2020 International Conference on Information Technology Systems and Innovation (ICITSI)
Bandung - Padang, October 19 - 23, 2020
ISBN: 978-1-7281-8196-7
The Impact of Information Technology on Business
Model Changes in Print Mass Media Industry:
Case Study of Surat Kabar Republika
Dea Wemona Rahma, Tri Buana Tungga Dewi, Nadina Adelia Indrawan, Muhammad Rifki Shihab
Faculty of Computer Science
Universitas Indonesia
Jakarta, Indonesia
dea.wemona@ui.ac.id, tri.buana91@ui.ac.id, nadina.adelia@ui.ac.id, shihab@cs.ui.ac.id
Abstract—The development of information technology has
transformed business model in most of major industry,
including mass media industry. Republika, as one of national
newspaper in Indonesia has embedded Information Technology
(IT) in their strategy and capabilities of the company in response
to the changes in customer’s behaviour who mostly demand
instant access to content, whenever and wherever. This study
aimed to understand the impact of IT on business model changes
in Republika’s strategy, capabilities, and values. The authors
also focused on the analysis of IT impact, whether IT drives
revenues growth, drives asset efficiency, drives cost savings, or
create a virtuous cycle of innovation, productivity, and
increasing returns. The research methodology used in this study
is qualitative method through observation and literature study.
The results concluded that IT has increased Republika’s online
advertising revenue by 43% compared to online advertising
through publishers based on Republika’s annual report. The
use of social media has also resulted in a significant increase in
Instagram audience by 164%. Whereas other social media
platforms grow by 5-10%. Information Technology also
facilitated efficiency in distributing Republika’s value
propositions, costs savings in their core processes, and also
generate new revenue streams (digital newspaper-Epaper).
Keywords—IT impact, business model changes, mass media
industry
I. INTRODUCTION
The significant increase of the internet and smartphones
usage in Indonesia is reported to continue to rise from year to
year[1]. The penetration of internet and smartphone changes
the behaviour of people in various things, one of them is how
people access the news. People used to sell and buy daily
newspaper every morning to get the latest news. Many people
also used to subscribe to the newspaper agent to have their
newspaper delivered to their home. However, traditional
newspaper nowadays is losing its readers and newspaper
agents are rarely found.
Republika is one of national newspaper companies in
Indonesia who was affected by the impact of information
technology. The newspaper was first published on January 4,
1993. It is currently owned by PT Mahaka Media; the holding
company of media and entertainment business unit in the field
of Broadcasting, Printing & Publishing, Online and Marketing
Company[2]. At the beginning, Republika printed their daily
newspaper to deliver their organization’s value to their
readers. During August 1995, Republika launched their portal
website. Republika became online newspaper pioneer in
Indonesia. In 1997, Republika operated Remote Printing
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System in order to deliver thousands of newspapers to wider
region as early as possible.
As information technology and internet reach more
people, Republika decided to launch their mobile application
called Republika to deliver the company values to their
customers who prefer reading news through smartphones.
From printed newspaper to digital newspaper, Republika
evolved their business model in order to exploit opportunities
and build their capabilities.
According to Nielsen[3], the existence of internet in
Indonesia as one of the media with high penetration level
indicated that Indonesians are increasingly prefer to access
various contents through digital media. Failing to connect with
audiences online could have negative consequences for
broadcasters and news publishers who are looking to expand
their reach. Thus, they must adapt to the changes in order to
stay relevant.
This study aimed to understand the impact of Information
Technology (IT) on business model changes in Republika.
This paper focused on the analysis of how Information
Technology impact Republika’s strategies and capabilities.
II. LITERATURE REVIEW
A. Business Model
A business model describes how an organization creates,
delivers, and captures value[4]. According to Lynda M.
Applegate, business model defines how an organization
interacts with its environment to define a unique strategy,
attract the resources, and build the capabilities needed to
execute the strategy, and create value for all stakeholders[5].
Business model is a combination of value bidding, value
evaluation, shipping and value capture. Value is offered to one
or more customer segments. Value creation is related to the
company's architecture including main activities, key
resources, and partnerships. Value delivery consists of
channels for creating, marketing, and providing value and
relationship capital[4].
B. Strategy
Strategy is part of the business model [5]. Supporting
Lynda M. Applegate, Braun proposed that strategy and model
business are two things that are interrelated but have different
goals. Strategy focuses on how to win business from
competitors, while business model focuses on how the
company acquire its customers[6]. Strategy is series of ways
used to determine the opportunities and potency that can be
obtained from those opportunities [5]. Strategy define the
revenue drivers of the business and its potential to grow. This
paper concerned about the IT impact on business model
change. The change of business model will affect how the
organization execute organization’s strategy. There are four
areas included to analyse the business model in an
organization[5]:
x Business context
x Customers
Fig. 1. Three components of a Digital Business Model [7]
x Competitors and substitute
Content is anything available in a business that is
x Business network consumed by customers. In Republika, for instance, content is
C. Capabilities the news that are provided in the websites and other digital
According to Lynda M. Applegate[5], capability is the products of Republika. Moreover, how the content is
organization’s ability to execute their strategy while also packaged supports the attractiveness of customer value
providing platform for future growth of the organization. proposition since it improves the customers’ experience in
Capability is also defined as organizational assets and consuming the product. Finally, the coherence of digitalized
efficiency of how those assets are used. There are four areas business process, data, and infrastructure, defined as platform,
that are analysed to see the capabilities of an organization: is important to make the product delivered to customer easily.

x Process and infrastructure. In this area the core process
needed for manufacturing products, delivering
services, managing relation with stakeholders, and
other core process in the organization are analysed.
End-to-end support process such as payroll, finance,
human resource management is also required to be
analysed to find whether the processes enable efficient
and effective strategy execution or not.
x People and Partners. This area is analysed to find
whether the organization has the expertise needed to
carry out the required activities and processes or not.
Therefore, performance evaluation for people and
partners is in accordance with the specific role.
x Organization and Culture. Analysis in this area focuses
on whether organization and culture ease people to
make decisions and finish their works. It is also
analysed, in this area, whether roles, responsibilities,
and authorities are defined clearly for coordinating
work across unit.
x Leadership and Governance. Analysis in this area
focuses on how governance structures and systems are
used by leaders to balance the creativity and vision
needed to set goals and prioritize investments needed
to execute and deliver results.
D. Value
Value delivered to all stakeholders is the final component
of business model. Organization analyse value created for all
stakeholders by looking at company financial ratios [5]. Such
economic-value metrics describe the financial returns for
organization’s owners and investors, which in turn affect the
stock price and market value.
In business model theory[4], value is described as value
proposition. It consists of products or services that caters to
the requirement of a specific customer segment. It satisfies
customers’ needs or solves their problems. Value proposition
is one of the reasons why customers turn to one organization
over another. Value proposition in digital business model
consists of three important components, namely content,
experience and platform[7].
E. Digital Business Transformation
Digital business transformation is the use of social media
and digital platforms for performance improvement that
affects system, structure, and business process in organization.
Existing organization has evolved their approaches to digital
business through a series of stages according to Dave Chaffey
[8].
F. IT Impact on Business Models
According to Lynda M. Applegate, the analysis of IT
impact on business model can be described along two
dimensions, namely IT impact on strategy and IT impact on
capabilities[5]. Analysing a single project or a series of project
which a company evolves its strategy over time can be
analysed using the IT Impact Map.
x IT impact on strategy defines the role of IT in
determining product, market, business network, and
boundary positioning. It is also used for defining the
growth path of the organization over time.
x IT impact on capabilities defines the role of IT in
building the capabilities needed to execute strategy.
The impact of IT on business model alignment can be
analysed using the framework of IT Impact on Business
Model as in Fig. 2 [5]. The framework help to analyse whether
IT drives revenues growth, drives asset efficient, drives cost
savings, or create a virtuous cycle of innovation, productivity,
and increasing returns.
Fig. 2. Impact of IT on Business Model Alignment [5]

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G. Previous Studies
In 2019, a research conducted by Harjanti et al [9]
discussed IT impact on changing business model in banking
industry. The authors analysed Jenius as their case study. The
authors explained the business models, strategy, capabilities,
and unique values of Jenius that are offered to their customers,
and how Jenius is a bank 4.0 model by implementing IT in
their business. The research methodology they used is a
qualitative method. The data collection is done by using
observation, literature study, and interviews. The result shows
that Jenius became a model of bank 4.0 by implementing IT
in their business. IT impact on Jenius's business model change
their strategy, increase their capabilities, and offer unique
values to their customers.
Another study conducted by Amping et al [10] in 2019
discussed the transformation process of PT Telkom and the
impact of it. The purpose of the research is to provide concrete
evidence of the implementation of business transformation
towards business at PT Telkom. The research was conducted
with qualitative methods. Literature studies on existing
theories are conducted, such as SWOT and Driving Digital
Strategy, and data are collected from the literature review's
result and through interviews and the company's documents.
III. METHODOLOGY
The research methodology used in this study is qualitative
method. The authors analysed to understand the impact of
information technology on business model changes in print
mass media industry, namely Surat Kabar Republika. This
paper was written based on data, evidence, and available
information.
The techniques the authors used in this study were
observation and literature study. The authors collected the data
and information from Republika’s Annual Report published
by PT Mahaka Media, Republika’s official website, official
news article and press release related to Republika, academic
journals and other documents that can support this study.
IV. ANALYSIS AND RESULT
The development of information technology in this digital
era allows organizations to change their business models as a
form of response to environmental changes in an industrial
area[8]. The form of responses given can affect changes in the
organization's business model, such as strategy, capabilities,
and value.
A. Strategy
Digital transformation in media industry is driven by
changes in consumer behaviour and expectations, especially
in younger generation who demand instant access to content,
whenever and wherever [11]. Along with changes in
consumer behaviour, information technology (IT) has also
been developed. The development of information technology
enables media industry to offer digital services and products
demanded by consumers.
Customers are important to any organizations. In mass
media industry, readers are the main customers. Republika
always ensures that the value proposition they offered is
delivered to their readers. Value that is not conveyed properly
able to make customers turn to competitors. Thus, this study
analysed the strategy carried out by Republika in terms of
delivering values and also how to engage and maintain their
customers.
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Republika initially delivered its value in the form of
newspaper by printing dan distributing it every day. In 1995,
Republika launched Republika Online (ROL) which can be
accessed through the republika.co.id to serve the readers who
could not be reached by the distribution of printed newspapers
and for readers who were abroad. Republika Online became
the pioneer of the first digital newspaper in Indonesia [12]. At
that time, as a news portal website, the published content was
a complete duplication of the printed newspaper’s content [2].
As time goes by, Republika realized that they need to
expand their market by reaching more areas. In 1996,
Republika began working with regional newspapers in the
fields of editorial, production, advertising, and human
resources. The collaboration involving the Surabaya Post,
Suara Merdeka, Pikiran Rakyat, Kedaulatan Rakyat, and
Waspada finally yielded a breakthrough in media
management. Using the information technology available at
that time, Republika built a remote printing system called
Sistem Cetak Jarak Jauh (SCJJ). In 1997, SCJJ was tested for
the first time in the city of Solo [13]. At that time, there was
not a single mass media organization that implemented this
system. The system was successfully running without any
obstacles. Since then, there has been no more activity in
Jakarta to send thousands of newspapers to Central Java,
Yogyakarta, and East Java. Thus, Republika’s readers in those
area can enjoy the national newspaper earlier than when it was
distributed from Jakarta.
In the next phase, Republika gradually began to develop
ROL in accordance with technological advances, especially
information technology. They renewed ROL’s interface and
add new features and web services. In 2008, ROL underwent
a major changes, from a simple news site to a multimedia web
portal. This change occurred in response to the emerging
challenges in the media industry which has begun to enter the
era of media convergence[2]. In this case, Republika as a
media industry institution is required to own and distribute
media content in print, online, and mobile formats. ROL’s
new look was relaunched in February 2008.
Fig. 3. Timeline of Republika
ROL exists with a vision to become an integrated online
media. Not only information and news needs, but also as a
space of expression for the community, entertainment, and
even shopping. For this reason, ROL becomes a ‘One Stop
Community-Based Portal’ which serves news, videos, digital
newspapers, community, social media, and e-commerce as its
services. In addition to ROL, Republika also build these
application as a complement to the ROL:
x “Epaper.republika.co.id”. Epaper Republika is a
digital newspaper that has the same content and
appearance as the traditional newspaper. EPaper
Republika is accessible via desktop and mobile. It
publishes every day on 02.00 in the morning. Similar
to the traditional newspaper, customers must subscribe
 in advance to be able to access Republika’s EPaper. A
subscription allows customers to access newspaper
archives from 2011 to the present date[14][15].
x Android application “Gerai Republika”. An online
store application that sells and caters for all Republika
digital product needs. The digital products include e-
paper, photos, selected news bundles, and video on
demand (VOD) for learning the Koran. The Republika
EPaper mentioned earlier can also be accessed through
this application[16].
x Android and iOS application “Republika.co.id”. This
application is the mobile app version of the ROL site.
Republika Online also presents news content. What
distinguishes the ROL application from Republika
EPaper is that news articles published on ROL are
more dynamic. If there are new news (headlines,
featured, etc) ROL will publish the news as soon as
possible unlike the Republika EPaper, which issues a
newspaper edition once per day[17].
x Android application “eRepublika”. The application
which also known as eRep, is a news reader application
for Republika EPaper. This application is based on
voice synthesizing technology and automatic speech
recognition. Its content can be accessed using voice.
The application can also respond with sound. This
application is intended for customers with disabilities,
especially the visually impaired [18].
The use of various types of applications as distribution
channel are part of Republika's strategy in providing values to
their customers. To summarize, Republika's strategy has
evolved from relying on the sale of printed newspapers to
relying on the sales of digital newspaper and online
advertising space at ROL.
In addition to the products and value delivery strategy,
Republika also implemented a strategy to engage and maintain
their relationship with their customers. The purpose of
customer relationship management is to ensure the customers
remain loyal and do not move to competitors.
At the beginning, in the era of printed newspapers,
Republika communicated with its readers by providing a
column in a newspaper called Surat Pembaca. The public sent
their writings to Republika and then the editorial team will
choose which articles to be published in the newspaper each
day. As information technology developed, the Surat Pembaca
column is provided via the ROL portal in a section called
“Retizen”. Each article published in Retizen states the name
of the writer.
Nowadays, in this digital era, Republika utilises social
media to manage their customer relationships. Social media is
considered important for organizations to remain competitive
in terms of interactions with customers [19]. The followings
are the social media used by Republika:
x Facebook Page Republika Online
x Twitter @republikaonline
x Instagram @republikaonline
Based on the authors’ observations, the three social media
accounts of Republika are regularly updated. News article
snippets of Republika Online are reposted on each social
media account and equipped with a URL-link that links
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directly to the posting page of Republika Online. Republika
readers are able to write comments and discuss with other
readers through social media. According to Osterwalder [4],
this type of customer relationship is known as communities.
Communities facilitate the relationship between readers to
exchange ideas. In addition, Republika also applies Personal
Assistance customer relationship types. This type of
relationship is based on interactions with humans. Republika
customers can interact directly with representatives of
Republika through the call center and email.
B. Capabilities
Capability is described as the ability of an organization to
implement their strategy while sparing platform for their
development in the future. Moreover, organizational assets
and the efficiency of how those assets are used are also called
capabilities [5].
As discussed in the previous section, Republika's strategy
has evolved from relying on the sales of printed newspapers
to relying on digital newspaper sales and online advertising
space at ROL. In order to realize this strategy, Republika must
have a reliable web portal and systems to accommodate it.
Republika also formed its IT division which specifically
handles all matters related to the Republika Online system and
its complement applications. The IT divisions maintain and
update their system gradually. Republika strives to ensure the
applications can be accessed and used by customers as a
medium or channel to get the value offered. This capability
enables Republika to reach a wider range and be more
accessible to their customers anytime and anywhere.
As for the customer relationship management, Republika
implemented Vuukle in their system. Vuukle is an audience
engagement platform. Republika’s readers can write
comments in each news articles by logging in using Facebook
account, google mail, twitter or Disqus account. Republika
also implement session tracking for each visitors to capture
how long the visitors in their website and what news articles
they usually read. Then, the system will offers related news
article according to the preferences of these visitors.
As stated in the book written by Lynda M. Applegate [5],
information technology is an important enabler for developing
the best capabilities that an organization needs to achieve
success. Republika had to print and distribute their newspaper
initially. After upgrading its capabilities by utilizing
information technology, value delivery without having to print
and physically distribute it become possible. Republika
realized that the role of information technology is no longer
just as a support, but also as an enabler that influences the
success and sustainability of Republika's business.
C. Value
In order to keep business going and increase profit,
organizations continue to develop innovation regarding their
process and products [20]. Using their product, organizations
deliver their value that is produced, exchanged and consumed
[9]. Its products and services possess value and is, thus,
defined as value proposition by Osterwalder[4]. Republika's
value proposition is to deliver an accurate and fast news
content to their readers [21].
Most executives of profit-oriented organization analyse
value created for all stakeholders by looking at company
financial ratios [5]. Information Technology enabled
Republika to launch an online newspaper portal, namely
Republika Online (ROL), to reach more customers and
generate new value such as community space for discussion
in their portal.
The changes in Republika’s strategy generate new revenue
streams and costs, which affect Republika’s profit margins. As
an example, the development of IT affect the behavior of
customers who prefer Republika Online or EPaper
(Republika’s digital newspaper) than the printed version,
resulting the decrease in sales of the traditional newspapers.
However, Republika Online which gradually had more
readers attracted the public to rent advertising space on the
ROL portal. Thus, the decreased revenue in printed
newspaper’s sale is covered by the online advertisement and
other products, such as subscription-based digital newspaper.
D. IT Impact on Business Model Alignment
In analysing the impact of information technology, the
authors used the business model framework illustrated in Fig
2 [5]. The framework was used for analysing the impact of IT
on business model alignment.
Information Technology has impacted the strategy,
capabilities, and values of the Republika business model. IT
successfully drives Republika in generating innovation and
increasing productivity. It was proved by the development of
applications used by Republika as a distribution channel in
conveying its value proposition to their customers. It
accelerated the delivery of news articles to Republika’s
readers. In addition, the application also reached more
customers. Information technology also played a role in
increasing Republika's productivity in terms of publishing
news articles. Formerly, news articles can only be published
once a day through printed newspapers. However, now,
articles can be published anytime and anywhere through
Republika Online.
The use of IT enables ePaper to become a new addition to
Republika's revenue streams and costs. In the contrary, it
resulted in the decreasing number of customers who subscribe
to the traditional newspaper. This is due to the changes in the
behavior of customers who tend to prefer digital products than
non-digital (physical).
Information technology was also utilized by Republika to
acquire and manage relationships with customers through the
use of social media. Social media facilitated Republika to
communicate and capture the needs and desires of its
customers. Good customer relationship management can
increase customer satisfaction and encourage customers to
remain loyal to Republika. Social media was also used by
Republika as a medium to increase their brand reputation and
awareness.
As stated in their annual report of 2018 [12], PT Mahaka
Media (parent company of Republika) managed to increase
online advertising revenue by 43% compared to online
advertising through publishers. The use of social media has
also resulted in a significant increase in Instagram audience by
164%. Whereas other social media platforms grow by 5-10%.
The use of IT also allowed cost savings in non-revenue
generating processes such as payroll, human resource,
accounting, and finance activities.
V. CONCLUSION
In this digital era, IT has transformed business model in
most of major industries, including mass media industry.
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Republika as one of national newspaper in Indonesia had
embedded Information Technology (IT) in their strategy and
capabilities of the organization in response to the change in
customer’s behaviour. Digital business transformation is
required not only to exploit IT opportunities but also to
survive in the evolving business environment.
Republika utilizes IT to deliver its value propositions with
the aim of reaching wider customers. Republika launched
Republika Online and its digital newspaper called Epaper to
fulfill the needs of its customers in acquiring fast and accurate
news. Republika also utilized social media such as Instagram,
Twitter and Facebook Page to interact and engage with their
customers. In order to realize those strategies, Republika built
its capabilities such as web portal and systems. It also formed
its IT division which specifically handles all matters related to
the Republika Online system and its complementary
applications.
The overall impact of Information Technology on
Republika’s business model facilitate efficiency in
distributing Republika’s value propositions, costs savings in
their core processes, and also generate new revenue streams
from the digital products such as digital newspaperņEpaper.
The use of IT also allowed cost savings in non-revenue
generating processes such as payroll, human resource,
accounting, and finance activities.
VI. LIMITATIONS AND FUTURE RESEARCH DIRECTIONS
Our study is not without its limitations. The limitation is
the data collection process. The authors only use secondary
data. Thus, a further investigation is needed. Future research
should explore more by interviewing Republika to acquire
more in-depth analysis.
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https://play.google.com/store/apps/details?id=com.republika.gera

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