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htm

Exploring interaction: print and online news media synergies

Gary Graham
Leeds University Business School, University of Leeds, Leeds, UK, and

Exploring interaction

Anita Greenhill
Manchester Business School, University of Manchester, Manchester, UK
Abstract
Purpose This paper aims to understand the level of synergy between print and online activity and to assess the influence of print/online synergy on the log of circulation change. Design/methodology/approach In order to meet this aim the authors conducted an empirical study of 100 regional newspapers supplying news media services in the UK. Two hypotheses grounded in a conceptual model were developed. The authors used Pearson correlation and (stepwise) regression analysis to test two hypotheses (H1 and H2). Findings H1 provides us with some interesting findings. The first is that higher priced newspapers attract more unique Internet users and mobile Internet access. Higher priced newspapers who have been in business longer and have established brands attract more online readers. Also, because these issues are more expensive there is more incentive to go online to read the papers for free. Note that this last explanation is consistent with the analysis provided for H2, the beta for price is negative. The negative coefficient indicates that the circulation change of higher priced papers has reduced more. Therefore circulation change impacts greater upon premium price newspapers for an elite rather than a broad readership. The regression results presented here indicate that established firms with premium pricing, providing multiple platform distribution and specialist digital editions with free online content, have circulations that are reducing less. Practical implications While reducing the rate of circulation decline, current levels of online presence are not reversing it. There is a need for online presence to be focused on more targeted segments/niches of circulation such as hyper-local news. This suggests a much clearer consideration must be made by newspapers with a premium price for an elite rather than a broad readership. Social implications News organizations now find themselves less socially relevant as consumers turn towards the Internet for alternative sources of news. News media firms are having to rebuild their brand identity and market positioning in the online marketplace. Higher priced newspapers have been in business longer and have established brand recognition for providing elite services. This is vital if they are to retain their community influence (as trusted sources of locally produced news, analysis and investigative reporting into public affairs). Commercial influence is determined by their social influence and the demise of newspapers would significantly threaten news plurality, democracy and public service journalism at the local community level. Originality/value The originality of this work concerns its specific focus on the influence of print/ online synergy on the rate of circulation change. The news media industry is an under-researched area of Internet scholarship. The study is significant on two counts: first, it estimates cross-media synergies based on print and online interaction at an aggregated level; and second, it identifies different combinations of cross-media exposure over individual media effects. It combines both print and online measures of circulation. Of most importance, the study is able to show that synergy is complementary and has had a positive effect on log circulation change by reducing it by a smaller number. Keywords Cross-media, Synergy, Traditional channel, Online presence, Newspapers, Circulation change, United Kingdom, Consumer behaviour, Information media Paper type Research paper

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Received 19 July 2011 Revised 23 November 2011 7 January 2011 Accepted 15 January 2012

The authors would like to acknowledge the research support given to them by the Newspaper Society and the British Academy.

Internet Research Vol. 23 No. 1, 2013 pp. 89-108 r Emerald Group Publishing Limited 1066-2243 DOI 10.1108/10662241311295791

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1. Introduction For almost a century the printing operations of newspapers have remained highly stable. The newspaper industry has long been seen as a cyclical one, tied closely to advertisers and economic fortunes. However, with the advent of the internet and the recent genesis of Web 2.0[1] the very survival of regional newspapers has been questioned (Grewal et al., 2010). With social media many of the assets under company control are embedded in the entrenched brand of a service operation rather than a product (Keller, 2010). In contrast, Keng and Ting (2009) believe that the potential for user interactivity defines the difference between traditional and new media and should be a critical element to any online market or advertising campaign. Convergence in this instance is defined as the interlinking of computing and other information technologies, media content and communication networks that has arisen as the result of the evolution and popularization of the internet as well as the activities, products and services that have emerged in the digital media space (Klinenberg, 2005). Consumers, particularly younger net natives (the generation of people who have grown up with the internet) are comfortable with the virtual environment and have become unaccustomed, and even unwilling to pay for, news (Tarkiainen et al., 2009). Online consumers prefer to read part of the news agenda and to move from one news outlet to another. This has led to the commoditization and atomization of news. Freer (2007, p. 101) suggests that: the biggest challenge currently facing news media firms is the changing means of distribution of news through the new media platforms of the internet and telephony [y] which deliver news, blogs, text alerts, news updates, podcasts and user-generated content (UGC) to consumers at a greater pace, in more accessible formats and when consumers demand them. Newspapers are being forced by readers use of the internet to change and adapt their content, style and design. Challenges tend to be made in an increasingly competitive and fragmented market for consumers and advertisers. As readers have moved from printed media to reading news online, advertisers have concentrated more of their resources into online advertising, gradually shifting their attention to online or non-news channels. The internet channel has taken a significant proportion of classified advertising away from regional news media organizations. For example, eBay and similar more specialized online classified advertisement sites have become serious rivals to newspapers as they offer new, better and cheaper ways of internet advertising. Similarly the effect of global news aggregators such as Google News, which amalgamates stories from across the web and presents them via a convenient user interface, are also rivals to newspapers. Such news aggregators have raised an estimated $100 million in advertising revenue with little outlay. This has been followed by a transfer of value away from content producers (newspapers) to content providers (Google News). As a result of these changes, newspapers and other news media providers have increasingly had to change the media formats in which they provide news. Of course, newspapers are well positioned to go online, and many have embraced the internet, offering extra content online and even access to their archives, sometimes for a premium (Tarkiainen et al., 2009). In cyberspace, newspapers have lacked social and commercial influence (Keng and Ting, 2009). Low set-up costs, the rise of blogging software and the citizen journalism phenomenon have permitted alternative sources and niche journalism to propagate in the form of online newspapers like the Huffington Post[2]. In attempting to combat the proliferation of citizen journalism, newspapers suggest that new entrants do not have the same level of accountability, credibility and professional standards to which they themselves adhere, whether that be in print or

digitized format. Such claims have not proved very effective as alternative news web sites continue to grow and are particularly popular with younger readers (Nel, 2010). Internet newspapers are becoming more common and digital journalism is developing rapidly with better designed web pages and layouts. Mark et al. (2007) draw attention to the revolution taking place with the shift from printed newspaper (products) to internet newspapers (services). Unfortunately internet channels are not without potential problems, as they are likely to increase uncertainty about market allegiance, thus generating real risks for long-term business performance as well as destroying the value of past investments (Chandy and Tellis, 1998). In the newsmagazine industry they are easily taken (at least partially) as substitutes for print magazines because the digital content often overlaps. Kidiyal and Simon (using data from the years 1996-2001) similarly found that the cannibalization effect was greatest when the digital content of the web site was identical to content in the current issue of the printed magazine. In such instances they suggest the effect has contributed to yet more negative circulation change in the industry. A different stream of literature, however, has emerged which suggests that by adding internet channels, news media firms have aimed to consolidate existing markets and to expand into new markets (Tarkiainen et al., 2009). internet researchers have similarly considered media web sites in terms of brand extensions (ChanOlmstead, 2006) and the prevailing idea is that the use of the same brand name in different channels is an attempt to leverage brand equity. Of particular interest to the authors is the level of synergy between print and online presence, which emerges when the media effects of combining two media exceeds their individual influences on an outcome measure (Zhang et al., 2010). Naik and Peters (2009) similarly propose that synergy between offline and online media enhances the effectiveness of each media. To understand this phenomenon and to test it empirically, we ground two hypotheses in a model of cross-media synergy. The contribution of this work to the literature is that it is the first of its kind to measure the nature of cross-media synergy and its effects of cross-media synergy on circulation change in the newspaper industry. Specifically, the research described here seeks to answer the question of how synergy between entrenched (print) and internet channels impacts on the rate of circulation change. In spite of the above work and the debate about disintermediation and insecurity generated by internet channels, there is a paucity of work investigating the influence of synergy on circulation change in the news media sector. The next section presents a conceptual model and two hypotheses. This is followed by a section outlining the contribution of the study. Then, we present the methodology underpinning the study. This is followed by a results section reporting the findings from the testing of our two hypotheses. In the conclusion section the theoretical and managerial implications of the work are presented together with our study limitations and future research directions. 2. Conceptual model and hypotheses The rapid growth of the internet as a medium for communication possesses simultaneity and is highly interactive, users can receive and broadcast information and enjoy more autonomy and control than that associated with traditional media (Keng and Ting, 2009). The literature on industrial and technological change tends to examine the reactive strategic response of the news media firm to disruptive

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innovation. There is an innate tendency for established news media firms to focus their resources on exploiting existing competencies in mature markets, as opposed to the exploration of new competencies in emerging internet channels (Ulutas and Islier, 2010). As Tarkiainen et al. (2009) lament, however, there is a relative absence of internet studies on newspaper firms that consider trajectories of innovation which complement rather than challenge their core competencies. Keng and Ting (2009) believe that the overriding objective of newspapers has, to date, been to construct (with the assistance of technologists) a closed sphere of innovation, populated with secure internet applications that reinforce the traditional linear flow of content from producers to consumers and marginalize value streams emerging from disruptive and usergenerated innovation such as co-creation and crowdsourcing. For instance, the blog platform[3] facilitates a very high level of interpersonal, often emotional, interaction and allows users to express their opinions and create dialogues, and to interact with others by contacting, communicating and information exchange. Table I illustrates the extant literature on cross-media synergy. Tarkiainen et al. (2009) studied the effects of web site extension on parent news-magazine brands and they concluded that it complements them, especially when there are few differences between online and offline consumers. Similarly the importance and innovation of our work is that while previous studies have shown the complementary effects of adding a new internet channel to front page layout (Ulutas and Islier, 2010), levels of reader participation and interactivity (Keng and Ting, 2009) and price (Grewal et al., 2010), no one to date has shown the impact on the rate of circulation change.

Author Tarkiainen et al. (2009)

Publication Internet Research

Cross-media synergy effects Authors studied the effect of website extension on the parent news-magazine brand. The results suggest that the website can complement the print edition brand. However they conclude that more research is needed on factors that are related to extension success This study focused attention on the differences between the front page layout of printed and Internet newspapers. They highlight the need to move away from static printed layout designs to optimize the potential of dynamic Internet environments The authors explored cross-media synergy from the concept of interactivity. They examined the emotional experiences readers gained from reading blogs. News blogs were shown to have much higher levels of participation and emotional commitment from users than conventional news media channels They compared pricing between offline/online channels. Because the marginal cost of another product is close to zero, a fair price for the consumer is much lower than that of traditional newspapers. They propose a versioning rather than a fixed copy price, whereby you than produce digital products with different products with different quality ties to take advantage of consumers willingness to pay for online news

Ulutas and Islier (2010)

Internet Research

Keng and Ting (2009)

Internet Research

Grewal et al. Journal of Interactive (2010) Marketing

Table I. Extant literature on cross media synergy

While the work of Meyer (2008) has focused on the goods/service divide his studies of newspapers, the conceptual model presented in Figure 1 considers moving forward to embrace the notion of goods and services being intertwined. Using the logic of services marketing as initially proposed by Vargo and Lusch (2006), what was once a physical product the newspaper has now transformed itself into a service experience (news provision) which is delivered in a variety of ways. Figure 1 suggests (based on a synthesis of the literature) there is synergy between print and online activity and that such synergy has a positive influence on the log of circulation change. 2.1 Hypotheses The internet is transforming the entrenched product-driven linear sequence of activities between producer and consumer of news into an intertwining service network of capabilities and a set of relationships that supplies and receives essential resources. We suggest that while many internet scholars emphasize the importance of synergy in planning multi-media strategic activities, research exploring cross-media measurement is scarce in the news media industry. Specific interaction variables were identified and corroborated by a panel of 14 newspaper industry experts at an industry seminar we organized in Leeds (UK). Further details on the methodology of variable selection are presented in Section 4.1. Therefore, the first hypothesis sets out to measure the strength and significance of the relationship between print and online presence: H1. Printed product characteristics[4] (business years, price, number of issues (per week), classified advertising rates (lineage)) are positively intertwined with internet channel service presence (interactivity, daily unique users, mobile internet users, user-generated content, convergence platforms, digital editions and paywalls). Circulation is measured by the number of copies distributed on an average day (Franklin and Murphy, 1991). It is frequently used as a measure of the health of a newspaper and it is a vital part of the business model. Picard (2006) suggests that high levels of circulation attract advertising revenues. Since 2008, Newspaper Society (NS)[5] measures of circulation have included the number of unique visitors to a newspapers companion web site together with physical measurement. Therefore, this work proposes that having a greater online presence not only extends and complements the market reach of the printed channel, but also improves the rate

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Print activity

H1

Circulation change

Online activity H2

Figure 1. Conceptual model

INTR 23,1

of circulation change by attracting more readers through the companion newspaper web site: H2. Interrelations between printed supply-chain characteristics (business years, price, number of issues (per week), classified advertising rates (lineage)) and online service presence (daily unique users, mobile internet users, user-generated content, interactivity, convergence platforms, digital editions and paywalls) have a positive effect on the rate of circulation change. 3. Research objectives News is the core business for newspapers, and in the newspaper industry the internet is a substitute for the printed version. There has been a sustained decline in the circulation of print editions of newspapers, coupled with a more recent reduction in advertising revenues as advertisers switch their advertising from newspapers to the internet. This paper aims to understand the level of synergy between print and online presence and, further, to assess its influence on circulation change. Through an understanding of the relations between printed activity and online presence factors, this research seeks to measure the effects of this relationship on circulation change in the form of a regression model. 4. Research design and methodology To obtain insights into how regional newspapers across the UK are engaging with the web, we accessed the NS database (which consists of 1,200 newspaper titles). Previous studies, including Nel (2010) and Franklin (2008), have indicated that the NS database provides a representative sample of the newspaper population. The database provides access to a convenience sampling frame; however, as our research study focuses on cross-media synergy, we adopted purposive (judgemental) sampling to select only those newspapers which were online with companion web sites (100 newspapers) within the available data period (2001-2009). We define companion web sites as sites on which the print product enjoys significant presence, i.e. beyond a simple listing on a corporate site or group news portal. The sample comprises 89 newspapers from England, four from Scotland, two from Northern Ireland and five from Wales. Data were collected by two coders, between May and July 2011. The findings were compared and any variances investigated and resolved by contacting each individual newspaper and through extensive newspaper archive searches. Table II provides sample classification details of the newspapers involved in this study. It can be seen that circulations range from the highest at 153,724 to the lowest at 14,611. The membership of this body covers 16 independent newspapers often still managed by the original founders or founding team, and 84 newspapers owned by large holding companies such as Trinity Mirror, Northcliffe Media or Johnston Press. 4.1 Definition of independent variables Using the evidential reasoning method proposed by Sonmez et al. (2001), 12[6] print and online variables were identified or corroborated by decision makers who were 14 industry practitioners who participated in a British Academy workshop (14 April 2011, Leeds) that we organized to define and appraise cross-media synergy in the

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Year established (average) Cover price (average) Issues per week (average) Urban-based (n) Rural-based (n) Circulation Range Average Holding company ownership (n) Independent ownership (n) Readership (average) Regional/local population (average) Note: n, number of respondents

1896 48p 6 58 42 153,724 9(maximum)-14,611 (minimum) 40,419 84 16 51,433 378,584

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Table II. Sample classification details of newspapers participating in this study

news media industry. As human decision making involves ambiguity, uncertainty and imprecision, we investigated whether the judgements of the respondents could be evidenced from the literature. Full descriptions of the print/online variables together with associated literature support are presented in Table III. Four areas were identified by the industry experts as facilitating synergy between the print and online variables suggested by the hypotheses. The following key areas of newspaper online presence were identified: (1) Convergence: Deuze and Neuberger (2007) note that the internet is driving much convergence in the news media with daily unique users accessing news media products across a growing network of information and communication technology devices. For instance, newspapers are increasingly being produced and distributed in multi-media formats (including television, online, mobile and printed forms). An online digital edition is a converged product specially customized for the reader, it is enhanced with annotations and metadata tags to increase the usability and value of the text (Howe, 2008).

Construct Print activity

Item label and description BusYears: number of years in circulation Price: cover price of the newspaper Issues: number of printed issues per week Classadlin: cost of classified advertising lineage rates Popmn: population of the newspaper community Convergto: multimedia platform for distributing news Dailyunique: number of unique daily users Mobile: number of mobile users Classadon: cost of online advertising lineage rates Diged: specifically designed online news product UGC: different types of user generated content Paywalls: paid subscriptions to access online content Interactivetoo1: number of Web 2.0 tools

Relevant literature Franklin (2008), Picard (2006), Meyer (2008), Mitchell (2009), Mintel (2007) Howe (2006, 2008), Li and Bernoff (2008)

Online presence Convergence tools

Co-creation Paywalls Interactivity

Deuze and Neuberger (2007) Greenslade (2010) Keng and Ting (2009)

Table III. Constructs and relevant literature

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(2)

Co-creation: Vargo and Lusch (2006) define co-creation relations as the participation of the consumer in the creation of the core product/service itself (p. 48). The economic logic behind co-creation is that businesses now have unprecedented opportunities for user participation and (re)engagement with their audiences. Paywalls: a paywall blocks access to a web page (content) with a window requiring payment (Greenslade, 2010). The logic is that readers will pay for a particular online story, a specific journalists work or video footage. Interactivity: through the development of Web 2.0 journalists now have a much wider range of interactive technologies with which to interact with their readers. This drive towards greater interactivity is being driven by consumers who are increasingly using social networking and blogging services to get their news (Keng and Ting, 2009).

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(3)

(4)

4.2 Measures dependent variable Circulation measures the average number of copies sold per day. Here, the dependent variable was measured using longitudinal data reporting the average rate of circulation change for the available data period (2001-2009). There is a negative rate of circulation change in our sample which has declined on average by 28.5 per cent. Hair et al. (2008) advocate testing residual values to determine normality. We found the dependence not to be normally distributed. By using log transformations[7], extra scores can be kept in the data set, and the relative ranking of scores remains, yet the skewness and error variance present in the variable(s) can be reduced. Orr et al argue that data are more likely to be representative of the population as a whole if outliers are not removed, therefore we kept the outliers in our data set. Further transforming a variable may reduce the likelihood that the value for the case will be characterized as an outlier. By using logarithmic transformation of circulation change, we specify the relationship between the independent variables and dependant variable in proportional terms. We conducted a normality test based on a procedure outlined by Jobber et al. (2004). This was completed on the transformed dependent variable by plotting a normal probability curve of deviance values. Figure 2 shows an almost perfect linear trend, thereby confirming that the deviance values are normally distributed. The p-value of 0.13 is large (40.10), therefore we assume that the data are normal (come from a normal distribution). 4.3 Measures control variable Table IV presents a summary of the regional population served by the sample. The sample mean is 1.63 m. Within this sample 60 per cent are urban-based newspapers while 40 per cent are rural operations. The MEN (Trinity Mirror), which circulates in the Greater Manchester region, has, at 10.7 m, the highest population in the sample, while the Halifax Evening Chronicle (Johnston Press) circulates in the Calderdale area and has the lowest population at 0.10 m. Thurman and Myllylahti (2009) suggests that population can have a strong mediating effect on the level of newspaper circulation (the highest circulations tend to be found in heavily populated urban regions), thereby resulting in heteroscedasticity[8]. Therefore, we used (natural) log transformation to control for the mediating effects of population.

1.0

Dependent variable; logcirc

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Expected cum probability

0.8

0.6

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0.4

0.2

0.0 0.0 0.4 0.8 0.2 0.6 Observed cum probability 1.0

Figure 2. Normal P-P regression plot

Holding company Trinity mirror Johnstone Press Newsquest ncjmedia ltd DMGT S & B Media

Titles 25 27 22 2 20 4

Characteristics Total population: 27.6 m High: 10.7 m (Manchester Evening News) Low: 0.61 m (Daily Post) North Wales Total population: 14.26 m High: 4.4 m (Yorkshire Post) Low: 0.110 m (Halifax Evening Courier) Total population: 16.04 m High: 4.3 m (Herald, Scotland) Low: 0.233 m (Bolton News) Total population: 4 m High: 2.6 m (The Journal Newcastle) Low: 1.4 m (Evening Chronicle) Total population: 8.857 m High: 1.2 m (Nottingham Evening Post) Low: 0.270 m (Plymouth Morning News) Total population: 1.4 m High: 0.994 m (Surrey Advertiser) Low: 0.676 m (Reading Evening Post)

Regional scope Greater Manchester, Merseyside, West Yorkshire, North Wales Scotland, Lancashire, West Yorkshire, Hampshire, Cambridgeshire Scotland, Sussex, Lancashire, West, North Yorkshire North-East England West/East Midlands, SouthEast England South-East England Table IV. Newspaper populations

4.4 Data analysis procedure Prior to the analysis of the data, the data set was screened for missing values, outliers and errors. Outliers and cases with missing data were not removed as the data are more likely to be representative of the population. The missing values in the data set were replaced with values obtained from an expectation-maximization iterative algorithm, since this method has been shown by Satorra to be more accurate than other substitution techniques such as case or mean substitution. The EM algorithm[9] is a technique that finds maximum likelihood estimates in parametric models for incomplete data. First, there is no distortion of the actual distribution of values; second,

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it does not depress the observed correlation and third, it states the true variance of the data. Through Pearsons correlations we assessed the relationship between print and online presence. Pearsons coefficients were used because we were analysing measurable rather than ordinal data. Further, we were interested in measuring the strength and significance of the linear relationship between print and online variables (Hair et al., 2008). An advantage of this coefficient is that it condenses the comparison of different print and online measures onto a single scale. A key advantage of Pearson is that it does not depend on the specific measurement units used; for example, the correlation between price (print) and classified (online) advertising will be identical even though the former is measured in pence and the latter is calculated in pounds per centimetre. Rodgers and Nicewander (1988) indicate that this correlation coefficient is completely invariant to linear transformations of variables. We use stepwise regression to assess the relationship between print/online synergy and circulation change. Stepwise regression was chosen for several reasons (Hair et al., 2008). First, the model was driven with multi-collinearity and stepwise fixes this. Second, our sample size of 100 was of adequate size to produce stable outputs. Third, stepwise regression is able to simultaneously and comprehensively assess entire sets of relationships in a model. Finally, it is able to estimate multiple and interrelated dependence relationships. Stepwise regression has the advantage of combining predictive variance with true (causal) functional characterization of the relationship between the dependent and independents. Hosmer and Lemeshow (1989) emphasize the parsimonious nature of a stepwise model, i.e. it contains only a few predictors, and every predictor contributes significantly to explaining the variation in the response. 5. Results and analysis The purpose of this study was to investigate the nature and form of synergy between print and online factors and its mediating role on channel performance. Cross-media synergy has been found to have a positive influence on circulation change in the newspaper industry. However, market development through online presence is not developed enough to reverse the negative trend in circulations. Table V indicates that H1 is appropriate and provides us with some interesting findings. One interesting finding is that higher priced newspapers attract more unique internet users and mobile internet access. This may be explained in that higher priced newspapers have been in business longer (see Table II) and have established brand recognition. Therefore, these papers attract more online readers. Also, because these issues are more expensive, there is more incentive to go online to read the paper for free. Note that this last explanation is consistent with the analysis provided for H2, where the b for price is negative. There is a strong correlation between the number of copy issues (per week) and online digital editions (r 0.286). Issues also correlates positively with mobile internet access (r 0.191) and user-generated content (r 0.195). These findings are consistent with several previous studies (Meyer, 2004, 2008) which found that there is a need for specialized/tailored products such as digital/mobile editions in order to differentiate the online service offering from the printed product version. The trend for newspapers to adopt greater outsourcing with increased production is reflected in the correlation with user-generated content.

1 1.000 0.274** 0.008 1.000

10

11

Busyears Pearsons correlation significance (two-tailed) Price

Issues

0.278** 0.005 0.142 0.158 1.000

ClassAdlin

0.185 0.066 0.181 0.072 0.324** 0.001 1.000 0.218* 0.029 0.210* 0.036 0.187 0.063 0.200* 0.046 1.000

Dailyunique

MobileIntacc

0.217* 0.030 0.213* 0.033 0.191* 0.050 0.199* 0.047 0.991** 0.000 1.000

UGCsubmec

0.097 0.338 0.016 0.877 0.195* 0.051 0.064 0.526 0.044 0.665 0.025 0.806 1.000

Convergto

0.093 0.257 0.000 0.0998 0.031 0.762 0.120 0.235 0.198 0.050 0.172 0.086 0.230* 0.022 1.000 0.096 0.340 0.094 0.350 0.286** 0.004 0.049 0.632 0.030 0.769 0.043 0.670 0.197* 0.049 0.016 0.971 1.000

Diged

Paywalls

0.144 0.154 0.018 0.857 0.117 0.245 0.127 0.206 0.090 0.374 0.084 0.408 0.021 0.839 0.014 0.888 0.100 0.324 1.000 0.025 0.808 0.172 0.086 0.043 0.670 0.084 0.408 0.044 0.662 0.230* 0.022 0.197* 0.049 0.016 0.871 0.014 0.888 0.016 0.871 0.014 0.838 0.186 0.064 0.100 0.324 0.220 0.280 0.297 0.300

Interactivetoo1

0.274** 0.006 0.278** 0.005 0.185 0.066 0.218* 0.029 0.217* 0.030 0.097 0.338 0.093 0.357 0.096 0.340 0.144 0.154 0.265 0.800 0.142 0.158 0.181 0.072 0.210* 0.036 0.213* 0.033 0.016 0.877 0.000 0.998 0.094 0.350 0.018 0.857 0.169 0.092 0.324** 0.001 0.187 0.063 0.191 0.056 0.195 0.051 0.031 0.762 0.286** 0.004 0.117 0.245 0.115 0.254 0.200* 0.046 0.199* 0.047 0.064 0.526 0.120 0.235 0.049 0.632 0.127 0.206 0.052 0.604 0.991** 0.000 0.044 0.665 0.196 0.050 0.030 0.789 0.090 0.374 0.058 0.567

0.265 0.800 0.169 0.092 0.115 0.254 0.052 0.604 0.058 0.567 0.044 0.662 0.014 0.888 0.186 0.064 0.220 0.280 0.297 0.300 1.000

Notes: **,*Correlations significant at 0.01 and 0.05 levels (two-tailed), respectively

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Table V. Inter-item Pearsons correlation coefficients

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Business years correlates with daily unique users (r 0.218) and mobile internet access (r 0.217). Finally, there is weaker correlation between advertising (lineage) rates and daily unique users (r 0.200) and mobile internet access (r 0.199). 5.1 Regression analysis The results of the regression analysis which was used to identify statistically significant relationships between variables. b and R2 coefficients were used as indicators of the strength and explanatory power of these relationships are presented in Table VI. In this analysis, R2 indicates the fit of the linear relationship between the explanatory variables and the circulation variable scores. To test H2 we used forward selection stepwise regression analysis. Forward selection involves starting with no variables in the regression model, trying out the variables one by one, and including them if they are statistically significant. From Table VI, R2 is 0.428 which means that 43 per cent of the variation in circulation change is accounted for by the predictors. This is above the acceptable level of 0.4 but below that of the recommended 0.6 for a robust model (Hosmer and Lemeshow, 1989). While R2 shows how much of the variability observed in your data are accounted for by the model, adjusted R2[10] modifies this by taking into account the number of covariates or predictors included in the model; 0.370 is similar to the observed value of R2 (0.428) which indicates that the estimated model is not overfitted to the sample and maintains an adequate ratio of observations to variable in the variate. The change in the amount of variance that can be explained by the model gives rise to an F-ratio of 5.153, which is significant with a probability of less than 0.001. Paywalls have the strongest (negative) correlation (b 0.481) with circulation change. The negative coefficient indicates that the log of change reduces more with paywall implementation. Paid-for content does not appear to have sufficient market presence to break down the highly integrated free producer-consumer relationships existing on the internet in the context of power, reciprocity, gift and counter-gift (Granovetter, 1973; Ouchi, 1980). The negative coefficient for price indicates that the circulation of higher priced papers reduces more, which suggests a premium price is targeted towards an elite rather than a broad readership. Business years has a strong positive correlation with circulation (b 0.423). This means that circulation change has reduced by a smaller number for established newspapers. On the basis of previous findings it appears that building circulation is a long-term strategy (Franklin, 2008). Weaker correlations were reported for interactive tools (b 0.269), convergence (b 0.19) and digital editions (b 0.232). Newspaper do not appear to have the same level of social or commercial influence with online readers.

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Predictor variables Paywalls BusYears Price Interacctivetool1 Diged Convergto

b 0.481 0.423 0.333 0.269 0.232 0.193

t-value 5.613 5.074 4.049 3.160 2.914 2.436

Significance 0.000 0.000 0.000 0.002 0.004 0.017

Tolerance 0.839 0.885 0.908 0.851 0.974 0.983

VIF 1.192 1.130 1.102 1.175 1.027 1.018

Table VI. Stepwise regression results

Notes: aDependent variable: logcirc; R2 0.428; adjusted R2 0.370; p 0.002; F 5.153

Online communities are more fragmented and dispersed (than physical communities) within the emerging technology landscape (Thurman and Myllylahti, 2009). 6. Conclusion and discussion This study examined the various relationships between cross-media synergy activities and channel performance. It developed and examined a regression model connecting these variables and found support for the mediating role of synergy activities on the rate of circulation change. While many newspapers have radically reorganized their distribution channels, the results of this study indicate that the news firm is slowing down but not reversing the long-term trend of declining circulations. This suggests that optimal channel configuration, is not being fully achieved. The result of our study show there is some support for H1 with positive correlation between: copy issues and online digital editions; business years with daily unique users and cell phone access; price with daily unique users and mobile internet access; issues with mobile internet access and user-generated content; advertising (lineage) rates with daily unique users and mobile internet access. However, weaker correlation was reported for interactive tools, convergence and digital editions. We confirm that higher priced newspapers having been in business longer and having established brand recognition (Franklin, 2008) that there is more incentive to go online to read these newspapers for free. Note that this last explanation is consistent with the analysis provided for H2, b for price is negative. The resulting negative coefficient indicating that there is further reduction in the circulation change of higher priced papers. This suggests setting a premium price strategy is more suited to an elite rather than a broad readership. The regression results presented indicate that more established firms with multiple platform distribution, providing specialist digital editions and free online content, have reduced the log of circulation change by a smaller number. However, online service presence is not reversing the decline and circulation has not gone up. As Williams and Franklin (2008) suggest, this might reflect a host of factors which could be: workplace specific (journalists attitudes to change); title specific (a newspapers market position, circulation strength, profitability); company or group specific (the relative willingness of different newspaper companies to commit resources to change). And, finally, resistance may be reader or consumer specific (readers preferences for certain types of news, how it is presented and on which platforms, as well as their willingness/ability to pay). 6.1 Theoretical contribution As far as the authors are aware, no previous internet scholarship has examined how multi-channel market extension, cross-media synergy and actual channel performance are related. This paper makes a significant contribution to the literature embedding an established theoretical construct (cross-media synergy) into the internet literature. Rising interests in the interactions between traditional and web-based media has led to a focus on synergy. However, there is a dearth of scholarly work examining the news media industry. This work contributes to the field by attempting to conceptualize synergy and to measure the cross-media effects on the log of circulation change. Theoretically, we have focused on aggregated-level synergy and the work is the first to measure the influence of the synergy between print and online presence combining the log of print and online measures of circulation change. Of most importance, the study

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has been able to empirically demonstrate that synergy in the newspaper sector can be complementary. 6.2 Managerial implications The study indicates firms which have successfully developed an online presence, while having less negative log circulation change, have not managed to make circulation go up. News media firms therefore need to consider a more targeted circulation, focusing on specific segments or niches of the population. In order to attract advertisers away from a high-circulation culture they will need to be convincing of the financial benefits. One way is to increase the emphasis on hyper-local news. Hyper-local news is news that relates to a specific segment in the community or region (Thurman and Myllylahti, 2009). As stated, the future challenge to regional newspapers in light of dwindling circulation figures nationwide is to stay geographically relevant (p. 691). The study provides additional insights for internet managers seeking to improve the management of their print and online distribution channels. Though as Tarkiainen et al. (2009) argue decisions regarding distribution are the most long-term in nature frequently implying heavy financial investment and resourcing. We believe that this study provides additional insights for internet managers seeking to improve their management of cross-media synergy. Monitoring synergy is not in itself sufficient to reverse declining circulations, rather managers need to better understand the process of multi-channel evolution and therefore design more adaptive channel structures that fully consider changes in channel tasks, resource allocation, sales goals, customer demarcations, pricing and promotional assistance. Since online sales do compete with traditional retail sales and this competition is becoming more and more intense with the rapid development of the internet, it is critical that internet managers in news media firms significantly improve levels of interaction and coordination between their online and traditional channels. Our results and findings also can be applied to the USA, Europe and other national news media environments where multi-channel distribution is becoming more and more popular and firms are running or planning to run their business through online channels operating synergistically with the traditional channel. 6.3 Limitations and future research Like all research projects, this study has a number of limitations that restrict its broader utility. In the context of management literature, some readers would regard the newspaper industry as an extreme case. While we maintain that our sample is a useful data set for theory building, rendering internet dynamics highly visible, we acknowledge that our findings reflect the unique context in which our research was conducted. Further studies are needed to explore other news media sectors (radio and television) and international comparisons would be useful to assert more robust causation, and to substantiate the evolving nature of synergy in the news-media sector. The focus of this research has been on newspapers, but many of the issues are relevant to community radio and local television news provision. These services, together with newspapers, are vital to the plurality of news supply in local communities and there is a need for research to compare and contrast their position with that of newspapers. Also, there is clearly a distinction between rural and urban communities, and so it would be interesting to conduct a more detailed comparative study to uncover key differences and trends.

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Equally, the growth in channel availability in a digital environment has done much to undermine the value of the individual distribution assets held by news-media firms. Increasingly, the strategic high ground in the creative industries is occupied not by those who control scarce distribution assets, but by those who, for whatever reason, can aggregate and crucially monetize readers attention. For instance, in the television sector, SYCOtv (owned by Simon Cowell, originator of The X Factor) is positioned to build television and music brands that aggregate audience attention, which can then be monetized on a variety of different platforms. Have we moved from a distribution- to an attention-based economy in news media? Certainly we have witnessed significant changes in the nature of competition, the consumer proposition, market structure and the link between distribution power and the ability to monetize media content. It is important to consider, what are the implications for incumbents in the sector seeking to explore opportunities to build new assets? Such questions should form the basis of future investigative research into the reassembly of business models in the culture industry.
Notes 1. Web 2.0 is the second generation of web site development and design on the internet frequently referred to by scholars as social media (Zhang et al., 2010). 2. The Huffington Post launched its UK version in July 2011. 3. In blog platforms interaction between users and bloggers is an exchange process involving the sharing of valuable information, individuals contribute and exchange their knowledge with others, with an expectation of benefiting from what is received in return (Lee et al., 2006). 4. Please refer to Section 4.1 which explains how these criteria were derived. 5. Our collaborating institution. 6. Please note that population was used as a control variable (refer to Section 4.3). 7. In calculating the logarithms we specified a base number, e, also known as the base for natural logarithms. The value of e is approximately 2.22 and we calculated the logarithm of circulation change to base e. 8. Heteroscedasticity refers to the situation in which the error term in a regression model does not have constant variance. 9. Satorra explains that the EM algorithm is an iterative procedure that finds the MLE of the parameter vector by repeating the following steps: first, the expectation E-step: Given a set of parameter estimates, such as a mean vector and covariance matrix for a multivariate normal distribution, the E-step calculates the conditional expectation of the complete-data log likelihood given the observed data and the parameter estimates. Second, the maximization M-step: Given a complete-data log likelihood, the M-step finds the parameter estimates to maximize the complete-data log likelihood from the E-step. The two steps are iterated until the iterations converge. 10. Adjusted R2 is an attempt to take account of the phenomenon of statistical shrinkage. He notes that, in regression analysis, a fitted relationship appears to perform less well on a new data set than on the data set used for fitting (in particular the value of the coefficient of determination shrinks). This idea is complementary to overfitting and, separately, to the standard adjustment made in the coefficient of determination to compensate for the subjunctive effects of further sampling, such as controlling for the potential of new explanatory terms to improve the model by chance, i.e. the adjustment formula itself causes shrinkage. But in our models results the adjustment formula yields only minimal artificial shrinkage, in contrast to the first definition.

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Voorfeld, A.H., Neijens, P.C. and Smit, E.G. (2009), Consumers responses to brand websites: an interdisciplinary review, Internet Research, Vol. 19 No. 5, pp. 535-65. Whitla, P. (2009), Crowdsourcing and its application in marketing activities, Contemporary Management Research, Vol. 5 No. 1, pp. 15-28. Zittrain, J. (2006), The future of the Internet and how to stop it, presentation at the Oxford Internet Institute, Oxford, 11 November. About the authors Gary Graham has been researching the internet disruption of the creative industries since 1995. He has co-authored two books on the Internet and its influence on business models in the music industry and the news media sector. His current work (sponsored by the British Academy) involves statistically modelling factors influencing the nature and form of synergy between traditional and online channels in regional newspapers, both in the UK and the US. He is a Foreign and Commonwealth Office (FCO) funded Visiting Research Fellow at the School of Journalism and Mass Communication, UNC-Chapel Hill. Gary Graham is the corresponding author and can be contacted at: g.graham@leeds.ac.uk Anita Greenhills primary area of research is in socio-technical information systems and the social sciences. Her key area of research interest is in the area of networked usage of technology within organisational and business settings. Under this broad theme she has specialised interests and is actively conducting research into technologically enable work, spatiality, and internet/ world wide web usage in organisations. She has a growing body of published work (more than 60 publications) ranging from examination of virtual space and the impact that new technological developments are having on organisations and people to the use of technology on techno-religious practice.

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