Leading a newspaper company is a tricky and challenging job. Wolfgang Bretschko, media investor and former CEO of Austria’s Styria Media Group, compared the industry situation to a frog in the boiling water: It can’t feel that water is getting warmer. And when it realises the danger, it’s already too late.
It is similar to media industry. In last 20 years, readers were shifting, advertisers had more choices, and newspaper companies were late to notice it.
The best days of printed newspapers are over as people use devices to read news, Bretschko says. There are media companies in Europe that still consider print as cultural habit and believe it would never die.
Bretschko quoted Marc Andreesen, co-author of Mosaic and Netscape Communications Corporation, who said: “Today’s news organizations are spending 90% of their effort and resources on playing defense. They are protecting the old artifacts and business model, rather than going on the offense and making the future.”
Changing the system within the existing framework is difficult, Bretschko acknowledged. But he is optimistic about the future.
Again, he agrees with Andreesen, who said: “I am more bullish about the future of the news industry over the next 20 years than almost anyone I know. You are going to see it grow 10x to 100x from where it is today.”
And there are many reasons to be optimistic, as media consumption patterns diverge, Bretschko says. People read, listen, watch, produce, and publish more content than ever before. Media consumption will grow faster than ever, as these statistics indicate:
- 70 billion pieces of content is produced on Facebook monthly.
- 190 million tweets are sent on a daily basis.
- 17 million articles are hosted by Wikipedia.
The dynamics of news consumption and production is changing, thanks also to media start-ups, Bretschko says. For publishers, many business opportunities arise. For example:
- Scripted: A platform that connects publishers with potential writers. It already has 7,000 writers, and 98% of its content was accepted by clients. This start-up already raised US$5 million.
- Mattermark: Thousands of firms use Mattermark to research private companies (US$3.4 million raised).
- TripleLift: A start-up focused on innovating native advertising (US$6 million raised).
People will invest in media start-ups as they are the future, Bretschko says. This is the trend in United States but also in European Union. There are already more than 5,700 digital media start-ups on AngelList (a European list of start-ups searching for an investor).
Bretschko believes there is enough space for small- and medium-sized companies on the media market. The more crowded it is, the bigger the demand for experts.
Bretschko closed his presentation with another quote from Andreesen: “The more noise, confusion, and crap — the more there is an increase of, and corresponding need for, trusted guides, respected experts, and quality brands. Remember: Most great businesses are not big businesses. This market is plenty big enough for thousands of high-margin, small- to medium-sized businesses.”