While media organizations are trying many different revenue models, the models that succeed in the long run will find a place in a new value chain of journalism. A “value chain” is a chain of activities, in which each activity adds value to a product or service. The financial success of any business model depends on the ability of an organization to capture value they create. (See graphics below. The value chain is also featured in our Big Thaw slide show.)
Journalism’s old value chain was delineated with clear roles and exchanges of value. The new value chain reflects more roles. One organization often plays multiple roles. In the old model, advertising also had clearly defined roles. It mostly concentrated on publishing and broadcasting. In the new model, advertising is spread across more players.
Since the market is still forming the new value chain, independent media can work together to experiment with new models, promote new relationships among players and advance new standards in measuring and valuing content. Individual organizations can use the value chain to explore strategic questions for themselves, such as:
- What role do we play in the value chain now?
- Where do our strengths fit best? And where could our role become most valuable?
- Is it best to focus primarily on one role or integrate many roles at once?
Here’s a graphic representation of the new/emerging value chain:
There are many possible ways the value in the chain could crystallize:
- The value of simplicity could lead some media organizations to focus on creating quality investigative journalism and leave chasing eyeballs to other media organizations that are willing to share revenue with them.
- Content could become even more differentiated. For example, stories with viral potential live free online, while more specialized premium content is used to build deeper, more loyal communities willing to pay subscriptions, donate, or make other payments. However, this move may rub against an aim to make news broadly available to the public.
- Publishers could use metadata to make information they produce more useful and valuable (further defined in Vol. 2, p26).
- Non-profit media companies may win greater foundation support if quality reporting declines, especially if they can more reliably measure that they preach beyond the choir.
- A “new social contract” between the press and the public could lead to more public support for journalism, if not also a shift in consumers’ expectations of free news.
There will inevitably be different places on the value chain to capture value. If smaller players do not proactively figure out their roles, the big players will likely determine them.
The answers to two questions will affect the value chain in coming years: “Will there be a new demand for quality journalism?” and “Will more reliable and consistent measures create greater distribution of value?”
This blog is an excerpt from The Big Thaw, a guide to the evolution of independent media, written by Tony Deifell of Q Media Labs and produced by The Media Consortium, a network of leading independent media outlets. Learn how your organization can use this report. For more information and recommendations from the study, click here.