This paper aims to understand the impact of the internet on different value activities in a physical goods (newspaper) supply chain.
Case studies were used to obtain rich data from three newspaper companies. The selected case study companies had experienced changes in their value chains as a result of the internet.
The internet has led to falling advertising revenues and dwindling circulations. The companies reacted to this by developing online news services, which do not have the distribution costs of a physical product, enable the customisation of editorial and advertising content, and facilitate the co‐creation of news content with consumers. Moving online has, however, not fully compensated for the losses in revenues. Readers were reluctant to pay for online content, the income from of the sale of web‐based advertising space was significantly lower than for the printed form, and journalists resisted co‐creation.
The small sample of cases limits the generalisability of the findings.
Regional newspapers face problems developing an effective online news service to enable them to remain relevant in the communities they serve. The findings suggest that, although newspapers have adopted multimedia, and now have some user generated content, there is a reluctance to consider greater usage of additional forms of news production and e‐tools.
This paper examines how digital media are displacing physical goods from a value chain. There is evidence that co‐creation, a variable so far neglected in the literature on internet supply chains, can have a critical impact on value adding/creation activities.
