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School of Business FACULTY OF HUMANITIES Print and Online Newspaper Interaction Effects on Circulation Change Dr Gary Graham LUBS Dr John Hill LUBS Dr.

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Presentation on theme: "School of Business FACULTY OF HUMANITIES Print and Online Newspaper Interaction Effects on Circulation Change Dr Gary Graham LUBS Dr John Hill LUBS Dr."— Presentation transcript:

1 School of Business FACULTY OF HUMANITIES Print and Online Newspaper Interaction Effects on Circulation Change Dr Gary Graham LUBS Dr John Hill LUBS Dr Anita Greenhill MBS

2 Phase 1: In depth qualitative interviews Dresden (n=11) March 2011 Leeds (n=15)April 2011 Phase 2: NS Regional Newspaper UK Database (n =100) SEM analysis (still in development). British Academy funded project: SG 100163 Methods

3 Leeds London MAP OF THE UK (LEEDS)

4 Leeds population 750,000 people make Leeds the second-largest metropolitan district in England. Business in Leeds 112,000 people work in the citys financial and business sectors Leeds is the UKs third-largest manufacturing centre, with 1,800 companies employing over 39,000 people. It has recognised strengths in advanced engineering, printing, chemicals and food industries The city is fast developing as a centre for the new, online economy. The city's media, communications & advertising sector is growing by about 10% a year. Leeds economy The city has the most diverse economy in the UK Leeds has a GVA of £15.4bn Around a third of GVA is generated by the financial & business services sectors. Transport in Leeds Leeds Bradford International Airport serves 70 destinations in 30 countries, including North America and Asia Leeds is linked by road to London and Edinburgh via the M1 and A1 and to the east and west coast ports via the M62 London Kings Cross can be reached by rail in just over two hours Manchester International Airport can be reached in just over an hour by road or direct rail link.

5 YORKSHIRE POST (40,160) YORKSHIRE EVENING POST (68,635) JOHNSTONE PRESS The regional publisher of more than 250 newspapers across the UK saw pre-tax profits fall by 47.4 per cent from £26.1m to £13.8m in the 26 weeks to July 2011. During the period headcount was reduced by 179 to 5,049


7 Europe Germany Saxony Dresden 51:03:00N 13:45:00E 113m / 372ft Euro (EUR) German Central European Time (CET) (UTC+1) Friday 13:17:39 The media in Dresden include two major newspapers: the Sächsische Zeitung (Saxonian Newspaper, circulation around 300,000) and the Dresdner Neueste Nachrichten (Dresden's Latest News, circulation around 50,000)

8 Sample classification details of newspapers participating in this study Year established (average)1896 Cover price (average) 48p Issues per week (average)6 Urban-based (n)58 Rural-based42(n) Circulation (range) (average) 153,724 9(max) to 14,611 (min) 40,419 Holding company ownership (n)84 Independent ownership (n) 16 Readership (average) Regional/local population (average) 51,433 378,584

9 UK regional newspaper sales (by volume), 2005-10 Source: Newspaper Society, 2010. Observations: The 21 st Century News Media landscape UK

10 Leeds University Business School Using new types of media to reach local communities (e.g. Facebook) Recognizing the role of Facebook and Google as high traffic generating websites Online journalism as manual news aggregator competing with algorithmic websites (e.g. Google) Delivering local news to a mobile device (e.g. Apple iPhone, Tablet PC) Implementation of a useful subscription model for different mobile devices Need for location-based news and services by using Global Positioning System Source: DD+V, Dresden workshop

11 Dresden The original financing model of newspaper (2/3 advertising and 1/3 sales revenues) does not take effect in the internet. Most online portals from newspaper publishers operate in deficit. German newspapers are less profit centric than their UK counterparts. Analogous to the pre-1980 newspaper environment in UK. Reservation: many are conglomerates (Sachsische Zeitung partnered with a profitable printing business). Online newspapers competing with public-service broadcasters (e.g. ARD, ZDF) Restrictions of a limited regional market (economies of scale) Role of local partners, alliances, acquisitions (economies of scope) Over-supply in advertising leads to sinking advertising rates and therefore to sinking advertising revenues. In addition, the web portals of the traditional content providers have a much lower reach compared to pure Internet services (e.g. SPIEGEL Online vs. GMX).

12 SZ Subscriptions

13 Leeds University Business School Product: Producer: Benefit: Latte Macchiato grande McDonalds 5 minutes Sächsische Zeitung DD+V 1 day 1, 9 9 1, 1 0 Source: DD+V

14 Extant literature

15 Leeds University Business School Paywalls ObservationsTheory (TCE?, Transactional efficiency) Conceptual Model – Market development through print/online synergy Synthesis

16 Empirically driven synergy model

17 We state the following hypotheses that predicts there is cross-media synergy between print an online media presence: H1: Printed supply chain product characteristics (business years, price, number of issues (per week), classified advertising rates (lineage) are positively intertwined with internet channel service presence (interactivity, daily unique users, mobile internet users, user generated content, convergence platforms, digital editions and paywalls). H2: Interrelations between printed supply chain characteristics (business years, price, number of issues (per week), classified advertising rates (lineage) and online service presence (daily) unique users, mobile internet users, user generated content, interactivity, convergence platforms, digital editions and paywalls) have a positive effect on the rate of circulation change. Hypotheses

18 Clemons & Lang, 2003;Geyskenset. al., 2002; Thurman, 2009. Constructs and relevant literature for the theoretical model ConstructItem label and descriptionRelevant literature Print activity Interactivitytools Convergencetools BusYears:numberof yearsin circulation Price: coverprice of the newspaper Issues: numberof printed issues per week Classadlin: cost of classified advertising lineage rates Displaypt: cost of display advertising lineage rates Classadon: cost of online classified advertising lineage rates Dailyunique: number of unique daily online visitors Mobile: number of mobile users Interactool1: numberofsocial media tools UGC: differenttypes of user generated content Convergto: multi-mediaplatform fordistributingnews content Diged:specifically designed onlinenews product Paywalls:paidsubscription to access online news content Popmn: populationof the newspaper community. Franklin, 2008; Picard, 2006; Meyer, 2008; Mitchell, 2009;Mintel, 2007. Co-creation Paywalls Howe, 2006, 2008; Li andBernhoff, 2008;Deuze& Neuberger, 2007. Greenslade, 2010. Online presence

19 Normal P-P plot of standardized residuals

20 Results: Print/online presence inter-correlations

21 Inter correlation effects Established daily unique users ( ϒ =.218/ p=.029) mobile internet access users ( ϒ =.217/ p=.030) High price daily unique users ( ϒ =.210/ p=.036) mobile internet access users ( ϒ =.213/ p=.033) High advertising daily unique users ( ϒ =.200/ p=.045) mobile internet access users ( ϒ =.199/ p=.047) Digital editions higher number of issues ( ϒ =.191, p =.051

22 Factor analysis

23 Hypothesis 1 Model Testing Path analysis parameter estimates

24 Hypothesis 2 model testing path analysis parameter estimates

25 Summary table: path analysis parameter estimates Path model produced a sound good fit to the data X2 = 19/4, p> 0.01; GFI = 0.968; AGFI = 0,905; NFI = 0.926; RFI = 0.827; IFI = 0.970; TLI = 0.926; CFI = 0.968; PNFI = 0.937; RMSEA==0.066; RMR= 0.066. Model 1 Latent effect PSC C OSP 0.42 (7.71) P>0.001 (Covariance ) Figures in parentheses represent unstandardized t-values Model 2 Latent effects PSCCLC1.06 (5.34) P>0.05 OSPLC - 0.22 (3.64) P>0.001 (Regression coefficients)

26 Discussion The SEM Model 1 shows a significant positive relationship between Printed Supply Chain Activity and Online Service Presence thus supporting H1. The SEM Model 2 does not show a significant positive path between Online Service Presence and Circulation Change and therefore does not support H2.

27 Dynamics of Multichannel Competition New organizational forms emerging. - Leveraging across channels - Optimal resource allocation OSP leading to negative change (cannibalization) in circulation change (homogenous experiences across channels, same experience with the brand). Better performing firms tailor each channels strength, harmonizing how channels work together, sum greater than the parts. Brand presence vital in the pick and mix of news media actors competing in the mass proliferated digital age.

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