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- Schibsted is building world-class digital media houses

CEO Rolv Erik Ryssdal has written an article on how Schibsted is building world-class digital media houses. The article was published in Aftenposten 18. September. Read the full article here.

Schibsted is building world-class digital media houses

By Rolv Erik Ryssdal, CEO, Schibsted Media Group

The story of Schibsted's reorganization of its media houses comprises two chapters: one of them about painful cost-cutting measures, the other about an extensive and assertive strategy for digital growth. So far, it has been the first of these that has attracted most discussion and debate.

Schibsted has been operating good and important media houses for 150 years. And we will continue to do so in the new digital era. Our Norwegian media houses have prepared forecasts and needs analyses that indicate a need to reduce our cost-base by a total of NOK 400 million by 2015. At the same time those same media houses are to invest NOK 175 million a year in digital growth! This is in addition to the resources we are already spending on our digital projects. This is reorganization in practice. It doesn't get much more specific or resolute than that, and you'd be hard pressed to find more convincing proof of Schibsted's commitment to its media houses.

So why, one could ask, – depending on where you stand – does Schibsted not reinvest all of that NOK 400 million in savings into digital activities, or – to flip the question around – why do we not realize all the cost savings without reinvesting? The short answer is that the first alternative would be extremely risky, both for the individual media houses and for Schibsted as owner. Media houses that are not earning money are treading on thin ice, regardless of how involved I or other members of Schibsted's executive management may be in these companies and in the journalism they produce. The second alternative would mean a strategy of lowering priorities for the media houses and would be contrary to everything Schibsted stands for.

Another good question is where we should invest; where should we use all those millions we are allocating to new growth? One of Schibsted's four core values is "We are innovative". Here at Schibsted, these are not just empty words. We have media houses that possess superior levels of knowledge and creative strength. There is no shortage of business development initiatives, and the desire to create something new and to continuously improve is strong. We will use the money to implement the plans we already have and – just as important – we will use the money to break new ground. We have already begun to explore new avenues: Fædrelandsvennen is the biggest Norwegian newspaper to have introduced an online user payment service. Several of our other media houses will soon be following suit because quality journalism has never – and will never – come cheap. We have established Schibsted Payment to facilitate simple payment solutions for all of our companies' customers, for buying everything from second-hand bikes on FINN.no to quality content in our newspapers. These are some of the measures that will make increased user payment – and consequently financing of quality journalism – easier to sustain in the digital age.

Reorganization is often a painful process, and no leader wants to subject his employees to uncertainty and anxiety, including me. But if our media houses are to fulfil their societal role in a new digital age, the changes must come now. The print newspapers will still be important for both readers and advertisers in the years ahead, but we see how they are being increasingly challenged by the digital media, and this is a situation we must address. When readers and advertisers are using increasingly more time and resources on social media, and the public debate is gradually moving to Twitter and Facebook, it is vital that we fight for quality journalism. We must produce content that is so good that people are willing to pay for it on the platforms on which they want to be reached.

The media houses and good journalism are part of Schibsted's soul, shaped through the course of a long history. We want to bring the best of our history with us into the new age, developing it and adapting it to the new digital world. We must become even better at exploiting the huge potential that lied in digital journalism. As an example, the ability to store large datasets and produce journalism from it, as Bergens Tidende did with its award-winning project "Døden på veiene" (Death on the Roads). We can become even better at exploiting the possibilities for combining live images with text. And we will be able to involve our readers in a totally new way in digital media than we can in print. These are all examples of exciting possibilities that we can continue to develop.

When we harbour ambitions of building digital media houses of world-class standard, this means:

• We must also deliver quality journalism on digital platforms.

• We must lead the way in finding new quality content and new sources of revenue.

• We must derive most of our revenues from digital courses (VG and Aftonbladet already have the majority of their ad-revenue from digital sources).

• We must create the most effective organizations possible to realize these ambitions by means of more collaboration, continuous improvements and competent people.

We have been operating in the digital environment since the mid-90s. We have invested, we have stayed the course, and we have tasted success. Changes in media habits are gaining momentum, and we now stand at a watershed moment in history. The future has arrived, and we want to be involved in shaping it. Employees with high developmental potential and our good relationship with our readers and users give us every reason to be optimistic about this future, even in a situation that is extremely trying for many. Never before have we delivered better content in so many channels to so many people as we do today. We therefore have excellent prerequisites for being able to build digital media houses of world-class standard; settling for less should not be an option.

Published: 9/18/2012 9:11 AM
Last updated: 9/18/2012 9:14 AM