by Zenzele Ndebele
“Never stand still. When you are still you are dead.” These were the words of Dr Torstein –Jorn Klein, President of Gruner+Jahr International as we set in his office in Hamburg, Germany talking about the impact of digital media on print. Gruner + Jahr is one of Europe’s biggest magazine publishers with 300 magazines and 150 websites in 30 countries. It is one of the business divisions of Bertelsmann. Last year the company had revenue of 2.287 billion-euros, 34% of this income came from advertising. Despite its success the company has seen sales of some of the products going down over the years because of the digital media. The question is, will print media exist 10 years from now? Dr Torstein says, “Print media will not die but it will go down.” He says in western countries media houses are already feeling the impact of digital media but in the developing world especially the BRIC countries, print media is expanding and the question is for how long ?
One of the titles of G+ J Geo magazine at its peak had a circulation of 600 000 copies a month and that figure has gone down to 300 000. The company says 80% of its readers are loyal subscribers who believe in the brand. The company says its success can be attributed to its strategy. It has about 8 segments -women, decorations and cooking, people, science, news and business, parenting and the automotive magazines.
Dr Torstein knows that digital media is a serious threat to his business and many others who are in the print business. Companies realise that the end user just needs to have something interactive. They realize that with any form of print media, whether it is printed and in someone’s hands, or whether it’s the search results of a Google search, it has the same effect. The person reading the content has control over how long they spend looking at it? Therefore, they know they need to keep it coming, even better than before, to compete against the Internet age. “Digital media is taking time from the consumer,” Dr Torstein admits.
All these cheap tablets and mobile phones that are being released into the market everyday change the habits of readers. People no longer rush in the morning to buy a newspaper because all the headlines are on Twitter. It’s even better now because they do not only have the headlines of local news but global stories as well. Even those who did not watch Michelle Obama’s speech the previous night are bombarded with tweets from the convention summarising the speech. Not only does the person get the news but latest music, video games, news apps, latest from the fashion world, latest tech invention, etc a ll in the mobile phones or tablets. Be it an ipad or a no name tablet it does not matter. The digital tools offer more than what the newspaper or magazine can offer you. It is true that newspapers are good for analysis but how many people go for that? In the US, the Internet has for the first time overtaken newspapers as the primary news source. People are just accustomed to having the Internet available in their pockets on phones and small tablets.
G+J knows the ground is shifting and they are positioning themselves. Dr Torstein says the way forward is to acquire digital companies. The company is planning to launch a digital unit this year. This new unit will focus on the development of digital media formats and innovative websites and mobile features across all Gruner + Jahr brands in cooperation with the G+J publishing groups. The group already owns a digital media company in India Networkplay. Networkplay is India’s fastest growing digital advertising network with a leading presence on the Internet. Network play was formed in 2008 by Webchutney, India’s digital advertising agency and funded by Capital18, the venture capital arm of the Network18 group. Since inception, Networkplay has successfully executed its vision of creating an effective and scalable advertising solution across all digital platforms. Over the last 3.5 years, the company has grown at a rapid pace to reach an execution capability of over 4 Billion impressions per month across 500 publishers and 350 advertisers. The company is also planning to acquire stakes in a mobile telephone company in India. That way it will have access to the consumers in the digital world.
G+J is also having online presence in China running one of the most successful women magazines RAYLI. The online version has 500 000 subscribers mostly women between the age of 25-30 years who subscribe 60 euros every month to receive fashion tips on their phones every morning. The trick with websites is to add a lot of content so as to drive more traffic to your website, that way you can be able to charge more for advertisers. One of G+J ‘s magazines STERN charges about 65 000 euros for a full-page advert and their website charges 6 times less for the same size advert. The financial times is also one of the few Newspapers who have managed to make money online. In 2010 Marjorie Scardino, CEO of the paper’s parent company Pearson Plc, reported that online readership grew 27% up to 149,000 viewers within the last six months. Registered users also climbed 77% to 2.5 million subscriptions. While most of Pearson Plc’s profits were driven by its educational and book publishing operations, Scardino was pleased to announce that FT group turned over operating profits with digital revenues contributing more than 25% of the total.
The Significant amount of the FT’s success is due to its iPad app. In 2010 the Financial Times’ iPad application received an award for “Best iPad App” at the 2010 Apple design awards. The application’s merit goes beyond rhetoric, as roughly 250,000 users have downloaded it. Furthermore, Scardino cited that users of the Financial Times’s iPad application spend an average of 25 minutes on the application.
It is very clear that the digital media is threatening the print business and only those who are not “standing still” will survive.