The Value of Local News in the Digital Realm–Introducing the Integrated Value Creation Model

Abstract

Taking the failing two-sided market model of commercial news media as its point of departure, this article introduces a value creation model that unpacks the dynamics of local newspapers’ value creation from a business, social responsibility, and audience gratification perspective. The integrated value creation model shows how local news publishers’ role as civic institutions and as commercial operations generate both value flows and value flow gaps between audiences, newspaper businesses and society. Specifically, the model illuminates how local newspaper businesses’ value capture strategies and audiences’ perceived value of the digital news product affect local newspapers’ societal role and their business sustainability. The article provides insight into the possibilities and perils of a funding structure for digital journalism in a triple market setting where state subsidies, audiences and advertisers contribute to news publishers’ revenue.