“Will Technology Save the Publishing Industry”
September 16, 2012
Case Study Questions
1. Evaluate the impact of the Internet on newspaper and book publishers using the value chain and competitive forces models.
The publishing industry has been hit hard by new market entrants and substitute products and services. Newspapers are the most troubled segment of the publishing industry because of the availability of alternatives and publishers’ inability to protect their content. Traditional print newspapers can’t match the ease of use and immediacy of online papers. It’s also much more expensive to print and distribute traditional newspapers adding to publishers’ overhead costs.
Many of the traditional newspapers’ primary activities are expensive while those activities don’t necessarily exist for online newspapers; obtaining paper, maintaining printing press equipment, distributing print papers, gathering old papers, collecting fees, etc. Online news sites don’t have any of those expenses or processes to deal with.
Traditional book publishers are facing similar situations from substitute products and services and new market entrants. Many brick-and-mortar bookstores have closed for two main reasons: online sales and new electronic downloads to e-readers and smartphones.
As with newspapers, online book sellers and e-books don’t have all the overhead costs of traditional book stores and publishers nor all the processes to get products to customers.
2. How are newspapers and book publishers changing their business models to deal with the Internet and e-book technology?
Online newspapers are pursuing more online advertising dollars and partnering with Google and Yahoo to share revenue from advertising. Some news sites charge fees for newspaper content delivered to new reading devices. Another option is for news sites to charge fees for “premium” news and opinion. Because advertising remains a major source of...