Designing Ubiquitous Media Services - Exploring the Two-Sided Market of Newspapers

By Eriksson, Carina Ihlström; Åkesson, Maria et al. | Journal of Theoretical and Applied Electronic Commerce Research, September 2016 | Go to article overview

Designing Ubiquitous Media Services - Exploring the Two-Sided Market of Newspapers


Eriksson, Carina Ihlström, Åkesson, Maria, Lund, Jesper, Journal of Theoretical and Applied Electronic Commerce Research


1 Introduction

Given the ongoing diffusion of laptops, tablets, phablets, smart phones and watches, as well as the advent of new service and platform providers, such as Google, Facebook and Apple, the media ecosystem is rapidly changing. These changes challenge traditional media organizations such as newspapers in several ways. First, the ongoing convergence of different information and communication technologies trigger the emergence of new channels for media content [30]. Second, nowadays the mainstream consumer possesses a range of different computing devices, and is thereby changing their use patterns and behaviors [27]. Third, the media industry converges and the boundaries between different media domains are becoming blurred [37], [42].

These ongoing changes in the media ecosystem started some 20 years ago. Since the introduction of online newspapers in the mid-1990s, the consumption of news in people's everyday lives has undergone a significant change [5], [6] and the fundamental business of printed newspapers has been challenged to its core [10], [37]. Newspaper markets are two-sided with both reader and advertiser customers [39]. Arguably, the change in reader and advertiser behavior enabled by new digital technology, as well as new players on the market, has brought important consequences for the newspaper industry. One major challenge facing the industry has been to innovate profitable digital news services in which consumers are willing to pay for content, as the subscriptions of the printed newspapers is constantly decreasing. Another challenge has been to gain the advertiser market's acceptance of new digital channels, as the advertisement revenue in print is rapidly declining. Furthermore, social media actors, such as Facebook, Twitter and Snapchat, as well as platform providers such as Google, Apple, and Microsoft, are aggregating or publishing news content themselves. As such, these new actors are competing with traditional media companies for advertising revenue. A third challenge has been to cope with the high costs of maintaining parallel channels of production and distribution of both printed text and digital media. An inability to face these challenges has severe consequences for newspaper organizations, something that has become evident the last few years for the newspaper industry as legacy news companies file for bankruptcy.

To meet these challenges newspaper organizations are exploring new opportunities in digital media [52]. There is however uncertainty of readers' and advertisers' perceptions of value in the new evolving media ecosystem. To capture value in digital media ecosystems, newspaper organizations need to understand and define how their intermediary role in the two-sided market changes, and what defines reader and advertiser values. Furthermore, the technological complexity of the infrastructure and platform needs to be understood in relation to the two-sided markets of newspapers.

One lens to understand the complex technological evolution is the notion of ubiquitous information environments [30]. In ubiquitous information environments, digital technology is embedded in our every-day movements and interactions, wherever and whenever usage situations might occur. Services in an ubiquitous information environment are distributed independently of devices or distribution channels, and are adapted to user context, see e.g. [1], [13], [51]. Access is provided cross this variety of channels, allowing users to interact fluidly with the services [8]. This is enabled by the underlying layered modular architecture of digital infrastructures that separate devices, distribution, services and content [50]. Media services in ubiquitous information environments today, such as iTunes, Readly and Spotify, are organized in digital platforms [25]. These digital platforms are complex socio-technical systems of two-sided markets, digital resources and organizations with common interest in the platform. …

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