Modifying the News Industry with the Internet

Abstract

The advent of the digitalization of pure information products has created new opportunities and changes in the information goods markets. The increasing acceptance and usage of the Internet and the decrease of access costs provide a new broad scope of economic activities and business models. These business models are based on the production, distribution, and sale of information goods (Clemons & Lang, 2003), and they have been developed either by traditional incumbents or by new players such as internet intermediaries. Nowadays in the news industry, writers and journalists can distribute their content directly to the end user. Moreover, new intermediaries, named infomediaries, have emerged providing informational services to their customers (Sawhney, Prandelli, & Verona, 2003). These infomediaries provide customized aggregated news Web content to the market and add value by essentially being cheaper, quicker, more specialized, easier to manage, and with a broader supply than the traditional businesses. As a result, the traditional news industry is changing and it is becoming digital and online. Despite the fact of the importance of these changes for the news and other industries, there is little research about this phenomenon. Based on empirical data collected from 15 case studies in the online news industry, this article focuses on the two major changes that are occurring in this industry. First, the activities of the value chain that are being modified and integrated. Second, the emergence of new players with Internet-based business models and the portal technology they use to exploit their business models.