Reach vehicles vs. money machines: blunt talk about popular and quality news brands

By Earl J. Wilkinson


Dallas, Texas, USA


As digital subscriptions become the monetisation mechanism du jour, an odd tension is playing out at urban-focused companies with multiple assets in play: the role of “reach vehicles” in a publisher’s media arsenal. 

Most companies managing single media brands are forced to choose between a traditional mass-market strategy — eyeballs and advertising — and a strategy based roughly on average revenue per user (ARPU). 

Over-simplified internationally, that is manifesting itself as popular newspapers as mass-reach vehicles and quality newspapers as premium money vehicles.

This choice was on abundant display during a recent visit to Poland where each media company is facing such a choice.

Quality newspaper Dagens Nyheter is a money maker more than an audience engagement brand for Bonnier.
Quality newspaper Dagens Nyheter is a money maker more than an audience engagement brand for Bonnier.

Agora owns the upmarket quality daily Gazeta Wyborcza, which is moving down a digital subscription path. Ringier Axel Springer owns the popular newspaper Fakt and Yahoo-like portal Onet, which remain reach vehicles. Polska Press owns 20+ community newspapers and is debating which model works best for their group. 

These Polish publishers are faced with “either/or” decisions about reach/advertising vs. digital subscription business models. You can imagine different options if assets were moved around and they could use a reach vehicle with one hand and a monetisation vehicle with the other — and the synergies that might produce. 

That is precisely the case two hours’ flight north in Scandinavia where Schibsted and Bonnier publish quality and popular newspapers — Schibsted in Oslo and Stockholm, Bonnier in Stockholm.

“Quality” newspapers feature higher-brow journalism aimed at higher-end demographics, while “popular” newspapers are big personalities aimed at working-class populations. Qualities tend to have a subscription history, while populars are single-copy. It is common for populars to outsell qualities on a 2-to-1 or 3-to-1 basis, historically.

This is very typical in European and Latin American markets especially. For example, News Corp owns the quality Times and the popular Sun brands in the United Kingdom. 

My personal intersections with Schibsted and Bonnier date back 20+ years — notably the popular brands, each with a slightly different history.

The peak of VG print circulation is in the past, year there are still revenue opportunities with the Schibsted brand.
The peak of VG print circulation is in the past, year there are still revenue opportunities with the Schibsted brand.

Schibsted’s VG in Norway became the top-circulating newspaper by the 1970s with an odd aim: to become each day’s second read. VG’s marketing campaigns, especially its TV commercials, were legendary for their irreverence and self-mocking. I once trekked to a supermarket with two top executives at Bonnier to better understand the art and science of how to sell Expressen at a checkout stand. 

Schibsted has been very transparent about the direction of print with VG. Hitting a print circulation peak of 390,000 in 2002, VG today circulates about 94,000 copies each day. There remain profits to be made, yet you can imagine the VG personality working quite well in mobile and video skins in the decade ahead.

To this end, these loud and proud popular newspapers have now been re-positioned as “reach vehicles” in the emerging digital ecosystem for both Schibsted and Bonnier. Another phrase commonly heard to describe them was “traffic machines.” 

I was fascinated that Schibsted and Bonnier both chose the popular newspapers to be the primary mobile and video vehicles — not their quality newspapers. Their “video” strategy across the three popular titles VG, Aftonbladet, and Expressen are more like 24/7 cable news channels on their Web sites — with hard flirtations with making this simultaneously work in linear TV.

Profitability for an operation of that scale has been slow, but it is beginning to happen. Their battles to be No. 1 in mobile readership and engagement were done with the three popular titles — not their quality titles. 

If the popular “newspapers” — or whatever you prefer to call them across print, video, and mobile formats — are the reach vehicles, what is the role of their sister quality newspapers Aftenposten, Svenska Dagbladet, and Dagens Nyheter? I suppose the best way to say it is “money.”

These remain heavy advertising vehicles for higher-end demographics, and digital subscription efforts lean toward premium pricing. I heard hints of “deeper relationships” with readers of the quality newspapers or at least a need for a deeper understanding of their needs. 

Even in the digital subscription game, you can see in the pricing strategy of the qualities over the populars. For example, Schibsted Norway’s Aftenposten is priced at about €24 per month (hybrid model) while sister title VG is priced at about €8 per month (freemium model). 

Why the repositioning in the past three years? Was it strategic, or do the new roles within these corporations simply reflect where they naturally landed? I suspect the latter, though I never got clear answers.

The hint seemed to be that all six newspapers across two cities pursued their own strategies, populars competing against populars and qualities against qualities. The repositioning was simply an acknowledgement of the declining role of print single-copy print sales that drive popular newspapers.

As a lower-advertising declining sales vehicle, they have more value as re-imagined reach print-digital vehicles — requiring a robust transformation of print-centric cultures, which I especially noted in visiting Expressen. 

While I see the value of a company owning a reach vehicle and a money vehicle, where are the synergies? They weren’t apparent to me during visits in Norway, Sweden, or Poland. They were more readily apparent in Australia where News Corp owns the free portal — along with the national daily The Australian and metropolitan dailies such as The Daily Telegraph in Sydney and the Herald Sun in Melbourne. is News Corp’s reach vehicle for Australia, while their newspapers serve as monetisation vehicles — each feeding the other. 

Does prevent The Daily Telegraph and the Herald Sun from selling digital subscriptions? Does Expressen prevent Dagens Nyheter from doing the same within Bonnier? 

My instinct, in talks with many executives across many markets faced with the same questions, is that more brands cutting across different consumer needs are better than an efficiency strategy. At least one publisher mused aloud that nobody really knows whether low-CPM digital advertising will remain out of vogue. It’s best, he reasoned, to have a hedge against the uncertainty of digital monetisation in the years ahead.

For now, that means reach vehicles laid over money vehicles in a kind of media matrix strategy. It seems like this is a replicable strategy worldwide.

About Earl J. Wilkinson

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