the whole production ow.

They are mainly xed irrecoverable costs substantially

independent from the single output.
The typical national television newscast of a major European country employ 100150
journalists and 100120 technicians with a total annual costs in the range of 3035 million
euros. If it deploys 35 editions every day, each one with 1620 stories, a total of 5070 stories
is produced every day. A television newscast is a huge machine, able to deal with unexpected
stories, designed not to miss any relevant story and to give every evening a relatively complete
view of the events of the day. Compared with other program a newscast is a cheaper way to
produce audience at least for television based on advertising model. The cost per hour per
viewer is three four time less compared with entertainment or drama.
An all news channel exhibit substantially the same dimension. The cost per year can be
around 4050 million euros. Once the production feed is deeply reused the same resources
needed to produce a traditional newscast can produce a full news channel.
Several news sites, notably those ones belonging to a newspaper have begun to offer news
video, to complete their product range. Sometimes the clips came from the news agencies, or
form some cheap source, but often they produce or commission these news coverage. A daily
ow of 67 original stories can cost 11.5 million euros per year, only a fraction of the cost of a
television newscast. Naturally the product is different: 67 stories, compared with 5060 and the
delivery model is a kind of best effort, but anyway the difference is huge and rely heavily on
production methods. Moreover usually these news services offered on the net hardly recover
their costs with the advertising clips they insert in. Technological innovation is the main factor
that drives down video production costs. Digitalization as usual reduce components, size and
costs of the devices while at the same time enhance technical quality. The price of a
professional video camera until 10 years ago was at least 100 thousand euro but now a small
digital camera with similar or superior features can cost 3,000 euro. A similar decline in price
occurred to editing stations that passed from 120 thousands euro to cheap software application
for standard personal computers. The digital environment facilitates the creation and the
growing use of video archive that if the video clips are completed with appropriate metadata,
can reduce the cost of reuse the original footage both in different programs and along with time.
Finally a exible and lighter production organization take advantage of specic technological
innovations and of transformations that digital environment allows in labour capabilities In the
past high technical costs supported heavy production organization. To make a simple interview
was employed a four o ve persons team. Some focal points of new organization are: smaller
video team, less skill in the frontline and more centralized support through mobile equipments.

Newspapers and magazines have been suffering the internet competition both in reader
than in advertising market and experienced an acceleration in their already established decline.
Internet is acting as a disruptive technological innovation that transforms the entire economic
environment in which publishers operate.
Three typical strategic answers are emerging: multiplatform distribution, to activate
relationship in a specic value chain and to develop user generated contents.
The economic result depends on several factors. With multiplatform distribution there are
new editorial costs to adapt the news ow to new platform, new technical costs to convert
contents in specic format and language, but are possible also scope economies between
different platforms. The possible additional revenues are linked to market dimension and
substitution patterns. But in general internet revenues do not compensate losses in copies also
if we consider only advertising. The average printed copy is read for thirty minutes every day
and generate 0.70.9 euro of advertising revenues. A unique visitor spend typically 23 min on
a newspaper site with 57 page view and 12 cent of revenues. On the cost side scope
economies are not easy to exploit in a very traditional work environment, as happens in
newspapers. A journalist could work at the same time writing for different platforms the same
story, performing the basic research and treatment just once, but she has to adapt format,
language and timing to communication and technical features of different platforms.
As a second strategy publishers can try to saturate the information space of a particular
sector combining print and online media. The basis is often to reach theability to enable the
actors of a specic economic sector to communicate each other. With a similar strategy some
publishers get 3540 % of their revenues from the web. Aside with traditional printed offer they
add interactivity background information, specic application. Sport Illustrated and Reed
Business Information are good example of this kind of strategy.
A third strategy is related to user generated contents. A publisher can use technical devices
like spiders or scraper to nd them on the net. But the real problem is to organize them
successfully in order to attract users and to monetize the attention.
UCG involve a production input provided by people without direct compensation and can be
described with private provision of public goods. The main economic issues when dealing with
UCS are similar to the ones that emerge with open source and for what we have a growing
stream of scientic literature (Lerner, Tirole, 2002).
A rst important question is: why do user contribute with their knowledge and give work,
mainly for nothing. A rst explanation is to signal the their value for a possible future labour
market, especially when in the labour market it is not easy to entry. A second possibility I related

to externalities or spillover promotional effects linked to UCG. If contributing to a blog or posting

a video I can have some benecial subsequent effect, it is rational to perform this activity.
Also the production side can be important. If I have some exclusive information but I cannot
exploit it in anyway, maybe because I lack the needed organization, then it easier to give it for
free as user generated content, hoping eventually in some possible future positive result. Or if
my marginal cost produce a valuable information are low, compared with other agents cost,
then other things being equal I would contribute with more and better UCG (Stoeckl, Rohrmeier,
Hess 2007).
The second main economic question, similar again to open source software. Is how the
quality can remain high in a non professional environment. Peer review and self selection of real
expert are probably the best explanations. Tweeter is already an important source for
newsgathering but until now the news signalled by a tweet need to pass through the costly
process of verication and conrm in the newsroom.