New Digital Model Just Like Last

Michael Hedges May 30, 2013 Follow on Twitter

Even for the most conservative media executive, balancing the need to innovate with operational reality requires a leap of faith. As the new media people chant “the whole world has changed” there are reporters and editors to feed. Executive instinct is to do something, sooner preferable to later. Executive survival instinct is to re-package and re-name.

To the baited breath of media watchers far and wide big German publisher Axel Springer gave details and timetable this week to a paywall for the online version of tabloid Bild. Like most publisher forays into online paywalls, some material will remain free-to-see but not exclusive content and the monthly tariff changes increases with the number of platforms offered. And, too, the paywall project – BILDplus – is branded as a benefit.

“Independent journalism has its place in a digital world only if it is funded by advertising and circulation revenues, just as in the traditional print media,” said Bild Group president Andreas Wiele, in a statement (May 27). The Bild.de online paywall will rise June 11th. There will be a one-month trial subscription offered at €0.99. Depending on platform choice – web, smartphone app, tablet app, digital paper, real paper – folks will be paying between €4.99 and €14.99 per month. Eventually, Bild buyers at the kiosk will find a unique code with which to access online content.

Bild has the biggest print circulation of all German dailies, just over 2.4 million, and website traffic is astronomical, 273 million visits in April, according to audit bureau IVW, up 29% year on year. Axel Springer posted record pre-tax profits in 2012, €628 million, allowing considerable flexibility to experiment. (See Germany – Major Media – Publishing in Resources here)

Online paywall critics, often from the world of advertising, consistently ring alarm bells warning of lower website traffic, potentially damaging brand strength and, worse, chasing away eyeballs for those lovely pop-up ads. Publishers – and others – have discovered that online users increasingly find those ads irritating to the point of a turn-off. With digital ads bringing in fractional revenues to publishers and broadcasters the paywall decision may not be easy but it’s very logical.

There is for the Bild.de paywall an ace in the hole, so to speak. Axel Springer acquired certain Bundesliga football rights, reportedly for €24 million, and will offer exclusive video highlights to BILDplus subscribers starting this August for just €2.99 more. Digital strategies are video strategies putting publishers in competition with free-to-air broadcasters and pay-TV operators. Indeed, the realm has blurred.

German publishers along with counterparts across Europe continue seeking digital revenue from all possible sources. Suing search engine company Google for copyright infringement has been a popular strategy though bearing little financial fruit. Governments friendly with or in fear of big publishers voice support for one sort of “Google tax” or another then gasp in horror when Google or European Commission lawyers explain reality.

Earlier this month a report from news weekly Der Spiegel (May 11), partly owned by Gruner+Jahr, citing “informed sources” said Axel Springer had allocated €50 million for “structural changes” largely affecting Bild. Operations would be consolidated and up to 200 jobs lost. The publisher, said Der Spiegel, is looking reduce Bild’s operating cost by €20 million.

Asked about the Bild.de paywall at a Hamburg media conference this week, Axel Springer CEO Mathias Döpfner said he has “fingers crossed.”

See also in ftm Knowledge

Media in Germany

Home to Europe's biggest broadcasters and publishers, Germany is a highly competitive media market. Transition to digital television was easy, other media not so simple, unsuprising with Germany's complex regulation and business structures. This Knowledge file reports on media leaders and followers. Includes Resources 214 pages PDF (July 2013)

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