The future media business model

The foundation of the media business is still based on the same principles as during the era printed newspaper. The customer is at the center of everything. Therefore, the first principle is to identify the customer. Media companies must be extremely interested in their customers’ actions and then collect the data accordingly. Only in this way will customer knowledge grow even faster compared to those lazier competitors. Thus, media companies are able to serve customers even better and thereby finally earn their trust. (Hämäläinen 2016) As can be seen from interviews and recent media studies, the role of data is a particularly important part of future media business. In other words, data will create a completely new business and refresh the traditional business to serve the consumer even better. The number of channels will increase, so the content supply will be fragmented around the internet. Therefore, media companies need to identify an important audience for the company and tailor the content accordingly. The major change in advertising relates to the increase in targeted and customized advertising. All this requires data.

Most likely, the future media business model will consist of several different dimensions in terms of both revenue streams and channels. Nevertheless, future scenarios still emphasize that the traditional print subscription model is most likely complemented with all of these smaller streams of digital subscriptions and other kind of micropayments.

(Lehtisaari et al. 2012) This is true as all the interviewees see some kind of role print media

will be having in the future media business. Already, all the major newspapers in Finland are generating a significant share of revenue from digital services. (Lehtisaari et al. 2012) These different revenue streams will be determining the mixed approach for future business model of newspapers. The figure below is adapted from the media business literature and the empirical results with a strong emphasis on digital elements of the newspapers.

Scholars and interviewees have recognized and categorized different type of revenue models in terms of subscriptions and advertising. In addition, this mixture of business model elements will spread outside traditional industry boundaries. (Lehtisaari et al. 2012; Picard 2014a, 2010; Berman et al. 2013; Hayes & Graybeal 2011; Lindqvist et al. 2010; Casero-Ripollés & Izquierdo-Castillo 2013; Argillander & Muikku 2013)

As stated earlier in this study, media companies should widen their interests outside revenue models regarding to business model innovations. Giesen et al. (2009) classifies business model innovation into three sections: revenue model innovation, industry model innovation, enterprise model innovation. According to empirical study, media companies in Finland are facing the changes in the industry characteristics. Enterprise model innovation is the most prominent type of innovation model in this context – considering the fact that the whole operating level of media companies needs reconsideration – as Giesen et al. (2009) states. Changing only the nature of revenue models will not guarantee as sustainable advantages as enterprise model innovation. In this context, it is particularly important to emphasize the increased transparency of media business highlighted by several interviewees. Consequently, traditional publishing companies and media companies in Finland are gradually transferring their operations to the digital environment.

The media business seems likely to be very different in 10-15 years from what it is now, still maintaining its basic function. The figure below (Figure 9) gathers all the viable business model elements from existing literature and empirical results around the newspaper and media business. It is important to note that both traditional income streams of the media, advertising and revenues from content, are changing their character. For example, the paywall is still searching and will continue to search the right model to implement appropriately. In addition, print and digital subscriptions will be supplemented with various micropayments. Advertising is also posing challenges for Finnish media companies, as the global technology giants such as Google and Facebook are slowly captivating the domestic advertising market. Mobile marketing, content marketing, and programmatic buying are the most repeated themes in the empirical research. The circle in the middle of the figure (Figure 9) gathers the rising trends regarding to media business. Considering the business

model theory, revenue models are changing remarkably and at the same time media business in Finland is asking for cooperation and strong customer relationships in order to survive in the turbulent industry. Finally, the value proposition of media companies is largely driven by consumer data in different matters. Compared to the situation of the media industry a few years back, the media industry has become much more complex environment. Business models are changing and traditional boundaries are fragmenting.

Figure 8. The future business model of media.

6 Conclusions

The initial purpose of the final chapter is to summarize the results of empirical research and to answer the set research questions. More synthesis is tried to create in order to gain comprehensive understanding in terms of media business today. Summarized results are continued with the managerial contributions and theoretical implications. Finally, limitations of the study should be identified and address the direction for further research.