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3.1 Threat of New Entrants
Threat of new entrants is one force to determine the attractiveness of the industry.
The greater the threat of news entrants, the less attractive the industry will be
(Mullins, Walker, & Boyd, 2008).
In traditional news industry where news is printed only in a newspaper, the threat
of entrants was moderately low, as the industry required strong capital and
resources, for example to gather, transfer and edit, then print out the news.
From the mid-1980s till the mid-1990s, when the PC was introduced and started
to be used more widely, the threat of entrants was still low, as the barriers of entry
were high. At that time, leading news source digitalized the news. Their early
online strategies were about blocking new competitors and new entrants. For
instance, the online editions of news the New York Times, the Chicago Tribune,
the Washington Post, the Los Angeles Times were published proprietary online
systems, such as CompuServe, America Online, Prodigy, and Interchange. Users
subscribed to AOL, if they wanted to read the New York Times. But, the Washing
Post was published exclusively on Interchange, therefore, they couldn‟t get to read
a story in the Washington Post at the same time. What they had to do was
disconnecting the screeching modem from AOL, purchase an Interchange
subscription, log onto Interchange, and then navigate to the Post. A return visit to
the Times required the reverse of that drill (Shafer, 2009). As the news publishers
struck the deals with the proprietary online systems, they raised the barriers of
entry to any potential new players.
As the Internet has become universal, it does not only increase readerships for
news publishers but also creates a huge threat of new entrants for them. In other
words, online news publishing has very high threat of entrants, because of fairly
low capital requirement, and easy access to distribution channels. Electronic
publishing cut the cost for ink, paper, printing and delivery (Taras, Bennett, &
Townsend, 2004). Consequently, the industry does not require the strong capital.
Furthermore, in the sector of online citizen journalism, everyone can become a
journalist, as online citizen journalism is „more proportionately local” compared
to online newspaper (Rosenberry & John, 2009). As a result, online citizen