Joint Ventures between Online Portals and News Publishers: Will they be an Alternative to Symbiosis?
2. Drivers of Joint Ventures between an Online Portal and News Publishers
2.1. Perspective of Online Portal and News Publishers’ Relationship
2.2. Naver-Korean News Publisher Joint Venture Status Quo
3. Performance Evaluation of Media Joint Ventures
4. Research Method
5.1. Motivation behind the Joint Venture Creation between Naver and Newspaper Companies
5.2. Joint Venture Performance Evaluation from the Participants
- [Strategic Performance] The joint ventures were a part of Naver’s mobile service strategies. Online platforms hold strength in their user base but weakness in content production. News publishers, in contrast, can create content, but often have difficulty in effectively distributing it. Thus, the managers regarded forming a joint venture between the two is a win-win strategy, complementing each other’s weak points.
- [Financial Performance] Naver provides one billion Korean Won every year to the joint ventures. The joint ventures can also draw additional financial resources through advertisements or selling their content to other third platforms. However, the joint ventures must show an average of two million daily visits to their site in order to place ads. What was found from the interviews is how greatly most of the joint ventures depend on Naver funds. Certainly, there exist some promising cases. Several early members like JOB& have made profits from their content sales to the third platforms. Additionally, some other ventures showed potential for better financial performances in the long run.
- [Managerial Performance] The news publishers (parent company) are willing to keep an eye on the ventures, but are reluctant to concentrate on and fully support them. For them, this is more of an experiment. The interviewed managers mentioned that major improvement is needed in three realms: (1) increase the number of content production workers, (2) provide stronger support in management for the ventures, and (3) devise a more effective and proper compensation system for dispatched workers. Further, for the joint ventures to succeed, both the parent companies and Naver need to pay greater attention to this business and extra efforts in communicating with the ventures.
- [Learning Performance] The managers pointed out that their joint venture with Naver provided them with an opportunity to (1) better understand the online market and users, and (2) learn about Naver’s organizational culture that truly promotes innovation. These know-hows and knowledge will later become a seed of innovation in the parent companies.
- [Social Influence] Thanks to the joint venture, participating news publishers not only became more competitive, but also gained better reputation and more partnership offers as well. In a sense, it helped the entire business ecosystem grow. Despite the fact that there are currently only thirteen participating companies, the managers expected, or even hoped, that more players would join as the ecosystem expands. A whole new area of content, which none of the current thirteen companies cover, can be added, or a second or third player in the existing area may emerge. Moreover, the act of forming a joint venture between Naver and news publishers may also imply the first step of putting the exhausting strife behind and moving forward together.
5.3. Joint Venture Performance Evaluation from Outside Experts
- [Strategic Performance] Experts explained that the key strategic motive behind this portal-news companies’ partnership is two-fold: (1) procuring a diversity of online content for users with diversified needs and wants, and (2) gaining tighter control over the content while showing a response toward news publishers’ complaints about the fees they pay to Naver. One billion Won worth of funds and getting access to run services on the Naver platform are definitely upsides, but structurally, the parent companies’ intervention and control over the ventures discourage its potential for expanding business and experiment, according to the interviewed experts.
- [Financial Performance] Financially, the joint ventures primarily relied on the seed money from Naver and lacked capacity in profitability and investment scalability. Improvement in content quality and renewal of a content-exposure strategy are crucial to future revenue increase. The experts suggested the following ideas as solutions: strengthening video content that are based on users’ demands and are suitable for cross platform ads, sharing user information across platforms, diversifying business models, improving the current incentive system, and developing a new pipe of finance resource.
- [Managerial Performance] Low autonomy in management and insufficient support from the parent company were identified as problems. Management in human resource and business administration were the two most critical areas. The interviewed experts recommended ensuring the appointment of a competent CEO with a professional background, building a system that can make employment more stable and promote performance, and considering a multi-stakeholder alliance model . Further, the development and sharing of successful cases and the sharing of key knowledge for making profits are also pressing matters.
- [Learning Performance] Naver can obtain content creation, sourcing, and editing skills of news publishers, while news publishers can more systematically learn about online users’ demands and responses to online content. To improve learning performance, it is necessary to have more professional, competent partners. Another crucial point is that all parent companies should pay greater attention to outputs from the joint ventures and seek ways to work together as a win-win strategy.
- [Social Influence] There are two contrasting views on the joint ventures from two groups: the ones participating in the joint venture, and the ones not participating. Academic scholars pointed out that content distribution and quality control are the positive sides of the ventures, but what also needs to be considered is a potential public bias created by the dominance of content from Naver and a particular news publisher. The experts also mentioned that how a joint venture is formed, overall corporate governance and business transparency need to be ameliorated.
6. Discussion and Implications
Conflicts of Interest
|Joint Venture||Subscribers||Days to Break 200 Thousand Viewers||Content Uploaded (per Day)||Content: (Original, Outsourced)||Type of Curated Content||Sales (₩) (Operation Costs and Others)||Service Expansion Plan|
|Job&||3.75 million (as of July 2017)||15 days||60 pieces||10 original||Content from other news publishers, blog posts||3 billion as of 2017 (including 1 billionof operation cost)||Content business (e.g., education, job-seeking, etc.)|
|Farm||2.3 million (as of April 2018)||8–9 months||30 pieces||7 original, 20 outsourced||Blog posts, online content published by the government||Refused to disclose||FarmTech Forum, Smart-farm projects, shopping mall, etc.|
|Designhouse||N/A||1 year||80 pieces||7~7.5 original||Content from other news publishers, professional blog posts from agencies||1 billion of operation cost (50 million asrevenue from ads)||Planning exhibits and spaces, designing talk program, etc.|
|SchoolJam||1.7 million (as of June 2018)||8 months||50 pieces||50 original (30% of 165 monthly uploads)||Content from other news publishers (high share oforiginal content)||1 billion of operation cost||Producing more original content|
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|Joint Venture (Company Name)||Parent Company (News Publisher)||Related Expertise of the News Publishers (Parent Company)|
|JOB& (JobsN)||Chosun Ilbo||Operating a job information website <Misaeng A to Z>|
|Travel+(Yeople)||Maeil Business Newspaper||10 years of experience as a travel map publisher|
|Movie (Cineplay)||Hankyoreh Shinmun||High reputation for its expertise in cinema based on its movie magazine <Cine21>|
|China (ChinaLab)||JoongAng Ilbo||First news company to found a research Centre specializing in China (Date: 2017.7)|
|SchoolJam (EBS)||EBS||Specialty in education broadcasting and abundant video content|
|Business (Interbiz)||The Dong-A Ilbo||Providing high-class business content via <DBR(Dong-A Business Review)>|
|Design (Designpress)||Design House||Expertise in design is the top priority|
|Farm (Agroplus)||Korean Economic Daily||Specialty in agro-related topics like back-to-farm trend|
|Concert/Exhibition (Artition)||Kyunghyang Shinmun||Having advantage in culture or art area thanks to its magazines or sections|
|Legal (Law&Media)||Money Today||Operating a professional legal media channel <the L>|
|Pets/Animals (Animal & Human)||Hankook Ilbo||Operating an animal-rights website <Animal and Human>|
|Marriage (Sun-lab)||Munhwa Ilbo||Published a category <Relationship & Marriage>|
|Tech(Tech-plus)||Electronic Times||The oldest IT news publisher in South Korea|
|A, B||Reporter (PC)||News media|
|C||Researcher (JV)||Media management and economics|
|D||Department Head (JV)||Online content|
|E||Chief of Division (JV)||Online news business|
|F||President (JV)||News media startup|
|Category||Company Interviews||Expert Interviews|
|Several early members like JOB& have made profits from content sales to the third platforms. Additionally, some other ventures showed the potential for better financial performances in the long run.||The joint ventures primarily relied on the seed money from Naver and lacked capacity in profitability and investment scalability.|
|The joint venture between the two is a win-win strategy, complementing each other’s weak points.||Transparency of the process for selecting a partner for joint ventures is important.|
|More support of human and financial resources is required.||Low autonomy in management and insufficient support from the parent company were identified as problems.|
|The joint ventures provide both parties (Naver and news publishers) with an opportunity to learn from each other.|
|The joint ventures helped the entire business ecosystem grow.||Overall corporate governance and business transparency need to be ameliorated.|
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Ryu, M.H.; Park, J.; Kwak, K.T. Joint Ventures between Online Portals and News Publishers: Will they be an Alternative to Symbiosis? Sustainability 2020, 12, 3296. https://doi.org/10.3390/su12083296
Ryu MH, Park J, Kwak KT. Joint Ventures between Online Portals and News Publishers: Will they be an Alternative to Symbiosis? Sustainability. 2020; 12(8):3296. https://doi.org/10.3390/su12083296Chicago/Turabian Style
Ryu, Min Ho, Jieun Park, and Kyu Tae Kwak. 2020. "Joint Ventures between Online Portals and News Publishers: Will they be an Alternative to Symbiosis?" Sustainability 12, no. 8: 3296. https://doi.org/10.3390/su12083296