Envisioning the Internet: Implementing 'disruptive innovation' in media organizations
First Monday

Envisioning the Internet: Implementing disruptive innovation in media organizations by Tamar Ashuri



Abstract
When incorporating networked technologies, many established organizations face immense challenges, as these media involve new economic and cultural components. Predictions based on models concerning the incorporation of the so–called ‘disruptive innovations’ in established firms, are being offered in this paper, viewing networked technologies as ‘disruptive innovations’. The study underscores the obstacles that limit implementation of such technologies in mainstream media organizations, and considers the strategies that might be used to overcome them. Analyzing the case of Israel‘s leading newspaper, Yedioth Ahronoth, between the years 1995–2000, it shows how managers of this traditional business approached the Internet. This paper analyzes how they respond to the ostensibly ‘disruptive’ networked innovation, eventually turning their organization’s Web site into the country’s chief news and content provider. This study offers lessons that extend beyond this specific case onto the broader vista of the implementation of ‘disruptive’ (networked) technologies in mainstream media environments.

Contents

Introduction
Literature review
Methodology
Yedioth Ahronoth and Israel’s journalistic landscape
Findings and discussion
Conclusions

 


 

Introduction

Observing the growing use of networked platforms, critics began to examine the challenges and opportunities such devices pose to professional mainstream media. They looked in particular at how print newspapers respond to the introduction of online platforms and devices (e.g., Harrison, 2010; Nguyen, 2008; O’Sullivan and Heinonen, 2008; Vujnovic, et al., 2010). In his pioneering work on the adoption of multimedia in online newsrooms, Pablo Boczkowski (2010; 2004) pointed to structural forms such as norms, habits, economic constraints, that hinder adoption of digital devices and platforms. Significantly, similar findings were echoed in recent works addressing reactions to networked technologies in the journalistic environment and the impact of such technologies on the performance of traditional news organizations (e.g., Beckett and Mansell, 2008; Fortunati, et al., 2009; O’Sullivan and Heinonen, 2008; Paulussen and Ugille, 2008; Singer, et al., 2011).

By way of contrast to the growing body of literature which point out the resistance to networked technologies in newsrooms, I explore the unique ways in which such technologies have in fact been adopted by a leading news organization in Israel — the daily (print) newspaper Yedioth Ahronoth. Shifting the attention from the newsroom to the managerial circle, I analyze the decision making processes that were occasioned in Yedioth Ahronoth with regard to the implementation of networked technologies between the years 1995 and 2000. I identify the unique strategies that were utilized, and led to the creation of Israel’s chief online news and general content provider (Alexa, 2013).

I use the “disruptive technology” (Bower and Bower, 1995; Christensen, 1997; Dyer, et al., 2011) analytic lens to identify the obstacles Yedioth Ahronoth executives faced when incorporating networked platforms, and the unique strategies they utilized to overcome them.

 

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Literature review

One key factor that enhances a firm’s performance — and by implication its success — in a highly competitive environment is the ability to enhance technological innovation. Hill and Jones (1998) amplified this supposition by claiming that ‘[i]n many ways innovation is the single most important building block of competitive advantage ... giving a company something unique that its competitors lack.’ [1]

Nevertheless, although a kind of consensus appears to have grown among managers and experts that technological innovation is something corporations must embrace, many studies show that large firms often encounter difficulty doing so. The impetus to provide reliable and predictable solutions, the argument goes, focuses a firm’s attention on mature technologies. Scholars have explained that this normally occurs because a firm’s incentive to develop a competitive advantage favors the retention of routines leading to distinctive competence and specialization, rather than experimentation. They also note that the motivation to establish uniqueness leads to bureaucratic procedures favoring a search of the proximate domain of technologies rather than exploration of less familiar arenas (Ahuja and Lampert, 2001; Thomond and Lettice, 2002).

Interestingly, similar findings were found in studies examining firms that invest aggressively and successfully in new technologies. As documented, these firms were indeed responsive to the development of new technologies but subsequently failed to make certain other technological investments that future consumers would demand. Studies have illustrated that many successful firms vanished after a decade or two, attributing their disappearance almost entirely to their failure to anticipate and embrace technological innovations (e.g., Christensen, 1997; Thomond and Lettice, 2002). Bower and Christensen (1995) pointed to a fundamental cause of this recognized failure: Leading companies, they suggest, ‘succumb to one of the most popular and valuable management dogmas. They stay close to their consumers.’ [2] The authors explain that because managers of large firms are evaluated on their ability to place the right bet, they tend to back projects in which the market appears assured. This is why, they argue, ‘good managers’ of large corporations assess the preferences of their existing (mainstream) customers before they decide to launch a technology, develop a product, or establish new channels of distribution. By staying close to lead customers, as they have been trained to do, managers focus resources on fulfilling the requirements of those reliable customers that can be served profitably. By giving known customers what they want ‘[r]isk is reduced — and careers are safeguarded.’ [3]

In their analysis, the authors highlight a significant paradox. They show that in most cases, secured (mainstream) consumers reject technological innovations because they introduce a very different package or attributes from the ones they historically value. More importantly, such technologies often perform far worse along one or two dimensions that are significant to those customers. As a result, mainstream customers, as a rule, are unwilling to use a new product in applications they know and understand. Hence innovations tend to be applied and valued only in new markets that are much smaller than existing ones. Because large firms depend on big markets, they fail to respond to emerging innovations and resist models that employ new architecture. They tend to embrace or develop technologies that their present clients value instead of investing in new technological domains that supply the demands of future consumers (Dyer, et al., 2011; Christensen, 1997).

What follows is that innovations that are disruptive — defined by Bower and Christensen (1995) as successfully exploited products that significantly transform the demand of a mainstream market and disrupt its key players — only begin to be truly realized by managers when the marketplace shifts to adopt a new technology. Yet, as experts noted, by the time managers of established firms realize that the majority of their customers have undergone a dramatic change in their behavior, it is often too late (Thomond and Lettice, 2002).

Bower and Christensen suggested a strategy to facilitate top level managers’ successful response to disruptive innovations, stressing that once a disruptive innovation has been identified, managers of established firms should establish a ‘disruptive organization’ and keep it independent from its mother company. In their view, to promote an innovation that will replace existing technologies in the long run, companies must give managers of disruptive innovation free rein to realize the innovation’s full potential — even if it means ultimately killing the mainstream business. The critics stressed that ‘for the corporation to live, it must be willing to see business units die.’ [4] Furthermore, they suggested that ‘[i]f the corporation doesn’t kill them of itself, competitors will.’ [5] In their estimation, only an independent organization that employs a unique business model, namely one that can develop and launch a disruptive innovation that is rejected by important customers within the context of the mainstream business’s financial demands, will succeed in promoting the technologies and services of the future.

Given that mainstream media organizations normally operate in a competitive environment, the “disruptive innovation” model is seen here as a useful tool for the analysis of the adoption of (as indeed the resistance to) networked technologies in mainstream news organizations. Offering an historical account in which the Internet is cast as a ‘disruptive innovation’, I explore how top–level managers of a traditional news–printing conglomerate uniquely and successfully handled the emergence of such networked innovation.

To do this I use the technological frames (TF) analytic lens offered by Orlikowski and Gash (1994). In this pioneering work, Orlikowski and Gash defined technological frames as ‘the core set of assumptions, expectations and knowledge of technology collectively held by a group or community.’ [6] The theorists argue that by examining key actors’ notions of technology that are ordinarily taken for granted, one may gain considerable insights into how technologies are developed in organizations and how people interact with changes in their work arenas. The authors identified three frame domains: 1) The nature of technology, referring to people’s images of the technology and their understanding of its capabilities and functionality; 2) technology strategy, consisting of people’s views of why their organization acquired and implemented a particular technology; and, 3) technology in use, addressing people’s understanding of how the technology will be used on a day–to–day basis and the likely or actual conditions and consequences associated with such use.

Building on this typology, I address three chief research questions:

RQ1: How did informants understand the disruptive (networked) technologies they used and their functionality?
RQ2: How did they perceive the contribution of networked technologies to their work, and to their organization?
RQ3: How do they explain their organization’s reactions to the Internet, and how do they understand the use of this networked innovation?

 

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Methodology

The study is grounded in an analysis of a case study — Yedioth Ahronoth — a conglomerate established in 1939 by the Israeli entrepreneur, Yehuda Mozes. As in all mainstream (privately owned) newspapers in the country, the viability of this paper depended on selling space to advertisers, subscription schemes, and retailing in kiosks. In the mid–1990s (when the paper’s online platform was developed), the newspaper has accounted for over half of all Hebrew daily sales.

Yin (2003) defines a case study as an empirical inquiry that uses multiple sources of evidence to investigate a contemporary phenomenon within its real–life context, in which the boundaries between the phenomenon and its context are not clearly evident. Yin (2003) recommended a single case study when the case is rare and ‘unique’; when it is ‘revelatory’ (that is when the researcher has an opportunity to access phenomena that have not been previously studied), and when it represents a critical instance in testing a theory (a single case matching all conditions for testing the theory). All three reasons determined my selection of the organization on which I conducted my case study: a news–printing conglomerate that responded to the emergence of ‘disruptive (networked) technologies’ in a unique way. Using a case study that focuses on a particular news organization has the advantage of allowing a direct test of the interaction with ‘disruptive innovation’ (in this case, the Internet) by practitioners operating in traditional media organizations (e.g., Dyer, et al., 2011; Christensen, 1997). The rationale behind this choice had to do with the need to deepen the understanding of the phenomenon rather than to map out the common elements which widely characterize the implementation of, and resistance to, disruptive technologies in the journalistic environment. The price to be paid for the decision to concentrate on a particular case study was the lack of scope for a statistical generalization of the findings. Under such circumstances any generalizations will have to be analytic, rather than deductive with theory being used to compare the empirical results (Yin, 2003). In other words, rather than asking whether, and in what way, the chosen ‘case’ is representative, I asked what are the processes that this case can be seen to reflect.

The particular organization Yedioth Ahronoth was chosen as a case study because of its relevance and appropriateness. I make no claims that this news organization can be taken as representative of other organizations. However, the choice of this particular organization was made in view of the fact that this traditional media conglomerate responded to ‘disruptive (networked) technologies’ in a unique (and successful) manner.

Focusing on this single case, this study offers a historical perspective regarding the process that led to the establishment of Yedioth Ahronoth’s online Web site (now called Ynet).

In–depth, semi–structured elite interviews were conducted with all past and current members of the managerial/editorial board of Ynet between the years 1995 to 2000. Participants were asked to recount their “life history” (Plummer, 2001), i.e., to provide an emic narrative regarding their own lives as viewed by themselves. In the interviews they recounted the history of Ynet and reflected on their own history as initiators of this unique journalistic project. The questions were constructed around three main frames articulated in the “technological frame” model (TF) offered by Orlikowski and Gash (1994): (1) Nature of technology — people’s images of the technology and their understanding of its capabilities and functionality; (2) Technology strategy — people’s opinions regarding why and how their organization could implement the technology and (3) Technology in–use — people’s reflections of the actual implementation of the technology in their organization (see a detailed discussion above). In discussing the interpretations of Yedioth Ahronoth/Ynet’s management of the Internet, I consider each of these three domains. Participates were asked: (1) to discuss their understanding of the nature of the technology under investigation — recount their perception of the Internet and understanding of its capabilities and functionality, (2) to discuss the technology strategy — recount their conception of the reasons that their organization — Yedioth Ahronoth — employed networked technologies, and 3) to discuss how networked technologies were used: provide their reflections on actual implementation of the Internet in their news organization (See Appendix B).

The analysis of the interviews’ content involved the construction of a schematic representation of individual’s perspectives regarding the three technological frames offered in Orlikowski and Gash’s (1994) model. Such “frame analysis” technique (Entman, 1993) allowed me to identify common experiences, and their relationship to interactions with networked technologies in the organization under investigation.

 

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Yedioth Ahronoth and Israel’s journalistic landscape

Despite the British authorities’ censorship, the Jewish press blossomed in mandatory Palestine: The liberal–democratic Haaretz was founded in 1918/1919. In 1925, the politically oriented Davar was established by the Histadrut — General Federation of Labor. In 1939, Yedioth Ahronoth began publication as an evening paper. A third independent daily, Maariv, was established in 1948.

During the first three decades after the founding of the state, the Israeli press landscape was relatively stable. Major changes, not unlike similar processes in other parts of the world, began in the 1980s, leading to media consolidation and the gradual disappearance of political and foreign language papers. Three chief media conglomerates emerged in that decade, owned by three powerful families: Mozes (Yedioth Ahronoth), Nimrodi (Maariv) and Schocken (Haaretz).

For many years, the largest and most popular paper was Yedioth Ahronoth, with a circulation of 300,000–600,000, followed by Maariv (160,000–300,000). The liberal Haaretz, with a smaller circulation (65,000–75,000), distinguishes itself for its in–depth political and business reporting and for a strong dedication to Israeli cultural, literary, and artistic life. Since the 1990s Yedioth Ahronoth has accounted for over half of all Hebrew daily sales, while Maariv and Haaretz together represented nearly all the rest of the market, with shares of about 25 percent and 15 percent, respectively.

In the mid–1990s such print newspapers have reacted to the challenge of the Internet. Globes financial daily launched its online version in 1997, followed by Haaretz and Maariv in 1998 and Yedioth Ahronoth, Israel’s leading daily newspaper, in June 2000. Yedioth Ahronoth’s online paper, known as Ynet, is currently the country’s largest and most popular news and content Web site, followed by Walla! and Mako news and entertainment portal, established by Israel’s most popular television broadcasting network, Keshet (Alexa, 2013).

 

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Findings and discussion

“Disruptive technologies” in practice: A history of Ynet

As mentioned above, to analyze the development of Yedioth Ahronoth’s online platform, Ynet, I draw on what Orlikowski and Gash (1994) termed ‘technological frames’ which were defined as the set of assumptions, expectations, and knowledge of technology that are collectively held by a specific community. I believe that this model which focuses on three main frames: (1) nature of technology; (2) technology strategy; and, (3) technology in–use, allows for a better understanding of the outcomes of disruptive innovation in the organization that are not captured by other perspectives, such as those of political or structural models.

Nature of technology

The Internet symbolizes a brand new world

Yedioth Ahronoth was established as a publishing business by Yehuda Mozes in 1939 and has been managed since by his descendants. In the mid–1990s it became clear to, Yedioth Ahronoth’s (hereinafter: ‘YA’) chairman, Noni Mozes, that ‘[t]he Internet is becoming a key source for content’, says Yon Feder, now editor in chief of Ynet (interview, 26 June 2011). At that time, people were starting to talk about broadband, and ‘[it] was obvious that broadband is on its way and is not going to disappear’, adds Motti Swartz, who served as a board member and Mimi Mozes’s right hand (interview, 27 June 2011). Reflecting on the state of affairs at YA, Swartz recalled: ‘Mozes knew he had to respond to the emerging upheavals [...]. [T]he Internet symbolizes a brand new world and Mozes understood that YA could not stay behind’. YA’s management, he remarked, found itself in an uncomfortable situation: Its members realized that the publishing business they led had to react to the upcoming networked platforms but did not know how to do it. ‘You have to understand’, Zeev Hasper, Ynet Web site’s first editor–in–chief, explains. ‘Noni Mozes didn’t even have a computer. I personally put one on his desk but he tossed it’ (interview, 1 May 2011).

The Internet is crucial for survival of the organization

Motti Swartz remembers explaining to Noni and Mimi Mozes that implementation of the new digital technology is crucial for the survival of an organization like YA, the country’s leading newspaper. He noted that the Internet is the first ‘multimedia medium’, facilitating the production, dissemination, and consumption of both written and audio–visual text. Swartz thought that by implementing this multimedia platform, YA will be able to compete with its chief rival — television. It was also clear to him that in contrast to newspapers, ‘consumers can access the Internet from wherever they are at any time’. This appears to be an important feature, as it enables YA to reach potential readers who do not reside within the geopolitical borders of Israel and to provide present and future readers with news updates 24 hours a day (Swartz, interview, 27 June 2011).

At that time, Ilan Ishayek, the editor of YA’s women’s magazine, Laisha, was replaced by a woman. He was then asked by Mimi Mozes to ‘look into the Internet while waiting for a new position with the paper’ (interview, 18 July 2011). Like Swartz, Ishayek recognized the Internet’s salient features and their possible contribution to the organization. He realized that unlike print media, that are limited in space, the Internet is a non–bounded medium. This feature allows news producers like YA to distribute unlimited content. Ishayek identified yet another significant element of the Internet: He perceived it as an interactive medium that facilitates and even enhances new ways of producing and consuming content. Interactivity, he argued, blurs the clear distinction between journalists and audience: Audiences will be able to attain a voice and to assist the paper’s editorial board by serving as fact checkers or news item providers. ‘I saw it as the beginning of a new democracy’, he recalled.

Having identified the Internet’s most significant attributes, the so–called ‘interactive team’ (Ishayek, Swartz, and Hasper) was convinced that their employer’s implementation of a networked platform was essential. Team members realized, however, that the upcoming technology would not attract much attention by YA’s mainstream consumers and would therefore not be welcomed by YA’s board. As only 4.6 percent of Israeli households had an Internet connection in 1997 (Israel Central Bureau of Statistics, 2001), team members had to convince the managers that despite this small market, the Internet is crucial to the development of the organization and consequently must be implemented by their publishing business. It was no easy task to persuade YA’s board to develop what Bower and Christensen (1995) defined as a ‘disruptive technology’, namely a new technology that is not relevant to the organization’s mainstream customers. Reflecting on the managerial state of mind in the mid–1990s, team members detected that ‘YA’s executives perceived the “world of the Internet” as avant garde. They did not see it as a “place” for serious news content’ (Feder, interview, 26 June 2011). Modi Fridman, hired in 1999 as interactive team manager (detailed discussion below), added that it is important to recall that ‘[t]he average age of YA’s board members was 70. These people do not use the Internet. They do not understand it. I recall them saying “Who needs the Internet?”’ (Fridman, interview, 4 August 2011).

Towards the end of the 1990s, the small interactive team realized that YA’s board had no real incentive to enhance an online version of their newspaper. Motti Swartz explained:

At that time, YA controlled the Israeli print news market. The newspaper was a milking cow. Because Israel is relatively small, readers could get the printed paper anywhere. YA, in contrast to American papers such as the New York Times, could not benefit from the Internet’s unique characteristic — its availability everywhere.

The Internet is a threat to the primary printing business

Towards the beginning of 2000, however, the Israeli media landscape started to change. In 1999, subscriptions to the Internet tripled: 11.9 percent of Israeli households purchased Internet subscriptions, as compared with 8.2 percent in 1998 and 4.6 percent in 1997 (Israel Central Bureau of Statistics, 2001). This sharp increase in Internet users troubled YA’s board that perceived the Internet as a threat to their primary business — the printed newspaper. Swartz, Fridman, and Hasper remembered board members saying that YA’s readers, who can now get free news content by surfing the paper’s Web site, will not pay for a print paper. In other words, YA’s board considered the Internet to be a technology that disrupts their business and could even destroy it (Christensen, 1997).

As no revenues were envisioned from the online paper, no business plan was drafted. Moreover, as Fridman notes: ‘The management was reluctant to create one [...] they didn’t know how to develop a business model suitable for free (online) content’. ‘We are not going to distribute the content we produce for free [...] and online papers cannot be sold at kiosks’, he remembered them saying.

It was not only economic issues that distressed YA’s executives. In an interview, Yon Feder (chief editor of Ynet and a former member of the interactive team recruited in 1998) explained that the board was also concerned that the new technology would ‘disrupt’ the working habits of the paper’s journalistic team. YA’s paper, like all other print news, is characterized by a strong daily cycle with a clear rhythm building up to a collective deadline. YA’s management was worried that the editorial team of their print paper would not be able to adapt to constant news production, in which every story has its own deadline. Feder remembers also that YA executives were troubled that the news they disseminate in and by their paper is perceived as credible and accurate by their readers, partly because they know that the paper’s journalists publish only carefully checked reports. Members of YA’s board thought that an instant online environment would not allow for comprehensive fact checking and as a result YA’s longstanding journalistic reputation would suffer.

YA’s management was also anxious about the interactive features the team was promoting. Feder remembers Noni Mozes saying that readers/users will post comments that ‘pollute’ the professional journalistic environment that YA’s trained journalists have maintained and enhanced. In this atmosphere, convincing YA’s management that the new technology is crucial for the survival of the organization was not an easy task.

Technology strategy

In 1997, YA’s chief competitors — Globes, Haaretz and Maariv — launched their online versions. ‘In the 1990s’, Swartz recalled, ‘YA’s readership was decreasing [...]. We knew that print media are dying and that youngsters don’t read newspapers. It was clear that to survive, YA had to expand its activities in the online environment’. ‘I also knew’, Swartz added, ‘[T]hat although there were many small players operating in the online field, big conglomerates (like YA) will eventually take the lead’. It was apparent to all, both Ishayek and Swartz noted, that YA is a leading player in Israel’s news arena, and the only way to maintain this status is to enter the online environment. They knew that YA had the financial and professional means to construct and maintain Israel’s primary news Web site.

The Internet — 24/7 news content in a singular platform

Swartz and Ishayek said they believed that as a leading player, YA could easily incorporate its high journalistic standards in the online environment, providing up to date news to readers around the clock. They pointed out that newspapers are usually read once a day during people’s free time. A news Web site, they argued, could target working people and in particular opinion leaders who would be able to surf the Web during their long working hours. Furthermore, Swartz and Ishayek perceived the Internet as an arena that is not limited by time or space — unlike newspapers — and could therefore be ‘a place where audiences stay’.

YA’s management was only partly convinced that the organization would indeed benefit from entering the online arena. Ishayek said that as of the mid–1990s, they were afraid that their readers would prefer the free online content over costly print news, and therefore refused to upload the screens produced.

Non–bounded

At the same time, however, they hired Modi Fridman, head of YA’s local newspaper group, to lead the small interactive team. Fridman realized the potential of the Internet and told the board that as a non–bounded, multimedia platform with meticulously selected content (e.g., encyclopedias, lifestyle material, etc.), the Web site will attract advertisers who, for various reasons, do not advertise their products in printed papers, including YA’s traditional newspaper (Fridman, interview, 4 August 2011). Ishayek added to this observation, explaining that the online platform facilitates collection of precise readership data, more efficient advertising and targeting of products to potential consumers.

Technology in–use

Innovative unit setup

As noted above, interactive devices were introduced at YA in late 1995, when Ilan Ishayek started his new job as the firm’s ‘interactive person’. ‘I brought another guy with me’, he recalled. ‘We were secretly browsing the editor’s internal files, collecting news reports, and stitching them into HTML pages, with technical support provided by a small telecommunications firm, Adiphon’. Four features characterized the screens produced: The YA logo was placed on the top of the homepage; The newspaper’s headlines/main stories were located on the initial screens, and links to YA’s archive and familiar supplements were provided. Random daily outputs were submitted to Mimi Mozes. ‘No one else saw them or knew what we were doing [...]. We were called the “secret team”’ (Ishayek, interview, 18 July 2001).

‘Disruptive organization’ setup

In 1997, Motti Swartz and Zeev Hasper joined the team. Hasper remembers that YA’s management did not show much interest in their still off–line product: ‘In the mid–1990s, only four people at YA had access to the Internet [...]. The organization’s executives didn’t know what the Internet was’. YA Chairman Noni Mozes’s perceptions of the Internet could be characterized by two contradicting elements: He did not understand the technology but was terrified by it. Driven by these two conflicting perceptions of the new technologies — its potential contribution and probable damage — Mozes unintentionally created a separate ‘skunkworks’ outside his main enterprise to cope with this disruptive innovation. As a ‘disruptive organization’ (Bower and Christensen, 1995) that was kept independent from its mother company, YA’s interactive team (Ishayek, Swartz, and Hasper) was able to explore the emerging technology — that was not applauded by YA’s mainstream consumers but was perceived nonetheless as strategically critical to the organization. Unknowingly, YA’s board followed Bower and Christensen’s (1995) recommendation: When identifying a disruptive technology (online platforms for news production in this case), the firm must create a separate operation outside the main business so that existing business priorities do not crush the innovations that keep businesses up to date.

Every night, the small team (which was gradually extended to four and later to eight persons) indeed produced an off–line Web site on which the newspaper’s content was posted. Until the spring of 1999, however, no one ever saw the screens produced except for two to three board members. In early 1999, it was announced that Israel’s general elections would take place later that year. YA’s interactive team saw this occasion as an opportunity to promote their project. They managed to convince Noni Mozes to launch a news Web site. ‘We promised Noni that the site would only provide news regarding the elections’, Ishayek recalled (18 July 2011). The green light was finally given and the Web site was uploaded on YA’s server. Its success was enormous: 50,000 users (about 25 percent of Israeli households with an Internet connection) had visited it. ‘We were very happy with the results’, Ishayek notes, ‘[...] But our success troubled YA’s managers. They were afraid that readers would prefer the free content and not buy the newspaper’. Five months later, Noni Mozes, who perceived the news Web site as a threat to his publishing business, ordered the ‘disruptive’ site removed from the server.

Creating a business plan and designing a news portal

Interestingly, Mozes made two (seemingly) contradicting decisions in the spring of 1999. He decided the team would only work on an off–line version, but simultaneously impelled the project forward by appointing his right–hand man, Modi Fridman, as news platform manager. ‘We knew at that time that we were constructing a monumental news site’, Fridman recalled (4 August 2011): ‘This is how it has always been with YA — it’s a number one organization’. Motti Swartz echoes him: ‘We were aiming at something different — big and magnificent [...] Modi and I traveled to the U.S., and visited the online groups of the Washington Post and the New York Times [...].We loved the Times’s site. It was something else and we said to ourselves “this is what we want”’.

On their return to Israel, Fridman drafted a business plan for YA’s Web site. The budget requested was 17 million dollars (Fridman, interview, 4 August 2011). ‘I took the budget book and put it on Noni’s desk’, Fridman recalled. ‘Noni looked at the numbers and said: “You are asking for a lot of money”. The next morning, I came to his office again and inquired. “You are asking for a lot of money”, he repeated again. Three weeks later, I said, “Sorry, Noni, but the project has taken off.”’

Fridman’s course of action proved to be the correct one. Mozes, who was reluctant to enhance the threatening (disruptive) technology, was finally persuaded that it was crucial for his organization. Once the budget was issued, the small team realized that their primary mission had begun — creation of a unique news Web site. Team members decided that in contrast to existing Israeli sites, that provided users with indexes or newspaper sites offering online news content, they would create an interactive news and entertainment portal (Ishayek, interview, 18 July 2011).

Over the next few weeks, the team explored existing news Web sites. Hasper recalled: ‘We fell in love with the Guardian’s Web site. It had its own language. It “spoke Internet” [...] We said to Modi [Fridman]: “This is what we want our Web site to look like: Clean and different”’. Fridman and Hasper traveled to London to meet Neville Brody, the Guardian’s Web site designer. The basic guidelines presented to Brody’s team were very clear. Ishayek noted: ‘We told him that as journalists, our goal is to create a news Web site. As such, we would like the opening screen to display the date and one lead news story (banner headline, text and a clear photo) [...]. At that time, most news Web sites opted for a different homepage — they posted the newest news item first’, he explained.

Planning and maintaining a ‘disruptive innovation’

While borrowing this lead story element from the traditional newspaper at which they were trained, YA’s interactive team made it clear to Brody that a visual departure from YA’s print edition is required. Once again, a strategic decision was made to create an independent news product that would not be associated with the existing newspaper and would thus not disrupt its business. Ishayek explained how this strategy was carried out: ‘We decided to provide different titles for the sections imported to the Web site from YA’s paper. For example, we didn’t keep the financial supplement’s title Mamon [Money] but called it Kalkala [Economics] instead’. The team decided also not to use YA’s name and logo. ‘The idea was to make something new that would not be associated with YA. ‘YA could not contain a Web site named YA’, Fridman explains. ‘Different names were used by members of the team’, Ishayek recalled: ‘One day, Brody’s designing team sent us the title Ynet’. ‘It was magnificent and fresh,’ added Swartz: ‘We looked at it and knew that “this is it”’.

While constructing a new news entity, YA’s interactive team — now called the Ynet team — was still working on YA’s off–line newspaper version, that was presented about once a week to certain board members. ‘We had no business plan at the time [... .] and we didn’t know, of course, how much money we would be able to make, if at all’, Fridman recalled.

Despite their managerial apathy towards the project, the Ynet team added another crucial feature to the still off–line Web site — interactivity. The team asked Brody to create accessible links to ‘community forums’, in which users could share information and ideas. Brody generated such forums and introduced ‘hubs’, that were later called ‘channels’: One for news, another for sports, another for entertainment and one for public opinion. One particularly important feature was a link to the editor’s digital mailbox, called ‘red mail’, enabling users to send news items to Ynet’s news desk at any time. ‘The idea was to get stories that we normally had no access to and also to encourage users to stay at our Web site’, Swartz explained. A new slogan was introduced by the team: ‘Easy to visit, hard to say goodbye’. That year (2000), broadband was introduced in Israel and 6,000 households picked up subscriptions (Israel Central Bureau of Statistics, 2011).

Equipped with a fresh slogan and a trendy design, the Ynet team presented their products to YA’s board in the beginning of 2000. ‘Members of the board looked at it and said — this is going to be a failure, it doesn’t look like a newspaper nor like the Internet’, Fridman recalled them saying. The Ynet team ignored this discouraging response and continued to work, still as a separate unit, on the off–line version of the news Web site.

Launch the news portal and produce in–house content

An opportunity to launch the Web site arose during the first week of June 2000, when YA’s print newspaper union announced a strike. The paper’s management, anxious over their inability to print newspapers that day, agreed to upload Ynet’s Web site. Modi Fridman recalled: ‘We presented the Web site to Noni [Mozes], who said: “Fine. You can launch it now, but ... who’ll write the news items?” I was puzzled by this question’, said Fridman, ‘and responded immediately: “What do you mean? You have 500 journalists at your disposal”. Noni [Mozes] looked at me and said: “Are you crazy? If you want a Web site, hire a new staff”’. Mozes’s response revealed his view of the new technology: He saw the news Web site as a disruptive element that could destroy his successful publishing business by providing free news reports by the organizations’ renowned journalists. In this case as well, Mozes responded to the challenge by establishing ‘a disruptive’ online editorial board that was kept independent from its mother company, providing Ynet’s team with free rein to realize the innovation’s full potential.

Fridman and his team, who at the time did not see the financial and professional advantage of establishing a ‘disruptive editorial board’ within their team, were compelled to create one by their management. Within a few months, they recruited a new editorial team (headed by Zeev Hasper) and moved to a different building. Physically and editorially separated from YA, the Ynet team launched its Web site on 6 June 2000. During the morning of 10 June 2000, Syrian President Hafez Al–Assad died. As YA is an evening paper (its deadline is 4:00 PM), news of Assad’s death could not be included in that day’s edition. YA’s mainstream consumers had to turn to a different news source. Ynet’s site seemed to be a suitable solution. ‘We at Ynet said goodbye to deadlines’, Yon Feder explained. ‘The site was efficient, rich, reliable and accurate. In contrast to Israeli print newspapers, Ynet offered accessible updated news around the clock and unlike other Internet portals, it applied the standards and ethics of press journalism’. Significantly, the Ynet team decided to borrow (as planned) the lead story element from their mother firm. The report of Assad’s death was placed in the center of the homepage (large photograph and one written report), a clear editorial lineup was created, and only carefully checked items were posted (Ishayek, interview, 18 July 2011).

The Ynet team made several additional crucial editorial decisions. The first was to add audio–visual content to the Web site: ‘The idea was to offer users “televised news”’, Hasper recalled. ”We gave video cameras to our reporters and asked them to provide audio–visual reports’. Ishayek adds: ‘From very early on, we created an infrastructure for video [...]. Our goal was to provide updated audio–visual content from every scene’.

The team introduced yet another significant feature to the news Web site, enhancing the interactive nature of the online platform by facilitating incorporation of audience material, creating online channels (community forums) in which audiences could post written or audio–visual text. Furthermore, the team’s establishment of a strong foundation for video streaming enabled inclusion of audio–visual material produced by non–professional journalists operating outside established media institutions.

Another important element that the team promoted and developed was an ‘opinion channel’ (led by Yon Feder) that they called ‘Talk Back’. Ilan Ishayek, who initiated this project, explained: ‘We were inspired by the New York Times site in which comments by commissioned commentators were placed at the bottom of some reports [...]. We said: “why not borrow the Talk Back idea and add another dimension to it: Place a Talk Back at the end of every report and allow all users to voice their opinions on all items”’. ‘We were shocked by its success’, Yon Feder said. ‘Users turned to the Talk Back before reading the actual news report’, Ishayek added.

Establish Israel’s leading news portal

Only weeks after its launching, Ynet became Israel’s leading news portal (Alexa, 2013). This status was boosted by the events of 11 September 2001, as Hebrew readers all over the world were searching for news updates. The YA editorial board (like those of other newspapers) was unable to provide news at the required speed. To obtain updates, YA’s mainstream customers had to turn to online papers. Servers around the world could not handle the extensive traffic and crashed. Ynet’s teams made an autonomous decision and deleted the commercial banners from their Web site (Ishayek, interview, 18 July 2011). As a result of this ostensibly financially unsound decision, hundreds of Hebrew readers in Israel and elsewhere were able to log onto the Ynet site. Within 14 months of online activity (and five years of off–line bustle), the Ynet news site became a home for Hebrew news readers, leaving its competitors (the online news groups of Globes, Haaretz and Maariv, who launched their digital news platform four years earlier) far behind. At present (2013), Ynet provides free content to users and is sustained through the selling of “space” (banners) to advertisers. It is now Israel’s most frequently visited Web site and is perceived as Israel’s primary news provider (Alexa, 2013).

 

Disruptive (networked) technology in-use
 
Figure 1: Disruptive (networked) technology in–use.

 

 

++++++++++

Conclusions

Using the case of the daily (print) newspaper Yedioth Ahronoth, I showed how an established mainstream media organization uniquely embraced and developed networked disruptive technologies and thus became Israel’s chief news and general content provider.

My findings show that in the mid–1990s, Yedioth Ahronoth’s management recognized the disruptive nature of the Internet, namely a technology that was rejected by the organization’s main consumers: It made free content available, upsetting the newspaper’s existing business model and facilitating constant production/consumption of news, thereby disrupting the practices of the organization’s established print journalists.

This study showed that despite perception of such new interactive technologies as a threat to their business, the board of Yedioth Ahronoth decided nonetheless to incorporate them in their traditional publishing organization. It also revealed that in the process of adopting the ostensibly disruptive technologies, the newspaper’s management established a ‘disruptive organization’ that was kept independent from its mother company. As an autonomous unit, its members were given free rein to realize the innovation’s full potential. I suggested that it is only in this exceptional setting that the self–governing team could investigate the disruptive technology thoroughly and rapidly, thus paving the way for successful implementation of future innovations.

By framing networked technologies in the print journalism environment as ‘disruptive innovations’ (Christensen, 2003), I tried to shed new light on factors that limit adoption of such technologies in newsrooms and to point to strategies that might be employed to overcome them. Furthermore, by offering a close look at the processes of implementing disruptive technologies and their outcome, I also tried to lay the foundations for further research on the challenges and opportunities involved in adoption of technological innovations that introduce disruptive economic, professional and cultural components to traditional media organizations. End of article

 

About the author

Dr. Tamar Ashuri is a lecturer in the Department of Communications at Tel–Aviv University, Israel. She holds a Ph.D. in Media and Communications from the London School of Economics and Political Science. She is the author of The Arab–Israeli conflict in the media: Producing shared memory and national identity in a global television era (London: Tauris Academic Studies, 2010). Her new book on the history of media technologies will be published in 2013 by Palgrave Macmillan.
E–mail: tashuri [at] post [dot] tau [dot] ac [dot] il

 

Notes

1. Hill and Jones, 1998, p. 166.

2. Bower and Christensen, 1995, p. 43.

3. Bower and Christensen, 1995, p. 48.

4. Bower and Christensen, 1995, p. 53.

5. Ibid.

6. Orlikowski and Gash, 1994, p. 199.

 

References

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Alexa, 2013. “Top sites in Israel,” at http://www.alexa.com/topsites/countries/IL, accessed on 17 January 2013.

C. Beckett and R. Mansell, 2008. “Crossing boundaries: New media and networked journalism,” Communication, Culture & Critique, volume 1, number 1, pp. 92–104.http://dx.doi.org/10.1111/j.1753-9137.2007.00010.x

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P.J. Boczkowski, 2004. “The processes of adopting multimedia and interactivity in three online newsrooms,” Journal of Communication, volume 54, number 2, pp 197–213.http://dx.doi.org/10.1111/j.1460-2466.2004.tb02624.x

J.L. Bower and C.M. Christensen, 1995. “Disruptive technologies: Catching the wave,” Harvard Business Review, volume 73, number 1, pp. 43–53.

C.M. Christensen, 2003. The innovator’s dilemma: The revolutionary national bestseller that changed the way we do business. New York: HarperBusiness.

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J. Dyer, H. Gregersen, and C.M. Christensen, 2011. The innovator’s DNA: Mastering the five skills of disruptive innovators. Boston: Harvard Business School Press.

R.M. Entman, 1993. “Framing: Toward clarification of a fractured paradigm,” Journal of Communication, volume 43, number 4, pp. 51–58.http://dx.doi.org/10.1111/j.1460-2466.1993.tb01304.x

L. Fortunati, M. Sarrica, J. O’Sullivan, A. Balcytiene, H. Harro–Loit, P. Macgregor, N. Roussou, R. Salaverría, and F. De Luca, 2009. “The influence of the Internet on European journalism,” Journal of Computer–Mediated Communication, volume 14, number 4, pp. 928–963.http://dx.doi.org/10.1111/j.1083-6101.2009.01476.x

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W.J. Orlikowski and D. Gash, 1994. “Technological frames: Making sense of information technology in organizations,” ACM Transactions on Information Systems, volume 12, number 2, pp. 174–207.http://dx.doi.org/10.1145/196734.196745

J. O’Sullivan and A. Heinonen, 2008. “Old values, new media,” Journalism Practice, volume 2, number 3, pp. 357–371.http://dx.doi.org/10.1080/17512780802281081

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M. Vujnovic, J.B. Singer, S. Paulussen, A. Heinonen, Z. Reich, T. Quandt, A. Hermida, D. Domingo, 2010. “Exploring the political–economic factors of participatory journalism: Views of online journalists in 10 countries,” Journalism Practice, volume 4, number 3, pp. 285–296.http://dx.doi.org/10.1080/17512781003640588

R.K. Yin, 2003. Case study research: Design and methods. Thousand Oaks, Calif.: Sage.

 

Appendix A: Introductory questions

  1. When did you join the ‘Interactive Team’/‘Ynet’ team?
  2. What was your position?
  3. What was your job description?
  4. Who, at Yedioth Ahronoth, hired you for this job?
  5. Did your position and/or job description changed during your time at Ynet? If so, how and why?
  6. What is the medium you worked in before joining the ‘Interactive Team’/‘Ynet’ team [choose all suitable responses]
    A. Print newspaper B. Periodical C. Radio D. TV E. Internet‘Interactive Team’/‘Ynet
  7. What was your position?
    A. Reporter B. Editor C. Chief editor D. CEO E. Other ____________
  8. Did your leave Ynet? If ‘yes’, when did you leave Ynet? Why did you leave Ynet?
  9. What is the medium you worked in after working for Ynet? [choose all suitable responses]
    Print newspaper B. Periodical C. Radio D. TV E. Internet
  10. What was your position/ job description after leaving Ynet?

 

Appendix B: Life history semi–structured interviews

Part A

As you know, I’m interested in the establishment of Yedioth Ahronoth’s online platform (now called as Ynet).

In a minute I’m going to ask you to please tell me your life story: All the experiences and the events which were important for you when working for the ‘Interactive Team’/Ynet.

Start wherever you like. Please take the time you need. I’ll listen first, I won’t interrupt. I’ll just take some notes in case I have any further questions for you.

OK. So can you please tell me your life story — When you look back on your life working in Ynet, are there any moments which you would identify as turning points? What are they? When did they occur? Why did they occur?

Part B

[For every turning point mentioned in Part A (above), the following leading questions were asked]:

  1. You said that “____________ was a turning point in the history of Ynet”, do you remember anything more about this time?
  2. Do you remember what were your perceptions of the Internet and your understanding of its capabilities and functionality?
  3. Do you remember who shared your views? [probe: your peers/managers/the publisher]
  4. Do you recall particular incidents or disagreements? [probe: with your peers/with the manageress/with the publisher]
  5. Do you remember specific examples?
  6. Do you remember why your organization — Yedioth Ahronoth — employed networked technologies in this point in time?
  7. Do you remember what did you think about such implementations?
  8. Do you remember who shared your views? [probe: your peers/the managers/the publisher]
  9. Do you recall particular incidents or disagreements? If ‘yes’ with whom [probe: with your peers/with the manageress/with the publisher], on what ground? What did you do?
  10. Do you remember specific examples?
  11. Do you remember how networked technologies were used in Yedioth Ahronoth in this point in time? [probe: What were the team’s tasks? What were the teams’ ‘outputs’?]
  12. Do you remember what did you think about the implementation and its outcome/s?
  13. Do you remember who shared your views? [probe: your peers/managers/publisher]
  14. Do you recall particular incident or disagreements? [probe: with your peers/with the managers/with the publisher]? What did you do?
  15. Do you remember specific examples?

 


Editorial history

Received 22 August 2012; revised 27 January 2013; accepted 18 February 2013.


Copyright © 2013, First Monday.
Copyright © 2013, Tamar Ashuri. All Rights Reserved.

Envisioning the Internet: Implementing ‘disruptive innovation’ in media organizations
by Tamar Ashuri.
First Monday, Volume 18, Number 5 - 6 May 2013
http://firstmonday.org/ojs/index.php/fm/article/view/4216/3668
doi:10.5210/fm.v18i5.4216





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