International Entrepreneurship and Management Journal

ISSN: 1555-1938 SJR : 0.746 SNIP : 1.448

Disruptive Innovation, Technological Improvement and Market Characteristics in News Media Industry

Omirtai Amalbek Darkenuly  (Senior Lecturer of the Faculty of International Relations And Economics Al-Farabi Kazakh National University)

Rakhmetzhan.Anargul (Senior Lecturer of the Faculty of International Relations Al-Farabi Kazakh National University)


The news media industry in the twenty first century transforms vast quantities of information readily to customers, briefly audiences. Evidently, as recent research in one highly regarded book explained, information and communication technology tools for instance the internet, mobile phone, computer and platforms add quantitative value to the widespread availability of news media industry (Ghannam, 2011). For example, approximately, 45 million users in a population of 160 million (28%) had accessed the Internet in Africa December 2012 (Paterson, 2015). With social networking side, both news media industry and Information technologies have been providing alternative platform to the world. Despite the positive aspect of the Internet and particularly the news media being able to affect our life, however, from social constructionist point of view Bourdiet argued, digital technology might spread information negatively in some point (1990). For example, although Social media sites on Facebook and news group explored, there were many similarities between the various sited in terms of content and information repetitively (Mtthembu, 2012). 

Moreover, the argument made here, it is seems to be outline that through internet to find reliable information resources and identify is quiet hard initially. In short, Working from a wide variety of aspect and perspective, the purpose to this work address the news media industry development from historical stage to today`s level. It also requires analysing how people, companies and organizations social media try to make profit. Moreover, the main purpose of this work takes a fresh look at the Disruptive innovation and technological improvement and long tail theory. Finally, it will provide an in –depth critical evaluation by comparing news media and traditional media.  

The Digital Revolution, Market Development and Disruptive Innovation of News Media Industry

Rugman(2012) defined that News media is an industry for all the sources and presentation of news, business and information, containing: different type of platforms, newspaper, magazines, webpage and television. The aim of news media is firstly, to broadcast information, news and data in different way. Secondly, attracting audience, customers, then, satisfy with them. Finally do all of above making profit. During 19th century, newspaper and leaflets were the only approach to make advertisement, spread news. As a matter of fact, 1922 in New York, radio- advertisement was stabilised. All over the along, television was introduces to the news media industry in 1950s, which let news media industry`s income rose to $ 10 billion a year. That means huge influenced on society of traditional media (Gunter, 2014).  However, the digital revolution brought significant different tools and new technology with innovation. As defined in ‘Studying and Research with Social Media’ 2014, verity of digital technologies make our life easy, and share information, experience, opinions, materials and perception with other via the internet (Photos, music, videos).  Today, we use internet platforms and services such as Skype, Facebook, Twitter, Baidu, Renren, Weibo and Wechat, which are attributable to Web 2.0 technology.  In addition, Web 2.0 considered as the second stage of diversification of internet technology, characters are different from Web 1.0 and also Web 3.0 with changing static web pages to dynamic. Moreover, world-wide Web 1.0 of flat data only changes information between users and sites without being received feedback (Stern, N/A). Unlike Web 1.0, Web 2.0 is more flexible in changing digital date between Web users and sites with feedback, comments and post review. Finally, Web 3.o will apply dynamic application and services which exactly machine to machine service. Web 3.o refers to the future. However, the historical feature and development of e- business are particularly over emerging technologies, which will be explained by Hype cycle figure 1 (Stafford, 2012). 

Figure 1: Gartner`s ‘Hype cycle’ for emerging technologies

(Sources: Reynolds, 2010)

Gartner captured Hyde Cycle in 1995 which describe the different stages of specific technologies (Reynolds, 2010). Gartner`s hype cycle stands for five stages. Firstly, technology trigger: a technological products that led press attention and interest such as, e- cash and biometric. However, secondly, peak of inflated expectation: in 1995, social computing platforms and web 2.0 were unsuccessful. Third stage, trough of disillusionment: unexpectedly, the technology`s failure was made by personal digital assistance and corporate blogging. After that, slope of enlightenment: in this stage most of organizations were wishing to understand the benefits of the technology. In fact, from time to time, the visibility of Table PC and location aware applications were increasing. Finally, plateau of productivity: at this stage, technology reached a point which had practical and implicational benefit. Nevertheless,    such station of stability needed further evaluation. For example, how the news media industry has been motivated and innovated? 

As news media industry the speed of new technologies, tend to produce innovative product and service to make differentiation. At this point, disruptive innovation has been influencing news media industry to achieve greatest portability. Following section will explain the literature of disruptive innovation, examples as well as recent research evidence. Disruptive innovation which is makes product or service much more affordable and accessible for much larger population, but historically, that was complicated process also expensive that only a few rich people or skilled people had access it. As I mentioned above, 19th century, the way of acquiring information, news and advertisement was newspaper and leaflet. After that, it took million and a great number of people to created computer. However, todays, the way we access to news and information seems to be easier than traditional media. Wherever and whenever, you feel free to read news, information and advertisements. Figure 2, the main point of view is all about disruptive innovation, however, I need to explain a little bit about sustaining innovation and combine together. Because of sustaining innovation, the first class of international competitive environment attracting a great number of foreign investor. Finally, both disruptive innovation and sustaining innovation has added value to news media with innovation and technology. Importantly, as the pace of technological process increasing, the level of performance has been also rising (Keegan et al. 2013).

Figure2: disruptive innovation 

                                  Sources: Harvard Business Review, N/A

Essentially, news media includes individual and collective meaning that users, companies, shareholders, advertisers and politicians. As we all know, Google and Facebook, for example, the world`s largest companies, are incredibly profitable. Based on the ‘SEC Filings, from 10-k, annual report 2013’, Google made US$12.9 billion profit, at the same time US$1.5 billion profit were made by Facebook (Fuchs, 2015). Effectively, the speed of digital revolution has brought variety of channel to communicating with customers and advertising shortly news media industry. On the other hand,   new technologies, innovation and technological revolution have also shortage at some point, for example, knowing where and how customers use reliable and useful digital technologies for their needs is also considered one of the significant issues. Of course, it doesn’t means users have to know how to write code, program, C++ or how to write JavaScript, instead it means that know how to access the internet, identify trustable resources by using research engine, for example. Coming up next, long tail theory will be taken example to support ideas with successful internet business from retailers such as Google, Chinese baidu.

Long tail (Figure 3) means that product which is difficult to find within small volume of profitable selling. In fact, it applies digital products and services. Today, without e- technologies, it is really hard to imagine our daily communication, individual, businesses and collective lives and indeed a world. In fact, 25thApr 2015, the victims of Nepal earthquake in which a great number of people have been struggling to find out their family, relative because of the internet access (BBC news). From the JavaScript code to hardware, from Web browsers to Yahoo, from mobile phone to facebook are all about e- technology.   

Figure 3: E- business can exploit the ‘long tail’ of less popular products.

(Sources: Reynolds, 2010)

In fact, web portal, Chinese research engine baidu (Baidu also prepare personalized service, such as show you more relevant search result, or news), created 2000 by Robbin Li, which become public company that considered being high and new technology enterprises. Baidu is one of the most typical ‘long tails’ of the company. 

Figure 4: the development of Baidu`s profit, in million US dollar

Sources: culture and economy in the age of social media, 2015

Regards of the long tail theory, figure 4 illustrate that between 2004 and 2013, it went through huge changes, in 2004, the popularity of baidu was high. The profits of Baidu from 2004 have been increasing, which means from time to time people are more rely on internet and new technologies, of course at the same time essentially the way news media reach customers is also changing through internet. Moreover, not only baidu, we have great platform to get access to news media which are Google, Twitter, Facebook and Wechat. According to the figure 5, it mainly express Google stock share which is increasingly raised. Despite that, Google`s stock value, however, has been many times greater than Chinese Baidu (Reynolds, 2010).  

Figure 5: Development of Baidu and Google`s NASDAQ stock value data

[Source: (Yahoo,Finance) culture and economy in the age of social media, 2015]

As a matter of fact that, Interpretation of Search Engine added values in term of Reach and Richness added to advertisement, media richness theory which is framework that describe communication by describing its resources and ability to explore information sent over which we developed by Richrd L. Daft and Allen (Brown, 2000). For example, a phone call is not able to everyone. But tools like face book or search engine are more easily toad value to customers in terms of news media. 

In addition, in terms of Long tail theory, figure 6shows the development of global advertising. From 2007 to 2011 internet advertising accounted from 8.7% to 16.1%, which nearly were doubling. In fact, online advertisement seems more effective and efficient (Fuchs, 2015). However, Mark argued that the availability of online information, advertisement and resources have affected human interaction and relationship between family members. For example, within family, at dinner time everyone is busy with their own small technology (smartphone), instead of exchanging information each other (2007). 

Figure 6: global advertising revenue, by medium 2007-2011

(Resources: Fuchs, C. (2015) Culture and Economy in the Age of Social Media)

However, Hitherto argued that the poor knowledge of customers from different social class, the long tail has provide limited range of products and service (Reynolds, 2010). Moreover, a new technology also has negative aspect and shortage.  According to the research engine advertising 2008, same companies are dealing with different price of truck accident attorney and employment attorney, that means that website advertise price totally depends on the key words. Therefore keywords are more expensive (figure 7).   

  Figure 7

Source: Economic and business dimensions Search Engine advertising (2008)

In addition, value is the average amount of time it takes to produce a commodity. Labours power is a necessary for the existence of value. In terms of 2015 social media research, Fuchs made brief explanation how the new Technologies process is getting complicated with complex network process.  Figure 8  shows that in terms of new technology revolution and innovation, every single social media step and labour process includes human subjects applying technologies and new technological instruments to support the process is growing unbelievably dramatic process with new technology. Systematically, this process illustrate noticeable cap between different workers.  

Figure 8 the Complex Network of Cycle of Digital Labour

Sources: (Culture and Economy in the Age of Social Media, 2015)

[O means objective labours/ T means technological labours/ S means production]

As I mentioned, although new technology has added excellent quality and value to news media industry, some digital literacy point needs to be critically analysis, evaluation and synthesis. Coming up next I will give brief comparison between traditional media and social media. 

Figure 9: News media & Traditional media 

   News MediaTraditional Media
 Tools:  Google,Facebook, WhatsApp,Twitter, Wechat, Weibo, YouTube, Baidu, magazine, radio, phone……Newspaper, diect mail, leaflet, TV,Newslatter,
  Negative Aspect:      1. Not reliable2. cost time and money to skilled people to control the webpage, 3.consumers could get same sort of news over and over again, 4.some of fake not published, technology tools affect health/ eyes, 6.cause less interaction between people,   1.Lack of innovation, 2.not all the time ready for customers, 3. Waste materials, 4. Needs more money 5. Hard to target audience, 6. Timelines 7. Less information
  Positive Aspect:     1.Can potentially reach people in the world with online access,  2.can instantly promote Via social network, different people with different segmentation tools, 4.easy process,5. feedback,6. Free ,7. Comfortable. 1.Trustworthy, 2. Most reliable, 3.  Easy process.

A comparison between news media and traditional media has been made with its own tools, negative aspects and positive aspects. Figure 9, here, contribution to discuss of Internet and news media often tend to stress new technologies transformative power.  Some examples: 

  • Yochai Benkler argues that in the sense of internet democratizes, the easy possibility of communicating affectability into the public sphere, people are getting less communication each other (Fuchs, 2015).

As we all know, in daily life, everything we do all connected to the internet, if I need to communicate someone in the world, I use internet for example, Fcebook, or send email, Yahoo. Moreover, the speed of technology revolution we do rarely go shopping, always use Amazon or Taobao(Chinese amazon). Figure 10 shows that analysis of the most used websites in the world in 2002 and 2013. In fact the creation of the new software and Apps has affected the level of information function. 

Figure 10: information function of the top 20 website in the world 


  •  The process of the Public network society constructed by building protocols of communication between different communications processes (Castells, 2009). 

  • In the sense of political issues, personally, I think political discussion; opinions or expresses are always posting in YouTube or posting a comment in discussion group (Deliso, 2006). 


To conclude, modern society is based on the Information technologies with innovation and improvement. In fact, news media industry has been driving by information technology. Technological changes and innovation, especially digitation as a main driver of news media industry had analysed by applying statistical evidence. Garner`s ‘Hype Cycle’ explained for emerging technologies by analysing historical features and development of e- business. Also different stage of specific technologies was explained by briefly comparing Web 1.0 to Web 2.o. 

As a matter of fact, once we discuss about new technology, disruptive innovation is one of the hottest point. So, long tail theory evidently discussed by offering statistics about Chinese research engine named Baidu. Despite this, development of Baidu and Google`s NASDAQ stock value compared to have better understanding what is going on in global research engine in terms of news. Although, news media regards of new technology has been adding value to our life, some affect point of view, we need to critically evaluate and avoid negative aspect. Lastly, both news media and traditional media compared with clear bully point to critically illustrated both news media and traditional media shortage limitation and postivie issues. 


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Appendix A:  Using Social Media for Search and Research 

Social media platform can be used for search and research in any communication- and how they can be used? 

Figure 1: Kuhlthau`s(1991) information search process and social media tools 

Sources: (Poore, M. (2014) Studying and Researching with Social Media.) 

Appendix B: Media representation of technology in Egypt`s 2011 pro-democracy protests 

News reporting on the Egyptian revolution made differences use of communication technologies, including Twitter, Facebook, mobile phone, Blogs, YouTube and Flicker. 

Figure 2: percentage of articles mentioning particular technologies


(Resources: Paterson, 2015) 

‘Web 2.0’ social media tools have delivered quantitate communication line. Descriptive statistics for mentions of particular technologies are shown in Table above. 

Appendix C: Media Output 

Figure 3: A Schematic Representation of Media Text Analysis Perspective

(Resources: Gunter, B. (2014) Media Research Methods).

Cell 1: 

It contains all purely syntactic technologies of content analysis. For example: frequency analysis of words, words or sentence. 

Cell 2: 

It contains all those content analysis on a syntactical basic, which require rules. For examples: word analysis (Johnson, 1944). 

Cell 4:

In this stage it includes read ability analyses based on the length of sentence. 

Cell 5: 

In this stage cell 5 goes for different systematically analysis, which requires analysis meaning and value. 

Cell 6: 

It contains all purely pragmatic analysis which related to either the intension of communication or a tex of the affect. 

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