Brukerinntektene i mediebransjen i Norge øker. Men brukerinntekter vil ikke løse alt. Hva gjør vi nå?

Programleder Kjersti Løken Stavrum har i denne episoden besøk av professor Lucy Kueng. Hun er en internasjonalt anerkjent ekspert på strategi, innovasjon og lederskap med et sterkt fokus på konsekvensene av digitalisering. 

Kueng mener mediebransjen må brette opp ermene:

– We’re going to have to fight harder. We’re going to have to be more purposive. More curious. And not work on the basis ‘everything’s gonna work out’, sier Kueng.

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Under finner du en ren avskrift av alt som er sagt i episoden. Vi gjør oppmerksom på at Lucy Kueng ikke har fått forberede seg på spørsmålene. Intervjuet er gjort via telefon.

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Kjersti Løken Stavrum (KLS): (In Norwegian) Hvordan blir fremtidens mediehus? Kommer vi til å forholde oss til redaksjoner slik vi kjenner dem i dag? Hvilken rolle kommer journalistikken til å spille? I ti episoder av podkasten Tinius Talks skal vi se på ulike sider av de neste utfordringene for mediehusene. Hvem er de nye mediebrukerne? Hvordan vil mediene gjøre hverdagen vår bedre, og hva vil de bety i samfunnet? Og jeg som snakker heter Kjersti Løken Stavrum, og er daglig leder i Stiftelsen Tinius.

(jingle)

KLS: In this series in the Tinius Talks, we are exploring the future of media houses. And today, we are lucky enough to have professor Lucy Kueng with us. And I would very much like to give her a proper introduction so that you all understand why we are so eager to talk with her in this podcast because Lucy is a professor and expert on strategy, innovation, and leadership with particular emphasis on managing technology shifts. And she is a professor of media innovation at University of Oslo, and has been a senior visiting research fellow at Reuters Institute. Welcome, Lucy!

Lucy Kueng (LK): Thank you! Nice to be here!

KLS: Very nice to have you here. And I would like to start with the report that you made by the Reuters Institute back in 2017 already, called ‘Going Digital.’ Because in my opinion, it was quite widely quoted, and your message was very clear: You said that the legacy media need to put as much emphasis on transforming their organizations as they do, transforming their content. So now, this is two years ago: How did that go, you think?

LK: I think the message was really well received, actually. I think a lot of people had realized that after transforming – attempting to transform the business model and transform the product, they kind of realizes that the organizations needed a lot of work. So, the resonance was really good. I think… My sense is: One of the kinds of deep-seated issues in the media industry, in general, is it doesn’t have a very well developed management organizational muscle.

LK: A lot of the passion, the commitment, and the energy is focused on journalism. On the product. On the content. And I think the issue which that report flagged up, and which I am looking at more in the research I am working on now, is: This need to become an incredibly sharply smartly run organization. And that’s – that’s quite a big shift I think, and it’s a shift that if it happens really transforms every bit of the organization from the culture how people think to how roles are defined to how leaders lead to how strategy is communicated. So I think it struck a chord, but I think there’s a lot of work to be done still.

KLS: Yeah. Could you try to be more specific in a way? What are you looking for in the newsrooms? What will be the good signs of working with the organizations, and what will not be the good signs for that matter?

LK: I think the trick is actually being very systematic. On the one hand, looking at the whole organization as a system and being very thoughtful. On the other about what you change and what you don’t. So I think it’s in terms of what are the components in the system. What you’re looking at, I think, is a very clear sense of the strategic goals of the organization at that point: What are we trying to do? What is our story? What does this organization have to do to find a viable future? Breaking that down into key projects that need to happen. And then looking at the shifts in the organization. So what I’m finding in the new research is there’s really kind of profound shifts in how leaders lead their challenges in leadership at all levels.

LK: There are issues around culture. What are the values specifically we need to change in this organization? How people look at digital. How people look at collaboration. How people look at inclusion – all of those issues. And then there are … We’ve been on such a ferocious fast-moving journey of change for the last ten years. We’ve created all kinds of new roles. All kinds of new departments. Some of those aren’t working actually as well as we had hoped. So I think we need to be … We need to really clean up the entire organization and ensure that we have designed organizations that are capable of delivering the strategies we’ve set and actually enable newsrooms to really maintain the role they’ve always had in democratic societies. But I think we need to really … Short shorthand, we need to really develop a much more sophisticated management leadership muscle.

KLS: Mmm. And apart from having clear strategic goals, you did not really mention technological or digital skills. How crucial do you think that is within the organization?

LK: It’s very crucial and one of the things I’m looking at the moment the balance between traditional, the legacy, the classic areas, and new digital areas. Because we’ve been putting those digital areas in now for 20 years, right? So there is an issue about how those two are balanced. We’ve all been pushing very hard, you know, digital-first, digital-first, digital-first newsrooms, digital-first processes, and so on. That’s absolutely critical. But we need to think very hard about where does the legacy fit into all of that.

LK: Because for a lot of organizations, legacy is still keeping the lights on. And I think we need to find a way for those two areas to exist in harmony. We need to look at skill sets. Some people only want to work in digital, some only want to work in legacy. Is that tenable? Is that feasible in the long term? If we have … If we’re sort of financially so compromised? So yes, I am obviously very aware of the need to get more digital. But I think we’re hitting a more kind of sophisticated area of going digital right now, which is really about solving this compromise of legacy and digital sit together.

LK: And I mean, some of the things that are coming up in the new research is some of these hybrid roles where you have journalists skills combined with say tech roles or tech skills or data skills or audience skills. A lot of people I’ve spoken to doing those roles, actually have quite a difficult life. They feel they’re not understood. They feel collaboration isn’t where it should be. They’re expected to work through soft power in order to get things done, which is exhausting. They’re burning out. So I think we’re sort of we’ve laid down the top line route march but making that happen we need to look in a lot more depth inside the organization.

KLS: I’m very curious because it seems to me that there are two different takes on the role of the legacy part job of media. Is it a drag, you think, for the development of the newsrooms, or is it unimportant history to bring further on into the digital era?

LK: I think there are many dimensions of that, right. I mean, there is the revenue dimension. Often it’s very important to maintain revenues until the digital revenues have grown to the point that they can be self-sustaining. Am… I think culturally – there it gets very tricky.

LK: Everyone I speak to is saying: yes, we have to change our culture. But the next stage of that is really pinning down which of the prevailing cultural norms and shared values are no longer fit for our journey going forward and which we want to hang on to. And I think there is a risk if we jump to wholesale into digital, we can throw out some very valuable cultural norms. But some of the legacy norms will actually … cultural norms will actually block progress. So I think what I see with culture is this need to, on the one hand, be very open about how you change the culture. But on the other hand, be very kind of forensic and planned in terms which bits of the culture are no longer fit for where we’re going?

KLS: Are there any aspects, you think, that is very important to cling on to in the … when it comes to journalism in the newsrooms?

LK: Well, I think the commitment to the purpose of journalism in democratic societies, you know, the commitment to the public good aspects of journalism is absolutely critical. I think the commitment to serving readers to enriching their lives is really important. I think the challenge there is – we’re in a situation where some of the digital competitors the platforms have a more nuanced understanding of those users than media organizations now have.

KLS: Mmm…

LK: And one of the cultural issues, I think, is reframing … inventing again what being close to audiences really means. Because there are now a set of actors in our world who do that really really well and have a kind of granularity and a volume of data that media organizations will find it very hard to replicate.

LK: So there’s a kind of competitive imbalance that’s come in there now. I mean, if you look at Google: People go to Google because it works so well. And part of the reason it works so well is they know so much about people, so there are all kinds of tricky issues, I think, around that. So I think one of the critical issues is getting much closer to audiences – even closer. I think you cannot over-index on that. And then being very open-minded about what those insights mean for how you do journalism how you do news.

KLS: And I like to bring up a quote you gave in an interview that really hit me hard, I must admit. You warned that if legacy media don’t succeed in the transformation, they could find themself in a position similar to opera in the world of music. And you go on saying that ‘it’s elitistic, it’s expensive, it’s subsidized. People wanted to be there, but they don’t really care very much if they’re involved.’ I find that really hard to read, I must admit.

(laughter)

KLS: Do you hear opera music from the newsroom these days?

LK: Am… I must admit I do. I think. I mean: I think it … The risk is not going out of business with a bang like, you know, Thomas Cook – one of these huge failures in the face of disruption. The risk is just gradually sliding down the food chain, right? Just getting less and less relevant. Less and less time of … a smaller and smaller percentage of people’s time is spent with media houses products. More and more time is spent on the platforms.

LK: They’re less and less clear who created the news they’re reading, so the news is impacting their lives – they just don’t really know where it came from. And I think the challenge for classic media organizations is to stop that drift, which is so slow. But it’s perceptible if you do, you know, enough retrospective analysis you can see a kind of gradual shrinking of markets, but it’s a little bit the boiled frog syndrome: the water’s heating up so gradually you don’t really notice it.

KLS: But how? How do you make sure that that won’t happen? That it’s pop music or modern music you continue playing in the newsrooms?

LK: Yeah, I think that there are a lot of levers you have to pull to make that happen. I mean: I think one of the things one has to acknowledge is structurally the industry is very weak at the moment, right? So we have to acknowledge: we came from a position of greatness of, you know, dominant positions in national ecosystems, but those positions are not as strong as they once were. So we’re going to have to fight harder. We’re going to have to be more purposive. More curious. And not work on the basis ‘everything’s gonna work out.’ So, I think that’s one thing we have to get kind of culturally alert and worried.

LK: So we’re talking about not kind of burning platform which I think just causes people to get the very freaked out and rigid. But really a sense of jeopardy, understand where the journey is heading unless action is taken. That’s one thing. That’s a kind of cultural thing, and that’s to do with leadership from the top. You know, explaining what’s going on. What the strategic story is and why it matters. I think one of the most important tools after that is actually getting in touch with audiences, with customers, with readers directly. I think the challenge is permanently investigating, revisiting ‘how are we perceived?’, ‘who are our users?’, ‘why do we still exist?’, ‘What value are we adding to their lives?’

LK: I mean: If if that value proposition – to use the horrible piece of management jargon – if you are creating real value, then people will acknowledge you, want you to be there and be more open to paying for that value with economic …  in an economic relationship. So I think one of the most powerful things is getting in touch with audiences.

KLS: You’ve just mentioned when we talked about the opera thing that people they get use of news, but they don’t really know where it comes from. And much of the reason for that is the tech platforms. And I know that you’ve been advising the newsrooms to play along with the tech giants and learn from them. But do you still think it’s good advice to play along with the tech giants or should one really try to get them on the arm’s length and see if you can develop something outside the tech giants to get in touch.

LK: Yeah. I don’t think I really advocated playing along. I think the issue is understanding they’re there. And understanding what that’s done to the kind of competitive standing of traditional media. I think one has to start from a place of reality and that reality is relatively … some *medium-sized* organizations often in relatively small markets are now kind of competing against some of the largest organizations the planet has ever seen. 

KLS: Mmm.

LK: So in their heads, they may be mass players, they may be dominant players, but actually they’re really pretty small organizations and pretty underresourced for that kind of fight. And it is, I think, one also has to understand it’s a very asymmetric relationship really. I mean, they need our quality content. It adds value to their platform, but that’s kind of it. You know there isn’t a deeper commitment to journalism, per se, I think. And if you kind of look at Facebook, its involvement in news has been a real nightmare, actually, in some … from some perspectives. 

KLS: I agree. I agree.

LK: Yeah, so… So it’s a very complex relationship. *They* need us for our content. *We* need them because that’s actually increasingly where our audiences are. The challenge is then how do you build a business around that. And what we’re seeing increasingly is being active on the platforms as a kind of form of marketing. As a form of fishing for volumes of turns of audiences. But then one has to kind of pull them back to one’s own platforms. So there’s the terrific issue around brand building, around making sure attribution is there. You don’t want empty reach, right? You want attributed reach. You don’t want just page views, you want engagement.

LK: I mean again … As with all of these things, we hit kind of subtlety and nuance. A kind of layer of subtlety and nuance that’s quite hard. So my sense is for the platforms: one has to be active there because that’s where the audiences are. But one has to be realistic: they’re never going to supply substantial revenues. That’s not the business they’re in. They’re fickle. They can change their strategies as we’ve seen many times. So it is an issue of engaging but being aware of the power balance, I think.

KLS: Mmm. And when it comes to revenue, which is always the painful question for the newsrooms: the main answer these days seems to be subscriptions. Digital subscriptions. 

LK: Yeah…

KLS: So everyone, almost, this is turning in that direction these days. Do you think this is the sustainable answer to the monetization question?

LK: It’s difficult, isn’t it?

KLS: Yes.

LK: I mean, there is a problem around everyone jumping onto subscriptions at the same point, and you know not just the news media … video, you know, the streaming wars that are heating up now. Spotify. I mean, there … I think there is a legitimate question around whereas peak subscription. I mean what I’ve seen during … when I wrote the last report, the last few years have been … I would completely agree with you.

LK: There’s been a wholesale shift from being advertising financed to being reader financed. And that relationship with readers, people have been trying really intelligently to get … to deepen that relationship, to really understand it. Am. So what I see is essentially … yes, a sure … a wholesale shift to subscription models, but I also think a kind of realization once those are bedded in, and the paywalls are up, and the kind of the whole mechanism around payment is *working* – which is the kind of what two-three-four year journey – this realization alone, that’s not gonna be enough. So then I think what we’re looking at is building a whole stream of revenue elements that pet … that feed into the subscription core.

LK: So what I’m seeing is, I think, a new kind of trifecta setting up around newsletters, events, and podcasts. Either as a way of deepening engagement, as of benefits subscription, getting to know users better. So those are the three revenue streams I see, but in some cases, they’re not revenue streams; they’re just kind of marketing tools or engagement tools. And then on top of that, I think e-commerce is coming up. So I think e-commerce and events I’m seeing as the main kind of attempts to bulk up average revenue per user.

LK: But I think the problem is, especially in smaller markets, are those ever going to be substantial enough to fund serious journalism? Especially if you want to do that, you know, with investigative journalism. If you want to it internationally. If you want to keep on touch with … up to date with tech developments and so on. So I think what we’re going to see is more and more consolidation also in smaller markets, I think. And from the CEOs and senior leaders I’ve been talking to for this research, there does seem to be increasingly new kind of ‘Last Man Standing’- philosophy taking hold.

LK: We’re in the kind of mid and smaller sized markets people are assuming ‘okay in 10 years there’s only gonna be a couple of players left in this market, and we need to make sure we’re one of those.’ So I think from that point of view we’re seeing more acquisitions activity. And I think the other response I’m seeing, which makes a lot of sense, is actually trying to take costs out of the backend. So more collaboration with peers in the industry around tech … around all kinds of technical solutions where frankly, each company doesn’t need a customized solution. It might be possible for people to collaborate.

LK: So I think on the one hand we’re going to see more collaboration between players and markets. I think we’re going to see more acquisition activity going on, and we’re going to see building out events and e-commerce and other kinds of revenue-generating activities. But I think what we’re seeing is ideally the models that are working well, or appear to be working well, they are very much based on adjacencies around the core journalism product, the subscription product.

KLS: Yeah. Now you really touched upon a series of shifts and challenges within the newsrooms and the media houses. And that the digital shift is only one of the challenges. And then the more sophisticated technology shift towards the data, and the engagement, and then subscriptions and let’s touch on the last one that I’m going to bring up: the new, young readers. 

LK: Yes.

KLS: Because I think *that* is the new shift that we’re just about to meet, I think. And they don’t really know the legacy media. They don’t really know the newspapers. How do you perceive them?

LK: Oh… Actually, I think that has two dimensions. I think the other big shift is the millennials inside our organizations. And youngers insider organizations. That’s the other thing that’s coming up through this research. I mean: I’ll come back to the question you phrased, but I’m seeing … Part of the pressure on culture and on skills and on leadership is around millennials actually just coming at the world from a very different place.

LK: So I think this younger dynamic is happening inside the organizations as well. But I think in terms of markets: a huge issue. And I would be really really grateful if anyone can contact me afterward: I can’t find any good examples of legacy players who really managed to ace products for younger markets. They’re all kind of making the assumption ‘yes we can stretch down into the younger demographic groups’, but I don’t see many people actually pulling that off.

LK: And that for me raises very big issues. What is the best way to do it? If if the assumption is right that within an existing structure, it’s going to be very hard to access those new audiences. Do we need to kind of start from a clean sheet of paper? I mean, if I think if one looks at … you know what’s happening on YouTube, how people consume on YouTube, on Instagram – it’s just profoundly different. It’s a profoundly different mindset.

LK: So what does … How does one act according to traditional news values, journalistic values, but on those new platforms with those new types of audiences? And I’m not seeing… I’m seeing everyone setting that out as a goal, but I’m not actually seeing *that* many really success cases. I don’t know. Are you seeing any?

KLS: Well, we tend to look at VG in Norway as quite successful. 

LK: Yeah.

KLS: They have a few good examples like the app Peil and their new products on Snapchat. So maybe that could be something of interest to you?

LK: Yeah, that would definitely be worth looking at. I mean, I think it is a big problem because I think we see a really profoundly different way of consuming, and way of thinking about the world in those groups.

KLS: And not least their willingness to pay for news?

LK: It’s hard to say. I mean, I don’t think they’re unreluctant to pay if they think the value is there. I mean anyone who’s lived in a family that has a family Netflix subscription – if they suggest they’re going to cancel that subscription, it’s that kind of 15 to 20 year olds who really complain. So I think they do kind of see the value in content, in subscriptions, although they’re not paying for it. Am. But I’m not sure.

LK: I don’t know to the extent they’ve been schooled in accessing so much content through the newsfeeds on the social networks. I’m not sure. For me, it’s a big question mark, but it’s a question mark that’s getting bigger and bigger. Because clearly, it has to happen. And you know the big – from the dawn of digitalization – the big question has always been ‘what is the best organizational structure for this?’. Do you try and do it inside the parent? Or when you’re dealing with a fundamentally different value proposition for a very fundamentally different market: is it best to start something from scratch? And for me, this is, I guess, one of those issues where we need to go back to the old question.

KLS: Looking back, do you think more newsrooms should have started from scratch?

LK: I don’t know… It depends on what the objectives were, right? I mean, if you look at the ones who started from scratch, that’s the ‘buzzfeeds’, the ‘voxes’, the ‘vices’, the ‘quartzes’ of this world. And that being able to start from scratch was contingent on very substantial private funding, right? And as we’ve seen as they’ve kind of hit their deadlines for their equity events, where their original backers step out, we’ve sort of beginning to see the insides of their finances – and that they’re not really that viable either. If you take away that huge amount of private funding, they also haven’t really answered it. So I think that’s one question mark.

LK: I think the other question mark is: if you set up a successful clean sheet of paper news organization, what do you do with it when it succeeds? Do you then integrate it into the parent, with the risk that you kind of dilute and compromise everything that made it different? Do you leave it as a standalone operation? So I think it is very tricky, actually,  that kind of thing. I mean, what I do think organizations need to be very clever and careful with, is how they set up these big projects. I think if it’s a very kind of innovative exploratory thing that *can* be in a standalone unit. If it’s a kind of really major pivot that *cannot* go wrong, that has to work – a one-way door, as Jeff Bezos would say. Once you’ve gone through it, you can’t go back. I think *then* that has to be done inside the parent. 

KLS: Right. Before we wrap up: I just need to ask this question hoping for – I know which answer I hope for as well. But you recommend that the newsroom clings to the values that journalism had…

LK: Yes.

KLS: …through all ages of society and democracy. Do you, with all your knowledge, do you look positive on their ability to cling to that value?

LK: I think the commitment is as strong as it ever was. I think it’s even getting stronger in the current environment we are with a very toxic news environment and issues around news integrity. I think actually that commitment is even growing, which I think is admirable and courageous and wonderful. I think the problem is if they don’t really sharpen up organizationally strategically from how they manage themselves, how they lead themselves, is not enough, right? They are a set of organizations facing a really profound set of strategic challenges.

LK: They need to be very clever, very joined up. Use all of their competitive advantages to the max in order to get through this period, and to be able to continue to act on that commitment. That’s what worries me. I don’t doubt the commitment where I see weaknesses is in the strengths of the organizations to fight back. They are really challenged to some extent. If you look at them up against some of the new players, they’re strategically disadvantaged, and it’s not to say you can’t win from a position of disadvantage. You’ve just got to be really smart about it.

KLS: Okay. Let that be a final challenge in a series, I think, of thought-provoking messages, Lucy King. Thank you so much for contributing to this episode of Tinius Talks, and Lucy Kueng; you are a professor and expert on strategy, innovation, and leadership. Thank you so much again. 

LK: Thank you! Thank you for the invitation to talk with you.

(jingle)

KLS (in Norwegian): Denne podkasten er produsert av Hansine Korslien for Stiftelsen Tinius.