Strategic Design Towards Platform Collaboration in The Newspaper Industry: A Design Science Research Study

Abstract

The newspaper industry is challenged by unsustainable business models. To stabilize dwindling revenue streams, publishers opted for digital subscriptions as one avenue for generating additional revenue streams. Large publishers have indeed benefited from rising subscription numbers. However, smaller publishers are challenged to achieve the same results. Some of the root causes are high churn rates, adoption costs and lock-in effects of subscription services. News aggregator platforms may promise newspaper publishers a large pool of paying readers. But platform fees and the loss of direct customer relationships enact commercial barriers among publishers. This study proposes design science research to address the aforementioned shortcomings by designing a collaborative subscription service in a Nordic country. Building on strategic alliance, digital platform and business model literature, this research aims to identify pertinent design principles that create positive conditions for a collaborative subscription services in the newspaper industry.

The Design Towards a News Aggregator Subscription Service: Results from An Online Experiment

“…To gain preliminary insights about the barriers and common grounds for a collaborative newspaper subscription service, we initially conducted semistructured interviews with the representatives of four [28]. Subsequently, the research team studied various newspaper subscriptions and aggregator services to gain a better understanding of accessing and reading news articles.…”

“…This present study is a continuation of the abovementioned research project from a user viewpoint by conducting an online experiment. By measuring the performance of the proposed software artifact in terms of usage (e.g., number of read articles), and different payment plans, the goal is to leverage on these insights to assist future studies that further seek to evaluate the designed artifact and the underlying design principles [28]. Specifically, the insights from the online experiment will be integrated into follow up studies to probe newspaper stakeholders to solicit their opinions and obtain statements towards engaging in a strategic alliance for a new type of news subscription service.…”

“…Although digital subscriptions promise stable revenues, and resourceful publishers with global coverage have indeed benefited from it (e.g., New York Times), smaller publishers (e.g., local newspapers), continue to struggle in increasing their subscription numbers [1]. To illustrate, smaller publishers have difficulties in convincing readers to pay for digital subscriptions in the first place [28], as users have, in most cases, a limited budget for media spending, while similar content is freely available just few clicks away. Secondly, even if readers start to pay for digital subscriptions, the churn rate, which is the rate of cancelations, is considerably high, which suggests a value mismatch between paying users, price, and content [28],.…”

“…To illustrate, smaller publishers have difficulties in convincing readers to pay for digital subscriptions in the first place [28], as users have, in most cases, a limited budget for media spending, while similar content is freely available just few clicks away. Secondly, even if readers start to pay for digital subscriptions, the churn rate, which is the rate of cancelations, is considerably high, which suggests a value mismatch between paying users, price, and content [28],. Based on these observations, this problem presents an opportunity for improvement.…”

“…To understand favorable conditions, this research conducts an online experiment to derive preliminary insights and design principles to utilize them for future studies with newspaper stakeholders in Finland. The goal of this study is to support a larger design science research (DSR) [8][9][10] study that seeks to identify and evaluate design principles for a collaborative news aggregator service that is operated by different publishers [28]. To the best of our knowledge, we are not aware of any public news aggregator services that are operated collaboratively by competing publishers.…”