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Just had dinner with my friend Mathias Döpfner, the CEO of Axel Springer one of Germany‘s top media and newspaper groups. During dinner we spoke about the future of newspapers, a subject very relevant to him since his company still makes most of their revenues and earnings from them. Indeed Axel Springer has Bild, the largest circulation paper in Europe, it also has the less popular but more informative Die Welt. In our conversation a trend came up that is worth sharing.
While downloading without paying has caused tremendous revenue erosion for record labels and studios, it is the culture of everything on the internet should be free that is hurting newspapers. In the case of newspapers it is not that people copy their content online for all to get it for free. What happens in the print industry is that owners put the content online and the revenues they make on online advertising do not compensate what they lose in print. But that is because the PC is an instrument that has made people used to not paying. While in print content owners can both sell the newspaper or magazine AND make money from advertising very few are willing to pay for content delivered to their PC. People have come to expect that everything that happens in a PC other than paying your DSL/Cable/Fiber provider should be free. But this is a psychological stance. It is hard to understand why this is the case but what is clear is that with other hardware come different habits. So the same is not true of smartphones and tablets. In a way what Apple has done is made people used to paying again both for apps (formerly known as software) and for content through iTunes. And that is also happening with Android both for smartphones and soon for tablets (Android tablets are still not a real contender for the iPad but Android smartphones are for the iPhone). So as people migrate from PCs to smartphones and tablets they will not find it offensive to pay, just like they don’t find it offensive to pay in the Sony PS3, or in Microsoft XBOX. Bottom line is this: if you have content think less of PCs and the web as we know it and more of smartphones, tablets and gaming platforms. That’s where the money is. Or may be. In the meantime Axel Springer is doing a remarkable transformation from offline to online. This migration should be good inspiration for my friends who run the New York Times, El Pais and other newspapers and magazines.
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MGQ on April 23, 2011 ·
Some newspapers have sunday supplements. This is a temporary solution. Paper would not die but money is not there anymore. They should think on freemium model (somehow powered by C. Anderson).
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They already have a relationship with lots of advertisers! Brainstorm brainstorm!
Monti on April 24, 2011 ·
Yes, I agree it. We’ve content and we’re migrating to tablets. The web era is dying for editors.
(I writing from my iPad)
benjamin on April 27, 2011 ·
roberto is right. people pay for convenience or content. newspapers deal with news from the political agenda on a high scale – but less people like to read these “informations” in wetsern europe. proof: look at statistic data that shows the decline of participation in political elections or political parties…newspapers are in crisis because publishers still try to sell concepts of the late 19th century in the beginning 21th century.
part of this concept – especially springer – is to influence the political atmosphere in a country. conclusion: politicial interest (springer) needs political content (newspaper) – people are less interested in this content – no convenient content – no easily selling product.
even if publishers like springer make everything more and more efficient, on the long run the concept is not satisfying any more. this is connected to the theme of mobile devices. but they are not the reason.
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Roberto on April 23, 2011 ·
People do not pay because of a new habit on a new device (e.g. iPhone, iPad). People pay for convenience, that´s all, in my opinion.
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Apple iOS ia successful platform, it´s easy to handle and people are used to App and later In-App purchases. You press twice on your screen and you just spent a few Euros. If Bild.de would have offered credit card payment on the iOS – making it necessary to enter all kind of informations before buying – they would have failed. It´s purely convenience that makes their Apps successful.