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The cutbacks at The Guardian and the demise Al Jazeera America announced this month provide painful lessons that the news business is not just about providing news, but creating workable business models and gaining audiences who think their content is valuable. The Guardian announced 20% budget  cuts (£50 million; $72 million) and stretched the credibility of corporate public relations by presenting them growth strategy. The news organization has been losing money for years in a digital strategy that can only be described as hoping to buy market share through aggressive international expansion, free content provision, and the belief that digital advertising would replace declining print advertising. The Guardian ’s strategy was closely aligned to the discredited digital startup approach of considering the “burn rate” of its capital as a surrogate for prudent investment. In announcing the changes, David Pemsel, The Guardian ’s new chief executive, used trite popular business ...

Twitter is one of the best known social media services, but it is suffering from its inability to provide sufficient value to consumers, advertisers, and investors. The firm has 316 million users, a respectable figure—but 80% smaller than Facebook. Its share price has dropped below the level set when it became a publicly traded company in 2013. The company has lost about $30 billion in market value in the past two years and is now valued at $15 billion. It continues to experience negative operating and profit margins and negative return on assets, despite about $2 billion in revenue. Twitter is suffering from two fundamental business problems. First, the lack of an effective value proposition that makes it attractive to larger numbers of users. Second, lack of vision and direction. The latter led to the departure of its CEO in June 2015 and he has still not been replaced. A significant value problem for Twitter has been that it is primarily configured for short, one-way communicati...

The explosive growth of digital news and information providers is forcing news organizations to recognize their diminishing significance to users of digital devices, but many remain bewildered about how to respond. This challenge is difficult because many news personnel do not make distinctions among news provision, information provision, and journalism. Consequently, the strategies of many news organizations approach each as equally valuable. They are not. News provision involves providing reports about contemporary events and developments locally, nationally, and globally. Information provision involves providing non-news content that meets audience interests and needs. Journalism involves researching and producing news, features, and analytical stories based on professional practices and norms. In the past, news organizations tended to have strong control over journalism, news provision, and information provision in their markets. However, they began losing that control wit...

Cable and satellite companies are increasingly finding it difficult to get the growth in customers and revenue they would like. Over the past 4 decades they achieved growth first by introducing services in new markets and by acquiring smaller providers and then, as unserved markets and acquisition opportunities declined, by offering an increasing number of channels, telephone and internet services.   The strategy increased customers and revenue, but inevitably let to a mature market in which only lower growth was possible. In the past decade cable and satellite overcome that maturity and achieved growth by offering a variety of new services and products to consumers--allowing them to access programming at times it is not offered on their channels or systems or in different forms--and syndicating their original programs and finding new income through merchandising and related activities. The development of connected TV and use of video on laptops, tablets, and smartphones has spurre...

Most media companies claim they are creative, believing that merely producing  content makes them inventive and artistic. Most media firms are not particularly creative, however, and we recognize it daily as we are confronted with formulaic and derivative content of limited quality. But some companies are consistently notable for unique and ground-breaking content that meet higher standards. What makes them successful is their ability to manage creativity. The concept of managing creativity may at first seem like an oxymoron. Anyone who has worked with talented writers, designers, directors, actors, or musicians knows that the muse of creativity is capricious and does not present itself on a predictable schedule. This does not mean it is impossible for an enterprise to manage creativity, however. Organizations that consistently produce highly creative content spend a great deal of effort managing the environment and processes in which creativity takes place. They do so to make...

The increasing consumption of news on digital platforms is forcing news organizations to rethink their news production cycles and staffing patterns. Most journalists, like other employees, prefer a normal pattern of life—going to work in the morning and leaving work in the afternoon—because it is conducive to social and familial life and enjoying the cultural amenities that communities have to offer. This preference helped keep afternoon newspapers the standard in the U.S. until 2000, when morning newspapers surpassed afternoon papers for the first time.   Even before that time, however, news production cycles and staffing patterns brought the majority of journalists to the office in the daytime hours, with the number of staff in newsrooms dwindling until morning papers “went to bed” about midnight. Most newsrooms then turned off the lights, and only a few larger metro papers sometimes kept a skeletal crew of police/fire reporters and photographers in the newsroom overnig...