The Norwegian news business is restructuring, but is it enough?

This autumn will be one of the most thrilling times for Norwegian media business ever.  All major media companies faces no alternatives but change. What that change will be, is still unclear.

Schibsted is restructuring and is going to down size their paper activity. Schibsted says that they will reduce costs with a full year effect of approximately NOK 500 million over the next two years in the subscription based newspapers of Norway and Sweden, in addition to Spain.

From Reuters:“- The aim is to continue the digital transition in our media houses in order to gain as strong positions online as they enjoy today in traditional media. Strong editorial products will continue to be the fundament for healthy and profitable media house businesses also in the digital future, CEO Rolv Erik Ryssdal says.”

A pressen will announce their strategy at the «Media Business 2012-2016» conference in Oslo the 29th of august. We know that A- pressen and the CEO Thor Gjermund Eriksen will have to sell at least 7 local newspapers in order for the Norwegian authorities to formally accept the merge between Edda media and A-Pressen. According to  Kampanje  Eriksen states that the job ahead will be to merge the to media houses into one modern and powerful media company.

TV2’s CEO  Alf Hildrum says that they will spend more money than ever to maintain or even grow their market position. They now have Egmont as one of the major owners and have something to prove towards their owners. Not to forget that the broadcast business  also is in radical change and meet competition outside their normal arenas.

The main actions for the three major media companies as far as I can se it is in short this:

• Reduce cost and increase efficiency by:
  • Relocating
  • Restructuring of the organizations
• Increase and maintain market positions by:
  • Invest in mobile platforms
  • Invest in (digital?) content production

Does this sound familiar? This sounds like cut offs in staff.  I do hope there are changes more fundamental than this in the business going on.

I did not read a word about business models, new and appealing products both towards readers/ viewers or on the marketing/ commercial side.

I didn’t hear anything about investments in external companies that can offer such, or internal innovation activities.

I did not hear a word about what the media knows about their readers/viewers/ users needs – or how to monetize on the value of such knowledge.

And I didn’t hear anything about how to meet the real competitions in the media world: How to meet the fact that Google, Facebook, Twitter, Linkedin, streaming media solutions like Telenor is establishing and other disruptive initiatives are collecting the traditional media revenues in a quantitative- and qualitative way that has never happened before?

Fact is that a whole lot of other major enterprises have the ownership to the users/readers/viewers and are able to monetize that far better than the traditional media industry.

I hope that, by now, the news- and media industry has a strategy and concepts for revenues that goes beyond subscriptions and advertisement.

And I hope they are searching and getting hold of external competence, that is not “hold as hostages” but that get real influence with their outside perspectives.

This is far more important to focus on than the above mentioned bullet points. I’m not saying that reducing cost and increasing efficiency is not important, it’s just that it is basic, what will make the business transform and become healthy and strong for the future is in innovation and meeting real needs better in the new digital world.

As I’ve blogged about many times before, business models and concepts needed, already exists and many more are in their start-up, but I’ve seen few coming from inside the business itself.

For the people working inside the business (media people, and journalists) there are radical changes ahead. How to get the owners of media/ news companies and the employees to work together to make the needed change to happen?

In my opinion there is a problem with the public discourse, because it’s not easy to criticize your own employer. And it’s not easy for the parties to accept criticism from outside either.

In a situation where serious change has to happen, I’m afraid we will see defensive rhetoric’s from all sides in the coming year. Unions will try to defend their members from cut offs; management will try to defend the profit rate for their owners.

This energy rather ought to be used to discuss how to best serve the public in a manner they will benefit from, and enable the media/ news business to get a fair share of the value created.