Four Essays Studying the Effects of Customization and Market Environment on the Business Success of Online Newspapers in Finland

Abstract

The literature on online newspapers includes fairly few empirical investigations of the factors affecting the business success of online newspapers, even though many business models and revenue logics have been presented. Moreover, practically the whole online newspaper literature has paid relatively little attention to the suggested effect of the market environment on business success.

In this dissertation we were especially interested in analyzing whether, as suggested, the better business success is achieved by applying the customization strategy rather than by producing pure standardized services. Moreover, we also wanted to test how the different factors besides customization, like the market environment, revenue logic, the importance of business objectives and experience in the online publishing, were directly or indirectly related to the business success of online newspapers. Since the majority of online publishing companies were having troubles in generating revenue, more comprehensive success measures than the typical annual revenue were needed. In this thesis, we considered comprehensive success in terms of capability to generate revenue, yet also in terms of the attainment of the strategic business objectives.

Based on the analyses of survey data from 42 online newspapers and case data from three online newspapers in the Finnish online newspaper market, the following conclusions were made. First of all our findings indicated that customization was not currently, or even in the short-term future plans, the main strategic option for online newspapers to achieve business success – even though especially process oriented customization seemed to provide some help in generating revenue. In general, mainly experienced online newspapers with a national-level geographical focus were interested in applying customization. Based on our case results, the following reasons for the low level of customization are suggested: content not suitable for customization, would not be profitable, current (low) level of customization is enough for end-users, users are not interested, online newspaper is highly differentiated even without customization. In addition, on the contrary to previous suggestions in the literature, we did not find a relationship between level of customization and level of perceived demand turbulence. Moreover, it appeared that experience in online publishing, the geographical focus of parent print newspaper, and the level of perceived demand turbulence and competition were individually and in combination related to the business success of online newspapers. Only national players seemed to improve their average success scores along with experience; the strongly geographically restricted online newspapers typically had declining trends in their success, especially in terms of business success