Case Study

Question 1Highlight the differences between the value chains of a

traditional newspaper publisher and an on-line news publisher. Specify the (dis)advantages of

providing news on-line.

Outbound Logistic

Printed News

• Retailer stores• Individual sellers

Online news:

• Website• Mobile application• PDF

Operation

Writing Editorial selection PrintingDesign Distribution

Writing Editorial selection Design Distribution

Services

User EngagementReader are free to voice their opinion

Connecting & SharingReader can share articles to different social

media platform

Retrieving & StoringReader can easily find archived news

Advantages

• Cost-effective• New advertising revenue• Better accessibility• Manage customer loyalty• Timely & informative• Environmental-friendly

Disadvantages

• Dependent on network connection

• Need laptop or smart device to open

• Less advertising revenue

Question 2Evaluate the “worries about cannibalization” by comparing and

contrasting the core products and target customers in the market “place” for newspapers and for on-line news.

Comment on the relationships between editorial integrity and profits, specifically at SCMP and more generally (across different

strategic groups) in the newspaper industry.

• SCMP (2014):

Print Circulation 3% Digital Subscription 54%

Core Product Target Customers

Newspaper Newspaper (free or subscription)

Age: 30 ++Occupation: Business elite, working professional, general publicCharacteristic: Digital immigrant

Online News Online news (free or subscription)

Age: 30 –-Occupation: StudentsCharacteristic: Digital Natives

I.

II.

Overall circulation revenue 5% !!!

• Cannibalization effect is small

Editorial Integrity VS. Profit

• In general, reader choose newspaper with editorial integrity.

• Small scale boycotts on some newspaper in the past, hundred to

thousand people joined.

• The impact is minimal unless the scale becomes bigger.

• Continuous income from advertising, therefore reduction of

circulation in short time will not affect company’s profit seriously.

• SCMP won “most trusted newspaper” 5 times locally.

• SCMP use action to prove its editorial integrity and ethical journalism.

Question 3Discuss the major trends and/or developments that represent opportunities and/or threats to the news publishing industry.

Based on your environmental analysis, comment on the sustainability of the “traditional” newspaper business model and

summarize the prospects for hard-copy and digital news providers.

1. Internet is major information source for

“after 80s” and “after 90s”Threat/Opportunity

Major Trend & Opportunities/Threats

3. More targeted content

Threat/Opportunity

2. Future battlefield – “Mobile First”

Threat/Opportunity

4. “Multi-homing” habits of readers

Threat/Opportunity

Conclusion

Traditional newspaper is declining

Company must embrace digitalization

Initiate the change in parallel

Changing from print to digital doesn’t mean a whole new world, just changing of battlefield

Not just competition between peers, but also competition between every kind of content providers – Twitter, we media, podcast, YouTuber, etc.