Earlier this week, I was thrilled to receive an email from Torry Pedersen, CEO of VG, Norway’s biggest newspaper and Chairman of VG.no, Norway’s biggest online service.
I became obsessed with Scandinavian newspapers earlier this decade as one after another, they migrated from broadsheets to tabloids. I used to annoy my coworkers with my love of saying their names – Aftenposten, Svenska Dagbladet, Dagens Nyheter…..
But my favourite was VG. Though its name is not nearly as fun to pronounce, everything I learned about its editorial and management strategies revealed that their teams certainly knew that a newspaper should reflect, affect and connect a city and the people who live there.
Torry had read my post on the 10 lies newspaper execs are telling themselves and wanted to share an article he wrote for the Tinius Trust 2008 Annual Report. You can see it here, it starts on page 27.
VG.no is profitable. In fact, 40% of their media house’s ad revenues and almost 38% of total profit now come from their digital business.
Fantastic results by any standard. Interestingly, Torry doesn’t believe that news organizations should be integrated (Lie #1). From his article:
“According to a survey by Zogby International, an overwhelming majority of the world’s editors – 86 percent – are convinced of the blessings of integrated newsrooms. Staffed by journalists so effortlessly versatile that they will manage to produce high-quality material for both the online and print editions day in, day out. Miraculous powers are attributed to integrated newsrooms. They are expected to secure the future of newspapers. They are the holy grail of editors – and managing directors. Personally, I dissent”
Why?
He later goes on to explain that:
“All content produced for the print media is periodic. Either daily, weekly or monthly. The Internet is an environment that is suitable for continuous journalistic production. At its best, this is often done in dialogue with readers. Their presence and experiences become an integrated part of the final journalistic product. These are two ways of working that obviously require different specialist skills”
How does this tie to revenue?
“The online business model – which relies almost entirely on advertising for revenues – means that the market leader receives a disproportionate share of the revenues.”
“…newspapers with a joint organization for their online and print editions are unlikely to make much money online. It is impossible to capture the valuable number one position with that kind of organizational structure.”
Amen.
So why is Torry so smart? Before he was CEO, he used to run VG’s online business, which is a separate company. I've often thought that the first newspaper that will win on the web will be the one that puts a digital person in charge of the whole organization.
When I asked him why North American newspapers have been so afraid of the separate online organization, he replied that “My observation from Scandinavia – and I have to underline it is distanced – is that the papers in North America focus more on cost savings then really mastering the transformation everyone know will take place – from analogue to digital.”
Yup.
Incidentally, I also received an email from Luis Alberto Ferre Rangel, editor/owner of El Nuevo Dia who seems to be making the case for the integrated newsroom. He and I may disagree on this point, but I like the way Luis made his case:
“We (the org and the newsroom) are disrupting from the inside and managing the transition from the industrial to the digital model. It’s ugly and it’s nasty. We will stumble and make mistakes. But we will get it done, through outsourcing, new hiring, training, investing, and a powerful vision that guides us. We are creating a new company. Period.”
I’m going to stay in touch with Luis as he transforms his organization. Something tells me that both VG and El Nuevo Dia will still be around when the dust settles.
Very interesting post!
You may be interested in the following blog post: http://www.betatales.com/2009/08/10/where-everybody-visits-newspaper-sites/
It describes how Norwegian newspaper web sites, with VG topping the list, is reaching a huge number of visitors. In fact, many of the newspaper sites would be on the top list if they had been published in English ...
Posted by: John Einar Sandvand | 09/07/2009 at 07:27 PM