return Home

How Axel Springer came back from the dead

From being described as an “internet midget” losing hundreds of millions a mere 17 years ago, Axel Springer managed to rebuild itself into a digital publishing powerhouse. Dr. Andreas Wiele, President Classifieds and Marketing Media at Axel Springer, Germany, explains how the German media giant faced off a near death experience.

 

Dr Andreas Wiele DIS 2018 ()

 

“Axel Springer missed the boat,” said Dr. Andreas Wiele, President Classifieds and Marketing Media at Germany’s largest media group Axel Springer, describing the events at the birth of digital publishing in front of hundreds of media executives during the second day of the Digital Innovators’ Summit in Berlin. He described the rapid decline of the publishing empire built by journalist and entrepreneur Axel Springer, the man who created iconic German newspaper and magazine titles such as Bild and Die Welt.

The truth, said Wielie, is that around the turn of the Millennium Axel Springer did not have a digital publishing strategy. From Europe’s most successful publishing business with record sales and record profits Axel Springer witnessed a “horrible loss” of €200 million in 2001. At the time the Financial Times reported: “Europe’s largest press conglomerate (is) a mere internet midget.”

In fact, said Wiele, the digitalisation of publishing truly brought about “a near death experience” for the company. Overnight the publisher needed to come up with a radical strategy to survive. “If you are convinced that your business will go down because there is simply a better offering and technological breakthrough, then there is only one way forward: you have to cannibalise yourself, disrupt yourself, and trust yourself. This needs to happen at full speed and determination because the opposition do not own a legacy business and do not mind attacking your business.”

In this process legacy publishers need to ask themselves what sets them apart from the rest and what you can do better than those starting out in your space of business, said Wiele. In Axel Springer’s case they realised that their publications essentially combined three individual businesses: selling journalistic content to consumers, selling classified advertising and marketing. The only thing that bound these three businesses together was the physical paper itself.

“But the internet ripped these components apart,” said Wiele. “It is much better to search for a new job or house or car on specialised websites and read an interview with Donald Trump on a site specialising on that content. And the same is true for marketing where it is much more efficient to focus on the interaction between brands and consumers than to just put display advertising up somewhere.”

Axel Springer decided to continue with these three businesses components but in the way it would be functional on the internet - separate from each other.

Journalistic content was put behind a paywall in a freemium model at their largest newspaper title Bild. “People do pay for content if they believe that it is worthwhile.” The newspaper has now grown its digital subscriber base to almost 350,000, which contributes a “significant amount” to the revenue.

 

Dr Andreas Wiele DIS 2018 ()

 

It is important that content remains independent and unique, warned Wielie.“That is the only way to set you apart from the big distribution monopolies like Facebook and Google. If you have content that the readers wants to consume, you will be able to have a strong position in the digital sphere.”

To ensure alternative and independent distribution of journalistic content, Axel Springer has partnered with Samsung who holds more than 40 per cent market share in Europe to roll out the Axel Springer ‘upday’ news app on their smartphones. It offers customised content curated by the user as well as “must read” selections curated by journalists and editors. Upday is now the most popular news app in Germany, the second most popular in France and third largest in the UK.

In a further commitment to quality content, Axel Springer acquired Business Insider “for a significant amount of money”. The website is fast becoming “the true leading business and financial information site for the new generation. We have 120 million unique users and monetisation is growing very successfully,” said Wiele.

In the case of classified advertising - primarily focussed on jobs, cars and real estate - the internet proved to be very efficient and profitable “if you manage to capture the largest market share”. Axel Springer is now the world’s largest classifieds operator through internationalising their classifieds offering across geographical boundaries.

Referencing the growth of platforms, Wiele also warned that in the case of marketing, publishers need to ensure that they manage advertising sales by themselves, or at the very least, in partnership with other publishers. To leave this in the hands of “any of the big platforms” would be a mistake “you will not survive in the long run”.

The ultimate outcome of Axel Springer’s digital regeneration strategy, said Wiele, is that the company managed to grow its digital revenue in the past then years from €200 million in 2007 to €2.5 billion in 2017. While in 2006 digital income only accounted for 1 per cent of Axel Springer’s income it has now grown to over 80 per cent.

More like this

Innovation launch: Here’s where and how magazines and other media innovate

Transforming Hong Kong’s newspaper of record, Gary Liu, CEO, South China Morning Post

How Harvard Business Review uses emerging media formats to super-charge audience engagement

Get ready for the Amazonification of media

Six insights from VGTV on online video for a highly visual society

How Cheddar Inc. innovates to create a new type of media for a new generation

  • How to innovate

    In the fast-changing publishing world, every business is looking to innovate. But getting it wrong can cost money and leave you trailing behind the competition. In advance of a major session on innovation at the forthcoming FIPP World Media Congress, a selection of experts, including speakers Martha Stone Williams and Robin Govik, offer tips for harnessing innovation in your business.

    16th Oct 2019 Features
  • 10 startups solving key issues for media companies and magazine publishers

    The last few years have witnessed a renaissance in media focused startups. Powered by initiatives like Artificial Intelligence and blockchain, the new breed of companies have sought to answer some of the key issues that have dogged media and publishing companies for the past decade. How can they scale the amount of content they produce? How can they increase the number of people paying for it? And how best to harness social media to target new consumers and turn them into regular followers - and maybe even paying customers? Here, then, are ten new-ish companies that have all made great strides in their attempt to simplify the world of media.

    14th Oct 2019 Features
  • Low-friction models gaining traction to supplement magazine subscription strategies

    While magazine media has shifted to focus on reader revenue streams over the last 18 months or so, the landscape is still fraught with questions and uncertainties. No surprise then that subscriptions have been top of mind for media this year; the subject has been discussed at INMA's Subscription Summit, and snapshotted by FIPP's Global Digital Subscription Snapshot. 

    14th Oct 2019 Features
  • Print ‘thriving in wider publishing ecosystem’, finds UPM white paper

    Print continues to play a pivotal role in multi-platform, multi-channel strategies for publishers. This was one of the key takeaways from a presentation at FIPP Insider in Paris based on a UPM white paper on the future of media. 

    10th Oct 2019 Features
  • Low-friction models gaining traction to supplement magazine subscription strategies

    While magazine media has shifted to focus on reader revenue streams over the last 18 months or so, the landscape is still fraught with questions and uncertainties. No surprise then that subscriptions have been top of mind for media this year; the subject has been discussed at INMA's Subscription Summit, and snapshotted by FIPP's Global Digital Subscription Snapshot. 

    14th Oct 2019 Features
  • 10 startups solving key issues for media companies and magazine publishers

    The last few years have witnessed a renaissance in media focused startups. Powered by initiatives like Artificial Intelligence and blockchain, the new breed of companies have sought to answer some of the key issues that have dogged media and publishing companies for the past decade. How can they scale the amount of content they produce? How can they increase the number of people paying for it? And how best to harness social media to target new consumers and turn them into regular followers - and maybe even paying customers? Here, then, are ten new-ish companies that have all made great strides in their attempt to simplify the world of media.

    14th Oct 2019 Features
  • FIPP Rising Star Thomas Deléchat: "The most interesting newsrooms are those that bring together people of all ages and social classes"

    Thomas Deléchat is Deputy Head of the Digital Factory of Ringier Axel Springer. Here we catch up with him a year after being awarded a Highly Commended FIPP Rising Star. Keep on reading to find out what he's been up to, his recently acquired skills and why he thinks that video and article views are an overrated term in the media industry.

    17th Oct 2019 Rising Stars
  • Chart of the week: Subscription is the main source of revenue for UK TV

    After surpassing advertising earnings nearly 15 years ago, subscriptions remain the top source of revenue for the television industry in the UK, according to Ofcom estimates. Growth in this arena remains strong and consistent, though online profit is accelerating at a breakneck pace.

    14th Oct 2019 Insight News
  • How to innovate

    In the fast-changing publishing world, every business is looking to innovate. But getting it wrong can cost money and leave you trailing behind the competition. In advance of a major session on innovation at the forthcoming FIPP World Media Congress, a selection of experts, including speakers Martha Stone Williams and Robin Govik, offer tips for harnessing innovation in your business.

    16th Oct 2019 Features
Go to Full Site