Conference PaperPDF Available

Paying for news: Opportunities for a new business model through personalized news aggregators (PNAs)

Authors:

Abstract and Figures

News consumption has been evolving from offline newspapers to online news. However, while offline newspapers sales are decreasing, online news business models have never been entrenched. Meanwhile, the new technology of social recommender systems enable automated news aggregation. Personalized news aggregators (PNAs) rely on this technology, and provide personalized news in visually appealing ways that might deliver the potential for a new business model. However, there is no research on PNA configuration or users’ willingness to pay (WTP). An empirical investigation with 116 participants examined usage features influencing PNA users’ adoption and their WTP for a paid-based service. First, we showed that perceived usefulness, usage comfort, awareness, and (social) personalization significantly influence intention to use a PNA. Users are also considering price. Second, we found an optimal price point of 1.88€ and a price range up to 6.83€ for monthly use.
Content may be subject to copyright.
Oechslein et al. Paying for News: Opportunities through PNAs
Proceedings of the Nineteenth Americas Conference on Information Systems, Chicago, Illinois, August 15-17, 2013. 1
Paying for News: Opportunities for a New Business Model
through Personalized News Aggregators (PNAs)
Completed Research Paper
Oliver Oechslein
Ludwig-Maximilians-Universität München
oechslein@bwl.lmu.de
Thomas Hess
Ludwig-Maximilians-Universität München
thess@bwl.lmu.de
ABSTRACT
News consumption has been evolving from offline newspapers to online news. However, while offline newspapers sales are
decreasing, online news business models have never been entrenched. Meanwhile, the new technology of social
recommender systems enable automated news aggregation. Personalized news aggregators (PNAs) rely on this technology,
and provide personalized news in visually appealing ways that might deliver the potential for a new business model.
However, there is no research on PNA configuration or users’ willingness to pay (WTP).
An empirical investigation with 116 participants examined usage features influencing PNA users’ adoption and their WTP
for a paid-based service. First, we showed that perceived usefulness, usage comfort, awareness, and (social) personalization
significantly influence intention to use a PNA. Users are also considering price. Second, we found an optimal price point of
1.88€ and a price range up to 6.83€ for monthly use.
Keywords
Personalized news aggregator, business model, social recommender system.
INTRODUCTION
Traditionally, news has been provided by newspapers, and the business model of selling newspapers or advertisements has
been around for some time. Nevertheless, due to digitalization, newspapers’ sales figures have dropped and the traditional
business model might no longer fit anymore. The transformation of an offline to an online business model did work, but in
the long run the consumer has many other options through which to consume news complementary. Besides, consumers’
WTP for online content is low (Dou, 2004). To date, publishers still have problems to find an appropriate digitalization
strategy in order to monetize news and content and to counteract the decline in revenue.
Online news has an important advantage for consumers: it is possible to adjust news according to preferences. In the
literature, it turned out that there is a correlation between online news, personalization, and new potential business revenue
strategies (Saeaeksjaervi, Wagner and Santonen, 2003). Meanwhile, the new technology of social recommender systems have
improved content personalization and adaptation to a user’s preferences. Content bundling can be transformed from manual
bundling to an automated aggregation. This technology is being used in new types of services: personalized news aggregators
(PNAs). The service is mostly optimized for mobile devices (e.g. tablet computers) and presents a personalized selection of
news and other content sources in an optically unified interface. A first approach to implementing this service is Flipboard.
There is little research about PNAs in the information systems (IS) literature available (e.g., Nanas, Vavalis and Houstis,
2010), and none on PNA configuration in a media context. A service such as PNA might enable the establishment a new
digital business model for news. This new content distribution form has not yet been explored and requires, besides the
investigation of the underlying technology, a scientific research of economic effects. To design a profitable business model
and digitalization strategy for publishers, it is necessary to know which features are in fact needed for the service and to know
what the user is willing to pay for it. To provide a first insight, this study examines the importance of different features in
order to influence users’ intention to use a PNA. We also examine WTP for this service, to show if there is a general
opportunity for a paid-based business model. We address the following research questions:
RQ1: Which features are relevant from a user perspective and how do they influence the intention to use a PNA?
RQ2: What is user WTP for PNA service?
Oechslein et al. Paying for News: Opportunities through PNAs
Proceedings of the Nineteenth Americas Conference on Information Systems, Chicago, Illinois, August 15-17, 2013. 2
The structure of the paper is as follows: First, we present a review of technologies and business models. We then present the
development of our research model, the hypotheses, and the methodological approach to measure the features and the WTP.
Next, empirical results are shown. Finally, we discuss findings, highlight implications, and present some study limitations.
RELATED LITERATURE
Social Recommender Systems and Personalized News Aggregators
Personalization mechanisms such as recommender systems have been in existence since the introduction of the first system –
“Tapestry” – by Goldberg, Nichols, Oki, and Terry (1992). These technologies assist the user by supplying well-structured
information in searching, sorting, and filtering the massive amount of information available online. Initially used in e-
commerce (e.g. product recommendations by amazon.com), recommender systems can now also be used for digital products,
such as news or music. Different technologies have been developed; the traditional and most widely used ones are content-
based filtering, collaborative filtering, and hybrid filtering (Adomavicius and Tuzhilin, 2005).
With the rise of Web 2.0, social networks have spread and (inter)personal information has become available, for instance via
Facebook (Carmagnola, Vernero and Grillo, 2009). Based on information about a user or users’ social networking friends,
social recommender systems can recommend content (Ricci, Rokach, Shapira and Kantor, 2011). As various scholars note,
social recommender systems devise a new way to improve both the selection and the weighting of recommendations, thereby
increasing recommender systems’ accuracy and enable a new consumption of content (e.g., Arazy, Kumar and Shapira,
2010). These systems enable the automated selection, bundling, and combination of content from different sources, adapted
to an individual consumer’s preferences.
Initially, IT-enabled personalization mechanisms such as recommender system technologies were integrated into aggregation
systems. Based on recommender systems, they provided a first solution to the simple task of bundling content. Aggregation
systems add value by analyzing and adjusting information from different sources according to a specific objective (Zhu,
Siegel and Madnick, 2001). Based on the new technology of social recommender systems, PNAs are the new generation of
aggregation systems. Paliouras, Mouzakidis, Moustakas, and Skourlas (2008) explain a mechanism that aggregated content,
sorting them into categories and presenting an adaptively personalized interface. Nanas et al. (2010) illustrated, by means of a
self-developed PNA, how content-based filtering can be useful for selecting relevant information.
Business Model for News
Traditionally, news was bundled in a paper-based newspaper and has been sold at low prices to individuals or corporate
subscribers. Advertising has been sold in order to cover the costs and generate revenue. This established approach became
known as the “newspaper revenue model” (Teece, 2010). Owing to digitalization, publishers began to move from print
newspapers to an online form; however this has created monetization problems (Saeaeksjaervi et al., 2003). As noted, WTP
for online content is low, and it is unclear whether advertising can entirely compensate for the loss in direct revenue.
According to Chyi (2005), publishers have been experimenting with different business models for online news: the
subscription model, the advertising model, the transactional model, and the bundled model. For example, Wang, Ye, Zhang,
and Nguyen (2005) showed that several factors (e.g. added-value or service quality) influence the willingness to access
subscription based news. Additionally, “freemium” – as a new revenue model – has the potential to monetize news, since a
free version as well as a paid-based premium version (e.g. without advertisement) are provided (Wagner, Benlian and Hess,
2013). Moreover, research is starting addressing digital media innovations in order to find a solution for news delivery in the
future (e.g., Gershon, 2013).
RESEARCH MODEL AND HYPOTHESIS DEVELOPMENT
First, we address the development of a research model in order to answer RQ1. To do so, we want to examine user attitudes
to adopting a PNA and how this is influenced by different features. The research model of Dibbern, Heinzl, and Schaub
(2007), which analyzes determinants that affect mobile banking services acceptance, seems to be appropriate for this study.
The research model is based on the Technology Acceptance Model (TAM) and the Theory of Reasoned Action (TRA)
(Davis, 1989; Fishbein and Ajzen, 1975). The purpose of technology acceptance models is to provide a theoretical framework
to analyze a technology’s adoption. It argues that an individual’s behavioral intention to perform a certain action is the result
of his or her attitude towards this behavior, which leads to a specific use behavior. This procedure has been validated (e.g.,
Davis, 1989; Doerr, Benlian, Vetter and Hess, 2010).
Oechslein et al. Paying for News: Opportunities through PNAs
Proceedings of the Nineteenth Americas Conference on Information Systems, Chicago, Illinois, August 15-17, 2013. 3
In this case and according to literature, we examine whether the user attitude (AT) to use a PNA influences the behavioral
intention (BI) to use a PNA. It is therefore hypothesized that:
H1: User AT will have a positive influence on the BI to use a PNA.
In a second step, we identified features of a PNA that influence user attitude, and to integrate these into the research
framework. We will draw on hypotheses for each feature to analyze its influence on AT. To support the development of the
framework a qualitative study was conducted first, with the aim to confirm literature-based features and to discover
exploratory new features in the context of PNAs. The study was conducted in mid-2012, including 34 interviews with
technology experts, such as employees, bloggers, or journalists. The following features are the result: perceived usefulness
(PU), considering pricing (CP), usage comfort (UC), personalization (PE), ease of use (EU), system quality (SQ), platform
support (PS), source integration (SI), multimedia content (MC), trusted sources (TS), awareness (AW), social interaction
(SO), and social personalization (SP). Following Dibbern et al. (2007), we clustered these features according to three
different perspectives: consumer, technology, and network.
In Hypothesis 2, the consumer perspective will be consolidated. PU thereby refers to user beliefs that task performance is
efficient, and CP can be described by the underlying payment model and the relevance of occurring usage costs. UC refers to
simple and intuitive handling, while PE covers content personalization according to user interests. Hence, the following
hypotheses are formulated:
H2a: PU will have a positive influence on user AT to use a PNA.
H2b: CP will have a positive influence on user AT to use a PNA.
H2c: UC will have a positive influence on user AT to use a PNA.
H2d: PE will have a positive influence on user AT to use a PNA.
Hypothesis 3 describes features from a technology perspective. EU refers to the user beliefs that the use of the technology is
possible without much effort. SQ is explained by the reliability and presence of the presented information, while PS describes
the different types of devices that support PNA. SI can be explained by the ability to involve various and different sources.
MC represents the degree of combination of text, image, audio, or video file formats. Thus the following hypotheses are
formulated:
H3a: EU will have a positive influence on user AT to use a PNA.
H3b: SQ will have a positive influence on user AT to use a PNA.
H3c: PS will have a positive influence on user AT to use a PNA.
H3d: SI will have a positive influence on user AT to use a PNA.
H3e: MC will have a positive influence on user AT to use a PNA.
Finally, Hypothesis 4 describes a network perspective. TS refers to a source’s credibility and origin. AW relates to the extent
of brand popularity and recognition of the PNA. SO includes all forms of exchange, such as commenting or recommending,
between users. SP integrates the interests of users’ friends as a basis for better recommendations and selection. This can be
summarized in the following hypotheses:
H4a: TS will have a positive influence on user AT to use a PNA.
H4b: AW will have a positive influence on user AT to use a PNA.
H4c: SO will have a positive influence on user AT to use a PNA.
H4d: SP will have a positive influence on user AT to use a PNA.
Oechslein et al. Paying for News: Opportunities through PNAs
Proceedings of the Nineteenth Americas Conference on Information Systems, Chicago, Illinois, August 15-17, 2013. 4
Use behavior*
(UB)
Behavioral intention
(BI)
Attitude
(AT)
Perceived usefulness
(PU)
Considering pricing
(CP)
Usage comfort
(UC)
Personalization
(PE)
H2a
H2b
H2c
H2d
Ease of use
(EU)
System quality
(SQ)
Platform support
(PS)
Source integration
(SI)
Multimedia content
(MC)
H3a
H3b
H3c
H3e
H3d
Trusted sources
(TS)
Awareness
(AW)
Social interaction
(SO)
Social personalization
(SP)
H4a
H4c
H4d
H4b
H1
* The PNA as proposed does not exist, and it is not possible to explain the de facto use
behavior. Various scholars consider behavioral intention a reliable indicator for de
facto use behavior, whereas it is satisfactory to explain the behavioral intention
(Fishbein and Ajzen, 1975).
ConsumerTechnologyNetwork
Figure 1. Research framework: Features that determine user attitude
To answer RQ2 and to achieve a first impression of price sensitivity, we investigated user WTP for a PNA service. To
measure the WTP, different methods were applied in research, for example the conjoint analysis method and the Becker-
DeGroot-Marschack method (Miller, Hofstetter, Krohmer and Zhang, 2011). In this study, the price sensitivity meter (PSM)
of Van Westendorp (1976) seems appropriate, as it is highly suitable for the price estimation of innovative services. For
example, it has been validated for the pricing of music-as-a-service (MaaS) (Doerr et al., 2010).
RESEARCH METHODOLOGY
Measures
For part one of the study, to operationalize the research framework, validated constructs were used in the questionnaire.
Constructs were measured and rated on 7-point Likert scales, where 1 refers the lowest score and 7 the highest score. The
items for BI were adopted from Venkatesh, Morris, Davis, and Davis (2003), while items for AT were measured by a
semantic differential by Graf (2007). Items for the features were adapted and worded according to the scale by Sujan and
Bettman (1989).
To measure the WTP for part two of the study, four items of the PSM scale were used, to calculate the marginal cheapness
(MGP), the marginal expensiveness (MEP), the optimal price point (OPP), and the indifference price (IDP). In the study, we
pretended to use a monthly charge for the use of a PNA. Nevertheless, the PSM only measures the price consciousness, but
not the intention to buy or pay for the service (Van Westendorp, 1976).
Data Collection
The data for this study was collected using a quantitative standardized online survey. At the start of the survey, we showed a
short video explaining the PNA’s functionality, to ensure that all participants had the same knowledge base. A pretest was
conducted. The survey was developed with the software Unipark by Globalpark, and data was collected in January 2013.
Participants were invited with an invitation link sent via email to 5,030 students of a German university, via Facebook, and
Oechslein et al. Paying for News: Opportunities through PNAs
Proceedings of the Nineteenth Americas Conference on Information Systems, Chicago, Illinois, August 15-17, 2013. 5
via personal contacts. We collected 498 datasets, but we could only consider datasets from participants who had already been
using a PNA. Thus, our final sample comprised 116 valid datasets. We followed the usual approach of asking students in this
development stage and in similar use cases (i.e. recommender systems or MaaS) (e.g., Benlian, Titah and Hess, 2010; Chyi,
2005; Wagner et al., 2013). The participants’ age ranged between 18 and 54 years, whereas 85% were between 18 and 29
years old. 54% of the participants were male and 46% were female. The sample comprised 75% students, 20% employees
and 5% self-employed. Most of the participants (62%) rarely use a PNA, but 19% already use it weekly, 13% daily, and 6%
use a PNA several times a day.
RESULTS
For the first part of the study, structural equation modeling was used to test the hypotheses. Therefore, the software
SmartPLS 2.0 M3, using the partial-least-squares (PLS) algorithm, was used for all analysis (Ringle, Wende and Will, 2005).
The algorithm has the advantage of modeling latent constructs and predictive models, and is usable with small sample sizes
(Chin, 1998). Furthermore, PLS analysis is highly appropriate for our explorative study (Hair, Ringle and Sarstedt, 2011). In
this case, the software was used to calculate path coefficients and to determine the paths’ significance in the model (using
bootstrapping).
To analyze the quality of the model and provide a valid model, all values have to be above literature-based thresholds. All
items except SQ and PS have Cronbach’s α values above .06, which is acceptable in this early research stage (Henseler,
Ringle and Sinkovics, 2009). For SQ and PS, one indicator each was rejected. A new calculation of the model now showed
values above the threshold. Composite reliability shows values above .70 in all cases (Chin, 1998). Furthermore, the average
variance extracted (AVE) showed values above the threshold of .50 (Chin, 1998). Discriminant validity was analyzed by
comparing the latent construct correlation and the square root of the specific AVE. For each construct, the AVE’s value was
higher that the square root (Fornell and Larcker, 1981). Therefore, all constructs satisfied the reliability and validity criteria.
Perspective Construct Composite reliability
AVE Mean
BI .966 .904 5.155
AT .897 .634 5.389
PU .852 .659 6.276
CP .730 .503 6.412
UC .908 .767 6.014
Consumer
PE .889 .729 6.182
EU .912 .777 6.129
SQ .863 .760 6.458
PS .853 .746 6.097
SI .920 .793 6.294
Technology
MC .927 .810 4.849
TS .870 .696 5.677
AW .969 .912 3.383
SO .920 .793 4.157
Network
SP .953 .872 4.231
Table 1. Composite reliabilities, AVEs, and descriptive statistics
To analyze the structural model, we used Ball’s Q² as the indicator for predictive relevance, as well as Cohen’s effect sizes f²
and t-values to investigate the paths’ significance. Using the jackknifing procedure, Q² > 0 presents a predictive relevance of
the model, whereas Q² 0 suggests a lack of relevance. All constructs have a positive Q², indicating that we have predictive
relevance (Fornell and Larcker, 1981; Sarstedt and Wilczynski, 2009). In a second step, we analyzed f² to determine each
path’s effect size. A value of .02 indicated a small, a value of .15 a medium, and a value of .35 a large effect size (Cohen,
1988). All of our significant results showed at least a small effect size. Overall, our model and features can explain one-third
of the variance in user attitude to use a PNA (R² = .299). Furthermore, AT shows an R² of .400 to explain the variance in BI.
In total, 7 of our hypotheses can be supported. First, as expected, AT shows a positive influence on the BI to use a PNA,
supporting H1 (β = .632, p < .05). We found support for hypotheses H2a, H2b, H2c, and H2d, whereas PU, CP, UC, and PE
positively influence AT (β = .230, p < .05 / β = .188, p < .05 / β = .238, p < .05 / β = .192, p < .05). On the one hand, the only
significant relationship for the hypothesis 3 is SQ of a PNA (β = -.233, p < .05). But, a negative relationship leads one to
reject hypothesis H3b. On the other hand, H3a, H3c, H3d, and H3e also cannot be supported (β = -.079, p > .05 / β = -.063, p
> .05 / β = .081, p > .05 / β = .009, p > .05). Therefore, EU, PS, SI, and MC do not lead to a higher AT. AW and SP
positively influence AT (β = .208, p < .10 / β = .393, p < .01). Therefore, hypotheses H4b and H4d can be supported. Finally,
Oechslein et al. Paying for News: Opportunities through PNAs
Proceedings of the Nineteenth Americas Conference on Information Systems, Chicago, Illinois, August 15-17, 2013. 6
TS and SO are significant but show negative relationships (β = -.286, p < .01 / β = -.394, p < .01). Hence, hypotheses H4a
and H4c must be rejected.
Perspective Hypothesis t-value β-value Effect size Result
H1
+
9.181 .632 - Supported
H2a
+
2.040 .230 .067 Supported
H2b
+
2.085 .188 .039 Supported
H2c
+
2.346 .238 .046 Supported
Consumer
H2d
+
1.968 .192 .039 Supported
H3a
+
.783 -.079 -.016 Not supported
H3b
+
2.057 -.233 .039 Not supported
H3c
+
.936 -.063 .004 Not supported
H3d
+
.867 .081 .006 Not supported
Technology
H3e
+
.102 .009 .010 Not supported
H4a
+
3.084 -.286 .098 Not supported
H4b
+
1.809 .208 .034 Supported
H4c
+
2.958 -.394 .083 Not supported
Network
H4d
+
2.666 .393 .066 Supported
Table 2. Results of the structural equation model and hypothesis validation
To evaluate the WTP for part two of our research, we aggregated all data and calculated four price points, following Van
Westendorp (1976). Price indications to the participants are scaled in 0.50€ intervals steps, ranging from 0€ to 20€. Results
are shown in a diagram presenting four graphs, with price on the X-axis and the cumulative percentage of the participants on
the Y-axis. MGP is calculated by the intersection point of not cheap and too cheap, because users considering the service as
too cheap would exceed users determining the service as not cheap. Using two mathematical functions, MGP has been
calculated as 0.42€. Obtaining a pricing range for the PNA use, MEP can be calculated by the intersection of too expensive
and not expensive, and shows a price of 6.83€. Again, if the price would be higher, the amount of users considering the
service as too expensive would exceed the users considering it as not expensive. OPP is calculated by the intersection of too
cheap and too expensive, and results in 1.88for PNA use. IDP is calculated by the intersection of cheap and expensive,
resulting in a higher price than the OPP. Here, IDP is 2.83€, showing that 25% of the users consider it too cheap and 25%
consider it too expensive. However, 50% of the users consider it an acceptable price. In this case, there is a high difference
between the IDP and the OPP of 0.95€ (2.83€ - 1.88€), indicating that users consider a PNA service to cost more than they
are willing to pay for it.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Cum. distribution
Price in €
not cheap not expensive too expensive too cheap
Range of acceptable prices
MGP
0.42
OPP
1.88
MEP
6.83
Figure 2. WTP: Price range and optimal price point
Oechslein et al. Paying for News: Opportunities through PNAs
Proceedings of the Nineteenth Americas Conference on Information Systems, Chicago, Illinois, August 15-17, 2013. 7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Cum. distribution
Price in €
cheap expensive
IDP
2.83
Figure 3. WTP: Indifference price
CONCLUSION, IMPLICATIONS, AND LIMITATIONS
This study primarily sought to investigate the question whether a PNA service might contain the potential to establish a new
business model for news in the digital environment. First, we investigated usage features, influencing the adoption of the
service; second, we considered user WTP for the use of this service.
First, the results of our survey, showed that the PNA’s perceived usefulness, usage comfort, and awareness of a PNA raise
users’ intention to use the service. Considering pricing, the survey shows that the user will have a look at the service’s costs
before starting to use it. Last, the personalization of content and the possibility of social personalization are important
features for a PNA to have and positively influence intention to use. Contrary to our expectations, system quality, trusted
sources, and social interaction lead to lower intention to use a PNA. It shows that users do not want most current affairs all
the time and not according to the most trusted sources; what users want is the most suitable news according to his or her
preferences. Finally, platform support seems not to be an indicating feature, and neither does integrating different types of
sources, video, and music content. Ease of use also seems not to be a feature. Second, the exploration of the WTP and an
OPP of 1.88€ shows that users are willing to pay for the use of the service. The pricing of a monthly service is acceptable for
the user, even if news is available complimentary. Furthermore, the price range goes up to 7€ as a monthly fee, which might
be the basis for a sustainable business model. This study therefore contributes to current research by applying the research
framework and the PSM scale to a new research field and by extending the framework with different features.
Concerning the study results, PNAs provide the requirements to establish a new business model for news. A PNA’s
configuration should focus on the core functionality so as to simplify users’ consumption of news. Design, surface
appearance, and content appearance are important. Our results show that customization is a key feature of a PNA and might
lead to higher WTP. Personalization allows for customizing according to user preferences, as stated during usage, but social
personalization allows higher recommender accuracy and improves automatic aggregation of content. Since this is one of the
main improvements of PNAs, it promises a solid base for PNA development. PNAs can be applied in the environment of one
publishing house, to aggregate content from different media formats personalized for each user. It is not necessary to try to
sell one newspaper or magazine as a whole. The selection of interesting articles for a user can achieve higher revenues.
Selling articles selected by the underlying technology could easily be implemented by a PNA.
The study provides a first insight in a potential future business model. However, our study also has some limitations. First,
the sample consists mostly of students and is therefore not representative for PNAs users. Results for the WTP might be
biased using this sample, as students provide a lower purchase power. Future studies should make use of a representative
sample, in order to transfer the results of the study to a wider population. Second, it should be explored how the development
of mobile Internet and mobile technologies affect PNAs in future. The continuance and discontinuance of PNAs is also an
interesting research area. Hence, this study is only a snapshot in time and it should be replicated in the future. Third, the
research model was tested in only one special application context (i.e. PNAs). The model should be tested with other digital
Oechslein et al. Paying for News: Opportunities through PNAs
Proceedings of the Nineteenth Americas Conference on Information Systems, Chicago, Illinois, August 15-17, 2013. 8
services or products. Also, other (moderating) variables should be explored in future studies to help draw a more complete
picture of the investigated relationships and the affected user intention. However, we could explain 30% of the attitude.
Fourth, predictions about the WTP are affected by other influencing factors that are not addressed in this study. WTP should
be examined in future, for example, to investigate price sensitivity for different features of a PNA.
REFERENCES
1. Adomavicius, G. and Tuzhilin, A. (2005) Towards the next generation of recommender systems: A survey of the state-
of-the-art and possible extensions, IEEE Transactions on Knowledge and Data Engineering, 17, 6, 734-749.
2. Arazy, O., Kumar, N. and Shapira, B. (2010) A theory-driven design framework for social recommender systems,
Journal of the Association for Information Systems, 11, 9, 455-490.
3. Benlian, A., Titah, R. and Hess, T. (2010) Provider- vs. User-generated Recommendations on E-Commerce Websites
Comparing Cognitive, Affective and Relational Effects, in Proceedings of the International Conference on Information
Systems, December 12-15, St. Louis, USA, ACM Press, 1-19.
4. Carmagnola, F., Vernero, F. and Grillo, P. (2009) Sonars: A social networks-based algorithm for social recommender
systems, in Proceedings of the seventeenth International Conference on User Modeling, Adaptation, and
Personalization, June 22-26, Trento, Italy, Springer-Verlag, 223-234.
5. Chin, W. W. (1998) The partial least squares approach for structural equation modeling, in George A. Marcoulides
(Eds.) Modern Methods for Business Research, Lawrence Erlbaum Associates, Hillsdale, 295-336.
6. Chyi, H. I. (2005) Willingness to Pay for Online News: An Empirical Study on the Viability of the Subscription Model,
Journal of Media Economics, 18, 2, 131-142.
7. Cohen, J. (1988) Statistical power analysis for the behavioral sciences, Lawrence Erlbaum Associates, Hillsdale.
8. Davis, F. D. (1989) Perceived usefulness, perceived ease of use, and user acceptance of information technology, MIS
Quarterly, 13, 3, 319-340.
9. Dibbern, J., Heinzl, A. and Schaub, N. (2007) Determinanten der Akzeptanz von mobilen Bankdiensten: Test eines Drei-
Perspektiven-Modells, in Tomas Bayon, Andreas Hermann and Frank Huber (Eds.) Vielfalt und Einheit in der
Marketingwissenschaft, Springer, Wiesbaden, 449-478.
10. Doerr, J., Benlian, A., Vetter, J. and Hess, T. (2010) Pricing of Content Services – An Empirical Investigation of Music
as a Service, in Proceedings of the sixteenth Americas Conference on Information Systems, August 12-15, Lima, Peru,
ACM Press, 13-24.
11. Dou, W. (2004) Will Internet users pay for online content?, Journal of Advertising Research, 44, 4, 349-359.
12. Fishbein, M. and Ajzen, I. (1975) Belief, attitude, intention, and behavior: an introduction to theory and research,
Addison-Wesley Pub. Co., Reading.
13. Fornell, C. and Larcker, D. F. (1981) Evaluating structural equation models with unobservable variables and
measurement error, Journal of Marketing Research, 18, 1, 39-50.
14. Gershon, R. A. (2013) Digital Media Innovation and the Apple iPad: Three Perspectives on the Future of Computer
Tablets and News Delivery, Journal of Media Business Studies, 10, 1, 41-61.
15. Goldberg, D., Nichols, D., Oki, B. M. and Terry, D. (1992) Using collaborative filtering to weave an information
tapestry, Communications of the ACM, 35, 12, 61-70.
16. Graf, D. (2007) Die Theorie des geplanten Verhaltens, in Dirk Krüger and Helmut Vogt (Eds.) Theorien in der
biologiedidaktischen Forschung, Springer, Berlin Heidelberg, 33-43.
17. Hair, J. F., Ringle, C. M. and Sarstedt, M. (2011) PLS-SEM: Indeed a silver bullet, The Journal of Marketing Theory and
Practice, 19, 2, 139-152.
18. Henseler, J., Ringle, C. M. and Sinkovics, R. R. (2009) The Use of Partial Least Squares Path Modeling in International
Marketing, Advances in International Marketing, 20, 277-319.
19. Miller, K. M., Hofstetter, R., Krohmer, H. and Zhang, Z. J. (2011) How Should Consumers' Willingness to Pay Be
Measured? An Empirical Comparison of State-of-the-Art Approaches, Journal of Marketing Research, 48, 1, 172-184.
20. Nanas, N., Vavalis, M. and Houstis, E. (2010) Personalised news and scientific literature aggregation, Information
Processing & Management, 46, 3, 268-283.
Oechslein et al. Paying for News: Opportunities through PNAs
Proceedings of the Nineteenth Americas Conference on Information Systems, Chicago, Illinois, August 15-17, 2013. 9
21. Paliouras, G., Mouzakidis, A., Moustakas, V. and Skourlas, C. (2008) PNS: A personalized news aggregator on the web,
Intelligent Interactive Systems in Knowledge-based Environments, 104, 175-197.
22. Ricci, F., Rokach, L., Shapira, B. and Kantor, P. B. (2011) Recommender Systems Handbook, Springer, New York.
23. Saeaeksjaervi, M., Wagner, M. and Santonen, T. (2003) Customization as a Business Model for Online Newspapers, in
Proceedings of the sixteenth Bled eCommerce Conference, June 9-11, Bled, Slovenia, ACM Press, 1-13.
24. Sarstedt, M. and Wilczynski, P. (2009) More for less? A comparison of single-item and multi-item measures, Die
Betriebswirtschaft, 69, 2, 211-227.
25. Sujan, M. and Bettman, J. R. (1989) The effects of brand positioning strategies on consumers' brand and category
perceptions: Some insights from schema research, Journal of Marketing Research, 26, 3, 454-467.
26. Teece, D. J. (2010) Business models, business strategy and innovation, Long Range Planning, 43, 2, 172-194.
27. Van Westendorp, P. H. (1976) NSS-price sensitivity meter (PSM)-A new approach to study consumer perception of
price, in Proceedings of the twenty ninth ESOMAR Congress, Amsterdam, Netherlands, ACM Press, 139-167.
28. Venkatesh, V., Morris, M. G., Davis, G. B. and Davis, F. D. (2003) User acceptance of information technology: Toward
a unified view, MIS Quarterly, 27, 3, 425-478.
29. Wagner, T., Benlian, A. and Hess, T. (2013) The Advertising Effect of Free-Do Free Basic Versions Promote Premium
Versions within the Freemium Business Model of Music Services?, in Proceedings of the forty six Hawaii International
Conference on System Sciences, Hawaii, USA, IEEE, 1-10.
30. Wang, C. L., Ye, L. R., Zhang, Y. and Nguyen, D.-D. (2005) Subscription to fee-based online services: what makes
consumer pay for online content, Journal of Electronic Commerce Research, 6, 4, 304-311.
31. Zhu, H., Siegel, M. and Madnick, S. (2001) Information Aggregation-a Value-Added E-Service, in Proceedings of the
fifth International Conference on Technology, Policy and Innovation, June 26-29, Delft, Netherlands, ACM Press, 1-11.
... The drastic changes of the business landscape that come along with its digitization exposes especially long-established firms to major challenges of competing in the digital sphere (Butler, 2003;Feller et al., 2008Feller et al., , 2011Henningsson and Henriksen, 2011;Henningson et al., 2010). Accordingly, the digitization of the business environment has particularly challenged long-established practices of traditional "offline businesses," i.e., businesses that have a long history of offering non-digitized products and services (Grover and Kohli, 2013), such as the book industry (Gerlach and Buxmann, 2011), the camera industry (Lucas and Goh, 2009), the newspaper industry (Oechslein and Hess, 2013), and the music industry (Oestreicher-Singer and Zalmanson, 2013). ...
... In fact, the setting of the funeral industry and the focal empirical phenomenon of path disruption through the digitization of firm-consumer interactions are peculiar in many aspects. However, with regard to the phenomenon of interest, i.e., path disruption through digitization, the firms in this industry were affected just like many other traditional offline businesses, such as in the book industry (Gerlach and Buxmann, 2011), the camera industry (Lucas and Goh, 2009), the newspaper industry (Oechslein and Hess, 2013), and the music industry (Oestreicher-Singer and Zalmanson, 2013). As these businesses also seem to have been disrupted by a failure of the driving self-reinforcing mechanism, such as the advertising-circulation spiral in the newspaper industry , our findings seem to be transferrable to pathdependent firms that are affected by path disruption through digitization in different contexts (Lincoln and Guba, 1985). ...
Conference Paper
Full-text available
While the digitization of the business landscape provides firms with numerous business opportunities, it has severely disrupted established business practices of many traditional " offline businesses. " To shed light on the disruptive nature of digitization and the challenges that it entails for traditional offline businesses, we draw on path dependence theory to examine how digitization disrupts strategic paths. We explore this issue by analyzing the strategic path of funeral homes, a paradigmatic case of a traditional offline business that has been struck heavily by digitization. We show that digitization is capable of destabilizing the key mechanisms that drive the successful reproduction of strategic paths and, consequently, induce their eventual demise, whereas other (non-digital) disruptive events may challenge the strategic pattern of paths but do not necessarily lead to path disruption. By discerning and emphasizing this disruptive peculiarity of digitization, we contribute to better understanding the disruptive nature of digitization and the challenges that it entails for traditional offline businesses. Furthermore, we extend the extant literature on path dependence by providing a more nuanced understanding of path disruption, and we offer guidance to practitioners on how to cope with the challenges of path disruption through digitization.
... Researchers agree that the interest in the BM concept in the IS field has grown ever since. Although the BM concept is considered applicable for all business in any sector [2], the majority of research into BM in the IS field is concerned about software industry and application service and infrastructure providers [5][6][7][8][9][10], online news, advertising and social media BM [11,12]. ...
... In terms of revenue model, advertisers could be charged based on user actions, the socalled performance based model, or based on the level of exposure, regardless of ad effectiveness [32]. Newspaper publishing industry has experimented several BM revenue model: subscription model, advertising model, transaction model, and bundled model [12]. ...
Chapter
Although the Business Model (BM) concept provides a convenient unit of analysis in the business practices, BM research in the Information Systems (IS) field emphasizes blurriness and divergences in its structure. With this paper we provide a clarification of the BM concept and update Al-debei and Avison (2010) analysis on the BM literature. Using a structured methodology, we review the titles and the abstracts of 108 articles from IS literature and examine a significant subset of 49 articles. Our work contributes first, to formalize the concept of BM as instanced in IS domain and organizes BM studies around two different frameworks. Second, it highlights the BM research streams and their current states of the art. Last, it discusses the current limitations of the BM studies and offers the basis for future research.
... Researchers agree that the interest in the BM concept in the IS field has grown ever since. Although the BM concept is considered applicable for all business in any sector [2], the majority of research into BM in the IS field is concerned about software industry and application service and infrastructure providers [5][6][7][8][9][10], online news, advertising and social media BM [11,12]. ...
... In terms of revenue model, advertisers could be charged based on user actions, the socalled performance based model, or based on the level of exposure, regardless of ad effectiveness [32]. Newspaper publishing industry has experimented several BM revenue model: subscription model, advertising model, transaction model, and bundled model [12]. ...
Conference Paper
Although the Business Model (BM) concept provides a convenient unit of analysis in the business practices, BM research in the Information Systems (IS) field emphasizes blurriness and divergences in its structure. With this paper we provide a clarification of the BM concept and update Al-debei and Avison (2010) analysis on the BM literature. Using a structured methodology, we review the titles and the abstracts of 108 articles from IS literature and examine a significant subset of 49 articles. Our work contributes first, to formalize the concept of BM as instanced in IS domain and organizes BM studies around two different frameworks. Second, it highlights the BM research streams and their current states of the art. Last, it discusses the current limitations of the BM studies and offers the basis for future research.
... However, Jere and Borain (2018) claim that the construct "user experience", which is concerned with the ease of use and interactivity of online news, is not significant for PI. Concerning WTP, Oechslein and Hess (2013) also report no significant result in this regard. Again, more research is needed to get reliable results in that respect. ...
Article
The advertising-based revenue model for journalism is severely challenged due to the effects of digitization. Providers of journalistic content have therefore put increasing emphasis on paid content strategies in recent years. This article provides a literature review of factors that contribute to consumers’ past payment (PP), paying intent (PI) and willingness to pay (WTP) for digital journalistic content. We identify 17 variables based on 37 articles that influence PP, PI and WTP. While those factors are linked to either consumer, the product or its economics, little research examines the psychological needs and motives associated with demand for digital journalism. Due to inconsistent measurements in the literature, however, the results remain ambiguous.
... Particularly the German newspaper market-formerly one of the world's largest and most diverse newspaper markets (BDZV, 2005)-came under big pressure, such that numerous newspapers were discontinued and the remaining news publishers drastically reduced content production (BDZV, 2003). Despite the insightful discourse on the characteristics of viable business models for the commercialization of digital news (e.g., Amberg and Schröder, 2005;Lopes and Galletta, 2006;Oechslein and Hess, 2013), none of the traditional big players in the German newspaper industry has found a sustainable way to transform the newspaper business model (Rothmann and Koch, 2014). Due to the severity of market disruptions that caused urgent needs to transform the traditional business model and the German news publishers' inability to do so because of path-dependent dynamics (Koch, 2008(Koch, , 2011Rothmann and Koch, 2014), the German newspaper industry served as a "talking pig" to gain novel theoretical insights (Siggelkow, 2007) in light of the formulated research question. ...
Conference Paper
Full-text available
The digitization of work and life has generated numerous market opportunities that remain untapped. The realization of strategic potentials of digitization is particularly difficult for path-dependent firms that are locked-in and perceive little scope of action to deviate from their established strategic patterns. In order to gain deeper insights into this phenomenon, we draw on qualitative data from the newspaper industry to explore how the scope of action evolves in lock-ins. We show that the scope of action continuously changes, as new market opportunities emerge and disappear. In particular, cognitive and normative barriers impede the realization of these strategic options until windows of opportunity close and the emergence of new market opportunities opens up new windows of opportunity that may be used to escape the established strategic pattern. Our research results provide several theoretical contributions, such as clarifying the role of digital technology for strategy development in lock-ins and providing empirical evidence for a continuously changing range of strategic options in lock-ins that alters the chances to break the path.
Chapter
Full-text available
How can journalism be financed sustainably? This remains the key issue for media companies and news start-ups when they develop and establish digital business models. The authors of this book provide a broad overview of the current state of knowledge on paid content, platforms and the willingness to pay in the field of journalism, and present innovative perspectives on novel platform models as well as on the motives and needs of users of digital journalistic content. Based on empirical research, the book explores recommendations for the user-centred development of paid content as well as new perspectives on the willingness to pay in the field of digital journalism, both of which are relevant for academia and media practice.
Article
Full-text available
Traditionell generieren Medienunternehmen ihre Erlöse entweder über den Verkauf ihrer Produkte an den Rezipienten (direkte Erlöse) oder über den Verkauf von dessen Aufmerksamkeit an die werbungtreibende Wirtschaft (indirekte Erlöse). Zwischen ausschließlich direkt refinanzierten Medien wie Büchern und typischerweise rein werbefinanzierten Medien wie dem Privatfernsehen hat sich ein breites Spektrum an gemischten Modellen der Erlösgenerierung für analoge Medien etabliert. Bei Online-Angeboten gestaltet sich die Gewinnung direkter Erlöse jedoch schwierig. Entstanden war das Paid-Content-Problem. Seit einigen Jahren wird eine rege Diskussion um die Generierung direkter Erlöse im Internet geführt. Diese Diskussion wird von der Frage nach der Zahlungsbereitschaft der Nutzer dominiert. Eine ausschließliche Fokussierung auf diese Frage würde aber zu kurz greifen. Tatsächlich ist die geringe Zahlungsbereitschaft für digitale Inhalte nicht die alleinige Ursache des Problems sondern vielmehr auch eine Folge der zugrundeliegenden Strukturen. Aufbauend auf einer Begriffsbestimmung werden im folgenden Beitrag die Probleme der Generierung direkter Erlöse für Medienprodukte eingeordnet und im Anschluss ausgewählte Lösungsansätze skizziert.
Article
Publishers, today, are struggling with their business model: Their efforts to convert traditional content into digital products seem to be insufficient as recipients expect more than simply the mere digitalization of content. Dissatisfied with solely being informed by selected journalists, modern recipients are often interested in acquiring information from various sources, in discussing with others, or even in contributing with their own content. Hence, recipients seem to evolve from being simply readers to contributors themselves. With regard to the established term ‘user-generated content’, we refer to those co-creating recipients as users. To underline these assumptions, the present study explores (1) users’ expectations of sources of content and (2) their willingness to provide their own content. Our findings show that both user-generated content and professional journalists’ content is of value to users. Second, we show that users are mainly driven to contribute by their own expertise, welfare of others, and personal acceptance in the community. With this study, we consider mainly the changed user behaviour in order to derive implications of user involvement for future business models of publishers, in particular on the customer value proposition as well as key resources and key processes.
Article
Full-text available
Provides a nontechnical introduction to the partial least squares (PLS) approach. As a logical base for comparison, the PLS approach for structural path estimation is contrasted to the covariance-based approach. In so doing, a set of considerations are then provided with the goal of helping the reader understand the conditions under which it might be reasonable or even more appropriate to employ this technique. This chapter builds up from various simple 2 latent variable models to a more complex one. The formal PLS model is provided along with a discussion of the properties of its estimates. An empirical example is provided as a basis for highlighting the various analytic considerations when using PLS and the set of tests that one can employ is assessing the validity of a PLS-based model. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Article
The statistical tests used in the analysis of structural equation models with unobservable variables and measurement error are examined. A drawback of the commonly applied chi square test, in addition to the known problems related to sample size and power, is that it may indicate an increasing correspondence between the hypothesized model and the observed data as both the measurement properties and the relationship between constructs decline. Further, and contrary to common assertion, the risk of making a Type II error can be substantial even when the sample size is large. Moreover, the present testing methods are unable to assess a model's explanatory power. To overcome these problems, the authors develop and apply a testing system based on measures of shared variance within the structural model, measurement model, and overall model.
Article
This paper presents an overview of the field of recommender systems and describes the current generation of recommendation methods that are usually classified into the following three main categories: content-based, collaborative, and hybrid recommendation approaches. This paper also describes various limitations of current recommendation methods and discusses possible extensions that can improve recommendation capabilities and make recommender systems applicable to an even broader range of applications. These extensions include, among others, an improvement of understanding of users and items, incorporation of the contextual information into the recommendation process, support for multicriteria ratings, and a provision of more flexible and less intrusive types of recommendations.
Article
Today, the combination of news information on the Internet coupled with the ease and access of posting news information and blog commentary has fundamentally challenged the economic business model for newspaper and magazine production on a worldwide basis. This paper will look at the state of the newspaper industry and will consider the role of the Internet (and digital media) as both a major cause of the problems now faced by today’s newspaper industry as well as its potential solution. Special attention is given to the design and development of the Apple iPad. A major argument of this paper is that computer tablets like the Apple iPad present a unique and historic opportunity to reconsider the meaning and purpose of news delivery. This juncture represents what former Intel CEO. Andy Grove refers to as a strategic inflection point; a time when a triggering event in the competitive marketplace requires new solutions or face the prospect of business extinction.
Article
Results of four studies demonstrate that perceptions of how different a brand is from other brands in the product category affect perceptions of the brand's position within the category. Specifically, perceptions that a brand is strongly discrepant result in a subtyped (or niche) position, whereas perceptions that a brand is moderately discrepant result in a differentiated position within the general category. Perceptions of discrepancy are affected both by the extent of discrepancy on an attribute and whether the discrepant information is concentrated in a single ad for the brand or dispersed across multiple ads for the product. The effects associated with a subtyped position, in comparison with a differentiated position, are identified (study 1) and are found to increase with time (study 2). The subtyped versus differentiated distinction for a strongly versus moderately discrepant brand is validated with a sorting task (study 3). This distinction is shown to hold in the context of multiple discrepant brands that differ in their extent of discrepancy (study 4). Implications of the findings for a theoretical understanding of subtyping versus differentiation and for the application of positioning strategies in the marketplace are discussed.