The newspaper industry in the US and Western Europe was experiencing a decline in its profitability with the onslaught of online marketing. This case study looks into the current news consumption preferences of customers and how the said industry has reacted to the threat of online publications.
David J. Collis, Peter W. Olson, Mary Furey
Harvard Business Review (709463-PDF-ENG)
March 11, 2009
Case questions answered:
- What are the key trends affecting the newspaper industry?
- How are newspapers responding to those trends? Which of those responses are sustainable and why?
- What should the newspapers do to stay relevant to readers and be profitable?
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Case answers for The Newspaper Industry in Crisis
Case Study Analysis – The Newspaper Industry in Crisis
The era of traditional print has come to a halt due to the advent of technology and demographic change. The Newspaper Industry must cater to the people’s changing preferences and respond to the threat of online establishments, which are taking away its market dominance.
Technology has stifled traditional newspapers’ revenues and profits and the whole print media industry. Before the booming arrival of technology, many firms and individuals relied on newspapers to advertise their products. These included car companies, real estate, exclusive deals, or brand-building campaigns.
Before, many companies promote their businesses through the print media and publications. This kind of promotion used to be one of the most effective ways to reach a vast number of relevant audiences. As a result, advertising accounted for 80% of newspapers’ revenues.
However, this all changed when the internet became prevalent. The industry of online advertising took away the market share of the newspaper industry. In some European countries such as Switzerland and the Netherlands, newspapers lost 50% of their classified advertising to the internet.
Many people prefer online advertising because the internet allows targeted marketing. This type of marketing will enable users to see only ads that are relevant to their interests, hobbies, or lifestyles.
Social changes also inadvertently decrease traditional newspapers’ readers. Young people develop a penchant for online news consumption because they want access to news instantly. Whereas daily newspapers only publish their articles once a day, online communication can update breaking news at any moment. Online news eliminates the time lag between when the story is created and when it reaches the readers.
Secondly, online sources allow a more flexible reading habit. Young people tend to have busy working schedules, so they prefer to check the news on-the-go, or whenever they have time. The internet facilitates them to grazer across different news outlets in just a few clicks on their devices.
The newspaper industry has gone through several mechanisms to retain its profitability. Several newspapers have…