A Comparative Study of the Business Models of Traditional and Internet-Based Newspaper Firms in Nigeria and Canada

Abstract

Long-established organisations and institutions have recently been derailed by a number of interlinked technology-driven changes, starting with the Internet and moving swiftly through tablets, smartphones, and the social media. These technological changes introduced by the Internet appear to disrupt the economic base and traditional revenue models of the newspaper industry as many potential readers are finding alternative sources of news online. The perception of the internet as the ―mother of all disruptions‖ stems from the perspective that it combines disruptive technologies of many component markets. Consequently, the newspaper business across the world is facing numerous challenges ranging from the changing times, changes in socio-cultural traits in different societies, demographic changes which inform new audience taste for news. While extant literature by scholars in both Nigeria and Canada have addressed the disruptive challenges posed by digitisation and the Internet on the revenue formula of the newspaper industry, only few have attempted a comparative, cross-national investigation into the nature, history, degree, scope and impact of the disruption in the industry. Given this gap, this study seeks to undertake a comparative, cross-national study of the newspaper crisis, not only because Nigeria and Canada represent different continents of the world but also to validate and or debunk the position by some scholars that while newspapers in America and Europe are in decline, those in Africa are enjoying a boom. The study is situated within the Disruptive Innovation Theory by Clayton Christensen (1997) and the Creative Destruction Theory by Joseph Schumpeter (1942). It adopted the mixed research design, collected and analysed both qualitative and quantitative data from the survey and in-depth interviews. The population of the study included 1430 respondents, comprising all print media journalists ascertained through membership of the Nigeria Union of Journalists (NUJ) in Lagos, Abuja, Enugu and Portharcourt, and 27 journalists purposively selected from newspaper organizations in Canada for the in-depth interviews. The total sample size for the survey was 405 ascertained through Australian calculator technique and 21 for the in-depth interviews. The questionnaire, with a reliability coefficient of .80; and the interview schedule served as instruments for data collection. The convergence model of triangulation design was employed in analysing the data. In this model, quantitative data and qualitative data were analysed, separately. They were finally compared before interpretation of both sets of data were made. Findings showed that: (i) The emergence of new technologies significantly impacted (F=20.152, df=356, P= <.05) on the growth of existing business models of the newspaper. (ii) Reinventing the business model of the newspaper industry and sustaining its growth is not dependent (t=141, df=233, P= >.070) on linking it to the emergence of new media. (iii) No statistically significant difference (X2=.139.00, df=359, p.>05) between revenue source of legacy newspaper‘s traditional business model and online-based news business model. (iv) T.test did not reveal any statistically significant dependence (t=.999, df=319, P= >.037) of business model options available to the newspaper industry to resource itself based on online business model options. On the other hand, the newspaper industry in Canada was quick to adjust to the internet as a more visible platform with revenue generating power than their Nigerian counterparts. On the flip side, newspaper organizations in Canada felt the impact of the disruption more than their Nigerian counterparts. This can be attributed to the size of the industry in Canada and the fact that the Canadian media operate a more developed market than Nigeria. In addition, the lack of transparency in the reporting of the operations of media organizations in Nigeria and the absence of an audit bureau that monitors and reports the number of newspapers sold in the country is an embarrassment to the industry. This study concludes that the traditional business models for legacy newspaper organizations, which was based chiefly on advertising, is no longer sustainable and that Internet technologies, which have admitted an army of competitors into the media landscape, have upended the revenue model thereby igniting a frenzied search for a sustainable new model.