Innovation and development: The Market rules

By Lena K. Samuelsson and Martin Jönsson, Editor-in-chief and Managing Editor, of Svenska Dagbladet, Stockholm

You have to be ahead of the game in terms of innovation and product development. Listening to readers and having the courage to take tough decisions will be the keys to developing the next generation of newspapers.

In Great Britain, an old saying from WW2 has once again become popular in the current deep recession. The appeal to “Keep calm and carry on”, written in white letters on a red background, can be seen everywhere: on t-shirts, posters, mugs and screen savers. Don’t panic, appear unruffled and continue as if nothing has happened.

Maybe that works as a self-ironic British joke during the crisis, but for the media industry it is probably the worst possible advice. Panic or no panic: we cannot continue as before; arguably the problem is that far too many editors and newspaper owners did that for far too long.
And at the moment, the situation is anything but calm.

On Friday, 26 February this year, the media analyst Jon Fine posted an article on his Business Week blog with the following opening: “Think your industry is having a rough week so far? Take a look at the newspaper business.”

He then listed all of the awful news communicated by newspaper owners over the past week. The newspaper chains Journal Register and Philadelphia News (with titles such as the venerable Philadelphia Inquirer) both requested bankruptcy protection, following in the footsteps of the Tribune group and the Minneapolis Star-Tribune. The media giant Hearst announced that it would have to close down the San Francisco Chronicle, which was losing a million dollars a week, unless staff accepted massive cutbacks.

The Financial Times added to the mood of crisis by encouraging staff to accept shorter working hours. The Hartford Courant informed that it was eliminating 100 positions. And on Thursday came the expected, but nevertheless tragic, news that EW Scripps would with immediate effect cease to publish the Rocky Mountain News – one of the most hard-hitting and creative newspapers in the US media landscape, with four Pulitzer prizes over the past eight years.

Fine’s title for the post was resigned and laconic: “And we still have a day to go”.

That has been the picture for the American newspaper industry throughout this brutal spring. In addition to the above, the longstanding quality newspaper the Christian Science Monitor has ceased publishing a daily print edition, the hard-pressed Detroit newspapers have withdrawn their home deliveries on weekdays, and the Hearst group has completely abandoned the print edition of the Seattle Post Intelligencer, which had a 146-year history as a daily newspaper.

More American newspapers are likely to have collapsed by the time this article is published, after the most recent predictions of a 30-35 per cent
decline in advertising revenues and acute liquidity problems brought on by the financial crisis. Dozens of newspaper groups are up for sale, but there are few, if any, people interested in, or capable of, buying them.

It is a wildfire that is spreading, and no-one can be sure at the moment what the consequences will be, neither for the companies nor for society. Big cities that until recently had two or more newspapers may be left without their own daily. Only a few big cities will be left with more than one daily in 2010, predicted analyst Mike Simonton of Fitch Ratings in a New York Times article.

On the day that the last Seattle Post Intelligencer was printed, the Financial Times published an obituary for the American newspaper business: “In loving memory, 1764-2009″. The obituary talks of its long, hopeless battle against an ageing readership, inflexible cost structures, excessive levels of debt, new Internet-based competitors and an arrogance and unwillingness to change at newspaper groups that had long enjoyed a virtual monopoly in the market for readers and advertising.

That is an appropriate description. The crisis in the media industry is not universal, even if it is being felt by everyone, on account of the economic collapse and the side-effects of a financial crisis that has spread across the globe faster than ever before.

A large part of the problems of the US press appear instead to be self-inflicted, precisely as described by the Financial Times. Many newspapers have clearly failed in their attempts to develop their print editions and websites, thereby increasingly losing touch with the needs of their readers and advertisers.

That laid the foundations for the appearance of new, mainly digital competitors – and when the structural transition to a new media landscape was combined with a deep recession and credit freeze, all of the industry’s problems came to the surface in what can only be described as a complete collapse. Newspaper groups are falling by the wayside, and in many ways it is too late to do anything but stand idly by and watch.
Svenska Dagbladet has also been there – almost. Suffering from long-term problems at the end of the 1990s, and hit by acute crises into the 2000s.

The first drastic decisions, taken in 2000, were to cut staff numbers, move to new premises and become the first morning paper to start using the smaller tabloid format.

Those were big steps forward, but it was clear that they were not enough. At the end of 2001, the newspaper was at death’s door, but it was saved at the last moment.

On a grey November day, when Schibsted’s Board of Directors entered a conference room in Apotekergaten in Oslo, everything suggested that SvD would be closed down, but after a heroic effort by Gunnar Strömblad, who was CEO at the time, the newspaper was given a stay of execution.

However, one big problem remained: readers were not happy. Focus groups carried out at the time delivered a crushing verdict against the new tabloid. Not against the format, which was an immediate success, but against what had happened to the brand. The newspaper was described as muddled, vacuous and on the point of losing its identity.

That sounded the starting pistol for a reinvention of the paper, focusing on the high quality that had been associated with SvD since 1884. That process has never really finished, and today we are in a state of continuous development.

The first measures involved creating a more unified newspaper, with a greater degree of harmony between its various parts, a logotype combining the new with the old and much clearer navigation, to make it easier to find the newspaper’s contents.

There was a heavy focus on the realisation that not all readers had the same needs – or the same amount of time. The aim was to make it possible to read the paper in three minutes, through quick guides and a clearer layout, but also in 30 minutes, by reading additional material, more news-related graphs and different outlooks on the articles – or three hours, for people who wanted to make use of all of the in-depth material.

This was the start of the transformation of SvD into a modern newspaper, with a focus on its readers and clearly defined target groups. The newspaper stopped seeing itself as the second newspaper on the market, and decided instead to be the leading newspaper for its target group: modern city-dwellers. Editorial choices and prioritisations were made more visible. We decided on new keywords for our journalism, which later became the core values for the whole of SvD: essential, informative, involving and useful. We formulated a vision: a natural part of a Stockholmers’ day.
The impact was obvious: circulation figures and revenues increased, and with them our self-belief returned.

On Thursday, 20 November 2003 the mood was great. All of the staff had gathered to celebrate with champagne that SvD had won Stora Journalistpriset, Sweden’s leading prize for good journalism, for the first time in many years. The winners Björn Hygstedt and Ulla Danné were congratulated. Their exposé of the abuse of power and extravagance at the Stockholm public transport company was a journalistic triumph and an extremely important symbol of the whole newspaper’s progress.

But the joy did not last long. The very next day, CEO Gunnar Strömblad was forced to convene another meeting, this time to pour cold water and not champagne: the free newspaper Metro’s real estate supplement had taken almost 50 per cent of the real estate advertising market in Stockholm, which would cost SvD over SEK 75 million in lost revenues over the coming year. These were difficult times. The contrast between success and crisis could not have been greater.

We learnt two things from this. Firstly that success is a vulnerable position, which you can never take for granted, and you must therefore always be a step ahead in terms of innovation. Secondly that it is possible to recover lost ground if you are good enough at understanding customers’ needs.

Because that is what happened. Aiming for the more expensive market segment – and listening to the needs of estate agents – we created Magasinet, a quality real estate supplement. And segment by segment we recovered market share, until the free newspapers were forced to pull out of the whole market, and in fact real estate advertising was the key to SvD achieving record profits in 2007.

The transformation of SvD continued alongside the battle for the real estate advertising market. In the autumn of 2004 we launched the “new SvD”, with an even more user-friendly, colour-coded design and three clearly profiled sections, with the business section being elevated into an independent business paper ready to take up the fight with Dagens Industri for business readers. This also enhanced SvD as a target group newspaper – and gained us ever increasing numbers of readers. Over the following three years, circulation rose by 16,000 copies in total, in a market where virtually all other Swedish dailies were suffering increasingly rapid declines in circulation.

A major brand survey also revealed that the strategy of combining a daily newspaper with a business paper had been a success: financial news was now the area in which SvD distinguished itself most clearly and scored highest.

Spring 2005: On Drottninggatan, a stone’s throw from the SvD building in Mäster Samuelsgatan, the editor-in-chief, CEO and other staff members hand out both SvD and the competitor Dagens Nyheter to passing Stockholmers. A total of 40,000 newspaper packages were handed out over the course of a month, as part of the campaign “The challenge”. It was time to get DN readers and non-readers to notice all of the positive changes to SvD, and to show them that it was a modern and distinctive morning paper. Anyone signing up for a trial subscription would be given their money back if they were not satisfied.

But there was an ulterior motive as well: to listen to readers again and to work out the direction for the next stage of our development.
We asked readers to tell us, over the Internet or by text messages, which newspaper they preferred. The result was a big success for SvD on weekdays, when readers preferred us – but, as we suspected, DN was seen as clearly better at weekends.

The lesson was clear: improve the weekend edition.

In the autumn of 2005, a working group was set up to improve and revamp the weekend papers. But not by adding new products and more paper, but rather by giving a radical overhaul to the existing material.
The idea was to enhance the areas that our readers already appreciated: the business section, the cultural material and the in-depth news. Three months later it came up with a solution that is unique in the world of newspapers: one newspaper and two magazines, N and K.

The “Daily paper magazine” combined the news and current affairs focus of the daily paper with the more personal style, reading experience and extensive photo-journalism of a magazine. The magazines were supplemented by an in-depth current affairs report in the news section, making the Sunday edition – when people really have time to read – an “SvD de Luxe”, without consuming much more paper and resources.

This was an immediate success, helped by us offering the option of a “weekend-only subscription”. That is something that the industry has been desperate to steer clear of, fearing that it would encourage many readers to cut back from a 7-day to a 3-day subscription.

But our reader surveys had revealed that many readers wanted precisely that – and we assumed that it would allow us to keep subscribers who would otherwise cancel their entire subscription with us, and also to attract new customers from non-readers and other newspapers.

We could see a parallel with how airlines had held out for as long as they could against letting customers book one-way tickets, so as not to lose out on the more lucrative return tickets – but were eventually forced to give in to the wishes of customers. We therefore felt that listening to the clear wishes of our readers would give us a definite competitive edge.

The result was incredible. We gained lots of new readers – many of whom we later succeeded in converting into full subscribers! – and avoided losing a large number of existing subscribers. Overall, our revamp of the weekend editions led to an increase in circulation of almost 10,000 copies per issue. And everybody loved the new Sunday paper. Dagens Nyheter no longer dominated on Sundays, now SvD did. We met the challenge laid down by our readers, and both of us came out as the winners.

The launch of the Sunday magazine also had a major, decisive impact on the whole newspaper: it laid the foundations for a transition to increasingly in-depth and agenda-setting reporting in the print edition of our newspaper, whilst updates on the latest news increasingly became the domain of our website.

The success of the changes to our weekend editions made us prioritise work on customer and reader insight: what did they need SvD for, in an increasingly fragmented and fast-moving media landscape, with explosive growth in the number of traditional and social media offerings.
Several processes were initiated at the newspaper during 2007 and 2008:

Better analysis of the world around us, with seminars for the whole company to ensure that knowledge about what was happening in the world was spread to as many people as possible – and initiated a discussion about what impact these changes would have on SvD. • Review of the organisation, with a step-by-step project to create a channel-independent, integrated editorial and sales organisation. • A comprehensive channel analysis, which looked at the strengths and weaknesses of the various media channels, and laid the foundations for a new channel strategy, highlighting the need for the same quality ambitions and values in all of our channels, but with greater variation and differentiation in the nature of the journalism, in order to fully exploit the various channels. • A thorough brand analysis, which showed clearly that SvD managet to retain the core brand perception that the SvD was a serious, high-quality newspaper, but that we were also managing to make it more relevant and interesting. • A reader survey, which segmented our most important groups of readers. In conjunction with that we also published a special edition about our readers, with staff being asked to interview one reader about his or her media habits and relationship to SvD. This was enormously important in terms of highlighting the needs and changing media consumption habits of our readers.In spring 2008, with an economic downturn clearly approaching, and in view of the excellent foundations that had been laid, there was a real sense of urgency amongst the SvD management. The downturn had not yet hit us – on the contrary the spring of 2008 was the most profitable period in the newspaper’s history – but it was obvious that both the downturn and the more structural changes to the media landscape would very soon create problems for the industry.

It was time to ask ourselves where we were going – and how. Yet again.
Over the course of a few months we carried out a thorough strategic review, and then decided to implement “SvD 3.0″: the newspaper’s biggest ever development project, which would aim to perform a complete review of what we offer readers and advertisers, through all imaginable channels.
Today we are very glad that we started that process of change back then, before the financial crisis led to the collapse of the market. It was an important statement that the development of the newspaper must be at the heart of what we do, even in tougher times – and the timing gave us a head start on the market, where we are now seeing that panic measures to reduce costs are leading to a complete halt to all kinds of development work in many areas. SvD has, of course, also implemented major cost-cutting programmes over the past half year, with the aim of reducing our long-term costs, but we have done so without slowing down on vital innovation. Today SvD has an organisation that is significantly smaller than those of its competitors, but tailored to our tasks and the journalism we want to do in the future.

Several concrete results have already been produced by SvD 3.0. For example, we have launched a new way of working with our brand: SvD accent, which offers readers carefully chosen journeys and inspiring experiences.

A fundamental lesson that we learnt from the success of N&K was that the needs of readers and advertisers are genuinely different on weekdays and weekends. In spite of that, in many respects the classic daily looks very similar seven days a week. We are now looking to change that.
In January we took a further step towards differentiating between weekdays and weekends, by trimming the weekday paper and making it more compact, to help the stressed-out weekday reader, and by making choices and prioritisations clearer. Meanwhile we enhanced the in-depth profile of the weekend, focusing on topics that we know our readers are tremendously interested in: food, travel and the Idag section’s series of articles on lifestyle and family issues. We also launched a new section, Food & Climate, which is entirely based on the questions that readers ask us, and exploits the knowledge of our special reporters.

Readers’ questions are a way of increasing interaction and strengthening our relationship with readers, both in the print edition and online. The same strategy underpinned an editorial innovation that we launched last summer: open series of articles. There we worked in a completely new way from an editorial point of view, by using ads and the Internet to invite readers to take direct part in creating the series of articles, through their questions and experiences. The response was enormous, and the results were a great success, creating a new kind of journalism. After we explained our approach at Schibsted’s Next Generation Newspaper project, several other newspapers in the group have been inspired to try out the same method.

The open series of articles and Food & Climate are examples of how we draw on
reader knowledge in our everyday work. But they also show the importance of the Internet and in terms of driving future development and building our brand.

In the industry today, there is great and obvious frustration at the difficulty newspapers are experiencing in getting the business model for news journalism to work online, while the Internet is taking an ever greater slice of the advertising revenue cake.

SvD’s Internet strategy has changed as a result of the channel analyses we performed, and is now based on more pillars than “merely” creating a profitable advertising business online:
• The importance of the Internet to brand-building
• The importance of the Internet to gaining new subscribers
• The importance of the Internet to developing new advertising partnerships
• The importance of the Internet to developing our journalism and building relationships with our readers

In a world where telemarketing has become an increasingly blunt instrument for gaining new subscribers, has become our most important platform for getting new customers – and strengthening our relationship with existing ones. Our Christmas gift campaign, which allowed subscribers to create digital packages and give away trial subscriptions, was a great success and provided a real boost to subscriber numbers. The campaign, which had been created internally, was rewarded with a gold diploma at the marketing competition Guldnyckeln, for its creative use of the web and e-mail in marketing.

One of the fundamental pillars of our digital strategy is also to increase the differentiation between our journalism in the various channels. “Uploading the print edition onto the Internet” is a hopeless strategy, which only weakens the print product. Our focus has instead been on exploiting Internet-specific formats as much as possible: real-time reporting, web TV, slide/audio shows, quizzes, blogs, blog links, twitter streams, reader discussions, etc. This means that the print and online editions support, rather than cannibalise, one another. We start out from the needs of our readers, are more innovative in the various channels – and then attempt to link them.

This strategy has led to fantastic growth for during 2008-2009. We have taken market share from our main competitor, achieved record readership and increased advertising revenues, in spite of the current market crisis. That gives us great confidence in the Internet, without that being a threat to the print edition.

Svenska Dagbladet is not Sweden’s biggest newspaper, but we are the biggest and most important newspaper for what we have defined as our target group – and we plan to continue “capturing our Stockholmers”.

Even in the deteriorating economic climate we are continuing to take market share, whether you look at circulation figures, readership or advertising. Readership figures reached an all time high for both our print and online editions in 2008 – and the on-
line edition has broken visitor records time and again in the spring of 2009. And for the second year in a row, SvD Näringsliv has been voted Sweden’s best business paper in the ranking produced by the directors of Sweden’s listed companies and industry analysts.

We believe that it is a question of daring to listen to readers and advertisers – and of acting on what they say. Being more relevant, meeting their needs better and being better at understanding what their media habits look like and how they are changing. It is impossible to force people to read things that they don’t want to read, especially in the highly competitive modern media landscape. But whichever newspaper is best at matching its content and overall offering with readers’ needs will become essential to them – and in that case they will be willing to pay.
SvD does definitely not have the greatest resources: we currently have around 195 people on our editorial staff, compared to around 315 at Dagens Nyheter – and our business paper SvD Näringsliv has only around 30 members of staff, as opposed to over 130 at its competitor Dagens Industri. But responding to crises and the clarity of our priorities has made the organisation incredibly efficient: less hierarchical, more operational and very productive. We have also created a more integrated news organisation to cover our various channels – and we are now implementing the complete integration of the print and online editions in all areas.

The next step towards making the organisation more efficient will be the new Schibsted Sweden, which will aim for cooperation between the Swedish papers where possible. Work on linking our administration with Aftonbladet, including shared IT and service functions, has already started, and in the long term, when we can move to shared premises, we see great potential for cooperation at other levels, in order to make development work more cost efficient and to ensure that the resources of the editorial staff in so far as possible are used to develop the things that are unique to the brand and decisive competitive factors.

We are convinced that it will even be possible to cooperate at an editorial level, provided that we are creative and innovative enough, without that damaging the unique characters of the two brands.

A first move in that direction is being launched this spring. SvD’s and Aftonbladet’s Op-ed writers, who belong in completely different political camps, will start broadcasting a joint web TV show. That will make the differences between then a joint strength – and will create something new and unique in the market.

We have learnt a lot from our journey between crisis and success. And we plan to stay ahead of the competition. Innovation and development, listening to the market and protecting our brand will maximise our chance of enduring the crisis, however deep it may appear, and coming out the other side as one of the winners.

5 keys to success in the newspaper industry:
• Newspapers must dare to make tougher choices and refine their profiles based on readers’ needs
• Newspapers must genuinely listen to, and interact with, their most important target groups
• Newspapers must dare to differentiate more between print and digital media, and exploit the unique strengths of the various channels
• Newspapers must become much more open to the possibilities offered by other kinds of journalism than traditional articles
• Newspapers must be more innovative and open to good ideas from outside, both in terms of their journalism and business models.

The autumn will see the next major change, within the framework of the SvD 3.0 project. At the moment we are listening to what readers think about our ideas in broad-based focus groups. And it sounds positive.

They are getting a sneak preview of a next generation newspaper – and they like it. Now our challenge is to deliver it. Every day.

Lena K. Samuelsson is Editor-in-chief of Svenska Dagbladet. She came to Aftonbladet in 1989, where she rose to the position of Deputy Editor. She spent the years 2000-2001 in Cologne and Berlin, working for Schibsted International, and when she returned to Sweden she was made Deputy Editor of Svenska Dagbladet. The following year she became Editor-in-chief.Martin Jönsson is Managing Editor of Svenska Dagbladet, and a visiting professor in practical journalism at JMG, the Department of Journalism and Mass Communication at the University of Gothenburg. He has previously headed and SvD Näringsliv, and worked as a media analyst, producing Sweden’s most influential media blog. Martin Jönsson has been Editor-inchief of titles such as Journalisten, Nöjesguiden, Bibel, Civilekonomen, Dagens Debatt and Svensk Export.

A selection of the awards won by SvD:

  • Stora Journalistpriset (“The Great Journalism Award”) 2003, 2004
  • Newspaper of the year 2005
  • Sales organisation of the year 2005
  • The world’s best designed newspaper 2005
  • The Swedish Design Award 2006, 2007
  • Media website of the year 2007
  • Business paper of the year 2007, 2008
  • Europe’s best designed newspaper 2008
  • Sales organisation of the year, Schibsted Sales Awards, 2009

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