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     newspapers

Eli Noam commented in 2005 that

electronic publishing will be much more than print content without paper. The differentiation between text, picture, audio, and video will blur, and news sites will become multi-media.

Producing such rich news will be complex and expensive. Realistically, no single news organisation will be able to provide the quality and quantity of information needed through its own economic and editorial resources. To gain such diversity of information then, the news organisation will be forced go far beyond its internally produced content. Publishers will have to rely substantially on other sources: traditional syndicated and wire-service content; specialized magazines, trade journals, newsletters, and books; blogs and other community sources; TV news providers; and many free-lance journalists, investigative reporters, pundits, and editors. In short, they will have to become “virtual.”

This will lead to two archetypes of news organisations: first, specialist content providers - some of them operating from offshore - and similarly specialist marketing, production, and advertising operators. And second, semi-virtual integrators who bundle, pick and choose their content and service elements from these specialists, validate its quality, add some of their own, and shape the overall character of the product. This will differentiate them from the more passive portals and search engines such as Google.

The problem for traditional news organisations is that this type of virtual integrator function can also be done by others. Today’s bloggers, for example, already do so embryonically through hyperlinking to chosen stories from other sources. In the future, some of them will expand into full-fledged news-sites based on such integration.
This does not mean a proliferation of large integrator-based news sites. There are strong economies of scale and network effects, and this means that, in time, market leaders will emerge and drive traffic, advertising, and hence larger budgets. With market power, these large news sites become economically viable.

It is not clear what the competitive advantage of established newspapers is in such a virtual model. They are too big for the specialist shop model, and too expensive or low-tech for the integrator model. Some have an established brand which will draw users, such as the New York Times, or the Financial Times. Other news organisations can find some niche based on ideology or a brand image with a loyal following.

But unless many of today’s conventional newspapers manage the transition to virtual, integrated, and networked information sites, they will have no real function beyond that of greatly diminished specialist providers of local information to bigger media integrators. Or, alternatively, as the local brand for such national integrators, either owned by them or in their orbit.

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