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Interview: „Diversification is crucial for newspapers future“

Almost 300 American newspapers are now in charge for digital content to users. In 2013, European media – ‘Bild’, ‘The Sun’, ‘The Telegraph’- have announced that their websites will become into pay walls. Experts think that these new initiatives maybe not the solution, but truly thing is a new business platform is now in progress. In this interview, Dietmar Schantin talks about the atmosphere of changes where media industry is living as he thinks the most important thing are news, whatever the platform may be.

We are living in times of uncertainty in media industries. Newspapers are losing their audience and their digital websites are not yet profitable. What is your point of view of the situation?

I am not sure if they are actually loosing their audience overall. I don’t know any newspaper who’s reach declined when you combine the print and digital channels. So the newspaper brand is actually extending its reach as more people are using the products.

Unfortunately, as we all know, at the beginning of the internet age we made the mistakes to use websites as marketing instruments for our printed (back then) core products. And these marketing channels were free to use. This free-to-use culture on the web is now haunting our industry.

Consumers are expecting free access. But in order to stay attractive for the consumer, and the digital advertising customer, newspapers have to provide attractive offerings on their websites, which means mainly content.

On the other hand we know that digital advertising will quite likely never achieve enough income to compensate for the losses in print advertising. There is just too much inventory available in the digital space and the real business has been taken by Google and others.

Do you think the expectations generated by the new payment schemes in US media are realistic in Europe?

I believe that charging for digital content is absolutely necessary. But I don’t believe that this will rescue the P&L of most newspapers. A few might be able to transfer their content-based business model into the digital space, but for most newspapers it will be not enough.

Charging for digital content is crucial for the integrity of a newspaper brand. There is absolutely no rational behind it that the same, or very similar content is paid for on newsprint and free on digital.

Yes, there is the convenience of using paper as reading platform and in many countries the luxury of home delivery, but the core added value, finding, selecting and preparing relevant content for the reader, is independent of any platform or media.

Concept of free contents is associated with the consumption of contents made in the Internet. Why do you think media user is going to change this habit?

We need to provide real added value to the lives of our customer on the digital platforms. We need to become an integral part of their real and digital life and need to bind the consumer to the brand and not to a single product, media or platform.

Studies show that only around 2-5% of the website users can be regarded as “fans”. These are people who visit the website more than 3 times a week. This is an indicator that we, as the media industry, are not really part of our customer’s daily life and habits.

So the question must be: What do we need to offer on our digital platforms such as website, mobile, tablet etc. that makes people come to our offerings, ideally at least 3 times a day?

If we find the answer to this question then we have achieved a level of loyalty that is need to make people pay because they don’t want to live without us and are happy to pay for that transactional relationship.

Now on the web the information is free. If you users begin to pay they will become into a customer. How does this affect the work of a journalist? Will you need more resources and more time to make a good information?

Online journalism has been seen as „second class“ journalism for many years. This won‘t be the case anymore when content on paper as well as on digital is paid for. Digital has the same importance as print or other traditional platforms.

Therefore the way of thinking and working in a newsroom has to change fundamentally. Digital-first does not mean that print or other traditional publishing platforms are not important anymore, but it definitely means that those traditional platforms have to give up the dictatorship in a newsroom.

We need to utilise the existing resources and time more cleverly and in a more innovative way. The story is the key element, not the platform it is put on.

Payment schemes in the US are increasing online subscriptions with a great audience but a low conversion to print editions. Do you think these schemes have sense on regional newspapers, which have lower audiences?

Regional newspapers have the advantage of having a high share of unique material i.e. regional content, local knowledge and very often a strong brand and long lasting relationships with the communities.

And these need to be the starting points for the business model for regional media house: Providing useful, relevant content and service offerings with a high engagement built around the brand of the media house.

Online subscription won’t be enough I believe, these smaller audiences need to be monetized through many other ways such as highly tailored services for local communities, events, e-commerce and other offerings.

Do you think that a possible success of media industries has necessarily to do with diversification of businesses and take into account the advantages of being a digital platform?

I think that diversification is crucial for the future. I don’t believe that digital advertising and paid content will be enough to compensate the losses in print advertising and print circulation.

We need to do more for our customers so that we can finance journalism and story telling. Using the brand and the trust that is connected to the brand can help us to provide products and services for our customers that are worth paying for.

And whilst content will always be a key component, media houses need to go beyond content-only products. We as industry are very good to produce and generate high quality content and this strength needs to be used, independently of the technical platform.

Will be 2014 the year of the strengthening and consolidation of these schemes?

2014 might be a little to early to celebrate. The culture of paying for digital content has not been established in society as yet, it will need a few years more i am afraid.

But eventually it will become the new normal as it was with digital music downloads or Pay TV – If we want to get quality content we find relevant in an convenient way, we will pay for it.

As justification they said that the manufacturer had provided the existing system and was therefore already linked to the company, and it had also offered a good price.

How will be the future of journalism?

Journalism will become more important. We need people who know how to find, evaluate, choose, verify and prepare stories so that they are accessible for as many people as possible.

There is so much noise out there, so many options to obtain content that people will be more interested to have someone helping them to find the right content and stories which fits their needs and their lifestyle.

But still, journalism does need to be different in the future. It needs to be more a conversation than a broadcast, it needs to be close to the people and not preaching from a pulpit.

Mobile phones and videos. Are these the keys of the future?

Definitely mobile phones and any portable platforms in general. People simply find portable platforms far more convenient. It has become a quick, straightforward and personalised way to obtain content and services and to communicate and interact. And this at any place and anytime.

For media houses mobile platforms have the big advantage that there has no “everything is free” culture been established. People are used to pay for stuff that they get on mobile devices. So loads of opportunities for our industry, we just need to be clever enough to grab the chance.

Where can we find a successful transformation in Europe?

I think Axel Springer, Schibsted and Ringier are interesting examples of companies who started the transformation and diversification process quite successfully. But there is still a long way to go, even for them.

 

This interview was conducted by ALFONSO NOGALES and JORGE GARMA and published in Spanish language in July 2013 in FARO DE VIGO. To original version.

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