The Newspaper industry - Online business models in sight yet?

Eric Schmidt, in his address to the American Society of News Editors yesterday on April 11th praised the newspaper industry for their creativity and the very critical work they perform in bringing daily news to readers.

However, the rest of the digital world looked upon for some cues to any innovative business models which may salvage the online newspaper industry. The critical question still remains as to how can the newspaper industry devise new revenue models for sustainability. Many business models like the Freemium and advertising models are currently available but have been successful in online edition of only specialized magazines and newspapers like the Wall Street Journal, Harvard Business Review and Total Telecom, to name a few.

The key may lie in the way readers consume information. While the previous generation of the internet was about data overload, the next generation is about personalization. As a user, I want my online aggregators and social sites to give me information I like and in the way I like it. At times, I would like to be suggested about news articles that may expand my current preferences. This is a beneficial model for businesses as they can devise targeted ads for me with high probability of catching my attention.

What is lacking in the online world is a lack of direct connection between social networking and the professional news generation. In twitter, my friend can provide a short news link from NY times but when I view the link, I am navigated away from twitter to the article. What I see here is lost opportunity for the advertizer to know about my preferences and why I found the newspaper article interesting as I decided to read it. If twitter could pull out the content from the news site and present it to me while within twitter, there could be a shared opportunity between the news site and twitter to provide advertizing targeted to my preferences ( as known to twitter).

This proposition has technical, business and legal challenges which need to be dealt with. A major  technical challenge is providing browsing capability within twitter. However, the mutually agreeable contract sharing content and revenue between the news producer and the news aggregator would be the most challenging hurdle. The privacy concerns users may have might be overcome by providing them with an opportunity to set their privacy settings. Facebook has successfully set a precedent for personalized targeted advertising.

I know we are not there yet, but soon personalization of news content needs to be affected, perhaps in  multiple ways. Only then will a reasonable advertising revenue could be generated for the newspaper industry.

The first one..

I am a graduate student at MIT Sloan. I love all things digital - but would like to be in the business of organizing and getting them work together so as to fit the larger scale of human intention. No, this is not digital philosophy 101, but a more system dynamics view of things. I like to think about the value chain dynamics existing within the communication and information industries in general.

After a few years in product design, program management, and technology strategy consulting, I decided to step back to reasses my perspectives and realized that there was much missing. With my engineering undergraduate degree and couple years spent managing teams, I sure knew the best project management processes and product design lifecycles and principles. But most of what you learn while at work can be stuck into compartments of restricted practical experience. I wanted to understand what drives innovation, how can I make it a part of a constant learning organization. How are dominant designs affected by the industry and what are the factors of new product adoption. How to be constantly focussed on the customer and not the technology itself? How does a firm operate in the constantly evolving capital markets and regulatory landscape to create value through collaborative decision making across partners and complementers?

All this drove me to join the MIT System Design and Management program, administered jointly by the MIT School of Engineering and Sloan School of Management. The program instills a 'systems' view of things, explaining through concrete cases and business problems, how every system exists within a larger system and is co-existing with other systems. The cumulative value of these systems is more than the sum its individual parts. My cohort, which comprises of some of the most brilliant minds I have met, is using these concepts to become better problem solvers, product managers, entrepreneurs, change management champions whithin their organizations and shrewd technology/ business strategists. More about this program can be found at http://sdm.mit.edu/.