Media Leaders

Media Leaders

What news publishers can learn from LEGO

28 February 2016 · By Gerold Riedmann

LEGO was forced to grow and change with the times while remaining true to its brand image — not unlike media companies that are also in a transitional state.

For most of us, toy manufacturer LEGO is a household name. Like Sony or Kodak, it has always been around — since our childhood days.

Opposite of Sony or Kodak today, however, we still have our LEGO moments. Kids love LEGO and grown-ups seem to, too. LEGO stop-motion videos are part of the digital pop culture. It seems those small plastic building blocks have been booming ever since we first had them in hands as girls and boys.

In reality, Danish toy manufacturer LEGO has been in some severe turmoil. It began in the mid-’90s. Be it Chinese copycats or the rise of video games from Nintendo — LEGO was on the decline, the revenues dropped, it had negative EBITDA.

Unlike other brands that have been around for many years, LEGO has stood the test of time.

In which direction are you innovating?

LEGO did start to “innovate” — well, sort of. It did a lot of things in the early 2000s: Star Wars LEGO, Harry Potter LEGO — and a huge variety of different LEGO product lines.

But it was either not able to spark large audiences or sold only when the corresponding movies were in theatres.

“If you are going to accelerate innovation, you need to know which way you are going.” Those are the words from David Robertson, today a professor at the Wharton School and a former LEGO professor. Robertson’s book “Brick by Brick: How LEGO Reinvented its Innovation System and Conquered the Toy Industry” is worth reading.

To make a long story short: LEGO didn’t know where to go, it seemed it just did everything possible.

My Denmark learnings

During a recent visit to Denmark, where LEGO was founded in the 1930s, I learned about LEGO’s life-saving innovation strategy that CEO Jørgen Vig Knudstorp implemented. And I’m sure that some of LEGO’s innovation lessons are pure gold for publishers.

In a structured innovation framework, employees from all levels and teams were invited to give suggestions about new growth opportunities. The only requirement: The ideas had to strengthen LEGO’s family friendly brand image.

It was a clear road to the core of LEGO: back to the brick.

Do you have to dance on every party?

Now, what about us in the news industry? Yes, we have to be everywhere: Facebook, Instagram, Android, iOS. We need to be on a lot of third-party platforms (and there will be more coming during 2016). We need a Snapchat strategy. We do virtual reality. We experimented with Snowfall-like stories back in 2014. We tried Instant Articles. We are keen to launch our Google AMP sites in the upcoming months.

For news products, willingness to pay is mostly centered on digital subscriptions. In the case of our company, the most asked-for digital product has been the PDF version of our printed newspaper.

Think about that. A very print-ish usage of digital, huh?

Not print nostalgia, just a transitional product

Don’t get me wrong. I didn’t fall for print nostalgia. As I’ve written earlier, over here at Russmedia, we divided our company into three speeds of transitions. The main driver for Russmedia’s digital growth was our pure-play digital news portal, Vorarlberg Online, a free news and service portal branded differently than the newspaper.

  • Transition A — for the print and print-ish (yes, also digital) part of the business, such as Vorarlberger Nachrichten.

  • Transition B — for the pure-play digital regional operations, such as VOL.AT

  • Transition C — for our international digital business, mostly classified and marketplace-oriented, such as erento.

And our news brands in Transition B are mostly mobile. They do have a huge social media impact and are operating in an ongoing developing news environment. They are mostly for digital natives. We reach new audiences.

But let’s concentrate on Transition A: These are our most loyal readers who love their newspaper. Vorarlberger Nachrichten (VN) reaches 50% of the households in Austria’s western-most province of Vorarlberg. And 10% of our daily sold editions are digital downloads. That makes us the strongest regional newspaper in Austria — and we have to keep pushing.

Don’t feel ashamed of your newspaper

Readers asked us for “the real newspaper.” The transformation of LEGO, in particular, provided a source of inspiration. We were surprised by LEGO’s strong focus on the original product, which was being outfitted with new capabilities.

While VOL.AT (Transition B) is a constant, free news stream, VN newspaper is edition-based and, also in the digital space, still a very “print-ish” product. That’s what we’ve learned from the needs of our readers. That’s what they are willing to pay for. People love VN for the morning ritual of spending 20 minutes with it — be it on paper or a tablet.

Henceforth, the media and its transformation became a core element of our strategy in the newspaper-ish Transition A. Our goal was to bring the emotion of “reading the newspaper” into the digital age.

The print-ish layout helps readers find content important to them in a matter of seconds — an incredibly efficient way to consume content, and reason enough to create the “golden standard for a next-generation e-newspaper.” With a layout developed over decades out of tradition, we have begun the process of bringing the VN into the digital world with HTML5 and a responsive Web site.

We believe the newspaper in its traditional format is, in this process of transition, the “ultimate browser” for news and acts as a curator of information. The Internet provides a tidal wave of information with no end. For this reason, our product was designed to have a beginning and an end: to bring the role of curator into the digital environment. A product for our customers, our readers, our “finishers.”

Will that be valid in five years from now? Who knows. But it’s always better to tailor your products to different audiences — and in digital, that has finally become mangaeable.

Whatever product you launch, be sure to give your consumers a chance to follow you — or consider to start new things completely separated from your core brand.

And have fun playing around with the LEGO case!


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The Media Leader blog is INMA's answer to the need for honest, big picture, fearless leadership that needs to be happening in the news media industry. We work in exciting yet challenging times. Our bloggers are doing some of the most exciting work at some of the most cutting-edge companies. Here are their stories from the field.


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Gerold Riedmann
CEO
Russmedia Digital
Bregenz and Vienna, Austria
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Dietmar Schantin
Founder and CEO
Institute for Media Strategies
London, UK, and Graz, Austria
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Johanna van Eeden
Editor in Chief
Media24 Dailies (Die Burger, Beeld, Volksblad)
Bloemfontein, South Africa
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