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The Ups and Downs of Techno-economic Explanations

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It is becoming increasingly evident that new digital technologies and new forms of news production and distribution have gradually led to the emergence of innovative and consolidated journalistic organizations. Many pure digital media born more than a decade ago have survived the current crisis facing the news industry and now compete alongside major legacy media nationally and globally. On the other hand, many other initiatives have failed, and well-established national and local journalistic enterprises have cut jobs drastically or just disappeared from the market. And news media companies are continuing to suffer enormous hits to advertising as a result of COVID-19.

Media experts and scholars explain the emergence of new actors (and the erosion and digital reinvention of old ones) in the Schumpeterian economic terms of “creative destruction” (Bruno and Nielsen, 2012; Schlesinger and Doyle, 2014; Nee, 2013; García-Avilés, 2016; Negredo et al., 2020). Schlesinger and Doyle’s exploration of how major UK media groups have responded to the crisis in printed newspapers draws on this economic pattern. They argue that, because of advancing technology, “the value of large, dominant incumbent firms that fail to transform themselves eventually becomes eroded and, in some cases, completely destroyed” (Schlesinger and Doyle, 2014, p. 2). In Bruno and Nielsen’s pioneering report on journalistic online start-ups in Western Europe (2012), pure digital media players, which are first tentatively located on the “creative” side of this Schumpeterian process, are also seen as subjects of destruction in the same way as inherited business models are. Explanations of the rise, survival, success, or failure of new players and the destruction of old ones seem to reflect a process through which new technologies and new markets cause the “mutation” of journalistic organizations (Boczkowski, 2004) and the whole media system from within.

Just as technology and economics bring the “destructive” element, they also embody the “creative” one. Responses to the transformations of journalism include technological innovations, innovative ways to measure and analyze audience figures, and new business models (sources of revenues, ownership, and financial sustainability). The success or failure of new media are also measured and assessed according to techno-economic factors. Through the process of creative destruction, technology and economics impose “a regime of trial and error and of making wagers,” as Jean-Gustave Padioleau puts it. The image of creative destruction establishes a present scenario and foresees a digital future in which new players are forced to compete with old ones, and new arrivals successfully win niche markets using up-to-the-minute technology. Padioleau observes that “under the guise of innovation, activities disappear to make room for newer, more ‘creative,’ more reliable/efficient ones. According to Schumpeter, creative destruction is at the heart of economic growth” (Padioleau, 2006, p. 110).

Schumpeter’s economic reductionism parallels a narrow technological understanding of journalism innovation. Drawing on research on journalism in Canada, Hermida and Young’s thought-provoking Chapter 3 in this book examines whether legacy newsrooms’ defensive adoption of innovation “as a technological-led solution” to economically navigate financial turbulence has been to their detriment. By entering into “the cycle of the never-ending pivots in the search for the killer innovation that will save the media,” Hermida and Young say, journalistic organizations get trapped in it. And in times of survival, they argue, few can afford to adopt the latest shiny new technology.

News Media Innovation Reconsidered

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