theguardian: It’s time to be entrepreneurial in digital news and break the shackles of print
A leading voice in European media says print and digital can’t work together – but are publishers prepared to take that risk?

Media companies around the globe have tussled with the question for the best part of 20 years. How do you manage a fast-turning wheel fuelled by growing audiences on an expanding array of platforms, alongside a resource-hungry engine that has been tuned by years of experience with the certainty of deadlines and finite pagination? How do you combine a traditional print news operation with an emerging digital proposition?

The dilemma has been played out again this month with the leak of the New York Times’ internal report on digital innovation within its business. But yesterday, one seasoned European media player gave his answer: you don’t.

A year ago, Wolfgang Bretschko left the group board of the Austrian media house, Styria Group, publisher of the regional daily newspaper Kleine Zeitung. Since then he has become an angel investor after spending time in Silicon Valley, exploring digital media startups. He’s passionate about a future where digital content production – by users as well as media groups and startups – and digital content consumption will continue to see exponential growth.

Yesterday, Bretschko explained the evolution of his thinking over the last 12 months to an audience of European media executives in London. The Institute for Media Strategies brought together about 40 directors representing traditional media in Scandinavia, Germany, Austria and the UK for a conference at the Telegraph Media Group’s offices.

The cocktail of opinions was enriched by presentations from Axel Unger of IDEO – on how to create a culture of “design thinking” in business innovation – and Hansi Voigt, charismatic founder and editor-in-chief of the Swiss media startup Unger spoke of the need for empathy with audiences, while Voigt suggested focusing on storytelling in the most engaging format possible.

Yet when Bretschko took to the stage, his message was simple. Media groups need to “face the reality that the best days of the newspaper industry are over” and take a new approach to digital innovation.

“Mixing old and new doesn’t work,” he said. “Scaling down one element of a business while developing another won’t work – there are different key performance indicators (KPIs). You won’t find people who can do both.”

Bretschko urged media companies to set up separate business units focused on innovation and create an “incubation programme” to support the growing numbers of startup media companies in the US and Europe. There are some 4,900 digital media startups looking for funding on the US site Angel List alone. The theme of entrepreneurship was consistent throughout his talk: “If you want managers to be entrepreneurial, give them budget and time. Make your managers entrepreneurs. Give them the chance to really act like an entrepreneur.”

But many CEOs and editors have clung to the virtues and values of a parent print brand and hesitated before unleashing what they fear will be potentially unruly, contradictory, digital offspring on the world.

In parallel, there has been longstanding frustration in boardrooms across Europe at the difficulty of implementing cultural change – the introduction of digital thinking, storytelling and workflows – to newsrooms of clever, articulate, sometimes contrary, and always independently-minded, journalists.

There’s also the financial reality: the mismatch in scale between digital revenue growth and falling print revenue losses – even in the continental press where newspaper subscription is often a larger proportion of print revenue than in the UK.

“It is not very likely that we will be able to compensate the losses in print advertising with digital advertising,” said Dietmar Schantin, co-founder of the Institute for Media Strategies.

“At the same time it is also not very likely that we will be able to compensate our losses in print subscriptions with digital subscriptions.

“Looking at that scenario, we need to devise totally new ways to make money from our core product content as well as create new products and services that can be offered to our customers under the parent brand or new brands.”

In terms of circulation revenue, digital app sales have helped. Similarly, experiments with paywalls and metered access models have generated welcome new income where publishers have confidence in their media brand and unique content is compelling enough a proposition to persuade people to part with money.

For ad revenue, executives at yesterday’s event saw potential in brand content marketing – providing creative digital “solutions” for traditional advertising clients through the likes of native advertising – but not without concerns about editorial integrity.

There are no right answers in the news industry, just a multiplicity of different possible models. Spinning out a digital operation from a print “legacy” businesses has been tried; the results have been mixed. But for Bretschko, the argument for action is undeniable: “If you are not willing to try, or aren’t prepared to fail, you will find it hard to innovate.”

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