technology such as the internet has a negative impact on the news industry and how it is going down. This paper goes on to consider the how modern technology has effected the news industry and in what way and what is being said about this decline on the news by journalists, news companies by examining extant literature on journalists and how they are working with new technology, blogging, twitter and such kinds of technology. The advantages and disadvantages of using such technologies are also explored. The paper also explores how the news industry makes money from technology as well as how the technology might make them bankrupt. Their opinions are sort in this paper. Statistics on the decline of the news industry are also presented as well as the possible long-term effects of technology adoption on the news industry are also explored.
This paper is written within the context of journalism. The aim of this paper is to investigate the danger that internet technology poses to the current and future news industry and how these dangers can be leveraged.
H1: Usage of internet technology leads a decline in the circulation of printed edition news paper and hence low revenues from newspaper sales.
H2: Usage of internet technology leads to a reduction in advertisement revenue
The rational of the study is based on the fact that the adoption of internet technology has lead to a more open society where information flows freely and at very minimal charges. The usage of internet technology has also been noted to lead to a reduction in advertisement revenue since most advertisers resort to internet-based advertizing which is more targeted (Graham & Smart 196). These changes are what prompted us to suggest that the reliance on internet technology as a source of news is most likely to lead to major bankruptcies within the news industry.
Extant literature has been dedicated to the effects of internet technology on journalism. In this section, we present a literature review on the negative effects of internet technology on the profitability of the global news industry. The work of Graham and Smart indicated that the global newspaper industry is undergoing very significant changes (Graham & Smart 196).They noted that recent technological development such as the advent of Web 2.0 technology has led in consumers, especially the younger ones who are commonly referred to as "net natives"
, becoming some much increasingly unwilling as well as unaccustomed to paying for any kind of news.Online consumers therefore, prefer to read sections of the news agenda and ten move around from one media or news outlet to the next. This activity has led to "atomization" and "commoditization" of news (Currah 5).
The work of Freer suggested that the greatest challenge facing the news industry today is the changing means of news distribution via the cutting edge platforms such as the internet and IP telephony (Freer 101) that can seamlessly deliver texts, news, blogs, podcast, news updates as well as other forms of user generated content to the "consumers" at an increased pace and in formats that are more accessible and readily available to the consumers. Newspapers are therefore being forced by their readers to employ internet in changing as well as adapting their style, content as well as design as a response to the various challenges poised by the consumers themselves and the advertisers.
The shift of readers' attention from the print media towards reading news from online sources has meant that advertisers have to move along by concentrating their resources in online advertizing. This has led to a gradual shift of their attention from print towards online as well as other non-news channels as noted by Deuze et al. (223). The internet is noted to have taken quite a significant proportion of the usual classified advertizing away from the existing regional news media houses. For instance, Craigslist and such like websites that are offer more specialized classified adverts have posed serious competition to the newspapers since they offer latest, better and even cheaper ways of advertisements (Pincus 55). Due to these changes and realities, the global news industry has suffered massive losses associated with general loss of revenues. These losses render some of the news outlets bankrupt in some cases.
The newspaper industry the world over is undergoing radical changes. These changes has seen a gradual decline in the levels of circulation of print media as well as a general reduction in the level of advertisement revenue. A rapid decline in the level of readership and sales has in the past been observed in various regional newspapers. For instance, the sales volume of UK regional newspapers reduced from 2.1 billion in the year 2000 to 1.7 billion in the year 2005.This sort of decline is noted to be on the increase and will fall to figures below 1.4 billion I years after 2010 (Mintel 22). Internet therefore is indicated to have a negative impact on the revenue of news companies.
As noted earlier on, extant literature has indicated that the internet has led to a general fall in advertizing revenues as well as dwindling circulations. Several news companies have reacted to this reality by developing various online news services which unfortunately, do not bear the distribution costs of product that are tangible but can enable customization of the editorials as well as advertizing content in order to bring about the co-creation of news content. The process of moving online has however, not completely compensated for the noted losses in revenues. A majority of online newsreaders are quite reluctant to pay for the content and the income generated from the sale of online advertizing space is far much lower that the one gained from print media. Journalists too are in objection of co-creation of news content.
One of the main external influences of news in the online sphere is social media penetration. Social media is having a great impact on the readership of online news items and newspapers. Readers under the age of 25 years are noted to be most affected since this is where there is the greatest level of social media penetration. It is therefore within this category that the highest level of decline of print media usage is found. Industry experts are noted by Graham and Smart (196) to believe that the concept of the internet has greatly fragmented the global news audience and the reach of newspapers has greatly reduced. This is marked with a significant increase in the number of news consumers who are relying on social networking as well as blogging services in order to access news at all levels (Berte and DeBens 695). This means that newspaper companies are rapidly responding to 2 new trends; the first one being that readers are increasingly accessing news through a wide array of information technologies such as mobile phones and computers. Advertisers too are placing great emphasis on the online news items (Bird 294;Domingo et al., 229).
The work of Kaiser (2003) investigated the effects of website-based news provisions on the demand for a German women's premium magazine. His estimates from a dynamic and static twelve nested demand model on the basis of quarterly market level data that was gathered between 1996 and 2001 for the forty one magazines suggested that the website provisions never significantly affected the physical magazine's recorded market share, a suggestion that they are either dependent on goods or at the aggregate level, the substitution or complimentarily effects of the newspapers balanced out.
One of the main distinctive features of the German magazines is that the content of the paper edition os never readily available online. The work of Kaiser & Kongsted on the other hand analyzed the relationship existing between the magazine demand, website visits as well as demand for advertizing spaces by means of the Granger non-causality on the German magazine's quarterly data gathered between 1998 and 2004. The work found evidence for a positive effects from the online website visits to paper circulation, a scenario that suggested that the news existing online and those on paper can be regarded as complimentary goods.These two however do not easily allow for a cross effects on the magazine's website. The authors also reported that none of the German magazines made their printed versions to be fully available online.
The work of Gentzkow investigated the independence, complementarity and substitutability between the Washington Post, Wachington Times and the online portal washingtonpost.com in a special model that allowed for multiple choices as well as a test on complimentarity on the basis of consumer level data. The estimates from the model on the basis of the pooled data from the survey indicated that the loss of newspaper readership due to the presence of online editions was close to 1.7%.
The work of Deuze et al. went ahead and noted that the advent of internet technology is driving several news companies to convergence of media and various devices. For instance, newspaper companies are increasing…