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Innovating networked journalism. What editors and publishers can learn from digital musicpreneurs

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Organisation. Networked Journalism
Innovating Networked Journalism
What editors and publishers can learn from
digital musicpreneurs
Christopher Buschow, research associate, and Carsten Winter,
professor, Department of Journalism and Communication Research,
Hanover University of Music, Drama and Media, Germany
Since the dawn of the digital age journalism’s future appears more
open as well as more insecure. This is also true for a country such as
Germany with its historically very strong newspaper and magazine cul-
ture and with journalism being extensively funded by public broadcast-
ers. In Germany, digital journalism began more than twenty years ago,
on 25 October 1994, with the start of Spiegel Online. From this day on,
publishers and editors have experienced a digital as well as disruptive
transformation in terms of financing, producing and distributing journal-
ism. For them, we have developed the following agenda: Leading and
innovating openly co-organized networked journalism: What editors and
publishers can learn from digital musicpreneurs.
In Germany, the social and institutional consequences of this transfor-
mation led to the establishment of a special law for press publishers
to protect their services and current organization of the production
and distribution of journalism (Leistungsschutzrecht für Presseverlage;
Buschow 2012; Tworek and Buschow 2016). The federal government
granted these ancillary rights especially because publishers could plau-
sibly argue for journalism’s importance for an independent critical pub-
lic sphere.
Our agenda with the learnings from the music sector aims to support
editors and publishers in their work for a more independent and se-
cure future of journalism. It recommends the redefinition of journalism
management on the basis of a music management innovation: “the
generation and implementation of a management practice, process,
PART III: ORGANISATION
Christopher Buschow, Carsten Winter
Organisation. Networked Journalism
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Christopher Buschow, Carsten Winter
structure or technique that is new to the state of art and is intended
to further organizational goals” (cf. Birkinshaw, Hamel and Mol 2008,
829). The management innovation considered here institutionalized
co-organized openly networked supportallows a more agile, more
flexible, more efficient, often cheaper and generally more sustainable
and secure as well as independent value creation in the music industry.
Our recommendation is based on research on this management inno-
vation, on the results of several empirical projects on digital transfor-
mations and innovations in the media, music and publishing industry,
and in particular on our knowledge of the dynamic return of the music
industry in a much more subtle, more complex, openly networked form
since 2010.
We identified this management innovation, which gave the impetus
for the agenda and for our recommendations, in the last project of a
cycle of three projects (2010-2016) on the digital transformation of the
structures of the music industry. The first project researched the driv-
ers and shapers of the dynamic recovery of the Berlin music industry
in transition (2010–2011). One central result of the project was that dy-
namics of structural transformation and growth were driven by new ac-
tors, often “prosumers” as “culturalpreneurs” (cf. Winter 2012) or mu-
sicians as “artepreneurs” (Paulus and Winter 2014). The second project
analyzed expectations of all stakeholders of the Clustermanagement
Music Business of Mannheim & Region to help to lead digital industry
transformations (2013–2014). Starting with a focus on new networks,
network organizers and the organization of support in the first two proj-
ects, the third project investigated how institutionally networked actors
in the Berlin music industry organize support to develop their activities
and competitive advantages and how they are supported by the Berlin
Music Commission (BMC), by their networking activities and formats
as well as network organizations and other actors in the network (cf.
Winter and Paulus 2017).
In this research project, we discovered – in comparison to the first proj-
ect in Berlin and the second project in Mannheim – that actors belong-
ing to the Berlin music industry are interlinked with one another in a
completely new quality and quantity.
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As ordinary support activities we would usually differentiate the fol-
lowing:
infrastructure – which consists of activities such as control, public
relations, accounting, legal and in particular strategic activities,
technological development – e.g. hardware, software procedures
and technical – digital media knowledge needed in their transfor-
mation of inputs into outputs, and
human resources management – activities involved in recruiting, hir-
ing, training, developing, compensating and dismissing or laying off
personnel or procurement, the acquisition of new software, digital
network media, services or work efforts from an outside external
source.
Active members of the Berlin music industry do not necessarily orga-
nize such support activities as is recommended in the textbook (cf.
Porter 1985). Less frequently than before the investigated actors have
resources within their company, ready when needed, or reach out to
well-known professional supporters (web designers, graphic designers,
attorneys, tax consultants, etc.). Instead, we found that they increasing-
ly interact in an institutionalized, co-organized manner with their BMC
network actors, who openly networked them with supporters, whom
they believe could help them best. For the actors in the digital-me-
dia network of the Berlin-based music industry, support in networking
has become the most important supporting activity (Winter and Paulus
2017): It has become increasingly relevant for the development of value
activities and competitive advantages in digital media.
The institutionalized, co-organized, openly networked support, made
possible by the Berlin Music Commission and by network organizers in
the city´s music industry, is more agile, flexible, effective, often more
favorable and sustainable as well as less risky in organizing support for
the development of value activities and competitive advantages (Win-
ter and Paulus 2017).
Currently, there are no comparable structures for openly networked
support in German journalism. Publishers and editors as well as found-
ers in journalism have so far failed to achieve profitability or to become
profitable in times of transition. A classic case of market failure (see
Karmasin and Winter 2000, 29): Although a whole range of actors have
tried to sustain journalism in the context of structural transformations,
they have so far not succeeded in creating new sustainable models of
(digital) journalism. In journalism, there are no comparable new net-
work formats and network organizers: Institutions that might link new
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Christopher Buschow, Carsten Winter
and old industry players and stimulate new digital-media value activities
as well as competitive advantages, such as the BMC, the Clusterman-
agement Music Business Mannheim & Region or the kre|H|tiv-music
unit in Hanover, are not (yet) observable.
Our empirical results suggest that this will change once the number of
new creatives in journalism increases, as it was the case in the music
industry where the number of new, especially urban music networks
rose after the number of potential digital musicpreneurs in a wide range
from prosumers to artepreneurs increased. In the music industry, their
importance is increasing simultaneously with their quantity (cf. Seufert,
Sattelberger and Schlegel 2015) as well as with the new potential of
network media such as Napster (1999), MySpace (2003), Facebook
(2004), Spotify, YouTube (both in 2006), SoundCloud (2007) and Kick-
starter (2009). They are new “post-industrial means of production” (Al-
exander 2015). Since 2015, “creatives” (whom we would call musicpre-
neurs) are recognized as a (new) music industry “subsector” (Seufert,
Sattelberger and Schlegel 2015), which includes 27,895 people contrib-
uting 15 % to the industry’s gross value added – 22,196 of whom are
self-employed and owners in the new digital industry (see below The
management innovation...).
To sustain their support in developing their own value activities and
value activities of others – in particular established music industry ac-
tors – as well as their competitive advantages, it is necessary to discov-
er the proper musicpreneurs in the increasingly fragmented and more
complex networked music industry. Also, their support achievement
has to be understood and evaluated and they have to be reached as
well. In the best case they can be directly embraced and invited by dig-
ital media. As revealed in a recent study on digitalization of the Berlin
music industry, this is increasingly achieved by all actors in the Berlin
music sector. They understand digitalization as a personal and profes-
sional challenge (Hermes, Knoflach and Winter 2016), because they are
engaged in personal and professional networks. They also use network
organizers and regularly visit networking events which are essential for
their activities.
Against the backdrop of the assumption that the digital future of the
media industry first appears in the music industry, where it started with
the introduction of the CD on the occasion of the IFA in Berlin in 1981
(and later with MP3, Napster, Last.fm, Spotify, SoundCloud etc.), we
further assume that, similarly, the future of digital media management
– a management that is based on digital innovation – will first be found
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in a more complex networked digital media music industry. We as-
sume that the institutionalized co-organized openly networked support
observed in Berlin’s music industry is a management innovation par ex-
cellence which might serve as an orientation for editors and publishers
when developing journalism. The following chapter will introduce this
management innovation in the context of the digitalization of structures
of the music industry. It shows how this management innovation is
based on digital innovations and digital-media transformed practices,
principles and processes as well as structures. Based on these find-
ings, the subsequent chapter formulates recommendations on how the
future of journalism can be developed especially by refining its manage-
ment, i.e. what editors and publishers do and could do in the light of
the currently prospering new digital-media networked music industry.
The management innovation institutionalized co-organized
openly networked support in the context of digital music
industry structure transformation
Institutionalized co-organized openly networked support allows the in-
terlinked actors of the Berlin music industry to structurally innovate their
management. Since the BMC in Berlin has institutionalized itself as an
innovative network-actor-constellation regarding new practices, princi-
ples, processes and structures (such as new network organizers, net-
work formats and network media), the actors expect themselves to be
able to organize support in a co-organized openly networked way that
is more agile, flexible, effective, often more favorable and sustainable.
Furthermore, this is less risky and helps to develop value activities and
competitive advantages.
These developments and competitive advantages are made possible
by faster, uncomplicated and – as a rule – socially and personally provid-
ed new networking opportunities of a better quality and quantity. This
innovation, the foundation of the BMC and the development and espe-
cially the institutionalization of co-organized openly networked support,
benefits from being based on the new practice of the digital-media
‘peer-to-peer production’ in which many Berlin actors and the found-
ers of the BMC were experienced. With the expansion of digital-media
peer-to-peer activities, the music industry entered into the second of
three waves of digitalization (regarding these waves cf. Hermes, Kno-
flach and Winter 2016, 6.). In each of these waves, new digital-media
structures of production, distribution, orientation and organization of
the perception and the use of digital forms of music were developed by
more and more different actors.
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Whereas the CD was still essentially developed, financed and pro-
duced in large electronic enterprises (Sony and Philips), this changed
with the development of MP3 and music software as digital instru-
ments. While the music industry has celebrated new revenues in sales
each year since the introduction of the CD in 1981, new digitally net-
worked scenes were established in the environment of science, mu-
sic, informatics, sub-, club- and DJ culture around MP3 music files,
the programming of music and open source programs. This actually
first happened in Berlin in the environment of clubs such as the Deli-
cious Doughnuts, which was (from 1993-1997) owned by today’s BMC
CEO Olaf “Gemse” Kretschmar, and new digital music software cre-
ators such as Native Instruments (1995), today a global enterprise with
branches all over the world.
This digital-creative scene became impressively visible for the music
and media industry when Shawn Fanning, informatics freshman known
by the nickname “Napster” within his “hacker crew” (Röttgers 2003,
17), provided a client-server software for free called “Musicshare”. This
software allowed the peer-to-peer (P2P) sharing of MP3 files via the
internet and also made it possible to see what kind of music others
have on their computers. Musicshare was the first P2P medium that
spread worldwide.
Peer-to-peer activities were innovated on the basis of new opportuni-
ties brought about by practices and principles of dealing with estab-
lished additional digital network media as “post-industrial means of pro-
duction” (Alexander 2015) – such as those mentioned above: MySpace
(2003), Facebook (2004), Spotify, YouTube (both in 2006), SoundCloud
(2007) and Kickstarter (2009). These new opportunities were opportu-
nities of sharing, commenting, criticizing, co-creating and networking,
even of co-financing – to mention only the most important. In the social
peer-to-peer context and in new technical and also somehow personal
P2P processes new principles and roles emerged around the new digi-
tal-media (production) practices. All parties involved learned that digital
forms of music do not become less but more by sharing them and that,
because of the free availability of production means, value activities
often do not have to be directed towards markets. Thus, the integration
of diverse, particularly non-monetary motivations is becoming more im-
portant, because it increases the value of value activities, also because
they become “values activities” (cf. Benkler 2016; Winter and Paulus
2017). Anybody associated with digital network media as a postindus-
trial means of production has become a musicpreneur a supporter
of a new entrepreneurial role which is, in the sense of Schumpeter,
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at the same time productive and innovative as well as disruptive (cf.
Schumpeter 1950).
Since Napster (1999) and the new digital-media opportunity to share
MP3 files peer-to-peer via the internet and to even see that others lis-
ten to similar songs, not only structures of distribution of music were
at first disruptively transformed by prosumers in particular (cf. Winter
2012). Since then, more or less all essential structures that constitute
music in society have been digitally transformed (cf. in detail Winter
2013).
Our research suggests that the management innovation institutional-
ized co-organized openly networked support has announced an end to
this transformation at least to the disruptive transformation. Shortly
after the institutional support of P2P productions by the Berlin BMC
and many other networks, the Berlin music industry started its stable
and dynamic growth, long before the end of the unprecedented reve-
nue slump (by significantly more than half) between 1998 and 2013 (cf.
in detail Winter and Paulus 2017).
In today’s new digitally networked music industry the dynamic of which
is pushed by new creative digital musicpreneurs, all – and not only new
or only a few – actors in Berlin profit from these new actors, practices,
principles and structures in the form of innovative open network-actors
constellations with innovative network and networking formats and
network organizations and thus new principles and processes based
on more personal relationships. The transformation of the music indus-
try’s structures has reached a totally new quality. This also becomes
apparent in the way the big music industry, i.e., the major label industry,
has come to terms with these transformations.
The compendium Musikwirtschaft in Zahlen 2015 of the Bundesver-
band der Musikindustrie, the German branch of the International Fed-
eration of the Phonographic Industry (IFPI), pronounced significant
growth (2015 by 4.6 %) and that “streaming subscriptions” had ex-
ceeded the prognoses and even increased by 106 % in 2015 (Seufert,
Sattelberger and Schlegel 2015). Frances Moore (CEO of IFPI) began
her Executive Summary to the Global Music Report 2016: State of the
Industry as follows: “Today we are at a crucial moment in the evolution
of recorded music. After two decades of almost uninterrupted decline,
2015 witnessed key milestones for recorded music: measurable reve-
nue growth globally; consumption of music exploding everywhere; and
digital revenues overtaking income from physical formats for the first
time” (IFPI 2016, p. 5).
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Our research on the music industry reveals that the institutionalized
co-organized open networked support in the sense of the definition of
management innovation (cf. in detail Birkinshaw, Hamel and Mol 2008)
allows networking participants a more efficient organization of support
for their own value activities and their development and thus of new
competitive advantages (cf. in detail Winter and Paulus 2017). In the
sense of the definition, this efficiency creates a more efficient inno-
vative network-actors constellation compared to the state-of-the-art
management. The network-actors constellation in particular is more
efficient on the basis of innovative digital-media practices, especially
networking, but also sharing, commenting, co-creating etc., based on
new, more personal relationships. These relationships often work bet-
ter on the basis of principles other than relationships based on contracts
and markets. This particularly applies to the discovery and development
of anything new. Everyone able to rapidly establish a better relation-
ship quality, especially with unknown actors, practices, technologies
etc., as is facilitated by open and network-like structures, may benefit
enormously.
In the new role of the digital musicpreneur, people with digital-media
peer-to-peer experience are able to become structurally embraced
and invited as well as to embrace and invite others within digital me-
dia – integrity and fairness presumed. This is firstly proven by the
continuously increasing number of new institutionalized networks with
network organizers and formats and often even own network media.
Secondly, it is a fact that the support in networking in networks (!) has
become the most important kind of support. This includes activities
such as help with the organization of new interests or as has been
the case in Berlin for some years – with the internationalization of own
value activities. Thirdly, it has to be stressed that the structural sig-
nificance of new networks for the development of economy has now
also been realized in policy. Therefore, financial support is extended
and very attentively observed, e.g., in German cities such as Berlin,
Hamburg, Mannheim or Hanover.
Against this background, we assume that the management innovation
institutionalized co-organized openly networked support established in
the music industry today, is, in an adapted form, at least partially able to
open opportunities for independent financing, production and distribu-
tion as well as for orientation and organization of the perception and use
of journalism in a more productive sense and for more creative actors.
Thereby, this management innovation might become more sustainable
in an intelligent, including and durable sort of way – quite in the sense
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of the EU 2020 strategy for smart, inclusive and sustainable growth
(European Commission 2010).
Agenda: Leading and innovating journalism for openly
co-organized networked public spheres
Unlike the music industry, journalism has not yet been embraced by
a third wave of digitalization, in which all actors embrace the person-
al as well as professional challenge to use digital network media as a
post-industrial, more powerful means of production and in which old
and new subsectors and – in particular – the new subsector “creatives”,
is growing (Seufert, Sattelberger and Schlegel 2015). So far, we cannot
observe a new open network-like structure in journalism that allows
new creatives to easily enter the industry and participate in the devel-
opment and the support of new value activities for their own benefit
and the benefit of the industry.
However, similar to the music sector, we observe that market entry bar-
riers in journalism are lowered especially by new post-industrial means
of production (Buschow 2017), that new creative actors and founders
of new ventures are growing in numbers and professionality as well as
that institutional expectations are formulated towards an „intelligent,
inclusive and sustainable“ development of the industry (EU 2020).
These observations suggest that the modes of production and distri-
bution as well as the orientation and organization of the perception and
use of journalism will continue to change in the process of digitization.
Against this background, in their work on the future of journalism, pub-
lishers and editors can profit from the experiences of actors from the
established Berlin music industry, the BMC and from musicpreneurs.
This can be achieved if they engage more in the development of novel
actor constellations and the development of their capacities. This is
likely to be the case if they consistently build on digital innovations that
allow them to share and develop new experiences with new digital and
media-based practices as well as new principles of sharing, producing
etc. (see below).
The development of not only technical and economic but, above all,
social and cultural competencies in the implementation of new digi-
tal media practices requires, as our research shows, not only a lot of
practical experiences, but also a more complex social, cultural and en-
trepreneurial curiosity on different levels, such as personal, technical,
commercial, political, legal, etc. (see below).
Looking back at all projects from the research cycle on the music indus-
try, it has been shown that this experience and competence coupled
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with the corresponding curiosity creates the prerequisite for the devel-
opment of value creation, which is obviously necessary in order to find
the right partners on a professional, objective and personal level. And
not only to find, but also to be able to successfully embrace and invite
digital-media, which contribute to development best and most. This is
particularly successful, if often unknown potential supporters are co-or-
ganized, as individuals can be personally addressed and also engaged.
In the light of our research, digital-medial practical experiences with
new media as new means of production based on new principles –
coupled with a more complex curiosity and openness and in relation to
a peer-to-peer media developed personality which allows to embrace
and invite other digital creative actors – are only a prerequisite. In order
to lead a management innovation and to perform the digital transfor-
mation of a structure more is required: This needs founders and their
experiences. To start the BMC in Berlin, know-how was provided by
actors of the ClubCommission, the network of Berlin clubs which was,
like later the BMC, founded bottom up in 2000. The establishment of
Clustermanagement Music Business Mannheim & Region benefitted
civically from the society of Mannheim’s founders’ centers mg:gmbh.
Similarly, the MusicUnit at kre|H|tiv profits financially from hannoverim-
puls, the organization for economic development of the county capital
and region of Hanover. In Mannheim and in Hanover, the interdepen-
dence with already established civic structures supported the respon-
sible network organizers with stronger engagement for the music clus-
ter. In contrast, the responsible actors in Berlin often express hope for
a more stable institutional connection to civic structures.
The following recommendations are meant to explicitly support editors
and publishers in developing their own management innovations in jour-
nalism. The recommendations build upon each other. We think of them
as steps on the path to a management innovation which is somewhat
similar to the institutionalized co-organized openly networked support.
They are recommendations to responsible actors, the consequences of
which however project much further than the action radius of individual
actors.
Facilitate positive media DEVELOPMENT experiences
Our research shows that structural dynamics and transformations are
not only presently but also generally inspired by actors who collect ex-
periences with new media as a means of added value. They are in
some respects ahead of their time, as they co-develop or at least in-
ternalize the specific functional logic of new media earlier than others.
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Those who try out new media at an early stage – also in a private con-
text – become agents of change. Therefore, it is barely surprising that
new generations find themselves at the forefront of change. Young
journalists digital natives – whose private use of media is changing,
carry individual experiences or formerly unfamiliar practices over into
professional environments. In network theory one calls this spillover
effects; effects which extend further than thus far separated contexts
(Padgett and Powell 2012). We assume that in journalism younger ac-
tors expect digital network media to be provided within organizations
for team work and expect that it is naturally used in various ways in
production and distribution and the orientation and organization of their
reception.
We recommend – more strongly than ever – that editors and publishers
facilitate experiences in practical interaction with new digital network
media as so-called post-industrial means of production as an explicitly
positive development experience, as opposed to conventions of the
past within the music and the publishing business.
Inspire cultural CURIOSITY and entrepreneurial OPENNESS
In the context of conflicts in digital processes of structural transforma-
tion it has been shown that new experiences have enabled productively
configured dynamics when cultural (often scientific) curiosity is coupled
with entrepreneurial openness.
This is more and more frequently inspired by the collaboration with ex-
ternal actors which is known to change, for example, journalistic prac-
tices (Buschow 2017). For instance, in projects common for this day
and age such as workshops (so-called hackathons), journalists and/or
publishing employees together with software developers, technicians,
hackers and designers co-operate, co-produce, comment, share their
knowledge and so forth. Nowadays, more and more software and hard-
ware products are developed, which later on present a meaning in and
for journalism as media. An exemplary result of such a co-operation
in form of sharing practices and knowledge within a process of inter-
action are modern actor-constellations and new phenomena such as
data-journalism, a new distinguishable way of reference to, on the one
hand, journalistic rules and resources as well as, on the other hand,
rules and resources of data analysis, statistics, computer and hacker
culture. Something similar is not only true for such overlaps also pres-
ent in drone, sensor and robotics journalism, where thus far there were
clearly separated practical constellations (aviation, computing, robotics)
overlapping with journalism – it increasingly also applies to the growing
number of digital reestablishments of journalism (Buschow 2017).
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Hire digitally creative journalists, partners and developers as
INDIVIDUALS
The institutionalization and distribution of the management innovation
institutionalized co-organized open networked support in the music
industry proves that this innovation is a further development of the
digital-media organization innovation peer-to-peer production. It is par-
ticularly successful and procures competitive advantages for actors
developing their value activities in the branch if own experiences with
peer-to-peer practices can be drawn upon and where it is possible to
build upon the basis of these practices and their principles – rather
principles of personal relationships than those of market or contractual
relationships.
It is possible to establish new digital-media relationships significant for
value activities in the long term when participants have seen them-
selves as individually participating people and also have addressed and
supported each other. Therefore, our recommendation for editors and
publishers is to see media employees, internal and external partners
and freelance journalists more than before as individuals and to address
them as such and to integrate them into their People Business. Thus, it
becomes possible to even embrace and invite them digitally from time
to time. In the organizational form of the publishing house, new val-
ue-creation constellations, which also develop digital-media structure
transformations in journalism, are becoming more and more important.
Competitive advantages no longer arise mostly from the optimization
of internal production processes alone, but particularly from (the opti-
mization of) the cooperation and the networking with more and more
different digitally creatives.
Participate in the FOUNDATION and INNOVATION of
digital-media open and networked forms of management
of journalistic value creation
Just as more and more actors from the Berlin music industry do, accept
digitalization as a personal as well as a professional challenge. Con-
tribute actively to the foundation and innovation of digital-media open
networked network institutions with your digital-media experiences
and competences with digital network media, with your cultural and
entrepreneurial curiosity and your experiences in foundation. It is best
to do this in cooperation with junior journalists or young actors who are
committed to the cause instead of being just controllers and number
crunchers as has been the case in journalism for the longest time. If
you do all this, journalism will become more agile, flexible, often more
favorable, more sustainable and, above all, economically less risky.
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LEARN more than before from others and from other branches
We are just beginning to understand the almost ten-year history of the
Berliner BMC as a story of management innovation in the music in-
dustry. Its economic importance as an innovative actors’ constellation,
especially compared to other similar network organizations and their
different network institution, currently indicate that first and foremost
network organizations are beginning to learn from other networks and
their respective other chances, challenges and structures or forms of
institutionalization. We are discovering that networks, network organi-
zations and networking formats have become a kind of new external
infrastructure for more and more value actors. These new structures
suggest the end of disruption of the transformation of established
structures as well as the outlines of a new order of value creation. In
conclusion, we therefore recommend editors and publishers to be even
more interested in structure transformations of other media industries,
to discuss experiences with those transformations and new digital-me-
dia structures with responsible persons belonging to such networks.
Potentially, in the light of the new structures and order of value creation
in music industry, they might start developing new openly networked
structures for journalism as well.
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