For the last several years, Večernji list had been focused on creating new revenue streams by creating a community of fans around its niche media platforms (print and digital platforms). It has done so not only by producing relevant and useful content, but with non-publishing projects that complement its core products, according to Petra Ivičević-Bakulić, the company’s media solutions sales director.
As part of a needs analysis, Večernji list concluded that across all age groups, readers are most interested in running/jogging, or in Nordic walking among the 50+ age group. Recognising a growing trend among all generations to participate in outdoor activities, Večernji list decided in early 2014 to launch a niche bi-monthly magazine GoOUT with an accompanying digital platform.
At the same time, a market analysis showed that sufficient capacity did not exist in clubs or schools to absorb all of this interest. So in 2014, Večernji list, seeing that its readers wanted a venue to run and walk for exercise, began preparing to start its own exercise school, the “GoOUT School of Movement” in the capital city of Croatia, as a complement to the GoOUT media platforms.
Early on, Večernji list was faced with several challenges:
- Managers didn’t know anything about organising an exercise school.
- They had no professional trainers.
- They had neither a location or permits.
- Finally, and most importantly, they didn’t have an allocated budget, Ivičević-Bakulić says.
So managers took it one step at a time.
In writing the initial business plan, Večernji list found that the project could be mostly financed from monthly memberships and the sponsorship of related companies that were interested in reaching this target group/community.
For professional assistance, Večernji list turned to the Faculty of Kinesiology at the University of Zagreb. The two organisations reached an agreement to provide professional trainers — five for the running school and seven for the Nordic walking school. Together, the professionals and Večernji list designed the programmes, Ivičević-Bakulić explains.
The activity involved both running and walking, leading to several training programmes to accommodate different weight classes, age groups, and physical capabilities.
As an added touch and to encourage participation, Večernji list provides babysitting in the morning and afternoon periods at two locations for the children of parents who were running or walking. This added service made the GoOUT school a unique proposition on the market.
Finally, the preparations completed and with four locations for the classes selected, Večernji list was ready to open the doors of the school in 2015.
Večernji list used all of its media platforms to promote activities at each of the locations — open houses and test trainings — as well as to potential sponsors such as makers of multi-vitamin drinks, sportswear, shoes, gadgets, and supplements.
In the first wave, Vecernji contracted for two years with two main sponsors. It started the school with 130 attendees, who trained three times a week and were divided into seven groups and different time periods. These steps ensured that Večernji list would make a satisfactory profit after covering the project costs (trainers, babysitting, and t-shirts for the attendees).
Today, the school has around 400 attendees and 21 groups, and the profit margin is growing each month, Ivičević-Bakulić says.
Since the school opened, Večernji list has expanded on its regularly scheduled classes to include two running races and two Nordic walking excursions in the mountains – open to anyone who is interested. The revenues from the registration fees for these events and the revenues from smaller/one-time sponsors are “icing on the cake” within the P&L. The current profit margin is 60%.
Večernji list has learned that a good project — even without an allocated budget — can be launched and create extra profit for a company. It believes that it has created a good programme, which, like all good media-related programmes, accomplishes these things:
- Creates a community of readers by quality content around niche media platforms.
- Recognises the needs of that community and finds empty space in the market.
- Creates additional services or products that satisfy those needs and charges for them.
- Maximises existing resources and gathers a team (project management, marketing, sales) to launch and implement a project that believes in its success.
- Constantly adds new elements to a project that will in the long term keep the existing users and attract new ones.
- Creates unique environment for potential sponsors based on the needs of the target group.
- Optimises costs and for promotion, uses only its own media platforms if the portfolio provides sufficient reach, as in the case of Večernji list. (Small niche publishers can try to link up with larger media companies on a revenue-sharing principle in exchange for media space).
Preparations for the next season are under way. Večernji list expects to organise even more extracurricular events, and anticipates that the school may expand to other large cities across the country.
This is one of 14 case studies featured in INMA’s strategic report “Revenue Diversification Beyond Traditional Print and Digital,” released in December 2015.