In 2023, mediahuis, the European news publishing group operating in six countries, drew up a strategic plan to shift from a 70% print margin to a 70% digital margin within seven years, coined its “7-7-7” goal. Paul Verwilt, the group’s Chief Operating Officer, concedes that with new forces at work, the goal is enterprising adn difficult to operationalise.
Forecasting models predicted that the shift could lead to a revenue gap of over €100 million by 2030 that would need to be plugged if the group were to maintain its momentum and keep funding quality journalism, Verwilt told the Asian Media Leaders Summit in Singapore in early November.
Mediahuis, formed in 2014, saw significant growth in revenue from €300 million in 2014 to over €1.2 billion,all without outside investment; rather,by acquisition and scale. Although highly profitable, there has been no growth in revenue or operating profit in recent years. The leadership team is “very concerned” about how to reach its north star targets by 2030 and thereby maintain its ability to support its journalism.
Subscription success and pricing
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Despite the flat growth lines, there have been some successes: “Where we have done well is on the volume of subscriptions, average digital subscription revenue. We’ve moved average digital subscriptions from six to eight euros to seventeen to eighteen Euros, which has made a huge difference.”
he felt pricing power was often underestimated, but data proves it works.”Even when customers feel uncomfortable, churn is lower than expected.”
the group is falling short on digital advertising growth, and print distribution costs (sometimes up to 80 cents per copy) are much worse than anticipated.
Now, “AI and automation are changi
News Publishers Must Collaborate for Survival, WAN-IFRA President says
the news publishing industry faces significant challenges, and collaboration – especially around shared infrastructure and technology – is crucial for its survival, according to Verwilt, President of WAN-IFRA (World Association of News Publishers). Speaking at a recent industry event, Verwilt emphasized the need for publishers to overcome competitive barriers and work together to reduce costs and invest in quality journalism.
The Need for Industry-Wide Collaboration
Verwilt highlighted that duplicating efforts in areas like printing, distribution, and technology growth is inefficient and unsustainable. “It doesn’t make sense for competitors to duplicate effort, such as, delivering newspapers in the same area or separately developing distribution technology,” he stated. This sentiment reflects a growing recognition within the industry that shared resources and collective action are essential to navigate the evolving media landscape.
The core argument centers on achieving economies of scale. By pooling resources, publishers can reduce operational expenses and free up capital for investment in areas that differentiate them – namely, original, high-quality journalism. “Scale and synergies matter. Working together can save money and allow investment in unique journalism,” Verwilt explained.
Areas Ripe for Collaboration
Several key areas are particularly well-suited for collaborative efforts:
* Printing & Distribution: Consolidating printing facilities and distribution networks can substantially reduce costs,especially in regions with declining readership.
* Technology Development: investing in shared technology platforms for content management, advertising, and data analytics can avoid redundant development and accelerate innovation. this is particularly relevant in areas like artificial intelligence (AI) and machine learning, where development costs are substantial.
* licensing & Rights Management: Collaborative approaches to licensing content and managing intellectual property rights can create new revenue streams and ensure fair compensation for publishers.
* Data & Analytics: Sharing anonymized data insights can help publishers better understand audience behavior and optimize content strategies.
The Broader Context: Challenges Facing News publishers
The call for collaboration comes at a critical time for the news industry. publishers are grappling with:
* Declining Print Revenue: The shift to digital consumption continues to erode conventional print advertising and subscription revenue.
* Dominance of Tech Platforms: Google and Facebook control a significant portion of the digital advertising market,leaving publishers with a smaller share of revenue.Recent legislative efforts, such as Australia’s news Media Bargaining Code and similar initiatives in Canada, aim to address this imbalance by requiring tech platforms to compensate news organizations for their content. Reuters provides a detailed overview of these developments.
* Rise of Misinformation: The proliferation of fake news and disinformation online undermines public trust in journalism and creates challenges for publishers.
* Changing Consumer Habits: Consumers are increasingly accessing news through social media and other platforms,often bypassing traditional news websites.
key Takeaways
* Collaboration is essential: News publishers must overcome competitive barriers and work together to survive.
* Scale matters: Pooling resources and achieving economies of scale are crucial for reducing costs.
* Focus on quality journalism: Collaboration shoudl free up resources for investment in original, high-quality content.
* Technology is key: Shared technology platforms can drive innovation and efficiency.
Looking ahead, the future of news publishing will likely depend on the industry’s ability to embrace collaboration and adapt to the changing media landscape.WAN-IFRA’s advocacy for collective action signals a growing awareness that a unified approach is necessary to ensure the long-term sustainability of quality journalism.
Worth a look