It’s been a week of dogged displays by Axel Springer, as the company continues to lead by example in its position as one of leading lights in the global industry. On Tuesday, the publishing house went on record to defend the place of free and independent reporting in Ukraine, announcing a €500,000 fund for outlets on the ground. Today, is it has gone a step further, by awarding Ukrainian President Volodymyr Zelensky the Axel Springer 2022 award.
But while Europe’s largest publishing house clearly understands the importance of remaining resolute in its defence of quality journalism, it also sees a bright future for the industry ahead.
Back in February, before the fighting began in earnest, the Chairman of the company’s Supervisory Board, Ralph Büchi, spoke on the Christian Kallenberg We Like Mags podcast, about the transitionary nature of the sector:
“It wasn’t so long ago that talk of the demise of journalism dominated. This has clearly been refuted. Digital journalism is not just a business model for the future. Digital journalism is already a very successful business model of the present,” he said.
German media giant Axel Springer has robustly invested in quality journalism over the years, going against conventional wisdom that there is no future in the sector. They acquired Business Insider, launched Politico Europe as a joint venture, and acquired the entire Politico business late last year. All the while continuing to invest in their content-driven businesses on top of other non-journalism investments.
Büchi is one of the most influential figures in European media, if not even further afield. He has a unique perspective, having been the founder of a successful startup, a key figure in a multi-national publishing empire, and Chairman of FIPP, where he has often championed sharing insights and doing cross-border business.
“I’m Swiss, and we had a kind of Freedom Day here two days ago,” says Buchi. “The restrictions around Covid have been largely lifted, and everywhere I look, I see only happy faces.”
“People are happy to get a big piece of normality back finally. And above all, they are happy to meet each other again, and I think that is the central theme of the upcoming FIPP Congress. The anticipation of all the colleagues I talk to is to be able to exchange ideas again in a beautiful place in Portugal. The anticipation is enormous.”
Meet The Speaker: Ralph Büchi will be speaking at FIPP Congress, 7-9 June in Cascais, Portugal. You can find out more about the agenda, speakers, and sponsorship activities at FIPP.congress.com
Creating a global digital business
One of the less anticipated effects of digital transition has been a re-ignition of the global ambition of publishing innovators. In recent years, Axel Springer has shifted from being solely a key media figure in the DACH (Germany, Austria and Switzerland) world to a global one via the high-profile acquisition of English language media brands.
Büchi says this is the result of a belief that “professional, fact-based journalism is and will remain one of the indispensable pillars of a democratic and free society, or will become even more critical. As a company, we want to play this role in the free world with conviction and also with commitment.”
“We only invest in democratic societies and countries,” he adds, “but we want to use good journalism, professional journalism, to help strengthen and further support these free societies. That is our journalistic mission, and it is not limited to our home market, Germany. The democratic world is large, and we want to take advantage of the opportunities it offers.”
“A second consideration is that size matters. We already believe that growth is about technological and market-specific challenges, and to master them successfully, you need a critical size. Investing in English journalism means you have a large market in the US opening up to you. With this market as the ‘home’ market, you can expand into the rest of the English speaking media world. English is becoming more and more the lingua franca for politics and business in Europe, Asia and Africa. So the market for the English language is, practically, the world.”
The strategy means Axel Springer has two home markets: the US for its English audiences and Germany for its German audiences. While many publishers are going into ever-tightening special interest niches, it has not followed quite the same path with the acquisitions of Business Insider and Politico.
We have opened up Business Insider in recent years. We have renamed the group Insider and now offer more than just traditional business journalism.
“Focusing on niches definitely makes sense,” Buchi argues. “However, Politico’s business model covers over a dozen topics of specific verticals. And it’s by no means just about political issues; it’s also about scientific topics. It’s also about topics such as cyber security. So Politico has an extensive range of topics. The same applies to Business Insider, one of the leading platforms for digital business journalism in the English-speaking world. We have also opened up Business Insider in recent years. We have renamed the group Insider and now offer more than just traditional business journalism. We believe that there is great potential here in a particular breadth and not just in focusing the offering.”
“Focusing indeed also serves to position a brand. There’s no doubt that we have a political focus at Politico and a business journalist focus at Insider. But thematic opening, I would say, is at least as exciting a model as focusing. I’ll give you an example from another company: The New York Times has achieved its huge success in the digital subscription business by also being much, much broader thematically.”
One of the critical trends in publishing is the personalisation of digital offerings. While Büchi broadly welcomes the innovation, he points out that “there are more limits to personalisation, because the whole data protection issue, the much-discussed data protection, will not only affect advertising. These regulations, which are likely to be tightened, will, of course, also affect content management using algorithms.
“I do believe there will be personalisation wherever it is possible and makes sense. But I see more growth opportunities in new topics and technologies. For example, we recently announced at Springer that we want to develop and offer a streaming platform dedicated to second-tier sports.”
“In other words, topics such as basketball, handball, ice hockey, and not always just soccer. Quite simply for the reason that if I look at Germany now, there are tens of thousands, maybe even hundreds of thousands of people, who follow these sports, who follow teams, and who hardly have the opportunity to follow them in the media in a professionally prepared way.”
Unlike football with its “single-topic huge audience” combined, these niched sports offer Springer a lucrative audience. “Thanks to the new technologies, it is cheaper and easier to broadcast a basketball league game or an ice hockey match than it was 10-15 years ago. Today, everything is much easier.”
Yet more digital disruption
Many media companies have struggled with digital transformation ever since the first wave in the 1990s, followed by more in the noughties. Today, they have to get ready for another wave with blockchain, AI, metaverse and other technologies.
“With the metaverse, we have seen the investments that Zuckerberg, Facebook and Microsoft are making in this area. I’m not an online gamer, but much money is being spent on virtual equipment for gamers in online gaming. “
“I am firmly convinced that the new technologies, i.e. all the augmented reality or artificial intelligence or virtual reality offerings, will also enable new business models that can or will be successful. We don’t yet know what these will be. But we do know one thing: This is the next digital transformation that is just around the corner. We should learn from the mistakes that many publishers made in earlier digital transformation waves and now try to get on the learning curve very early here.”
Back to journalism
No matter how the metaverse and its accompanying technologies develop, Büchi is confident about the future of the media in general. He believes that there is now optimism, which hasn’t always been the case in recent years.
“There have been very pessimistic statements about journalism as a business model time and again. We all know that subsidised journalism is not a business model for the future. We have to be able to survive on our own. My firm conviction is that the first condition for independent journalism is economic independence. We have to finance ourselves; we have to be able to run successful businesses.”
“I think we have succeeded in showing in the last few years that, on the one hand, entirely new revenue streams have been created, primarily through the digital subscription business.”
Not only have we created a new business model for Bild, but we have also created entirely new possibilities and forms of expression on the digital level journalistically and the whole moving image offering.
“Take Bild-Zeitung, for example: Bild-Zeitung was always a newsstand paper. Bild had practically no subscriptions. Today, we have hundreds of thousands of digital subscriptions to Bild. So not only have we created a new business model for Bild, but we have also created entirely new possibilities and forms of expression on the digital level journalistically and the whole moving image offering.
“The offering has expanded tremendously, and we’ve built a subscription business for Bild that didn’t exist in any way before. At the same time, as an industry, we’ve also alleviated some of the one-sided dependence on advertising revenue through growth in digital subscriptions. Of course, we want to remain a desirable partner for the advertising industry. But we don’t want to have to live unilaterally from the revenues generated by advertising our offerings.”
“I’ve felt very closely connected to the cause of FIPP for many, many years,” says Büchi, who many of our readers will know firsthand from previous Congresses and other FIPP events. “I’ve also had great encounters and met some exciting personalities at FIPP. Therefore, it is an honour and a pleasure for me to remain on the Board. My two years as chairman went by so quickly. You never see the job as finished; it’s never over.”
His 2-year chairmanship of FIPP ended with the last in-person FIPP World Congress in Las Vegas in November 2019. “Then, as a regular board member again, the pandemic came along. That was a huge challenge. Like in our companies, we didn’t know how the markets would react. We didn’t know how well home offices would work. It was very satisfactory to see FIPP didn’t come out of the pandemic weakened; it came out stronger.”
“I see the role of FIPP is to enable the exchange of information, experience and knowledge not only on a national level but also on an international level. [It is] to provide insight into business models that you might not find in your market in your own country but which are already working very well in other markets. It dramatically broadens the horizon, and all members will undoubtedly benefit from this.”
“Beyond that, it’s a bit like politics. Certain issues cannot be solved nationally. There are security issues, defence issues, and perhaps environmental issues in politics. Today, many issues cannot be solved nationally; people must tackle them internationally. It is the same in our industry. There are international topics such as data security or data regulation. The solutions to these supranational issues cross national borders.”