{"id":18274,"date":"2016-11-18T14:41:34","date_gmt":"2016-11-18T19:41:34","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/the-startup-trying-to-save-a-media-dinosaur\/"},"modified":"2016-11-18T14:43:02","modified_gmt":"2016-11-18T19:43:02","slug":"the-startup-trying-to-save-a-media-dinosaur","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/the-startup-trying-to-save-a-media-dinosaur\/","title":{"rendered":"The startup trying to save a media dinosaur"},"content":{"rendered":"<p>\u201cThe news out of Philadelphia, is that there is no news,\u201d declared Mark Dillen of the USC Center on Public Diplomacy in early 2009. \u201cNo newspapers, that is. The Philadelphia Inquirer and the Philadelphia Daily News have joined the swelling ranks of American print media that have gone bankrupt.\u201d<sup>[2]<\/sup><\/p>\n<p>How did we get to this point? How did an industry that attracted $65B in advertising revenue in 2001 fall to around $20B only a decade later? <sup>[8]<\/sup><\/p>\n<p>&nbsp;<\/p>\n<p><strong><u>The Print News Industry, Disrupted<\/u><\/strong><\/p>\n<p>The answer begins by looking at the four primary roles of newspapers and the competitive pressures enabled by technology in each:<\/p>\n<ul>\n<li><strong>News<\/strong> <strong>source<\/strong>: A newspaper\u2019s primary role has always been to create and deliver news to subscribers. The Internet broke the \u201cinformation monopoly\u201d that newspapers enjoyed. Bloggers and online media entered the competitive fray without burdensome overhead. Getting consumers to pay for content continues to be the billion-dollar question.<\/li>\n<li><strong>Community<\/strong> <strong>forum<\/strong>: Newspapers provide a medium for community connectedness, including wedding and funeral announcements, birthdays, anniversaries, and accomplishments. Social media offered a free medium through which to reach friends and family, with a more targeted delivery than newspapers.<\/li>\n<li><strong>B2C marketing medium<\/strong>: Where businesses previously relied on newspapers to reach markets, and broadly marketed to entire cities, they now can reach consumers through a plurality of technology-enabled media, including television, social media, and search engine optimization. In addition to being more targeted, these media often also provide trackable metrics that inform the effectiveness of a marketing campaign.<\/li>\n<li><strong>Individual marketplace<\/strong>: Through classifieds and personals ads, newspapers made it possible for people to market to each other. Craigslist and later Facebook Marketplace have largely displaced the newspaper\u2019s classifieds section.<\/li>\n<\/ul>\n<p>As a result of these parallel pressures, print media found itself in a crippling cycle: flight of advertising revenue leads to smaller papers, layoffs and decreased talent, limiting a newspaper\u2019s quality and breadth of coverage. This decline causes subscribers to be dissatisfied, and they turn to other media sources. Advertisers see declining circulation numbers, and further cut newspaper advertisement budgets, restarting the cycle.<sup> [2] [9]<\/sup><\/p>\n<p>&nbsp;<\/p>\n<p><strong><u>A tech response to a tech problem<\/u><\/strong><\/p>\n<p>Media companies have scrambled to innovate in the face of such intense and existential pressure. They have turned to content paywalls, subscription smart device applications, and online advertisements to try to offset advertising and subscription revenue, but this has only covered ~10% of a ~$45B industry decline (figure 1). <sup>[6]<\/sup><\/p>\n<p><strong><em>Figure 1:<\/em><\/strong><\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Advert-Rev_v1.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-18182\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Advert-Rev_v1-300x219.png\" alt=\"Newspaper Revenue\" width=\"300\" height=\"219\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Advert-Rev_v1-300x219.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Advert-Rev_v1.png 376w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>Among the most promising technology startups to target the media industry is Blendle, a journalism \u201cmicropayments\u201d startup attempting to modernize the way readers purchase content. <sup>[4]<\/sup><\/p>\n<p>Blendel\u2019s fundamental hypothesis is that people are willing to pay for the journalism they consume, but not in the way people used to pay for it. Instead of subscribing to a single news source and paying for blanket access to all content, Blendel sources articles from many media outlets and allows customers to browse and \u201cbuy\u201d articles that they are interested in. When the user clicks into an article, their account is automatically charged for that content (per-article prices range from about $.09 for a standard newspaper article to $2.50 for headline, long-form articles). <sup>[1]<\/sup><\/p>\n<p>Blendel keeps 30% of the revenue, passing 70% to the media source. The opportunity to participate in this \u201cmedia marketplace\u201d has drawn news sources including <em>The New York Times<\/em>, <em>The Washington Post<\/em>, <em>The Economist<\/em>, and <em>Fast Company<\/em>. <sup>[1]<\/sup><\/p>\n<p>The technology combines <strong>convenience<\/strong> (available on smartphone, laptop, or tablet), <strong>flexibility<\/strong> (access to a wide range of news sources, including newspapers and magazines), <strong>trust<\/strong> (users can request refunds for disappointing content, discouraging publishers from creating \u201cclick-bait\u201d and encourages quality), <strong>ease<\/strong> (being able to debit a \u201cwallet\u201d or charge to a credit card reduces the friction of pay walls and multiple log-ins), and <strong>targeted content delivery<\/strong> (generating customized recommendations\u00a0based on preferences and history, reducing content search time).<\/p>\n<p>One year after conception, Blendel has a million paying users in Germany, the Netherlands, and the U.S. (beta version only). <sup>[7]<\/sup><\/p>\n<p>If scaled, this model would give newspapers access to a global market of potential readers. The model also rewards \u201cunique\u201d or complex (and expensive) forms of journalism, as these types of articles are more likely to be attractive to customers. <sup>[7]<\/sup><\/p>\n<p><strong><u>\u00a0<\/u><\/strong><\/p>\n<p><strong><u>Pushing even farther<\/u><\/strong><\/p>\n<p>Blendel should seek to be embedded in the websites and apps of media outlets. Instead of having to subscribe to <em>The New York Times, The Economist and Wall Street Journal<\/em>\u00a0to read content from their\u00a0websites, users could use their Blendel account to pay for articles on each\u00a0site.<\/p>\n<p>This would reduce the friction of purchasing articles from different publications and allow newspapers to continue to collect on other website advertisements. It would also appeal to the consumer who wants an unabridged <em>view<\/em> of available content from a news source, without having to pay for content that isn\u2019t relevant.<\/p>\n<p>(794 words)<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>Sources:<\/p>\n<p>[1] Greenberg, Julia. &#8220;Would You Pay 25 Cents to Read an Article? Blendle Certainly Thinks So.&#8221; Wired.com. Conde Nast Digital, 3 Mar. 2016. Web. 18 Nov. 2016.<\/p>\n<p>[2] Joyner, James. &#8220;The End of Print Media.&#8221; Outside the Beltway. USC, 9 Mar. 2009. Web. 18 Nov. 2016.<\/p>\n<p>[3] Kissel, Mary. &#8220;The Decline of Print Doesn&#8217;t Mean the End of Journalism.&#8221; The Guardian. Guardian News and Media, 29 Oct. 2013. Web. 18 Nov. 2016.<\/p>\n<p>[4] Lomas, Natasha. &#8220;Blendle Clocks up 1M Signups for Its Pay-per-article Journalism platform.&#8221; TechCrunch. N.p., 11 Aug. 2016. Web. 18 Nov. 2016.<\/p>\n<p>[5] McFarlane, Greg. &#8220;Technology And The Death Of Print Media.&#8221; Investopedia. Investopedia, 08 Jan. 2012. Web. 18 Nov. 2016.<\/p>\n<p>[6] Olmstead, Kenneth. &#8220;Newspapers: Stabilizing, but Still Threatened.&#8221; The State of the News Media 2013. Pew Research Center, 17 Mar. 2013. Web. 18 Nov. 2016.<\/p>\n<p>[7] O&#8217;Reilly, Lara. &#8220;Some of the Biggest News Sites in the US Are Going to Start Letting Readers Pay-per-article.&#8221; Business Insider. Business Insider, Inc, 23 Mar. 2016. Web. 18 Nov. 2016.<\/p>\n<p>[8] Perry, Mark. &#8220;Newspaper Revenues Fall to 60-year Low.&#8221; CARPE DIEM. Blogspot, 26 Feb. 2012. Web. 17 Nov. 2016.<\/p>\n<p>[9] Smith, Russ. &#8220;The Day the Newspaper Died.&#8221; Splice Today. N.p., 15 Dec. 2008. Web. 18 Nov. 2016.<\/p>\n<p>[10] Stefano, Theodore. &#8220;Do E-Readers Spell the End of Print Media?&#8221; Do E-Readers Spell the End of Print Media? | Business | E-Commerce Times. N.p., 2 Sept. 2010. Web. 18 Nov. 2016.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Newspapers are hurting. Can a new pricing approach reverse declines?<\/p>\n","protected":false},"author":1959,"featured_media":18294,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-18274","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/digitization-challenge-2016\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The startup trying to save a media dinosaur - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/the-startup-trying-to-save-a-media-dinosaur\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The startup trying to save a media dinosaur - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"Newspapers are hurting. 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