stay alive in the face of new technologies. In addition, since the study is focused on the distressed business model and revenue crisis in the newspaper industry, journalists who were interviewed were those that have sound knowledge of the organizational and revenue operations of the selected newspaper firms. They include those working in the sales and finance departments and those who constitute the digital teams of their respective newspaper organizations. 72
The qualitative aspect of the study employed semi-structured interviews, administered on a select group of journalists working in newspaper organizations in Canada. Data collected from the interviews were used to answer the research questions. Our theories are based on the concept of disruptive innovation/technology by Christensen (1997) as well as the theories of creative destruction by
Schumpeter (1942) and digital innovation theory presented by Yoo et al. (2010).
The semi-structured interviews had a qualitative approach that gave the researcher latitude and know-how as to answer the important questions, ―how‖ and ―why‖ (Yin, 1981). Through the process of data gathering, interviews, observations and the interpretation of quantitative and qualitative data, the study explored the existing theory which postulates that while newspaper organisations in North
America (Canada) are in decline, those in Africa (Nigeria) are enjoying a boom. Altogether, twenty- one journalists were interviewed from seven media organizations in Canada. At the inception, interview requests were purposively sent to twenty-seven (27) journalists from 10 newspaper organisations in the selected provinces in Canada. In the end, 21 journalists responded. Of the twenty- one (21) journalists that responded positively, nine insisted on anonymity while six requested that the interviews be held outside the company premises.
The criteria for the choice of the newspapers was based on the 2017 Newspapers Association of
Canada list of newspapers with the highest circulation figures in each of the Canadian provinces chosen for the study. In the province of Ontario, The Toronto Star, The Globe and Mail, The Toronto Sun,
National Post and Ottawa Citizen were chosen for the study. In the province of Manitoba, Winnipeg
Free Press was identified as the most widely read newspaper in the province with a weekly circulation figure of 823,184. The Montreal Gazette, with a weekly circulation of 806,122, and the oldest surviving
English language newspaper in the Province of Quebec, qualified for our study. 73
3.5 Description of Instruments for data collection
The research instruments for data collection for this study were the questionnaire and interview schedule. A description of the questionnaire and interview schedule guide is as follows:
Questionnaire: The instrument is a 28-items questionnaire designed to generate both demographic and psychographic data for the study. It contains dichotomous response questions such as yes or no and multiple- choice questions. Many open-ended questions were included to enable a deeper probing of the phenomenon by the researcher. A total of four field assistants who were familiar with the various locations were used in the administration of the survey instrument. Administration and retrieval of copies of the questionnaire lasted for a period of two (2) months.
Interview Schedule: This consisted of eleven interview items addressing issues in the research questions. The interview was directed at journalists in the purposely sampled newspaper outfits in
Canada. It was aimed at gathering data on the disruptive innovations that are diminishing the business models of traditional newspapers and their revenue generating formula and how the distressed business models can be reinvented, reformulated or reinvigorated to address the challenges of digitisation and internet technologies. The interview guide contains basic questions derived from the research questions.Through telephone conversations, convenient and acceptable interview locations were agreed upon between the researcher and the journalists. Six (6) of the interview sessions were conducted by telephone due to scheduling conflicts.They were recorded and later transcribed and edited for clarity and conciseness. Since the focus of this study is on revenue generation as opposed to the editorial content and orientation of the newspapers, the majority of journalists interviewed were those sufficiently informed about the business and financial operations of the newspaper organisations. The interviews took place from July 2 to August 11, 2017. Each of the interview sessions lasted between 30 to 45 minutes. In addition, the study made a conscious effort to incorporate journalists in the mostly newly created department of digital news to understand the challenges and gains recorded in the current 74
effort to transit from a manufacturing model to a digitalised process of newsgathering, production and dissemination.
3.6 Validity of research instruments
To ensure that the instruments for the study measured what it set out to achieve, experts in mass communication, journalists and the research supervisor examined and scrutinised the instruments in line with the study‘s objectives and determined the validity of the instruments for collecting data for the study. Wimmer & Dominick (2006) corroborate this statement when they note that a valid measuring device measures what it is supposed to measure. The levels of validation included the face (for structure, readability, line spacing and clarity) and content (for relevance, ambiguity and double- barreled question types).
For the qualitative data, some scholars have argued that the term validity is not applicable to qualitative research, but have realised the need for some measure of qualifying check or measure for the research. Based on this, Creswell & Miller (2000) suggest that the validity is affected by the researcher‘s perception of validity in the study and his/her choice of paradigm assumption.
Consequently, validity is measured for the qualitative aspect of this study using rigour and objectivity.
This is associated with being open to the data, scrupulously adhering to specific perceptive, and thoroughness in collecting data.
3.7 Reliability of Research Instruments.
Reliability test is concerned with the degree to which results obtained in a study agree when it is used more than once. Wimmer & Dominic (2011) observe that reliability is arrived at when repeated measurements of the same material results in similar decisions or conclusions. However, since reliability is a component of quantitative research, Healy & Perry (2000) argued that the quality of a 75
study in each paradigm should be judged by its own paradigm‘s terms. Consequently, dependability, neutrality and confirmability were used as the criteria to test for quality in the qualitative aspect of this study.
On the other hand, to determine the reliability of the research instrument used in gathering data for the quantitative design, the test-retest technique was adopted and analyzed with the Cronbach alpha coefficient model. This involved a pilot study which was conducted, using 30 copies of the questionnaire to serve as trial tests. The questionnaires were administered to 30 respondents from Port
Harcourt, Rivers State, which was considered as having similar characteristics with the sampled area of study. After the research instrument had been administered, the data were then subjected to the reliability test using SPSS 16.0 software. This is to ascertain external and internal consistency of the questionnaire when administered to similar individuals for the same responses.
See table below:
3.7.1 Reliability of Instrument (Questionnaire)
Inter-Item Correlation Matrix Education Traditional newspaper Disruptive innovators Variables models Locations 1.000 .040 .042 Traditional newspaper models .040 1.000 .120 Disruptive innovators .042 .120 1.000
Intraclass Correlation Coefficient Intraclass 95% Confidence Interval F Test with True Value 0 b Correlation Lower Bound Upper Bound Value df1 df2 Sig Single Measures a -.007 .115 1.164 374 748 .043 .052 Average Measures .141 -.021 .281 1.164 374 748 .043 Two-way random effects model where both people effects and measures effects are random. a. The estimator is the same, whether the interaction effect is present or not. b. Type C intraclass correlation coefficients using a consistency definition-the between-measure variance is excluded from the denominator variance.
Summary Item Statistics 76
Mean Minimum Maximum Range Max / Min Variance N of Items Inter-Item Correlations .067 .040 .120 .080 2.983 .002 3
The reliability test shows that the instrument had a reliability coefficient of (M=0.67, r=080, P<.043). This indicates high consistency or reliability coefficient of .80. 3.8 Method of data presentation and analysis
The convergence model of triangulation design was employed in analysing the data. In
this model, quantitative data and qualitative data were analysed, separately. They were finally
compared before interpretation of both sets of data was made. The quantitative data generated were
analysed with the aid of the Statistical Package for Service Solutions (SPSS) 20.0 version. The
questionnaire data were analysed in frequencies and percentages, while the significant mean
differences were ascertained with the ANOVA. The formula for the simple percentage is:
X x100 Percentage N
Where X = Individual sum in the group or responses
N = Total response
The three alternate hypotheses were tested with a combination of T-test and Analysis of variance
(ANOVA). While the t-test examined whether there was dependence or independence of one variable on the outcome of another variable between two groups, the ANOVA tested mean differences among several groups. The level of significance of the mean differences was at 0.5. Further, a post-doc analysis was conducted to ascertain the level of positive and negative relationships that the independent variables may have with the dependent variables. Data were presented in tables, graphs and figures 77
based on extant rules on the use of explanatory and illustrative materials (Wimmer & Dominick, 2006;
APA Documentation Guide, 2016).
78
References
Asemah, E.S., Gujbawu, M., Ekhareafo, D.O., & Okpanachi, R.A. (2012). Research methods and procedures in mass communication. Jos: Great future press.
Cresswell, J. W. and Clark, V. L. R. (2007). Designing and conducting mixed methods research. London: Sage Publications.
Creswell, J. W. & Miller, D. L. (2000). Determining the validity of qualitative inquiry. Theory into practice, 39(3), 124-131.
Healy, M., & Perry, C. (2000). Comprehensive Criteria to Judge Validity and Reliability of Qualitative Research Within the Realism Paradigm. Qualitative market research, 3(3), 188-126.
Kendall, L. (2008). The conduct of qualitative interview: Research questions, methodological issues, and researching online. In J. Coiro, M. Knobel, C. Lankshear & D. Leu (Eds.), Handbook of research on new literacies (pp. 133-149). New York: Lawrence Erlbaum Associates.
National Bureau of Statistics (2012). Annual Abstract of Statistics. Retrieved July 27, 2016, from www.nigerianstat.gov.ng
National Statistical Service (2014). Sample Size Calculator. Retrieved July 27, 2016, from www.nss.gov.au/home.nsf/pages/sample+size+calculator
Nwachukwu, C.A. (2014). Influence of rollback malaria radio campaign on rural dwellers attitude to malaria prevention and treatment in three selected Southeast States. [Unpublished Master degree thesis]: University of Nigeria, Nsukka.
Odoemelam, C.C. (2015). Evaluation of health communication interventions on Men’s knowledge of Obstetric Fistula prevention and treatment in South-East, Nigeria. [Unpublished PhD dissertation]: University of Nigeria, Nsukka.
Ohaja, E. U. (2003). Mass Communication Research and Project writing. Lagos John Letterman Ltd.
Osuala, E.C. (2005). Introduction to research methodology (3rd ed.). Onitsha: Africana-first publisher limited.
Wimmer R. D & Dominick J. R. (2006). Mass Media Research: An Introduction, 9th Ed. Belmont: Wadsworth Cengage Learning.
Wimmer R. D & Dominick J. R. (2011). Mass Media Research: An Introduction, 9th Ed. Belmont: Wadsworth Cengage Learning
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CHAPTER FOUR DATA ANALYSIS AND PRESENTATION
4.0 Analysis of quantitative data from the survey (Questionnaire)
To gather information from the respondents, 405 copies of the questionnaire were distributed to sampled population and 359 copies were recovered. The analysis was based on the 359 copies of the questionnaire that was received. The Statistical Package for Service Solutions was used to analyze the copies of the questionnaire for the study.
4.1 Data Analysis
Table 1: Distribution of Respondents’ Sex Items
Frequency Percent Valid Percent Cumulative Percent Male 207 57.7 57.7 57.7
Female 152 42.3 42.3 100.0
Total 359 100.0 100.0
Figure 1: Sex of respondents
152
207 Male Female
80
The copies of the questionnaire returned (n=359) consisted of 207(57.7%) male respondents
and female 152 (42.3%) respondents as shown in the table and chart above.
Table 2: Distribution of Respondents’ Age
Items Cumulative Percent Frequency Percent Valid Percent 16-25 148 41.2 41.2 41.2
26-35 145 40.4 40.4 81.6
36-45 46 12.8 12.8 94.4
46-100 20 5.6 5.6 100.0
Total 359 100.0 100.0
Figure 2: Age of respondents
160 148 145 140 120 100 80 60 46
40 20 20 0 16- 25 26 -35 36- 45 46- 100
On the age distribution of the respondents, it ranged from 16 to 100, having the four different groups of all the age intervals. Most of the respondents (41.2%) fell within the age bracket of 16-25 years followed by (40.4%) for the 26-35 years age bracket. The age bracket for 36-45 recorded
(12.8%), while the category of 46-100 recorded (5.6%).
81
Table 3: Respondents’ Marital status Cumulative Items Percent Frequency Percent Valid Percent Single 255 71.0 71.0 71.0
Married 100 27.9 27.9 98.9
Divorced 3 .8 .8 99.7
Widowed 1 .3 .3 100.0
Total 359 100.0 100.0
Figure 3: Respondents’ marital status
Widowed 1
Divorced 3
Married 100
Single 255
0 50 100 150 200 250 300
In the above table and chart, single respondents recorded 255 responses which accounted for
(71.0%) of the total respondents. The married among the respondents were 100 amounting to
(27.9%) whereas the numbers of divorced or separated among the respondents were 3 or (0.8%).
Only 1 or (0.3%) of the total respondents were widowed.
82
Table 4: Respondents’ Educational Qualifications Cumulative Items Percent Frequency Percent Valid Percent High School 95 26.5 26.5 26.5
Diploma 37 10.3 10.3 36.8
University Degree 158 44.0 44.0 80.8
M.Sc./PhD 67 18.7 18.7 99.4
No Formal education 2 .6 .6 100.0
Total 359 100.0 100.0
Figure 4: Respondents’ educational qualifications 2
67 95
High School Diploma 37 University Degree
158 Msc/PhD No Formal education
On the status of the respondents‘ educational qualification, Table 4 and Figure 4 above shows that 95 respondents representing (26.5%) were high school graduates, 37 respondents representing (10.3%) hold a diploma certificate, 158 representing (44.0%) obtained a university degree, those with M.Sc./PhD returned 67 respondents representing (18.7%) while those with no formal education recorded 2 respondents representing (0.6%) of the respondents.
83
4.2 Psychographic characteristics of respondents
Research question 1: What are the defining characteristics of newspapers’ traditional business models in Nigeria?
Table 5: Respondents’ knowledge of Business Model
Items Frequency Percent Valid Percent Cumulative Percent
Yes 280 78.0 78.0 78.0
No 53 14.8 14.8 92.8
Can't say 26 7.2 7.2 100.0
Items Frequency Percent Valid Percent Cumulative Percent
Yes 280 78.0 78.0 78.0
No 53 14.8 14.8 92.8
Can't say 26 7.2 7.2 100.0
Total 359 100.0 100.0
Figure 5: Respondents’ knowledge of Business Model
300
250
200
150 280
100
50 53 26 0 Yes No Can't say
84
The responses from the Table and Figure above indicate that the majority of 280 respondents, representing (78.0%) have knowledge of what a business model is. However, 53 respondents, representing (14.8%) of the total respondents do not have knowledge of what a business model is, while 26 respondents‘ representing (7.2%) can‘t say.
Table 6: Main Source of Revenue Traditional Newspapers Cumulative Percent Frequency Percent Valid Percent Valid Advertisement 235 65.5 65.5 65.5
Subscriptions 34 9.5 9.5 74.9
On-stand sales 90 25.1 25.1 100.0
Total 359 100.0 100.0
Figure 6: Main Source of Revenue of Traditional Newspapers
Advertisement Subscriptions
90
34 235
On-stand sales 85
Data from the above Table and Figure shows that 235 respondents, representing (65.5%) acknowledge that advertisements are the main source of revenue for traditional newspapers, while 34 respondents‘, representing (9.5%) hold the view that subscriptions are the main source of revenue for traditional newspapers. Also, 90 respondents representing (25.1%) said that On-stand sales were the main source of revenue.
Table 7: Business Model of Newspaper Industries
Items Cumulative Frequency Percent Valid Percent Percent
Yes 146 40.7 40.7 40.7
No 114 31.8 31.8 72.4
Can't say 99 27.6 27.6 100.0
Total 359 100.0 100.0
Figure 7: Business Model of Newspaper Industries
146 150 114 100 99
50
0
Yes Yes No Can't say
The Table and Figure above, revealed that 114 respondents representing (31.8%) said
newspaper industries do not operate on a traditional business model. Most of the respondents 146
(40.7%) responded that newspaper industries operate on a traditional business model, while 99 86
(27.6%) respondents could not say whether legacy newspaper industries operate on a business model.
Given the result, it can be concluded, therefore, that newspaper industries truly operate on a business model.
Table 8: Reasons for Damage of Newspaper Business Model
Themes Cumulative Frequency Percent Valid Percent Percent Social media influence 25 7.0 7.0 7.0
Newspapers not the only medium 16 4.5 4.5 11.4
Advertising in print is limited 4 1.1 1.1 12.5
Newspapers not proactive 314 87.5 87.5 100.0
Total 359 100.0 100.0
Figure 8: Reasons for Damage of Newspaper Traditional Business Model
Chart 16 4 Title 25
314
Social media influence
Newspapers not the only medium Advertising in print is limited Newspapers not proactive 87
The Table and Figure above reveal the reasons given by respondents for the devaluation of newspapers‘ traditional business model. This shows that 25 respondents representing (7.0%) said it was due to social media influence. Most of the respondents 314 (87.5%) hold the opinion that newspapers were not proactive. 16 (4.5%) respondents said newspapers are not the only medium, while
4 respondents representing (1.1%) observe that advertising in print is limited.
The implication of the analysis is that newspaper organizations were not proactive in managing the advance and influence of Internet technologies and other disruptive innovations that negatively impacted their traditional business and operating models. Given the result, it can be concluded, therefore, that lack of proactiveness on the part of traditional newspaper industries have led to the damage to their business model.
Research question 2: What are the differences between the business models of the internet-based firms from that of the newspaper industry in Nigeria?
Table 9: Whether newspapers Business Models Differ from others
Items Frequency Percent Valid Percent Cumulative Percent Yes 212 59.1 59.1 59.1
No 71 19.8 19.8 78.8
Can't say 76 21.2 21.2 100.0
Total 359 100.0 100.0
88
Figure 9: Whether Newspapers Business Models differ from others
76
Yes 71 212 No Can't say
On the respondents‘ rating of whether newspaper business models differ from others, 212 respondents representing (59.1%) said yes, 71 (19.8%) respondents said no, while 76 (21.2%) could not say whether newspaper business models differ from others. The analysis shows that a sizable number of the respondents adjudged newspapers business models to be different from other business models. What this implies is that the traditional business models of newspaper organizations are distinct from other business models.
Table 10: Impact of IT Business Model on Newspaper Production Cumulative Items Percent Frequency Percent Valid Percent No Impact 78 21.7 21.7 21.7
Very Impactful 157 43.7 43.7 65.5
Extremely impact- full 124 34.5 34.5 100.0
Total 359 100.0 100.0
89
Figure 10: Illustrating Impact of IT Business Model of Newspaper Production
Extremely impactful 124
Very Impactful 157
No Impact 78
0 50 100 150 200
On the respondents‘ rating of the impact of IT business model on newspaper production, 78 respondents representing (21.7%) said no impact, 157 (43.7%) respondents agree it is very impactful, while 124 (34.5%) posited that it is extremely impactful.
The analysis shows that a sizable number of the respondents (43.7%), strongly believe the impact of
IT business models on newspaper organizations to be ―very impactful‖. Given this result and the unfolding scenario in the newspaper landscape, it is important to note that extra effort is still needed by legacy newspaper industries to resuscitate their business model and to compete favourably in the new digital environment.
90
Table 11: Reasons for the impact of IT on newspaper organisations Cumulative Themes Percent Frequency Percent Valid Percent News online 60 16.7 16.7 16.7
Cost effectiveness 19 5.3 5.3 22.0
Lack of adaptability of 47 13.1 13.1 35.1 newspapers
Recession 15 4.2 4.2 39.3
Immediacy of technology 218 60.7 60.7 100.0
Total 359 100.0 100.0
Figure 11: Reasons for the impact of IT on newspaper organizations Chart Title News online 60 19 Cost effectiveness
47 Lack of adaptability of 218 newspapers Recession
15 Immediacy of technology
The data in the Table and Figure above emanated from the question which sought to know the reason for the impact of IT on newspaper organizations. The analysis revealed that 60 respondents, representing (16.7%) of the total respondents access their news online. Also, 19 respondents, indicative of (5.3%) opined that the reason is due to cost effectiveness, 47 respondents, representing (13.1%) attributed the situation to lack of adaptability of newspapers. Again, 15 respondents representing 91
(4.2%) said the recession is the reason for the impact of IT on newspaper organizations, while 218 respondents representing (60.7%) averred that it is the immediacy of technology.
From the responses generated, it is evident that the immediacy of technology is the strongest reason for the impact of IT on newspaper organizations.
Table: 12: Media techs had Cannibalised Newspaper Business Models
Items Cumulative Frequency Percent Valid Percent Percent
Valid Yes 161 44.8 44.8 44.8
No 136 37.9 37.9 82.7
Can't say 62 17.3 17.3 100.0
Total 359 100.0 100.0
Figure 12: Whether media techs have Cannibalized Newspaper Business Model
62
161
Yes No 136 Can't say
The data in Table 12 and Figure 12 above emanated from responses to the question which sought to know whether media and internet technologies have cannibalized newspaper's business model. The analysis shows that 161 respondents, representing (44.8%) of the total respondents agreed,
136 respondents, representing (37.9%) returned no, while 62 respondents, representing (17.3%) cannot say. 92
The implication of the analysis is that more respondents believe that new media technologies have upended newspaper's traditional business and revenue model.
Table 13: Whether New media technologies have Better Business Formula
Items Cumulative Frequency Percent Valid Percent Percent Valid Yes 291 81.1 81.1 81.1
No 30 8.4 8.4 89.4
Can't say 38 10.6 10.6 100.0
Total 359 100.0 100.0
Figure 13: Whether New media technologies have Better Business Formula 350
300
250
200
150 291
100
50 30 38 0 Yes No Can't say
The data in Table 13 and Figure 13 above emanated from the question which sought to know
whether media technology has a better business formula. The analysis shows that 291 respondents,
representing (81.1%) of the total respondents affirmed "yes", 30 respondents‘, representing (8.4%)
answered no, while 38 respondents, representing (10.6%) cannot say.
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Table 14: Whether news online should be Free
Items Cumulative Frequency Percent Valid Percent Percent
Yes 147 40.9 40.9 40.9
No 183 51.0 51.0 91.9
Can't say 29 8.1 8.1 100.0
Total 359 100.0 100.0
Figure 14: Whether news online should be Free
29
147
183
Yes No Can't say Information was sought on whether news online should be free. As indicated in table 14, 147 respondents, constituting (40.9%) of the total respondent population of 359, agree that news online should be free. Meanwhile, 183 respondents, representing (51.0%) of the total respondents negates the statement, while 29 respondents representing (8.1%) cannot say. This suggests that the respondents believe online news should be paid for rather than being freely accessed. This is good news for traditional newspaper organizations who are struggling to raise revenue online while maintaining their traditional operations.
94
Table 15: Factors Leading to Breakdown of Newspaper Business Model Cumulative Items Percent Frequency Percent Valid Percent Customer fragmentation 60 16.7 16.7 16.7
Changes in consumers 75 20.9 20.9 37.6
Economic down turn 74 20.6 20.6 58.2
Migration to web 150 41.8 41.8 100.0
Total 359 100.0 100.0
Figure 15: Factors Leading to Breakdown of Newspaper Business Model
160 140 120 100 80 150 60 75 74 40 60 20 0 Customer Changes in Economic down Migration to fragmentation consumers turn web
The data in Table 15 and Figure 15 was designed to find out the factors leading to the breakdown of newspaper business model. The analysis shows that 60 respondents, representing (16.7%) of the total respondents attributed customer fragmentation to the breakdown of newspaper business model. Also,
75 respondents, indicative of (20.9%) opined that the breakdown is due to changes in customer behaviour, 74 respondents, representing (20.6%) averred that economic downturn is responsible for the breakdown in newspaper business model while 150 respondents representing (41.8%) opined that it is due to audience fragmentation and migration to the web. The implication of the analysis is that the 95
respondents considered the rapid migration to the web as the major factor to the breakdown of newspaper business model.
Table 16: Whether respondents have ever Paid for News Cumulative Percent Frequency Percent Valid Percent Valid Yes 143 39.8 39.8 39.8
No 196 54.6 54.6 94.4
Can't say 20 5.6 5.6 100.0
Total 359 100.0 100.0
Figure 16: Whether Respondents have ever paid for News
Table 16 and Figure 16 summarizes respondents‘ views on whether they have ever paid for
news online. 143 respondents, representing (39.8%) of the total respondents affirmed that they have
paid for news online. The analysis shows that 196 respondents representing 96
(54.6%) said they have never paid for news online, while 20 respondents‘ representing (5.6%) of
the total population cannot say. The inference from the entire data suggests the majority of the
respondents do not pay for accessing news online. The result agrees with other studies conducted in
other parts of the world, notably the US, Europe, and Asia, which reflects reader's unwillingness to
pay for Online news.
Table 17: Whether business models of Internet-based newspaper firms affect Traditional newspapers Cumulative Percent Frequency Percent Valid Percent Valid Yes 250 69.6 69.6 69.6
No 61 17.0 17.0 86.6
Can't say 48 13.4 13.4 100.0
Total 359 100.0 100.0
Fig- 17: Whether business models of Internet-based newspaper firms affect Traditional newspapers
97
The data in Table 17 and Figure 17 seeks to find out whether business models of internet-based newspaper firms affect traditional newspapers. Responses gathered from the respondents show that majority of the respondents 250 representing (69.6%) felt that the business model of internet-based firms affects traditional newspapers. While 61 respondents representing (17.0%) said that the traditional newspapers are not affected by the business models of internet-based firms. 48 respondents representing (13.4%) cannot say whether the business model of internet-based newspaper firms affects traditional newspapers.
From a cursory look at the data above, it suggests the traditional newspaper is affected by
the business models of the internet-based firms.
Table 18: Whether Internet-based online news and newspaper industry operate different business models
Cumulative Percent Frequency Percent Valid Percent Valid Yes 240 66.9 66.9 66.9
No 63 17.5 17.5 84.4
Can't say 55 15.3 15.3 99.7
5 1 .3 .3 100.0
Total 359 100.0 100.0
98
Figure 18: Illustrating Whether Internet-based online news and newspaper industry operate different business models
240 250
200
150
100 63 55
50
0 Yes No Can't say
From Table 18 and Figure 18 above, it can be said that internet based online news and newspaper industry operate different business models. To this end, 240 (66.9%) of the respondents affirmed this, 63 respondents representing (17.5%) negated the statement while 55 respondents representing (15.3%) cannot say.
The analysis above shows that the internet based online news and newspaper industry operate on a distinct business model from that operated by the traditional newspapers‘ industry. Table 19: How Internet-based news firms differ from the conventional newspaper industry Cumulative Themes Percent Frequency Percent Valid Percent Human resource 26 7.2 7.2 7.2
online based and Print based 60 16.7 16.7 24.0
Free readership and Cost Related 7 1.9 1.9 25.9
Accessibility 18 5.0 5.0 30.9
Delivery mode 248 69.1 69.1 100.0
Total 359 100.0 100.0 99
Figure 19: Illustrating How Internet-based news firms Differ from the conventional newspaper industry
250
200
150
100
50
0 Human online based Free Accessibility Delivery resource and Print readership mode based and Cost Related
The question that generates the data in Table 19 and Figure 19 was designed to find out how internet news firms differ from the conventional newspaper industry. The manifest data shows that
248 respondents representing (69.1%) opined that internet-based news firms differ from conventional newspaper industry in terms of their delivery model. 26 respondents representing
(7.2%) associated this difference to human resource were, 60 respondents representing (16.7%) perceived this difference to be online based and print based. 7 respondents representing (1.7%) aligned the difference to free readership and cost related, while 18 respondents representing (5.0%) opined that the difference is due to accessibility. This means that majority of the respondents believed that the delivery mode is the basic distinguishing factor between the conventional newspaper and the internet-based firms.
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Research question 3: What business model options are available to the industry to reinvent
newspaper journalism in Nigeria?
Table 20: Whether Conventional newspapers can reinvent old business models to survive Reinvent
Cumulative Frequency Percent Valid Percent Percent
Valid Yes 237 66.0 66.0 66.0
No 47 13.1 13.1 79.1
Can't say 75 20.9 20.9 100.0
Total 359 100.0 100.0
Figure 20: Illustrating Whether Conventional newspapers can reinvent old business models to survive
75
47 Yes No 237 Can't say
The data in Table 20 and Figure 20 seeks to find out whether conventional newspapers can reinvent old business models to survive. Responses gathered from the respondents show that majority of the respondents 237 representing (66.0%) felt that conventional newspapers can reinvent old business models to survive. The analysis revealed that 47 respondents representing
(13.1%) believed that there is no way conventional newspapers can reinvent old business models to survive, while 75 respondents representing (20.9%) cannot say. The import of the analysis is 101
that conventional newspapers can reinvent old business models to survive as opined by 66.0% respondents.
Table 21: Whether there are Business Model Options available to the traditional
newspaper industry
Frequency Percent Valid Percent Cumulative Percent
Valid Yes 189 52.6 52.6 52.6
No 50 13.9 13.9 66.6
Can't say 120 33.4 33.4 100.0
Total 359 100.0 100.0
Figure 21: Whether there are Business Model Options available to the traditional newspaper industry
Can't say
No
Yes
0 50 100 150 200
From the data in Table 21 and Figure 21 above, the majority of the respondents averred that there are business model options available to the traditional newspaper industry. This is evident by
189 respondents representing (52.6%) of the total respondents who shared this view, 50 respondents 102
representing (13.9%) contended that there are no business model options available to the traditional newspaper industry, while 120 respondents representing (33.4%) have no opinion on the issue.
Table 22: Suggested Business Model options available to Traditional
Newspaper Industry
Valid Cumulative Themes Percent Percent Frequency Percent Online adverts/Presence 67 18.7 18.7 18.7
Smartphone/mobile options 292 81.3 81.3 100.0
Total 359 100.0 100.0
Figure 22: Suggested Business Model options available to Traditional Newspaper Industry 350
300
250
200
150 292
100
50 67 0 Online advertisement: Smartphone/mobile options
Responses from Table 22 and Figure 22 above indicate that majority of respondents, 292, representing (81.3%) hold the view that smartphones/ mobile options are the available alternatives to the traditional newspaper industry, while 67 respondents representing (18.7%) contend that online adverts/presence are better alternatives available to the traditional newspaper industry. The import of the analysis suggests that traditional newspaper industry can keep afloat should they consider going on smartphones and other mobile options. 103
Table 23: Whether there are Better Revenue generating models for newspaper industries Frequency Percent Valid Percent Cumulative Percent
Valid Yes 231 64.3 64.3 64.3
No 48 13.4 13.4 77.7
Can't say 80 22.3 22.3 100.0
Total 359 100.0 100.0 Figure: 23 Illustrating Whether there are Better Revenue generating models for newspaper industries
80
Yes 48 231 No Can't say
The data in Table 23 and Figure 23 seeks to find out whether there is better revenue generating models for newspaper industries. Responses gathered from the respondents show that majority of the respondents 231 representing (64.3%) felt that there is better revenue generating formula available to the newspaper industries. The analysis revealed that 48 respondents representing (13.4%) believed that there is no better revenue generating models for newspaper industries, while 80 respondents representing (22.3%) were not of any opinion.
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Table 24: Preferable Formats for Future Newspaper publishing
Cumulative Items Percent Frequency Percent Valid Percent Hard copy 122 34.0 34.0 34.0
Online/digital 210 58.5 58.5 92.5
Can't say 27 7.5 7.5 100.0
Total 359 100.0 100.0
Figure 24: Illustrating Preferable Formats for Future Newspaper publishing Hard copy Online/digital Can't say 27
122
210
The question that generates the data in Table 24 and Figure 24 was designed to find out preferable formats for future newspaper publishing. The manifest data shows that 122 respondents representing
(34.0%) opined that hard copy remains the best format for future newspaper publishing. Also, 210 respondents representing (58.5%) averred that online/digital platforms should be the preferred format for future newspaper publishing, while 27 respondents representing (7.5%) were of no view. This means that majority of the respondents believed that moving to the online platform will be the panacea for traditional newspaper businesses to survive in the future.
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Research question 4: How has the industry been coping with the disruptive challenges of internet
technologies and how can they be repositioned to overcome the current crisis to be able to
respond to future business model disruptors in Nigeria?
Table 25: Whether there are possibilities for newspaper industries to overcome current business model crises
Items Frequency Percent Valid Percent Cumulative Percent Yes 221 61.6 61.6 61.6
No 53 14.8 14.8 76.3
Can't say 85 23.7 23.7 100.0
Total 359 100.0 100.0
Figure 25: Whether there are possibilities for newspaper industries to overcome current business model crises
Can't say , 85
No , 53 Yes , 221
Responses from the analysis in Table 25 and Figure 25 above emanated from the question
which sought to know whether there are possibilities for newspaper industries to overcome current
business model crises. The analysis shows that 221 respondents, representing (61.6%) of the total
respondents affirmed that traditional newspaper industries can overcome current business model
crises, while 53 (14.8%) negated the assertion. 85 respondents representing (23.7%) returned zero 106
opinion. The inference from the entire data suggests that a clear majority believes that the
traditional newspaper industries can overcome current business model crises.
Table 26: Suggested options for overcoming current business model crises in the Newspaper industry Cumulative Themes Percent Frequency Percent Valid Percent Free access/social worth 8 2.2 2.2 2.2
Upgrade their platforms 38 10.6 10.6 12.8
Provide news online 36 10.0 10.0 22.8
Online advert slots 243 67.7 67.7 90.5
Legal solutions 34 9.5 9.5 100.0
Total 359 100.0 100.0
Figure 26: Illustrating Suggested options for overcoming current business model crises in the Newspaper industry 243 250
200
150
100
38 36 34 50 8 0 Free Upgrade Provide Online Legal access/social their news online advert slots solutions worth platforms
The data in Table 26 and Figure 26 above emanated from the question which sought to know the suggested options for overcoming current business model crises in the newspaper industry. The 107
analysis revealed that 8 respondents, representing (2.2%) of the total respondents opined that newspaper industries should operate free access while also improving their social worth. Also, 38 respondents, indicative of 10.6 percent suggested that they should upgrade on their platforms, 36 respondents, representing (10.0%) averred that they should provide news online. Again, 243 respondents representing (67.7%) suggested traditional newspaper industry should secure online advert slots, while 34 respondents representing 9.5 percent opined legal solutions.
Table 27: Whether newspaper industries have potentials to respond to Disruptors Items Frequency Percent Valid Percent Cumulative Percent
Yes 190 52.9 52.9 52.9
No 59 16.4 16.4 69.4
Can't say 110 30.6 30.6 100.0
Total 359 100.0 100.0
Figure 27: Illustrating whether newspaper industries have potentials to respond to Disruptors
Can't say , 110
Yes , 190
No , 59
Information was sought on whether newspaper industries have potentials to respond to disruptors. As indicated in table 27, 190 respondents constituting (52.9%) said newspaper industries have the potentials to respond to disruptors. Meanwhile, 59 respondents, representing (16.4%) of the total respondents negates the statement, while 110 respondents representing (30.6%) 108
cannot say. This suggests that the traditional newspaper possesses the potentials to respond to disruptors.
Table 28: How Newspaper industry can respond to Business Disruptors Cumulative Themes Percent Frequency Percent Valid Percent Pay attention to opportunities 36 10.0 10.0 10.0
Reshape Content 11 3.1 3.1 13.1
Build professionalism 8 2.2 2.2 15.3
Develop online 18 5.0 5.0 20.3 platform Embrace convergence 286 79.7 79.7 100.0
Total 359 100.0 100.0
Figure 28: Illustrating How the Newspaper Industry can respond to Business Disruptors
109
The data from Table 28 and Figure 28 above shows that 36 respondents, representing 10.0 percent opined that newspaper industry can respond to business disruptors when they pay attention to opportunities available to them, 11 respondents, representing 3.1 percent averred that to respond to business disruptors they should reshape their content. Also, 8 respondents representing (2.2%) said they got to build professionalism, while 18 respondents, representing 5.0 percent opined that developing an online platform would suffice. Again, 286 respondents representing (79.7%) suggested that convergence should be embraced. The inference from the entire data suggests that various means to respond to business disruptors are available. However, responses from the respondents showed that media convergence is the better option towards responding to business disruptors.
Hypotheses
The following hypotheses were tested:
1. H1: The emergence of new technologies will significantly impede the growth of existing
business models of the newspaper if the newspaper industry does not reinvent itself.
2. H2: Reinventing the business model of the newspaper industry will sustain its growth if a
change in the traditional business model is linked to the emergence of new media.
3. H3: There is a significant difference between the revenue source of conventional newspapers
and those of online-news providers.
4. H4: The business model options available to the newspaper industry to reinvent itself will
significantly depend on online- based business models if online-based models continue to reveal
more viability. 110
H1: The emergence of new technologies will significantly impede the growth of existing business models of the newspaper if the newspaper industry does not reinvent itself.
The hypothesis proposes that the emergence of new technologies impede the growth of existing business models of newspapers. Items 12 and 13 on the questionnaire were manipulated to test the hypothesis.
Table 29: Analysis of Variance of the emergence of new technologies and the impeding of existing business models
Cannibalise Sum of Squares df Mean Square F Sig. Between Groups 19.903 2 9.951 20.152 .000
Within Groups 175.796 356 .494
Total 195.699 358
(F=20.152, df= 356, P= <.05) Table 30: Multiple Comparisons of the emergence of new technologies and the impeding of existing business models (I) Better (J) 95% Confidence Interval Business Cannibalis Formula e Mean Differ- ence (I-J) Std. Error Sig. Lower Bound Upper Bound Yes No -.17113 .13475 .205 -.4361 .0939
Can't say -.76587* .12121 .000 -1.0042 -.5275
No Yes .17113 .13475 .205 -.0939 .4361
Can't say -.59474* .17163 .001 -.9323 -.2572
Can't say Yes .76587* .12121 .000 .5275 1.0042
No .59474* .17163 .001 .2572 .9323
*. The mean difference is significant at the 0.05 level. 111
As table 29 and 30 show, the emergence of new technologies significantly impacted (F=20.152, df=356, P= <.05) on the growth of existing business models of the newspaper. Because of this outcome, we fail to reject the alternate hypothesis which is supported statistically.
H1: Reinventing the business model of the newspaper industry will sustain its growth if a
change in the traditional business model of the newspaper industry is linked to the emergence
of new media.
To test this alternative hypothesis, items 9 and 10 in the questionnaire were manipulated. The hypothesis suggests that reinventing the business model of the newspaper industry depends on efforts geared towards linking it to the emergence of new media.
Table 31: T-test of reinventing the business model of newspapers and the emergence of new media Impact of IT N Mean Std. Deviation Std. Error Mean
Cannibalise Neutral 78 1.6795 .81374 .09214 Very Impactful 157 1.6943 .73084 .05833
Table 32: Summary statistics of T-test of reinventing the business model of newspapers and the emerge (t=141, df=233, P= >.05) As tables 31 and 32 show, reinventing the business model of the newspaper industry and sustaining its growth is not dependent (t=141, df=233, P= >.070) on linking it to the emergence of new media.
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H2: There is a significant difference between the revenue source of conventional newspapers and those of online-based news providers.
To test the hypothesis, items 6 and 9 in the questionnaire were manipulated. The hypothesis Mean ence 95% Confidence Interval of the Diffe Sig. (2- Differ- Lower Upper Sig. T Df tailed) .070 -.141 233 .888 -.01478 -.22200 .19244
-.136 139.985 .892 -.01478 -.23037 .20081 argues that significant difference exists between the revenue source of newspaper model and online- based news business model Table 33: Revenue source of newspaper traditional business model and online based news business model. Cases
Valid Missing Total
N Percent N Percent N Percent
Source of Revenue * Model Differ 359 100.0% 0 .0% 359 100.0%
Table 34: Cross tabulation of the traditional business model and online news business model
Model Differ
Yes No Can't say Total
Source of Revenue Advertisement 149 40 46 235
Subscriptions 20 8 6 34
On-stand sales 43 23 24 90
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Table 34: Cross tabulation of the traditional business model and online news business model
ModelDiffer
Yes No Can't say Total
Source of Revenue Advertisement 149 40 46 235
Subscriptions 20 8 6 34
On-stand sales 43 23 24 90
Total 212 71 76 359
Symmetric Measures
Value Approx. Sig. Nominal by Nominal Contingency Coefficient .139 .130
N of Valid Cases 359
(X2=.139.00, df=359, p.>05)
As tables 33 and 34 show, the cross-tabulation of sources of the main source of revenue for traditional newspapers and does newspaper business model differ from online-based newspaper business models did not evidence any statistically significant difference (X2=.139.00, df=359, p.>05) between revenue source of newspaper traditional business model and online based news business model.
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H3: The business model options available to the newspaper industry to reinvent itself will significantly depend on online- based business model options if online -based models persists.
To test the hypothesis that the business model options available to the
Mean Differ- 95% Confidence Sig. (2- ence Interval of the Diffe Sig. T Df tailed) Lower Upper .037 .999 319 .318 .16460 -.15942 .48863
1.096 36.928 .280 .16460 -.13964 .46885 newspaper industry to resource itself are significantly dependent on online based business model options, items 6 and 10 on the questionnaire where used.
Table 35: t-test of resourceful newspaper business model options and online based business model options.
Better Business Formula N Mean Std. Deviation Std. Error Mean Source of Revenue Yes 291 1.5979 .86694 .05082
No 30 1.4333 .77385 .14129
Table 36: Summary of statistics for t-test to resource newspaper business model options on online- based models (t=.999, df=319, P= >.05)
As tables 35 and 36 show, the t.test did not reveal any statistically significant dependence
(t=.999, df=319, P= >.037) of business model options available to the newspaper industry to resource itself on online based business model options. Given this outcome, we fail to accept the alternate hypothesis which suggests a dependence on the online- based business model.
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4.3 Analysis of Qualitative data
RQ1. What are the defining characteristics of newspapers’ traditional business model?
There is a high degree of agreement and consensus among the respondents regarding what constitutes newspapers‘ traditional business model. Advertisement, (national, classified, retail) especially classified advertisement, subscription sales and on-stand sales of physical copies were identified as the bedrock/cornerstone of the industry in terms of revenue generation. According to the business editor of one the newspapers interviewed, ―newspapers are sold to readers for a price.
However, the price to the reader does not even cover the printing costs. Close to eighty percent of
Canadian daily newspaper revenues are derived from advertising. The transaction between an advertiser and a newspaper firm is a complex one, dependent on circulation, the frequency of insertion and location of the advertisement.
There is the usual tendency of advertisers to buy only from the firm offering the largest audience. This is cost efficient in the context of an overall marketing strategy that includes other media. The result is that the newspaper with the higher circulation attracts a disproportionate share of the advertising revenue. For purposes of analysis, however, the transaction can be treated as a sale of a specific audience by the newspaper firm to an advertiser. In understanding the economies of the newspaper industry, this is the crucial transaction‖ Another journalist from Toronto Star observe that ― the current business model of the newspaper industry for physically printed newspaper is based on obtaining revenue from four primary sources: Advertising (also known as ‗display‘ or ‗retail‘ advertising), for products and services; classified advertising, targeted to local consumers; subscription (home delivery), a fee paid by consumers for access to news; and per copy sales such as newsstand sales of printed newspapers.‖ 116
When newspapers began publishing in Canada, they totally depended on government grants and subsidy for survival and they catered to a specialized audience. But as education and wage increases gained traction, coupled with comfortable middle-class and technological developments, newspapers accelerated their services to serve a mass audience. And newspapers came to depend on advertising as a way not only to earn revenue but also to subsidize the cost of the product to the consumer. The associate digital editor for the Winnipeg Free press notes that ―The more copies a newspaper can sell and distribute, the more the paper can charge for advertising. As advertising revenues grew, so are the pages in the newspaper, the cost of printing and distribution are substantial, but they are passed on to the advertiser‖.
Another journalist noted that the ―traditional business model (advertising supported, and subscription-based newspaper) builds on providing a standardised product that is sold on a fixed price each day and selling the potential audience of the medium to advertisers who can purchase advertising millimetres.‖ This predictability in cost, products and services provided the basis for the sustainability and prosperity of the industry for so long. Legacy newspaper traditional business model was based on selling newspaper copies to readers on the one hand and advertising space to advertisers on the other, cross-subsidizing the production of news with the sale of advertising or other commercial activities.
John Stackhouse, the editor of The Globe and Mail, spoke with nostalgia about the demolition of the advertising model which has sustained the newspaper industry for nearly two centuries.
Reminiscing, he went through the early beginnings of newspaper publishing through the turbulent years of the Telegraph, Radio and Television and notes that though the traditional business model was strong to withstand these periods of upheavals, it was not meant to evolve in a manner able to sustain the industry at a time of unprecedented technological transformations brought about by the internet and web 2.0
One of the journalist interviewed noted that ―Retail, classified, and national advertising has traditionally accounted for more than eighty percent of newspapers revenues, with subscriptions and 117
newsstand sales making up the rest of the revenues. The traditional advertising model for years generated healthy profits and helped keep subscription and newsstand prices low and affordable‘.
When newspapers were first published in Canada, they depended solely on government patronage for revenues. However, as time passed commercial advertising and classified advertising increasingly filled the pages and eventually became the bedrock of the industry in terms of revenue earnings. The contemporary newspaper business model was developed in the mid-late-nineteenth century, replacing a different model that was based on a specialised audience, rather than a mass audience.
RQ2: What are the differences between the business models of the internet-based firms and that of legacy newspaper organisations?
The internet economy is manifestly different from legacy news organisations both in complexion and operation. A business model is defined as the architecture of a business, the operational and managerial process that allows an organisation to deliver value in a way that they can successfully repeat and increase in scale. It creates revenue for an organisation while providing values for customers. When the third research question was posed to journalists all agreed that internet firms have a different modus operandi from the legacy organisations. One of the journalists put it succinctly,
―On the internet, readers can seamlessly navigate from website to website, from story to story.
Legacy news organisations have lost the power to bundle modular sections into an aggregated product.
We have lost the power of the package‖. In terms of distribution and news delivery, the printed newspapers need to be physically delivered to consumers by road or by air. This can be expensive and time-consuming especially when dealing with time-sensitive content. On the internet platform, journalists can reach consumers anywhere there is internet connection and news are delivered in real time. Links to stories appear natively on popular social media platforms like Facebook and Twitter or sent an email and there are resources allowing for comments which ensure continuous dialogue between content providers and readers. This is the ―icing on the cake which readers have missed during the legacy years‖ said one Journalist who noted that traditional newspaper orientation was the top- 118
down model where news was passed down to consumers without allowing meaningful input and feedback.
In addition to providing real-time coverage of news and information, publishers on the internet employ usage tracking services to like Google Analytics to track and report website traffic, while ad-trackers serve targeted advertisement based on internet usage, consumer interest profiling and demographics.
Internet tracking and measurement allow publishers and content providers to monitor and measure the popularity of articles to modify them in other to increase visibility and revenue.
In terms of operational costs, internet-based firms are ―characterized by low capital requirements, low fixed costs, low production and distribution costs, no variable costs and rapidly declining costs. In contrast, the cost characteristics of traditional newspaper model consist of high capital requirements, high fixed costs, high production costs, high first-costs, moderate variable costs, low marketing costs, and rapidly declining average total costs.‖ This is how one of the journalists summed up the unique characteristics of the internet-based firms and the legacy newspaper organisations and notes that these features determine the sustainability and profitability of the business models which they operate.
Similarly, the majority of the journalists interviewed strongly agree that the major reason for the demolition of the traditional business model for newspaper organizations was the over-dependence on or the loss of advertising revenue, especially classified advertising. One of the journalists interviewed for this study put it succinctly: ―the newspaper industry operates a mature market in Canada.
Readership and circulation numbers have fallen and continue to deteriorate. Consumer habits have changed and continue to transform and there is increased competition from online content providers and news aggregators like Google, news updates on mobile devices and social media like Facebook and
Twitter. And, of course, the biggest factor was the loss of classified advertising to electronic commerce firms like Craigslist and eBay. 119
All these forces have come together to upset the traditional operating model of the news industry‖.
Another journalist pointed to technology giants like Facebook and Google as behemoth competitors who are luring away loyal advertisers by selling audience reach and metrics that traditional media companies simply cannot offer. He observed that the loss of advertising revenue was the ―greatest setback, the last straw that broke the camel‘s back ---We put all our eggs in one basket--In retrospect, it seemed like a silly and dumb idea‖.
Although newspapers in Canada and the United States have since the 1970s witnessed a decrease in circulation and dwindling readership, the arrival of the Internet in the 1990s with all the disruptive technologies it introduced into the market dealt a serious blow to newspaper‘s revenue profile. The loss of classified advertising business was, no doubt, the biggest setback experienced by the industry in
Canada. The classified advertising business yielded about 80% of the industry‘s advertising earnings.
When internet firms like Craigslist and E-bay which offered free and alternative spaces came on stage, the classified advertising earnings literally evaporated. As early as 1964, media theorist Marshall
McLuhan observed that the industry‘s reliance on classified advertising made it vulnerable to market forces ―should an alternative source of easy access to such diverse daily information be found, the press will fold‖. The rise of the Internet created such a source, and Internet start-ups such as Craigslist and E- bay opened a fresh new way for consumers to list goods and services for sale without relying on newspaper advertisements.
Majority of the journalists interviewed pointed to the complacency that wrapped publishers and managers of news organizations who failed, in the beginning, to enlist in the digital revolution.
According to one of the journalists interviewed, ―the cultural inertia and lack of vision aggravated the situation and hastened the destruction of the traditional business model which has sustained the industry for so long‖. One of the journalists mentioned that greed for profit was one of the reasons that hastened the demolition of the traditional model. He noted that when newspapers began publishing in
Canada, it was mostly a family business where the owners maintained a high regard for public integrity 120
rather than profit. ―When newspapers changed ownership, the new owners who were mostly corporations became too greedy for profit and neglected quality and content improvements.‖ She observed that long before the internet became widely available to the public, the newspaper industry had lost most of its good reputation due to partisanship and lack of objectivity in reporting news.‖ The
Internet, with its interactive channels, found consumers who were ready for change‖.
RQ3: What business model options are available to the industry to resource and reinvent newspaper journalism.
The legacy newspaper business model has been struggling to adapt to an online and networked environment. The economic challenges facing newspaper organizations have made it imperative for them to seek new ways of attracting revenue in highly competitive and fragmented media ecology. The advertising and subscription model which has sustained the industry for more than a century has been eroded by dramatic shifts in technology and significant changes in audiences‘ tastes and expectations.
The industry is in experimental mode, looking for alternative business models and complementary revenue sources to replace the old model that was advertising -based. Overall, advertising models that supported media offline seem for the most part, unsuitable for the web and therefore have failed to generate enough revenue to compensate for the money lost from print advertising. Media analysts and scholars are worried that the newspaper industry is not doing enough to finding an urgent solution to the problem.
Rather than engaging in serious innovative processes, most legacy news organizations are stuck in their old ways of doing business. Meanwhile, as digitization and the growth of the internet continue to diminish levels of readership, circulation and advertising revenue for legacy newspapers, there is greater urgency and need for the industry to find a solution. Journalists interviewed for this study expressed diverse opinions on the best models which they think will help reinvent the industry and ensure its‘ continued relevance and sustainability. 121
The business editor of Ottawa citizen, James Thang, noted that the ―way forward is multi-platform diversification‖ He observed that given the challenges of the digital revolution, newspapers cannot survive on a single model of building revenue that was the case in the past. ―Looking at the scenario, we have to devise new ways of making money from our core product content as well as create new products and services that can be offered to our customers under the parent brand or new brands.‖
Another Journalist agreed and observed that ―the real challenge will be how to manage multi-platform channels; how to attract revenue from online advertising, how to find the best combination of distribution platforms to invest resources, how to develop the competency to select content for the different platforms and how to sell media in a fragmented market. These challenges can be overcome if legacy media businesses are open to innovative process in their thinking and operations.‖
The commercial editor for one of the newspapers interviewed contends that the search for a new business model may not produce a single model that will suit the need of all the newspaper organisations. ―There may not emerge, in the end, a one size fits all kind of business model. It will be what works for each organisation,‖ he observed, saying that ―each news organisation will have to examine its‘ brand strengths to know what will see them through, whether the paywall model,
Freemium model, the exchange model, the subsidy model, the influence model, grants, donations and membership plan, syndication of content and corporate sponsorship or a combination of some of these.‖
Ron Freeman, one of the journalists interviewed believes that the future of the newspaper industry will be played out on the web.‖ it will be a hybrid of printed newspaper and online newspaper, whereby the printed newspaper as we know it today will become a premium product catering to a smaller community of readers who are willing to pay for the high cost of production. The paper newspaper will cover and analyse specialised topics while the rest of general news will be featured online.‖ This model, according to the journalist, will put less emphasis on advertising revenue and more focus will be on audience subscription and sale of media products. Since the physical newspaper will be smaller and 122
positioned to serve a smaller community of readers, it will reduce the high debt burden on most legacy organisations and make it possible to conveniently support the newsgathering process from money realized from online advertising. He noted that his newspaper has already instituted some of the changes such as partnering with other newspapers to share coverage and content, consolidating and or dropping sections of the daily paper, contracting most of their printing jobs to third parties and discontinuing some features such as stock listings to save money.
He continued that ―we have also embarked on staff retraining to equip our staff with latest digital skills to leverage the opportunities offered by Web 2.0 for online advertising and e-commerce‖.
Interestingly, most of the journalists interviewed for this study observed that their newspaper organizations have been designated as ―digital first‖ organisations. According to the digital editor for the Winnipeg Free Press, this designation implies that greater human and financial resources have been dedicated to transforming their organisation to ‗digital first‘ entities to maximize the benefits of the web; attracting more advertising revenue and responding to the demands and expectations of their customer on the web.
Many newspapers in Canada have instituted paywalls on their websites and this has strengthened the belief that paywall is a possible business model for the newspaper industry to monetize their products and services online. Paywalls are restrictions placed by newspaper organisations on their online content to persuade readers to subscribe and to build circulation as a means of attracting revenue. There are basically three kinds of Paywalls being implemented by various legacy news organisations in Canada, namely the hard paywall, which is the most restrictive and allows no access to online content without subscription; the soft paywall, which allows access to a limited number of articles or content before the reader is prompted to subscribe; and finally, the less prohibitive metered paywall, which allows access to number of articles or content for certain period without subscription.
Since 2011, newspapers in Canada have been struggling to convince readers to pay for content online and the campaign has not been very successful. 123
The paywall model has had varying degrees of success. While some newspapers are making significant revenues from paywalls, others are falling behind. Some of the newspapers that implemented the model from the start dropped the model after some trial period noting that it was preventing them from broadening their readership base and therefore making the media outlet less attractive to online advertisers. Other models proposed by interviewees include the Foundation funding model whereby a media outlet can be funded through donations from foundations and this will be run as a not-for-profit organization; Crowdsourcing model, also a not-for-profit option which can rely on donations from private citizens and individuals that embrace a particular cause championed by the media outlet; the pay-per-article model, which is a subscription model that encourage readers to pay only for individual article they read. A journalist interviewed from the Winnipeg Free Press confirms that his organization has implemented the model since 2015 and that the results were ―very encouraging‖.
RQ4: How has the industry been coping with the disruptive challenges of the internet and how can they be repositioned to overcome the current crisis? The demolition of the traditional business/operating model of legacy newspaper organisations means that newspaper organizations must find ways to adapt to the networked environment if they must remain relevant in the information and digital age. Legacy newspaper organization impacted by the technological shifts like digitization and the internet have instituted measures to cope with the challenges associated with the transition from a manufacturing model to a purely digitized process of news production and dissemination. Early research shows that the transition has been slow and painful due in part to confusion, misunderstanding of the digital landscape, scepticism, lack of insight on the part of managers and the print-centric culture of newspaper organizations.
However, recent studies indicate that many legacy newspaper organizations are diligently pursuing and implementing various measures aimed at coping with the disruptive challenges of the internet and digitization but also positioning their organisations as digital giants of the future. There is abundant 124
evidence, based on interviews for this study, that the newspaper sector is adapting to the technological advances through attrition and disappearance of jobs in some areas while, in functions related to digital delivery, the flow of new jobs has increased markedly in recent years. One of the journalists interviewed notes that ―we have undertaken a massive reorganisation both in staff and resources.
Many positions have been dropped while a number of new positions have been created especially in the areas of IT and digital content delivery and this has been accompanied by significant changes in resource allocation‖. In terms of editorial content production, some of the changes have occurred in the areas of digital page editing, video production, interactive graphics, and contributions to blogs. In addition, teams of analysts have been hired to collect and interpret information gathered through the return path about patterns of consumption and usage of digital products. According to the journalist,‖ the process of reorganization and renewal of staff competencies has involved shrinkage too with the loss of a number of jobs in conventional journalism, production and editing‖.
Another journalist working for one of Canada‘s largest newspaper chains notes that his organisation has ―streamlined every aspect of our operations to protect our core newsgathering operations. We have already cut copy desks from most of our papers and centralized production of national, international and business pages to reduce duplication across the chain. We are also working on other areas of our operations such as manufacturing management, circulation and marketing that can be handled from a central location.‖ He further observed that apart from these measures outlined, they are also looking at whether money can be saved in how ―newspapers are laid out each night, whether printing the paper half an hour earlier would be cheaper and if there is a way to have fewer delivery people on the street each morning.‖
The commercial editor for one of the metropolitan newspapers interviewed for this study also noted that his firm has embarked on the implementation of various changes within the organization and this includes staff retraining, separating their print investments from the digital operations as a way of granting more autonomy to the digital staff who may be constrained by the legacy culture. ―While we 125
are investing so much in our digital operations because that is the area we need to grow urgently, we are at the same time dedicated to our print investments because that‘s where the money is coming from.
Our cross-media philosophy is to achieve sustainability in both our digital and print operations‖ he observed. In another development, the head of digital operations at another newspaper confirmed the financial and staff reorganization taking place in his firm noting that ―our purpose is to secure more effective adjustment to a digital multiplatform publishing environment by investing in re-training of staff, better integration of digital teams and an improved content management system.‖
Apart from these broad changes introduced by newspaper organizations to cope with the disruptions to their traditional revenue sources, most of the journalists interviewed for this study affirm that their organizations are exploring other avenues of raising additional revenue to compensate for the money lost in advertising and circulation sales. Some of these measures include engaging in electronic commerce: selling goods and services on the web utilizing their brand strength; establishing employment and other services website as a way of slowing down the competition from internet firms like Craigslist and E-bay and opening membership clubs that offer loyalty and rewards programs as a way of incentivising subscribers. According to a journalist working for the Globe and Mail newspaper,
―our rewards and points program is one of the best in the retail industry and we have been able to build a large base of clients from this program and we are exploring other programs of this kind to help us not only build our subscriber base but remain relevant in their lives.‖ Some legacy or mainstream news organizations are utilizing their existing business and expertise by engaging in businesses such as consulting, event marketing and content repurposing. Huddle, a new online business site focusing on
New Brunswick, is run by a marketing firm. Also, the Economist group has an editorial arm,The
Economist, and a consulting and events arm, The Economist intelligence unit. These initiatives are yielding small but significant revenues that are helping these organizations remain standing in a turbulent and unpredictable digital landscape. 126
This qualitative analysis shows that mainstream newspaper organizations in Canada are undergoing a painful transition from the manufacturing model to a digitalised process of newsgathering and distribution. Internet and digitisation, two technological forces, have upended the traditional and established models that have sustained the industry for over a century. A technology is considered disruptive when its use generates services or physical products with different performance attributes that may not be valued by the company‘s core customer base, but which improves well enough to dominate the market. The disruption literature and the theory of Disruptive Innovation (1977) explain in detail why incumbent firms are reluctant to innovate due to fear of cannibalising their own products.
Since 2005, over 15 media outlets have closed in Canada resulting in the loss of over 800 jobs.
Some surviving publications have either reduced the number of days they publish in a week or become online-only publications. Yet others have filed for bankruptcy protection and reorganization which has impacted not only their products and services but also the psychology of the communities they serve.
As Mainstream media organizations continue to absorb a steadily declining readership on their print platform, and a precipitous drop in circulation of the print products, a mammoth crowd of readers are moving online to access free news and advertiser, in turn, are pursuing them. On the Web, independent content providers like Buzzfeed and Huffington Post, news aggregation monsters like Google and
Yahoo, social media giants like Facebook and Twitter, electronic commerce start-ups/players like
Craigslist and eBay, are having a field day at the expense of legacy media organizations by offering free digital content and consequently appropriating advertising revenues and audiences hitherto reserved for legacy organizations. Furthermore, the convergence of digital information goods and computing and communication devices like smartphones, tablets, laptops, e-readers and other newly minted electronic gadgets have aggravated the situation for legacy newspaper organizations since consumers have multiple platforms to access news and information.
Many legacy organizations are responding to these developments by deploying digital platforms to create new ways of attracting and engaging audiences. They are also offering digital solutions and 127
very different approaches to news, information, social networking and entertainment and, also implementing a wide variety of online revenue models which is hoped will restore sustainability to the sector. The design is to transform from a purely printing model supported by advertising to a multiplatform publishing entity.
According to the former BBC director general, the solution is ―thinking cross-platform whenever possible, but also being able to harness the benefits of two-way connectivity with readers‖. Most legacy organizations are utilizing their trusted brands to engage in commercial activities that are yielding small but cumulatively significant gains. Interestingly, the transition from a purely print culture to a digitally diversified model of newsgathering, production and distribution is yielding dividends according to some journalists interviewed for this study. Majority of the respondents agree that support for news production activities in the future will be drawn from, in addition to subscription and advertising, a diversified range of commercial activities which will enable user traction around news content on digital platforms to be converted into revenue.
In terms of circulation revenue, digital app sales have helped in reducing the gap in revenue.
Similarly, experiments with paywalls and metered access models have generated welcome new income where publishers have confidence in their media brands and unique content is compelling enough to persuade consumers to part with their money. For advertising revenue, there is potential in brand content marketing, providing creative digital solutions for traditional advertising clients through the likes of native advertising.
Scholars and media analysts worry that the biggest obstacle to achieving a full digital transition may be the legacy culture that has hindered innovation. Publishers, managers and journalists trained in the print-centric culture of legacy media require a new orientation towards news production in the digital age and to know that what made them great in the past may not sustain them in the digital age. This problem is what scholars refer to as ―structural conservatism‖ (Bogart, 1995) ―Incumbent Inertia‖
(Gilbert, 2005), ―Path dependency‖, (Koch, 2008) and ―mindset barrier‖ (Marnix Assink, 2013). This 128
refers to legacy processes that enforce bureaucracy, command-and-control structures, waterfall development and risk management that stand as obstacles to the transition to a digitalized process. This business philosophy stands in contrast to the management philosophy of new entrants or digital natives who ―are lean, mean, learning machines that have an intense bias for action and tolerance for risk, expressed through frequent experimentation and relentless product iteration.‖ (Heflin, 2010).
Based on data gathered from respondents in this study, there is no doubt that the traditional business model of legacy newspaper organizations in Canada has been devalued by internet and digitization. However, the same forces that are causing this long-established model to crumble are also enabling new opportunities for brands to reinvent themselves. Media companies can thrive and survive by looking beyond traditional business models by diversifying their product lines, exploiting their brand strengths in pursuing multi-platform collaboration and seeing opportunities in the challenges they face. Publishers that grasp this truth will prosper and thrive in the new digital landscape.
4.4 Discussion of Findings
This section of the study is a discussion of findings from the data collected through the instruments used in the study. The major aim of the study was to investigate, using the cross-national comparative analysis, the influence of internet technologies on the traditional business models of newspaper industries in Nigeria and Canada and how the industry is reinventing themselves. The discussion, therefore, addressed the four (4) research questions raised alongside the hypothesis.
4.4.1. Research question 1: What are the defining characteristics of newspapers’ traditional business models in Nigeria and Canada?
This question is answered by the quantitative analysis provided in tables 5, 6, 7, and 8, qualitative analysis from the in-depth interview conducted with journalists in selected media houses in Canada on what the defining characteristics of newspapers‘ traditional business models are in Nigeria and Canada.
The manifest data from the in-depth interview suggest that there is a high degree of agreement and consensus among the respondents regarding what constitutes newspapers‘ traditional business model. 129
This claim finds support in the responses from table 5 which indicates that majority of 280 respondents representing 78% agree that they are aware of what a newspaper business model is.
However, 53 respondents, representing 14.8% of the total respondents did not share this view. Also, the data from table 6 revealed that 235 respondents, representing 65.5 percent of the respondents opined that the main source of revenue for traditional newspapers is advertisements, 34 (9.5%) said the main source of revenue for traditional newspapers is subscriptions while 90 respondents, representing 25.1 percent, averred that on- stand sales is the major source of revenue for traditional newspapers. This means that the dominant source of revenue for legacy newspapers in Nigeria is advertisements. This finding is consistent with the responses received from journalists from media organizations in Canada who claim that advertisement remains the revenue haven for their organizations. However, unlike
Nigeria, revenue earnings for newspapers in Canada are heavily and irresponsibly tied to advertising sales, particularly, classified advertising which constitutes more than 70% of their revenue. This explains the reason why the demolition of the classified advertising model has a more devastating impact on newspaper organisations in Canada than their Nigerian counterparts. Olley & Chile (2015) argue that Internet has turned out to be the greatest challenge faced by the newspaper industry. It has damaged classified advertising in newspapers and put the industry on the path to extinction. John
Stackhouse, the editor of The Globe and Mail in Canada, alluded to this when he spoke with nostalgia about the demolition of the advertising model which has sustained the newspaper industry for nearly two centuries.
Table 7 reveal that newspapers operate on a traditional business model. Most of the respondents
146 representing 40.7% responded said yes. While 114 respondents representing 31.8% were of a contrary view. Responses from the analysis in table 8 emanate from the question which sought to know why newspapers business model is damaged, 314 respondents, representing 87.5% of the total respondents affirmed that it was due to newspapers not being proactive while 25 (7.0%) opined that social media influence negated the newspaper business model. 16 respondents representing 4.5 percent 130
and 4 respondents representing 1.1% attributed the damage of newspaper business model to the newspaper not being the only medium for news stories and the limited advertisements in print.
From the quantitative data gathered, it is obvious that majority of the respondents believe that newspaper‘s traditional business model was destroyed due to their lack of foresight and not being proactive enough to deal with the disruptors. John Stackhouse‘s view supports the above assertion when he reminiscence the early beginnings of newspaper publishing through the turbulent years of the
Telegraph, Radio and Television and notes that though the traditional business model was strong to withstand these periods of upheavals, it was not meant to evolve in a manner able to sustain the industry at a time of unprecedented technological transformations brought about by the internet and web 2.0. This again gave credence to the outcome of the first hypothetical statement tested in this study, which proposes that the emergence of new technologies impede the growth of existing business models of newspapers. To this end, postulations arising from previous studies conducted by (Kperogi,
2011; Aborishade, 2015; Abati, 2016) with regards to the defining characteristics of newspapers‘ traditional business models, hold that advertising revenue for newspapers have dwindled as advertisers seek greater visibility and reach for their messages. Consequently, there have been the convergence and movement of traditional news media to cyberspace, which has made the future of the old media appear bleak as their market share is shrinking and their business matrix is on a spontaneous decline.
4.4.2. Research question 2: What are the differences between the business models of the
internet-based firms from that of the newspaper industry in Nigeria and Canada?
The quantitative analysis in table 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, and 19 show the reasons why the traditional business model was broken. However, table 9, 13, 15, 17, 18 and 19 were considered apt to answer the above research question. Table 9 reveals that 212 respondents representing
59.1% posit that newspapers business model differs from other business models, 71(19.8%) respondents returned no, while 76 (21.2%) were undecided. 131
The data in table 13 emanated from the response of respondent on whether new media have a better business formula. The analysis shows that 291 respondents, representing 81.1 percent of the total respondents averred that new media technology have better business formula than the traditional newspapers, 30 respondents, indicative of 8.4 percent said no to the assertion, 38 respondents, representing 10.6% were undecided.
Table 15 emanated from the factors leading to the breakdown of newspapers business model.
The manifest data shows that 60 respondents, representing 16.7 percent of the total respondents attributed it to customer fragmentation, 75 respondents, indicative of 20.9 percent opined that it was due to changes in consumers behaviour. Also, 74 respondents, representing 20.6% posit that it was due to the economic downturn, while 150 respondents representing 41.8% attributed the crisis to the rapid migration of consumers to the web.
The data in Table 17 was designed to find out if the business models of internet-based newspaper firm affect traditional newspapers. Out of the total respondents, 250 respondents representing 69.6 percent agree with the position that the business models of internet-based newspaper firm affect traditional newspapers, 61 respondents, indicative of 17.0 percent said no to the assertion,
48 respondents, representing 13.4% of the respondent population were undecided.
As indicated in table 18, of the 359 respondents, 240 constituting 66.9% opined that internet- based online newspapers operate different business models. Meanwhile, 63 respondents, representing
17.5% of the total respondents negates the statement.
Again, data from table 19 revealed how internet-based news firm differ from conventional newspapers industry. 26 (7.2%) of the respondents opined that this difference is based on human resources, 60 respondents representing 16.7 percent pointed to online based cum print-based, while 7 respondents representing 1.9 percent attributed the difference to free readership and cost-related factors,
18 (5.0%) respondents posit that it is due to accessibility, while majority of the respondents representing 248 (69.1%) associated the difference to delivery mode. 132
The import of the above analysis suggests a unanimous agreement among the respondents that traditional newspapers business model differ substantially from that of the online news operators, and that new media have better business formula than conventional or legacy media. Given this scenario, rapid migration to the web was chiefly identified as the leading factor in the breakdown of traditional newspaper business model. This finding is in consonance with the postulations of Abati (2016) who argued that the pursuance of greater visibility and reach for media messages online by media consumers resulted to the dwindling advertising revenue by traditional newspapers. Olley & Chile (2015) further corroborate this assertion by stating that the emergence of the internet no doubt has damaged classified advertising which has been the bedrock of traditional newspapers industry. To this end, the majority of the journalists interviewed in Canada strongly agree that the major reason for the demolition of the traditional business model for newspaper organizations was the over-dependence on or the loss of advertising revenue, especially classified advertising. One of the journalists interviewed for this study put it succinctly: ―the newspaper industry operates a mature market in Canada. Readership and circulation numbers have fallen and continue to deteriorate. Consequently, it can be deduced that there is a loss of readership and reduction in circulation of the hard copy newspaper both in Nigeria and in
Canada. Aliagan (2015) captured it right when he opined that newspaper industry in Nigeria is losing readership and revenue, but the extent of the loss is unknown.
However, qualitative data from the study identified some of the following as the reasons why the traditional business model was destroyed; loss of classified advertising, selling of audience reach and metrics that traditional media outfit cannot offer, and complacency that wrapped publishers and managers of news organisations who failed at the beginning to enlist in the digital revolution. This is in conformity with the quantitative finding in this study, which attributes the damage of traditional newspapers business model to newspaper managers and publishers not being proactive in the face of technological transformation. Therefore, the second hypothesis tested using items 9 and 10 in the questionnaire suggests that reinventing the business model of the newspaper industry depends heavily 133
on the ability of the operators to realign their operations to the realities of the digital environment and the new media technologies.
More importantly, the qualitative data indicate that in terms of operational costs, internet-based firms are ―characterized by low capital requirements, low fixed costs, low production and distribution costs, no variable costs and rapidly declining costs. In contrast, the cost characteristics of traditional newspaper model consist of high capital requirements, high fixed costs, high production costs, high first-costs, moderate variable costs, low marketing costs, and rapidly declining average total costs.‖ The commercial editor of one of the newspapers interviewed in Canada observed that there are unique characteristics and differences between the Internet-based firms and the legacy newspaper organisations and notes that these unique differences and features determine the sustainability and profitability of the business models which they operate.
4.4.3. Research question 3: What business model options are available to the industry to
resource and reinvent newspaper journalism in Nigeria and Canada?
The quantitative analysis from tables 20, 21, 22, 23 and 24 show the business model options that are available to the industry to resource and reinvent newspaper journalism. Data presented in table 20 shows that 237 respondents representing 66.0% of the total respondents believe that conventional newspaper firms can reinvent themselves by realigning and updating their business models to survive,
47 respondents, representing 13.1% and 75 respondents representing 20.9 percent negated the statement while the others were undecided. Also, 189 respondents, representing 52.6% opined that there are business model options available to the legacy newspaper industry, 50 respondents representing 13.9% said that there are no business model options available to the traditional newspaper industry. The analysis also reveals that 67 respondents representing 18.7% noted that increased online presence is an absolute option for traditional newspapers to survive, 292 respondents, representing 81.3% opined that increased exploitation of smartphones/mobile phones for news delivery are options of survival. Again, 134
231 respondents representing 64.3 percent still believe that traditional newspapers have better revenue generating formula, 80 respondents representing 22.3 percent were undecided, while 48 (13.4%) respondents were on the contrary. In addition, 122 respondents representing 34.0 percent averred that hardcopy remains the preferred format for future newspaper publishing, while 210 respondents representing 58.5% opined that online digital format is better for future newspaper publishing.
The import of the above analysis is that traditional newspapers can reinvent themselves and their diminished business models, even in the face of technological disruptors, to survive. This can be done through multi-platform diversification, retraining of workforce to maximize new tools for newsgathering and dissemination, greater engagement with consumers and updating the knowledge base for journalists to compete with online news operators and entrepreneurs. Since there are business model options available to traditional newspapers industry, the majority of the respondents believe that a switch to the smartphones/mobile options would be a better strategy to keep afloat and remain competitive in the new media environment. This finding is consistent with Olley and Chile (2015) position that the online publications do not have significant effects on the actual sale of hard copies, as most respondents still buy the hard copies after reading online versions of the news.
However, qualitative data arising from this study conclude that advertising models that supported media offline seem for the most part, unsuitable for the web and therefore have failed to generate enough revenue to compensate for the money lost from print advertising. Media analysts and scholars are worried that the newspaper industry is not doing enough to finding an urgent solution to the problem. Rather than engaging in serious innovative processes, most legacy news organizations are stuck in their old ways of doing business. Meanwhile, as digitization and the growth of the internet continue to diminish levels of readership, circulation and advertising for legacy newspapers, there is greater urgency and need for the industry to find a solution. Obijiofor (2003) on the contrary argued that new technologies have improved rather than harmed the quality of newspapers in their countries. 135
Similarly, Nworah (2014) noted that internet led to a decrease in the revenue of newspapers. However, this revenue might come up again.
There are basically three kinds of Paywalls being implemented by various legacy news organisations in Canada, namely the hard paywall, which is the most restrictive and allows no access to online content without subscription; the soft paywall, which allows access to a limited number of articles or content before the reader is prompted to subscribe; and finally, the less prohibitive metered paywall, which allows access to number of articles or content for certain period without subscription.
Since 2011, newspapers in Canada have been struggling to convince readers to pay for content online and the campaign has not been very successful. The paywall model has had varying degrees of success.
Other models proposed by interviewees include the Foundation funding model whereby a media outlet can be funded through donations from foundations and this will be run as a not-for-profit organization;
Crowdsourcing model, also a not-for-profit option which can rely on donations from private citizens and individuals that embrace a particular cause championed by the media outlet; the pay-per-article model, which is a subscription model that encourage readers to pay only for individual articles they read. A journalist interviewed from the Winnipeg Free Press confirms that his organization has implemented the model since 2015 and that the results were ―very encouraging‖.
The foregoing qualitative data from Canada supports the results got from the quantitative data in
Nigeria presented in table 20, 21 and 23 where a clear majority of the respondents opined that conventional newspapers can still reinvent their old business models for survival. This is due to the business model options available for traditional newspapers industry both in Nigeria and Canada to maintain their revenue generating power in a competitive media market.
4.4.4. Research question 4: How has the industry been coping with the disruptive challenges of
the internet and digitization and how can they be repositioned to overcome the current
crisis in Nigeria and Canada? 136
This question is answered by the quantitative analysis provided in tables 25, 26, 27, and 28 as well as responses from the in-depth interview conducted with journalists and editors of newspaper firms in
Canada. Table 25 provides insight into the possibilities for conventional newspapers to overcome the current business model crisis. Majority of the respondents 221 representing 61.6% asserted that there are possibilities for newspapers industry to overcome the current business model crisis, 53 respondents representing 14.8% said that traditional newspapers do not have the possibilities to overcome the current business model crisis.
Table 26 which summarizes the options for overcoming current business model crisis in newspapers industry shows that 243 respondents representing 67.7% of the total respondents adjudged that online adverts slots are a better strategy towards overcoming the current crisis in the traditional business model, 8 respondents representing 2.2% opined that free access/social worth would be a panacea. Also, 38 respondents representing 10.6% submit that the upgrade of online platforms by the traditional newspapers will make a huge difference, while 36 (10.0%) respondents canvassed for the need to provide free news online, while 34 respondents representing 9.5 percent suggested legal solutions. This means that majority of the respondents believe that it is not yet obituary for legacy newspaper organisations and that the industry has the capability to overcome the current crisis.
From the data in table 27, responses gathered shows that majority of the respondents 190 felt that traditional newspapers industry have the potentials to respond to disruptors. While 59 respondents representing 16.4% believed that traditional newspaper industry does not possess the potentials to respond to disruptors.
From the data in table 28, the majority of the respondents contend that traditional newspapers industry can respond to disruptors when they embrace convergence. This is evident by 286 respondents representing 79.7% of the total respondents who shared this view, 36 respondents representing 10.0% noted that attention should be paid to opportunities. The manifest data also show that 11 respondents representing 3.1% assert that there is the need for newspapers to reshape their contents, 8 respondents 137
representing 2.2% canvassed for the need to build professionalism, while 18 (5.0%) respondents opined that newspaper industry can respond to disruptors by developing the online platform.
The import of the above analysis is that respondents believed that traditional newspapers industry have what it takes to respond to disruptors. Consequently, they are to embrace convergence by going online and increasing their online adverts slots. This is in conformity with the qualitative data which observed that legacy newspaper organizations impacted by the technological shifts like digitization and the internet have instituted measures to cope with the challenges associated with the transition from a manufacturing model to a purely digitised process of news production and dissemination. Early research shows that the transition has been slow and painful due in part to confusion, misunderstanding of the digital landscape, scepticism, lack of insight on the part of managers and the print-centric culture of newspaper organizations. However, recent studies indicate that many legacy newspaper organizations are diligently pursuing and implementing various measures aimed at coping with the disruptive challenges of the Internet and digitisation but also positioning their organisations as digital giants of the future. This is a confirmation that all newspapers in Canada have established an online presence as a direct response to the changing market environment.
Also, the findings from this study supports the theory of disruptive innovation. Disruptive innovation has proved to be a useful analytical tool for understanding how technological innovation has played an important role in shaping many industries in society. In addition, this study helped to further explicate the fact that traditional newspapers can reinvent their business model for survival and can respond to disruptors positively both now and in the nearest future.
Finally, the newspaper market varies greatly by country due to factors such as long-standing historical and cultural traditions in each region; levels of social development in terms of education, literacy and income; the news industry‘s organisation, economies, production and distribution system; and the overall structure of public subsidies, government regulations and national levels of democratization. 138
4.5 Summary of Findings
Based on the discussion of findings from this study with other findings from related studies as they address each research question, the researcher, therefore, summarizes the findings arising from this study as follows:
Majority of the respondents (85.5%) agree that support for news production activities in the
future will be drawn from, in addition to subscription and advertising, a diversified range of
commercial activities which will enable user traction around news content on digital platforms
to be converted into revenue.
A clear majority of the respondents (79.2%) are aware of what the concept of the business
model is and what is meant by traditional newspaper business model. Classified advertising was
identified as the main revenue source for traditional newspapers. However, the emergence of
the internet and Web 2.0 have placed a disruptive hold on the classified advertising market have
breached the revenue profile of the industry which resulted in newspaper closures and the loss
of thousands of jobs by journalists. This situation has ignited a fresh search for new revenue-
generating opportunities resulting in multiplatform diversification, convergence and ―digital-
first‖ strategies implemented by many legacy organizations.
Most of the respondents (68.8%) believe that the major reason for the demolition of the
traditional business model for newspaper organizations was the over-dependence on or the loss
of advertising revenue, especially classified advertising. To this end, the qualitative and
quantitative data agree that complacency, lack of vision and cultural inertia that enveloped
publishers and managers of news organizations at the beginning of the digital revolution,
aggravated the situation and hastened the destruction of the traditional business model which
has sustained the industry for so long.
From the analysis, there is unanimity of agreement among the respondents (75.2%) that legacy
or traditional newspapers‘ business model differ substantially from that of online news 139
operators and start-ups, and that new media firms have better business operating formula than
the conventional media. Based on this, rapid migration to the web was principally identified as
the leading factor in the breakdown of traditional newspaper business model.
Most of the respondents (70.9%) opined that conventional newspapers can still reinvent their
old business models for survival. This is due to the abundance of business model options
available to conventional newspaper operators both in Nigeria and Canada to maintain their
revenue generating power in a competitive media market.
From the analysis, it is observed that most respondents (68.5%) believe that traditional
newspaper industry has what it takes to respond to disruptors given their size and knowledge
base. Consequently, they are to embrace convergence, increase and strengthen their online
presence and online adverts slots. This suggests that while traditional newspapers implement
digital strategies to boost their online revenues, they should not do so to the detriment of their
existing form.
The unique contribution of this study to the field of knowledge.
This study highlights the factors at the heart of the current crisis in the newspaper industry, detailing the measures taken by major newspaper organisations in Nigeria and Canada to reinvent themselves into digitally relevant organisations capable of withstanding the impact of technological innovations. it builds on original and existing literature to suggest innovative ways news organisations can reclaim their battered business models and be positioned to face future business model disruptors. Across the globe, established businesses have been challenged by a turbulent wave of technological innovations.
They include the Airline industry, (low-cost airlines) transportation industry, (Uber) hospitality industry, (Airbnb) Telecommunications services, Retail businesses and Parcel delivery services.
Experts in industrial management warn that this trend will accelerate in the coming years and many established businesses and institutions will disappear and die. 140
This thesis makes an invaluable contribution to knowledge by alerting businesses, particularly the newspaper industry, of the latent and potential risks to their business models and suggesting innovative business models that will provide flexibility, adaptability and sustainability to the industry. By understanding the business matrix of the digital media, legacy newspaper organizations can increase their sources of revenue, remain sustainable and relevant in a fast-changing media landscape.
Suggestions for future research
Legacy newspaper organizations have been challenged by the disruptive impact of digital media which have upended their longstanding business models. However, this impact has been felt more by city and metropolitan newspapers and evidence from research show that regional newspapers have exhibited more resilience than their counterparts in the metropolis. Future research can explore this trend and help understand why this situation is prevailing given that metropolitan newspapers have more resources to respond to the demands of the digital era.
141
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CHAPTER FIVE SUMMARY, CONCLUSION AND RECOMMENDATIONS 5.1 Summary
This study is a comparative assessment and investigation of the influence of Internet technologies on the traditional business models of newspaper organizations in Nigeria and Canada.
Specifically, the study looked at the defining characteristics of newspapers‘ traditional business models in Nigeria and Canada; the differences between the business models of the Internet-based firms and online news operators from that of the newspaper industry in Nigeria and Canada, the business model options that are available to the industry to resource and reinvent newspaper journalism in Nigeria and
Canada, how the industry has been coping with the disruptive challenges of Internet technologies and digitisation and how they can be repositioned to overcome the current crisis in the industry to be able to respond to future business model disruptors. To effectively carry out the study, four research questions were raised based on the objectives as well as four alternate hypotheses. One theory (The Disruptive
Innovation Theory) was used to explain the concept under study.
In conducting this study, the mixed research design (questionnaire and in-depth interview) was used to generate both quantitative and qualitative data. The questionnaire result was presented in tables of frequencies and percentages by the researcher. The researcher also analyzed the in-depth interview using the Yin (1984) explanation building model. The findings were discussed and results from related studies were used to support the findings. This study will add to the existing knowledge in this field as well as provide new grounds for further studies.
5.2 Conclusion
Based on the above findings, the following conclusions were reached. The traditional business and operating model for traditional, conventional and legacy newspaper organizations, which was based chiefly on advertising, is no longer sustainable. Digitisation and Internet technologies, which have admitted an army of competitors into the media landscape, have upended the revenue model 144
igniting a frenzied search for a sustainable new model. Legacy newspaper organisations are in experimental mode, implementing various strategies to see what works best for the industry. Most of the efforts are focused on digital transformation as publishers and managers of legacy organizations believe that the future of the newspaper industry will be played out on the web. So far numerous models are on the table, from paywalls to crowdfunding, but no one can predict with certainty what the future model or models will be. Evidence gathered from this research shows that newspaper organisations are already thinking outside the box, diversifying their operations and spreading their revenue generation tentacles to include areas outside their traditional media boundaries.
Media experts believe that multi-platform diversification will restore sustainability to the industry and help check the activities of future disruptors. Traditional newspapers, given their size and knowledge base, have the potential and capability to completely reinvent themselves if they can overcome the corporate inertia of doing journalism ―as it has always been done‖. This means being more receptive to fresh ideas and showing the willingness to take risks and venture into new areas of news production and delivery. This research shows that traditional news organizations that are bold enough to do journalism differently, just like the start-ups, are already reaping good results. This is not to encourage unethical practices, reminiscent of some online news merchants and social media news practitioners, but a call to reflect more flexibility in the process of newsgathering, production and delivery. This will correct the irony or injustice playing out in the new media landscape where the majority of the news products used by online news merchants and aggregators are provided by mainstream media who, unfortunately, do not generate enough revenue from their online products.
Traditional newspapers industry can reinvent their business model should they harness the possibilities made available by new media while trying to improve on their conventional state to reflect the current realities of things in a competitive media marketplace. 145
Managers of traditional newspapers industry should closely monitor the internet and its attendant innovations that can promote or cause a decline in their revenue. This is to enable them to cushion the effects of the disruptors to their business model.
A comparative analysis of the traditional newspapers industries in Canada and Nigeria show that the newspapers industry in Canada was quick to adjust to the Internet as a more visible platform with revenue generating power than their Nigeria counterparts. On the flip side, newspaper organisations in
Canada felt the impact of the disruption more than their Nigerian counterparts. This can be attributed to the size of the industry in Canada and the fact that the Canadian media operates a more developed market than Nigeria. In addition, the lack of transparency in the reporting of the operations of media organizations in Nigeria and the absence of an independent body that monitors and reports the number of newspapers sold in the country is a minus and an embarrassment to the industry. Aliagan (2015), have noted that the newspaper industry in Nigeria was already in distress even before the disruption by the internet and that the last circulation report presented by the Newspapers Association of Nigeria was inconclusive due to the controversy that surrounded it. This lack of transparency and a reputable monitoring body like the Audit Bureau of Circulation hinders the ability to gather an accurate statistic on the circulation of newspapers in Nigeria. Some scholars believe this is a deliberate attempt by some media companies in Nigeria to manipulate circulation figures to give them an advantage to advertisers.
Furthermore, both Nigerian and Canadian newspapers industry have what it takes to positively respond to disruptors to their revenue generating acumen and to retain their relevance in the changing face of technological innovation.
5.3 Recommendations
The following recommendations are put forward based on the outcome of this study: 146
1. Newspaper organisations must expand their revenue base to include areas unrelated to
Journalism. Given the realities of the digital age, it is impractical to sustain the newspaper
business with advertisement or subscription sales. Majority of repondents (66.7%) believe that
newspapers have the capability and resources to overcome the current crisis if they build on
their brand strength on the web.
2. Newspapers,especially those in Nigeria and other developing economies,must devote more
resources to improving their image on the Internet. This can be done through staff training and
becoming more interactive to know and respond to consumer‘s needs and aspirations.
3. Newspaper organizations must become just more than newspaper companies. This means
completely reinventing corporate culture, mission and products. According to the Executive
Editor for Digital news at UK‘s Telegraph, ―we are not a newspaper company. We are not a
Digital company. We are both.‖
4. Newspapers must develop a deeper relationship with readers around targeted interest areas. This
builds on a strength that has always been at the heart of publishing. The era of top-down news
delivery system which characterized the traditional news system is outdated. The people
formerly called the ‗audience‘ are now in the news-making and delivery business. This new
relationship can be harnessed to the full benefit of mainstream media.
5. They must tap into revenue streams beyond advertising and circulation. New publishing
services will include such as custom content, consumer insights and lead generation, and new
offerings for customers such as premium content and data-based applications.
147
6. Finally, newspapers must learn to think like disruptors. This means they must be willing to
cannibalize their own products when it becomes necessary and unavoidable. They must act as
both start-ups and incumbents.
148
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APPENDIX 1 REQUEST TO FILL QUESTIONNAIRE
Dept. of Mass Communication University of Nigeria, Nsukka November 2016 Dear Respondent,
I am a postgraduate student at the University of Nigeria, Nsukka. I am conducting a cross-national research on the disruptive impact of the Internet on the business models of newspaper organisations in Canada and Nigeria. I request your assistance in completing this questionnaire. All information provided will be used solely for this research and will be treated with strict confidentiality. Thank you.
INSTRUCTIONS Please tick (√) in any of the boxes and fill in where necessary. Section A(Demographic Data)
(1) Gender: (a) Male (b) Female (2) Age: (a) 16-25 (b) 26-35 (c) 36-45 (d) 46-100 (3) Marital Status: (a) Single (b) Married (c) Divorced (e) Widowed (4) Education: (a) High School (b) Diploma (c) University Degree (d) Masters/PhD (f) No formal education Section B
(Psychographic Data) 5.Do you know what a business model is? Yes No Can‘t say 6. What do you consider to be the main source of revenue for traditional newspapers? Advertisement Subscriptions On-Stand Sales 7. Newspaper industries operate on a traditional business model? Do you think this business model is damaged? Yes No Can‘t say 8. If you think the traditional business model of the newspaper is damaged, can you de scribe this pattern of damage______9.Does newspaper business model differ from other business models? Yes No Can‘t say 10. How would you rate the impact of internet technologies on the business models of news organisations? Neutral Very Impactful Extremely Impactful 11. Based on your response, can you describe further, the reason for which you think so? ------12. Does the emergence of new media technologies cannibalise newspapers business model? Yes No Can‘t say 156
13. New media technologies have better business formula strategies than the traditional newspaper industry?
Yes No Can‘t say
14. Do you think that news and other services on the internet should always be free?
Yes No Can‘t say
15. Indicate the major factor that contributed to the breakdown of newspapers‘ traditional business model.
(a) Customer fragmentation
(b) Changes in consumers behaviour (c) Recession and economic condition (d) Youth migration to the web
16. Have you ever paid for news on the internet?
Yes No Can‘t say
17. Do the business models of Internet-based firms adversely affect the business of the traditional newspaper industry?
Yes No Can‘t say
18. Internet-based firms and newspaper industry operate different business model?
Yes No Can‘t say
19. How do these business models differ from that of the conventional newspaper industry? ______
20. Can traditional newspaper industry re-invent their old business model?
Yes No Can‘t say
21. Are there business model options available for the traditional newspaper industry?
Yes No Can‘t say 22. If yes, what are these business models available to them? ______
23. Is there better revenue generating formulas accessible to newspapers industry?
Yes No Can‘t say 24. What format/platform do you prefer your future newspaper to publish? Hard copy Online/digital Can‘t say 157
25. Are there possibilities for newspapers industry to overcome the current crisis in their business model?
Yes No Can‘t say
26. Kindly give further reasons for your answer______27. Does newspapers industry have what it takes to respond to future business model disruptors?
Yes No Can‘t say
28. If Yes, how ______
158
APPENDIX 2 INTERVIEW SCHEDULE
A. Defining Characteristics of Newspapers’ Traditional Business Models in Canada. i. Discuss what you consider to be the main source of revenue for traditional newspapers? ii. Newspaper industries operate on a traditional business model? Do you think this business model is damaged? Please explain your thoughts. Business Model of Newspapers in Canada Damaged i. Do you think new media technologies have better business formula strategies than the traditional newspaper industry? ii. The emergence of new media technologies cannibalise newspapers business model
C. Differences between the Business Models of the Internet-Based Firms from That Of The Newspaper Industry in Canada i. What factors contribute to the breakdown of newspapers‘ traditional business model? ii. How do these business models differ from that of the conventional newspaper industry? D. Model Options Available to the Industry to Resource and Reinvent Newspaper Journalism in Canada i. Are there business model options available for the traditional newspaper industry? Please elaborate. ii. Please elaborate on these business models available to them?
E. Coping with the Disruptive Challenges of Internet Technologies and Digitisation i. Are there possibilities for newspapers industry to overcome the current crisis in their business model? ii. Do newspapers industries have what it takes to respond to future business model disruptors? iii. Kindly give further reasons for your answer?
Closing: I will be analyzing the information you and others gave me and submitting a draft report to my supervisor in three weeks‘ time. I will be happy to send you a copy to review at that time if you are interested.