Two important reports were released recently: Hackers.Media’s list of the biggest media companies in Europe, and Reuters’s report on developing digital news projects. There’s some significant overlap between the two lists, so it’s interesting to see how a focus on digital innovation has led to success for some of the top European media companies.This week we have three cases of how these digital news projects have been implemented in the biggest media companies in Europe.
A few key takeaways:
- A few of the projects were initiated after publishers were approached by new platforms with partnership offers. This yet again illustrates how large technology firms are increasingly influencing investments made by publishers.
- Commercial considerations do play an important role in the decision to invest in new digital projects, but there are more indirect drivers as well, including building an innovative image, experimenting with new forms of storytelling, and fostering organizational change to facilitate ongoing innovation.
- The most common reasons new digital projects are undertaken is to reach new audiences, with all but n-tv identifying this benefit.
Paid Content Diamonds: Helsingin Sanomat (Sanoma)
Sanoma, the leading media group in the Nordics, is ranked number 18, with €1.64 billion in revenue. Its daily newspaper Helsingin Sanomat is the largest subscription newspaper in Finland, with 97% of its circulation being comprised of subscribers.
In September 2016, changes in the paywall model and the production of premium content were made, with the aim of fostering the conversion of users into digital subscribers. While a metered paywall has been in effect since 2012, internal marketing research showed that it was not enough to convert readers into digital subscribers. Now, the editorial and marketing departments work together to produce, as well as promote, up to five premium articles each day, which are known as “diamond stories”. These stories can only be accessed by subscribers, as well as registered users on a trial subscription. Kaisa Aalto, head of strategy and business development, explains:
The ‘diamond wall’ is [a sort of] hard paywall that you cannot bypass by changing browsers or deleting cookies, or by coming from Facebook. You have to log in and be a subscriber. We also offer two-week free trial subscription deals. These trial subscriptions have been a great source of sales leads for us.
Senior vice president Petteri Putkiranta explains that this project is one part of their wider strategy which focuses on the expansion of their digital subscription base as well as attracting a younger audience. By strengthening their digital subscriptions, they will be able to better insulate their digital business from the ups and downs of the advertising market. But the impact of the diamond stories goes further as well, even changing how the news itself is produced, with the newsroom putting greater emphasis on the production of content that creates value and better converts readers into subscribers. Kaius Niemi, editor-in-chief, highlights that in order to enable innovation, news organizations “have to reject the idea that things would continue to be as they are, that success would continue as it was before.”
The 1st Mover Strategy: n-tv (Bertelsmann)
The German media company came in at number one of the biggest media companies in Europe, with €16.95 billion in revenue.
In September 2016, a new project for Amazon Echo was launched for n-tv, with the production of news bulletins for the voice-controlled personal assistant. The intention of this project was to be the first mover on this potentially important new platform. Eva Messerschmidt, vice president of sales and digital products, explains that being a first mover is part of their approach to innovation:
We have a so-called double pillar strategy for our digital development. In the first pillar, we work on our core products, which are relevant to generating revenues. The other pillar is more about [designing for] the future, being first movers, occupying positions and working on new trends, with the hope that some of the product developed within this approach eventually migrates into the first pillar.
This project makes Bertelsmann among one of the first media organisation to offer the news on Amazon Echo. While Messerschmidt acknowledges that there is of yet no clear revenue model for this project, she explains that the assumption is that when demand increases, opportunities for monetisation will also follow. Being the first mover has allowed them to establish a dominant position, as well as garner press coverage.
Younger Audiences: Le Monde (Prisa)
Coming in at 21 is Prisa, the Spanish media conglomerate, with €1.36 billion in revenue. Along with the Groupe Le Monde, Prisa partially owns the French daily Le Monde. Prisa has long been a proponent of digital transformation, with a senior executive explaining, “We realized early that if we don’t transform the way we do business, we’re going to die. It’s not about changing the way we do technology but changing the way we do business.”
In September 2016, a Snapchat Discover team was established for Le Monde, which publishes news editions on the messaging app, with an aim of reaching younger audiences. Every day 12 stories, generally ‘hard news’ stories such as politics and terrorism, are adapted for the younger audience and published at 17h on Snapchat. Topics that are interesting for millennials but not covered as in-depth in Le Monde are also published. With a team of seven, this is a particularly costly project. Yet by allowing the newspaper to reach a younger audience, as well as to experiment with new formats, it is considered a strategically important investment. (Plus it is partially funded by Google’s Digital News Initiative).
Attracting younger audiences is often critical for legacy news organization whose audiences is getting older, as the head of the Snapchat Discover team Jean-Guillaume Santi explains:
The goal is finding a way to talk to young people. They have lost the habit of typing www.lemonde.fr when they look for news. Rather, they look for news directly on social media feeds and arrive at Le Monde through a link on Facebook. Given the difficulties in establishing a direct relationship with this generation, Snapchat offers us the opportunity to have high visibility on the social media platform they use most frequently.
Digital innovation pays off
We’ve seen before how offensive digital strategies pay off, with Jacques Bughin, the director at McKinsey Global Institute explaining that “Companies that strategically go on a digital offensive generate three times more revenue and profit growth than their more defensive counterparts.” The examples of these top European media companies show digital innovation is only becoming increasingly important for news organisations.
Business Development @ Twipe