Think Tank

Holger Kansky: “We are talking about growth again, and setting ambitious goals for the future German News Media”

Holger Kansky is Head of Digital & Marketing at the German Association of Digital Publishers and Newspaper Publishers (BDZV) in Berlin. He studied German language and literature, journalism and economic policy at the University of Münster. Kansky started his professional career in 1999, initially as an online editor at Bertelsmann Springer in Wiesbaden. At the same time, he completed an MBA at the University of Mainz before moving to the BDZV in Berlin in 2006.

Ioana Straeter – Holger, we would like to understand more about the latest trends in Germany’s news media when it comes to topics like digital subscriptions, product development, data, digital distribution. My first question to you is about digital subscription success models in Germany. What have you seen that works?

Holger Kansky – In Germany more than 80 percent of all newspaper brands have implemented a paid content model. Around 70 percent of these use a freemium model.

Bild+ from Axel Springer has the most digital subscribers in Germany and is one of the top ten most successful digital journalistic paid content offerings worldwide. We are talking about growth again. The time for shrinking is over. The total of print and digital subscribers has a growth rate for the first time for years now. One example: NOZ Medien reports that they are no longer losing subscribers and total numbers, but for the first time actually have more paying subscribers than in the same quarter last year. Publishers have set ambitious goals for the future. For example, the Funke Mediengruppe wants to increase the number of paying customers across all newspapers from 850.000 to 1.000.000 by 2025. Half of these are to be digital. To achieve this goal, Funke has introduced new organizational forms and KPIs. Workflows are changed to be product and user centric, and data is the basis for all decisions.

IS – What about membership models?

HK – Membership models have hardly played a role at German publishers to date. In Germany, the titles of the Holtzbrinck Group are experimenting with the membership model. Die Zeit has been successful in this respect. The publishing house invites the customers to readings, and congresses, uses dialog formats to engage them in conversation, even in the case of disputed issues and markets knowledge or lifestyle products that are in line with the high brand aspirations.

IS – Getting customers to subscribe is a crucial first step. But the next step in the process is keeping hold of them. You don’t want to lose them, and you also want to grow. Tell us a little about how growth hacking and churn-reduction are working in the German market?

HK – That’s a very relevant question. And in this regard, one fact is important; active readers don’t cancel. The more the publisher creates contact points with their subscribers, the more likely they are to remain subscribers. For example, customers who subscribe to a newsletter, download an app or read articles by specific authors or on specific topics are more likely to renew their subscription. The goal must be to encourage engagement, to avoid cancellations. And this can be done, for example, with newsletters. Website users with a newsletter subscription are more active on the newspaper website than non-subscribers. They generate more visits and page impressions than non-subscribers, and more and more publishers in Germany are focusing on the KPI media time as the target figure for being successful in the digital subscription business. The key figure of “media time” refers to the cumulative time a person spends on an online offering. Media time offers numerous advantages. The key figure is easy to understand. Different teams talk about the same goal. Editors can actively influence it, and it helps not only in conversion, but in all funnel stages. The metric can be used to predict digital subscription conversions, but it also helps retain existing customers. More and more publishers want to identify their users at a very early stage by a registration barrier. Registration enables the publishers to analyze reader behavior and create a personal profile. The publisher can engage its users with relevant content or convert them with personalized offers. Another starting point for identifying potential churners is to analyze criteria that indicate a subscriber is about to cancel. So countermeasures can then be taken in good time. At Schwäbische Zeitung data analysts pick up all those subscribers from the subscriber pool who are likely to cancel soon so that sales can initiate countermeasures.

IS – Data analysis and data intelligence are essential. We have seen that many media houses have problems getting the right people on board and using data intelligence and data analysis in their activities. Is that your experience too?

HK – It’s very difficult to get the right people to analyze data, but it is a very relevant topic because media companies must regain control over their data. Data is indispensable for developing a successful digital business. Digital business models will have no chance of succeeding without analyzing data. Data driven content will have a big impact on journalism in the future. Data helps newsrooms make better journalistic decisions. However, it does not dictate anything; editorial departments have to check their own relevance criteria. If no one reads the story, if no one wants to pay for it, then how important, really, is the content to people?

IS – New digital products are key to success and monetization. Yet product development is still a new field for many media houses. Can you tell us more about your experience with this?

HK – Today, German publishers are focusing much more on a broad product portfolio, much as in other countries. This also allows them to reach more target groups. We have e-papers. They reach the age cohort around 60. We have online products, which reach users around 40, and now podcasts which reach the 30 year olds. Reaching the target groups depends primarily on the output channel and not on the content. So German publishers are developing new products, especially in audio and newsletters, and audio especially is booming. The strong growth in audio consumption offers publishers great opportunities to distribute their editorial content. Publishers are stepping up their activities in this area. Axel Springer has announced its intention to become the leading media company for audio journalism in the German speaking world by 2025. Audio will become part of the company’s journalistic core. The goal is to make every written text also available as audio and to present major topics as unique audio experiences. NOZ Digital, a regional publisher, has an audio team already installed and launched back in 2019. The goal is to put all of the newspaper’s content on the soundtrack and buy a playlist function. Then using artificial intelligence, to give customers the opportunity to listen to individual news stories. Currently, the publisher converts three thirty-five thousand articles a month to audio for its 42 daily newspapers. The Frankfurter Allgemeine Zeitung has an audio paywall for monetizing its text to speech solutions. Last year, Hamburger Abendblatt declared audio content an integral part of its future strategy. There are a lot of activities concerning audio.

On the other hand, there are newsletters which are booming like never before. COVID newsletters have brought publishers huge sign-up numbers and subscriptions in the past two years. That is another activity where the German publishers are growing. In 2019, the Tagesspiegel Checkpoint newsletter was Germany’s first paid B2C newsletter. The Checkpoint has always been much more than just a newsletter for its readers. Only paying subscribers get access to the full newsletter with all the exclusive news.

IS – When you have great products, the next challenge is to distribute them in a smart way. Digital distribution can be very time consuming and challenging. What are the trends you’re seeing?

HK – The digital market and the technology are developing so rapidly that we can no longer afford to think in silos. That’s why cross-divisional teams that work together are exactly the right response to the demands of the market.

Even the best technology will be ineffective if a publishing house does not consistently think and act in a customer-centric way across all areas, I think that’s very important.

Data analysis shows that 75 percent of web content is not read at all. That content therefore makes no contribution to achieving the defining publishing objectives. If publishers want their content to be more congruent with the target group, they must produce new content that they do not have today. Personalization must change the mindset in newsrooms, and it can help keep the value of the subscription in front of the customer. This can mean, for example, presenting a customer with exactly the content they might have missed.

One thing which is very relevant in Germany is data protection. But I think it’s also very important in all European countries. 84 percent of publishers in Germany rate data protection as having a high to existential relevance. Data use is important for maintaining journalistic paid services and user-friendly digital advertising. The obligation to request consent means an additional hurdle in advertising finances. Providers such as Google and Facebook already receive the necessary consent due to their market power. So that’s a problem for publishers and we must work on it. I think one point is very relevant. Collaborating on common challenges helps publishers solve problems and benefits all parties, reducing their costs, time and effort, creating value for all involved. I think we must cooperate more.

IS – With the metaverse, NFTs, and digital currencies we are moving very fast into a new digital world. How do you envision the future of news media in this context?

HK – I think even in a fragmented media landscape, orientation and the creation of meaning will continue to take place by well-known media brands. The network needs strong news brands as a basis for communication. I think this will still be in place and that beyond the stream of news on the net there will continue to be a need for curated quality journalism. We see that hate speech, fake news and disinformation show how important quality journalism is for society and democracy, both today and in the future. The news industry has always made media-neutral offers to its customers. The core of journalism: journalistic independence, credibility, and quality will remain important in future. Of course, publishers will have to continually adapt content and formats to meet the demands of customers, but I’m confident that this will also succeed in the future.

IS – That’s wonderful. Thank you so much, Holger, for your contribution to our knowledge about the German news media trends.

HK – My pleasure.

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