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Plus Report - By Thomas Baekdal - December 2020

Why do Norwegian newspapers perform so much better than the industry average?

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I want to show you something crazy. Earlier in 2020, Reuters Institute released their Reuters Digital News Report 2020 that, among many other things, looked at how many people in each country were paying for online news.

The result looks like this:

As you can see, most of Scandinavia scores relatively highly compared to the industry average (at about 10%), but Norway is just off the scale at (42%).

This is strange because the Nordic countries are usually very similar, and most other studies there rarely differ more than a few percentage points. So why is there such a big difference when it comes to news? ... and why is Norway doing four times the industry average?

Well, this is the topic of this 31-page Plus report. We are going to take a deep dive into the Norwegian market to find out how this is possible.

Infrastructure, market, tech, culture, and editorial

To explain what is happening in Norway, we have to look at many different things. We need to look at the infrastructure in which Norwegian newspapers operate, we have to look at the market as a whole, at the tech solutions Norwegian publishers have implemented, the culture we see around news, and also very important, the editorial focus.

Each one of these plays a role in defining this, and it's the combination that makes all this work. And we will start our analysis by looking outside the media industry. What is Norway like as a country compared to other countries?

Norway was an early adopter of the internet

We will start by talking about the internet and the infrastructure, because Norway (along with the rest of Scandinavia) was an early adopter of digital.

Let me start this analysis by illustrating the share of the population using the internet over the past 25 years.

It looks like this:

As you can see, Scandinavia (Denmark, Sweden, Norway and Finland) very quickly started using the internet, way earlier than the rest of Europe, and today 97% of the public in Norway, Sweden and Denmark are online.

But what's special about Norway is how early they really were. In the year 2000, 52% of the population of Norway was already online, making Norway the country with the highest internet penetration in the world (at the time). In comparison, France only had 14% internet penetration, Germany had 20%, the UK had 26%, and Italy had 23%.

In fact, here is a graph indicating how many years it took for other European countries to 'catch up' to where Norway was in the year 2000.

As you can see, Sweden caught up only one year later, Denmark and Finland the year after that, but look at France. They didn't exceed 52% internet penetration until 2007, and Italy didn't reach that level until 2010!

In 2010, Norway already had a 93.39% internet penetration, most other European countries haven't gotten close to that. In Italy, they were at 53% in 2010, and they were still just at 61.3% in 2017 (the latest numbers). In France, they were at 77% in 2010, and still only at 80% in 2017.

It's the same in the US. In the early years, the US kept up in a pretty good way (not surprising since it was where the internet started), but after providing the internet to bigger cities, the rural areas are still struggling to get online. In 2017 (latest data), they are still at 76% ... and the areas that lack the internet most are the smaller towns where we also have problems with news deserts.

In Norway, this problem doesn't exist, because they reached the same level of internet penetration all the way back in 2002. They are 15 years ahead of the US. It's crazy.

This has a really big impact in three very important ways.

First of all, when the financial crisis hit the world in 2008, and publishers all suddenly had to scramble to shift to digital, the Norwegian market was already digital. People have been used to doing things online in Norway for decades.

Secondly, because Norway embraced digital so early, much of the digital infrastructure has already been built. When I talk with publishers in other countries, we often run into obstacles related to how the digital world has not been fully built for them yet.

Think about something like payments. In the Scandinavian countries, digital payment has been a thing for decades. Many public services are also digital by default, and it's digital in such a way that people don't even think about it. This has allowed them to adopt new technology much earlier than what we see in other countries.

Thirdly, Norway is incredibly innovative. I'm not just talking about the government, but also about the culture in general. In Norway we see this fascinating public sentiment that embraces changes in society as a whole at a level that other countries just don't have.

Just look at electric cars. In Norway, the share of new cars being plug-in electric is almost 60%. In most other countries, it's still below 10%.

Now, in terms of cars, part of the reason for this is their sovereign wealth fund, funded by their oil industry (there is a good video about that here). But it's not the wealth of Norway that defines this.

Sure Norway is a very rich country. If we look at the latest Eurostat data for material wealth in Europe (actual individual consumption), we see that Norway is indeed at the top, around 10 points ahead of Germany.

However, when we compare this to subscribers to online news, we get a completely different picture. Yes, Norway is still massively ahead, but look at Germany, Austria, Denmark, etc.

So when we ask why so many people in Norway are embracing online news, it's not the wealth of the country that defines it.

Instead, the real difference is about public sentiment to new things. In Norway, there is a much stronger culture to accept change than what I see in many other countries.

This has a real impact on a lot of things, including news reporting. Take the debate about electric cars. In Norway, almost 60% of all new cars sold are electric, meanwhile in Denmark, this was how the newspaper reported about electric cars just last month:

Electric cars are expensive, cumbersome to use and in fact do not help the climate at all. These are some of the most important reasons why the population does not want to invest in new electric cars, shows a new poll conducted by Megafon for Politiken.

This might not seem like that big of a deal, but it is. In Denmark, we are still having endless debates that don't seem to get us anywhere, whereas in Norway, they have already moved on. This has an impact on how valuable people feel the news is, and it is a very important difference in mindset.

The media changed with the internet

This mindset is also reflected in how the media has embraced the future in Norway. Unlike the media in most other countries, Norwegian newspapers are exceptionally future focused.

For instance, back in the late 1990s, newspapers in most of the world experienced a loss of classified advertising. In the US, they were losing the market to Craigslist, here in Denmark it was to DBA, and every other country saw a similar trend.

The same thing happened in Norway, but, unlike newspapers in most other countries, four of the largest regional newspapers Aftenposten, Bergens Tidende, Stavanger Aftenblad and Fædrelandsvennen (what we today know as Schibsted) decided to collaborate and do something about it, and so they launched their own classified platform.

Their first attempt at this was something called vis@avisen. It was essentially just an internet gateway to classified ads in their print newspapers, and so it failed. This was not what people wanted.

Upon realizing this, they created finn.no, which today is a massive classified site in Norway that is totally dominating this market. But it doesn't stop there. Over the years, Schibsted has expanded this focus to a ton of other services and classified sites. They now also run big classified sites in Sweden and Finland. They have created a car buying and selling site, a place to find services, a big job portal, and more. And that's just the marketplaces, they have expanded into other forms of services, like weather sites, a site for patients and doctors to schedule visits in people's own homes, a price comparison site, a place to find the best loans, a wellness marketplace, and so much more.

This illustrates the mindset I talked about earlier. In Norway, companies like Schibsted don't look at change as a bad thing. They see it as a way to create new markets and build new things.

Think about how different this is compared to many other publishers around the world where innovation is often defined as something they would rather avoid.

We see exactly the same thing with many of the other publishers in Norway. One very prominent example is Amedia.

Amedia is another publisher who is innovating by default. They are a publisher of 79 newspapers in Norway, and, today, they are one of the most innovative media companies in the world.

Let me tell you how.

Shared ID + login

The first thing that really sets the big Norwegian publishers apart is how they have embraced a shared ID across their services. Schibsted and Amedia have their own shared ID system across all their sites, and are even extending that to outside publishers as well.

Amedia's system is called aID.

It works the same way as shared IDs from tech companies. For instance, think about how you can use your Apple ID to login with other services.

Amedia has done the same thing. With aID, once people have logged in at one site, they have logged in everywhere. This allows Amedia to tailor how they optimize everything they do, from how they design their subscription model and the path people take, to advertising, and also the journalism.

At a recent talk at the WAN-IFRA Digital Media 2020 conference, Haakon Johanson, Amedia VP Consumer Market, explained why this is so important for them. He said it's not about the paywall at all. Instead, it is about 'control'. Control over the contact to their readers, the customer journey, legal aspects (like privacy), economics, but most of all, it's about data capture.

A shared ID means two things. First, it creates an easier path for conversions between sites, which for publishers with multiple sites can be extremely beneficial. It also allows a much deeper form of audience relationship.

We see the same thing with the tech companies. Think about how important it is for Google to have a shared login across all their services and sites.

However, having a shared ID is only part of the equation, the other part is getting people to use it. You need to get people to log in.

This is also true for Amedia. Getting people to login is paramount. And so, when you look at all their sites, you will see that their entire model is focused towards this goal. For instance, instead of having an open metered model (no logins required), they have a premium model, where all the best articles are behind a login.

Here is a look at one of their local newspapers. These are all the articles that are premium. They are being super-aggressive about it (which is a good thing).

In comparison, here is a local newspaper from my country (Denmark). On top of their newspaper, there is only one article that is premium, everything else can be read for free.

This is important because of something called a stop rate. A stop rate is the percentage of your audience who are 'stopped' and asked to either pay or log in (or both) per month.

There was a great study about this from Shorenstein Center/Lenfest Institute, looking at 500 US publishers. What they found was that there is a very clear correlation between high-performing publishers (green) vs. low-performing publishers (red) and their stop rates.

High-performing publishers had a stop rate of about 8% (which is still very low), compared to low-performance publishers with a stop rate around 1% or even lower.

This is something we have learned over the past 10 years. Having a high stop rate is critical to your success, and in Norway, their stop rate is very high. I don't have a specific number, but when I look at Amedia's sites, my guess is that their stop rate is way above 8.4% (the best of the US publishers).

But, now we come to the magic part.

What Amedia has done is created the infrastructure for growth. They have created a shared ID system for much easier and frictionless conversions, they have implemented a premium system (which is the model they need if they want to get people to login), and they have increased their stop rate to a very high level.

The result of this is remarkable. From only having 5% of their traffic logged in in 2014, in 2020, between 75% to 80% of their traffic is now logged in. This is way above the rest of the media industry.

Usually we only see numbers this high with very specific forms of premium news sites.

And, by having this shared ID across all their 79 newspapers, 40% of the Norwegian public over 18 years old now has an aID (1,643,100 people). Granted Norway is a small country with only 5.4 million people, but this is still remarkable.

But even this is not enough. Just getting a shared ID and asking people to login is obviously not going to work by itself. We have seen plenty of examples of publishers completely failing to make their paywall work.

To make this work, you have to have a great editorial focus to put into it, and you need to use it in a really smart way that makes it super-valuable and relevant to people.

So, let's look at that.

Defining editorial value and relevance

Let me ask you a simple question. What elements would you need to make news valuable and relevant to people?

Well, there are four things that really make a difference.

The first element is what I usually refer to as the 'circles of relevance', and there are three of them. We have the circle of concern, which is how concerned the public is about a specific topic. We have the circle of interest, which is how interested the public is in hearing about it. And finally, we have the circle of usefulness, which is a measurement of how actionable the news is to the public. In other words, can you do something about this?

The second element is personal relevance. Newspapers should do a study and simply ask your readers:

Is the news written for someone like me?

I have seen many studies over the past 10 years that looked at this question, and usually the numbers are very low. I have come across newspapers who are in the single digits, meaning that less than 10% of their audience thinks that the news they bring is for them.

The third element is 'respect'. When you publish something, do you present yourself as a trustworthy source of information, or do you sound more like a used-car salesman trying to trick people into buying a crappy car?

This is a problem I come across all the time. Think about how many times you have come across an article where the headline is misleading. Or where the headline is clickbait and doesn't even tell you what the article is about before you click on it? Or what about the article where the true facts aren't revealed until the very end... or worse, the articles where the topic hasn't been fact-checked at all, which is only done the next day in a follow-up article?

When newspapers do something like this, they illustrate that they don't have their customer in mind, and it's one of the worst things you can do. Because, each of these things in isolation might not seem like much. But if you do this every day, why would people pay for what you have to offer?

The final element is a strange one. I would call this the cozyness rate. This is a bit hard to explain, but here in Denmark we have a word that is "hygge", and in Norway, it would be "kos".

Roughly translated, it means having a good time, where you feel comfortable and relaxed (you feel cozy), but it's also a time you cherish. It's quality time, as opposed to just time you spend being bored.

So think about news. When you wake up in the morning and you read the morning newspaper, how does that make you feel? Does it make you feel cozy? ...or does it make you feel anxious?

Mind you, I'm not talking about whether the news is positive or negative. As a newspaper you can present people with a highly negative story, but if you present it in an informative and constructive way, it can still feel comfortable to read.

So, these are the four elements that define valuable news.

What I then see as an analyst is that newspapers in Norway are really good at maximizing all of these.

I'm not saying it's perfect, but news in Norway feels more relevant, it's far more community-focused than what I see in many other countries.

There is a strong audience focus, which means that the articles feel like they were written by journalists who were thinking about what the audience actually needed to know from the very start. And the feeling you get when looking at the news in Norway is 'kos' (cozy) compared to the much more antagonistic and adversarial focus we see in many other cases.

As a result, there is almost zero polarization in Norwegian media, we don't see the political filter bubble that we see in so many other places, and there is a strong sense of togetherness in how the news is reported.

In comparison, take a look at this video from journalist Johnny Harris.

 

The effect of this is that people feel much more inclined to pay for news. And we see this in other countries as well. In Sweden, for instance, we have seen similar effects with newspapers like Dagens Nyheter.

So think about what we have here.

In Norway we have a country that is very adaptive to change, we have publishers like Schibsted and Amedia who have built up an amazing infrastructure that allows them to innovate and optimize, with a shared login system that provides them with the data they need, and we have a news culture and approach that feels more relevant and valuable to people individually and is more pleasant to consume.

And so, the final step is to put all this together in a way that is hyper-focused on demonstrating that value to the public. The trick is to identify what element each individual reader needs at any given time, and, once again, Amedia is a perfect example of this.

Personalization taken to the extreme

Because of their shared ID system (aID) and how they have managed to get almost 80% of their traffic to be logged in, they have an extremely clear picture of which articles help drive certain effects.

They then take this and apply it in different ways for the six steps of their audience conversion and engagement path. At the WAN-IFRA conference, Haakon Johanson, outlined it like this:

The first thing you should notice is that Amedia defines a conversion as the full customer lifetime journey. This is such an important thing to do.

I see so many other publishers who define their conversion as just the step leading people to subscribe. But as I have said many times in the past, in the media industry, a conversion doesn't end once people subscribe. It ends once people stop coming back.

Amedia very clearly understands this.

You will also notice that, once people subscribe (the green sections), they are segmenting their audience into how established that audience is. Are they still 'on campaign', being their introduction discount? Are they in their early renewal phases (below 100 days), or have they been with the newspaper for long enough to be considered loyal readers?

Again, brilliant.

This seems like an obvious thing, but I have seen so many newspapers over the years who are not doing this. Or worse, I have come across many newspapers who are measuring this, it's in their analytics dashboards, but they don't have a different strategy for each group.

Let's look at each group.

If we look at the group of people who haven't yet subscribed, the key is to find out how to demonstrate your value and relevance to them. The challenge, however, is that you may not have any information about them (since they have not yet subscribed or created an account).

But here we see the power of aID. Amedia is saying that, using the data they analyzed over the past 2 years (from any given date), they can use predictive analysis to identify which stories will sell 3+ subscriptions, with an 84% certainty before an article is even published. And what this means is that they can use this knowledge to give non-subscribers the right articles to read.

They then turn this into a very specific editorial decision. They will look at the articles that each of their 79 sites have published over the past 24 hours, identify which ones have performed the best in providing value and relevance and have caused people to subscribe. And then they will actively personalize the front pages to each reader based on this data.

What this means is that every person will, individually, be presented with exactly the articles they are most likely to find useful. Again, Haakon Johanson gave an example of this.

Below, you see the difference between a standard news site (like how most other newspapers would do it), and Amedia's personalized front pages.

Notice how their system has automatically picked out a better article to show the individual person, brought that to the top of the page, followed by a subscription box (in yellow).

For those of you who cannot read Norwegian, the subscription box is special too. It says:

Only 10 NOK for 10 weeks. Read the news from over 70 newspapers covering the whole of Norway. Try Digital+All.

What they have done is used their size and created a separate subscription bundle that includes all their newspapers in one big package. This was something they started because of the pandemic because the public had a need for better information about their friends and families in other towns. And so they started offering this for free as a way to help.

This was a really brilliant thing to do because suddenly everyone could read about the COVID-19 situation in the local newspapers where their friends lived.

This has since been upgraded to full price. The price difference is 50 NOK per month (about $5.75). Meaning, you can subscribe to just one newspaper for 199 NOK ($23), or get the 'all access' package for 249 NOK ($29).

Also, when Amedia first announced this back in June, many people talked about it being a 'Netflix of News'. But that is not really what this is. This is upselling.

This is a very interesting feature, and while it is still too early to tell, it will be interesting to see some data about how well this actually performs a year or two from now.

The next step is the 'on campaign' stage.

Amedia is offering people really huge discounts to capture new readers. From the examples I have seen, the price is usually something like 1 NOK per week (over either 5 or 10 weeks depending on the campaign). That's about 11 cents.

At that price, it's not about the money. Instead, it's all about getting people to log in and to get them into their aID system so that they can start to do their personalization.

But this also means that they haven't actually converted anyone yet. 11 cents is not a conversion. That's like one of those free taster samples in the supermarket.

The problem is that this approach almost always fails when we have seen other publishers try something similar. People would sign up because this is a really cheap product, but then they won't engage and once the introduction campaign ends, they simply won't renew. The newspaper then has to recapture them, often using another huge discount ... and once you end up in this situation, you have pretty much lost.

So the way Amedia is fixing this problem is to use their aID system to create a very personalized onboarding.

This onboarding consists of many elements. They are obviously personalizing what news stories people should see, to highlight and feature exactly those stories they have identified as what people will find most valuable. Remember, the trick here is to prove the value so that they stick around after this intro campaign ends.

They also try to get people to download and use their app (no surprise there), and then they do 'family' sharing.

This is something I find slightly amusing. Many publishers around the world have realized just how powerful family and friend sharing really is. The reason it works so well is because, if you can get someone to share their subscription with another family member or friend, then they will be much less likely to cancel their subscription a few weeks later. It's such a simple feature, but it's so powerful.

Finally, they do a very interesting thing with their newsletters. Obviously, they are doing newsletters like almost all publishers these days, but they personalize them too.

During this onboarding stage, they will look at how you have engaged with their premium articles each day. And then, if you haven't engaged before 8 pm, they will send you a personalized newsletter of things they have a high confidence that you would want to know.

This is amazing, and the combination of all these things is such a strong way to demonstrate your true value to people.

But now let's talk about the final stages.

What is different in this stage is that now Amedia will have built up enough data to start to know what each reader really needs, and so they can focus their personalization on what this specific person wants, more than just looking at what other people might find useful.

This means that, at this stage, every reader is essentially getting uniquely selected stories based on algorithms identifying just their interests.

It also means that, in their newsletters, they are excluding content that people have already read. And they can start to look at consumption patterns, and, for instance, if they notice that people rarely visit the website, they will bring even more relevant stories to people with the newsletter instead.

All of this is done to prevent churn (people from leaving), and this also extends to their churn management (the steps you take once you know people are about to churn).

We already talked about how family and friend sharing can be an effective way to make people think twice about canceling their subscriptions, but you can do the same thing with your articles. If you know that a person would have a high interest, concern or usefulness for a specific article, showing that article to people when they are considering leaving can be an effective way to remind people of your value. And this is exactly what Amedia does.

And remember, managing your churn is even more important than getting people to subscribe in the first place. When we look at the studies above where we could see that more than 40% of the public in Norway is subscribing to online news, this isn't just because they have subscribed. It's also very much because they keep renewing.

In other countries, we might see the same conversion rate, but because of churn, your effective subscription base might be much lower.

So what big publishers in Norway, like Amedia or Schibsted, are doing is really impressive. But as you can see from this article, it's not just one thing. It's the combination of many different factors: the culture of Norwegian society (which enabled them to adopt the internet really quickly) which led to their amazing technical and societal infrastructure. We see how their innovative mindset is helping them find opportunities. We see the amazing impact of having shared ID across sites and services, not only in creating a frictionless flow, but also in connecting directly with your audience using first-party data.

But the most amazing thing is what they do with this. Most other publishers are just ... you know ... publishing. But in Norway, they think about publishing from an audience perspective.

Of course, not everything is perfect. I'm praising Amedia and Schibsted here because, as a media analyst, I'm very impressed by what they do. But there are also problems in Norway.

One thing you have to remember about Norway is that Schibsted, Amedia and Polaris command more than 70% of the total media market in Norway. And just like the New York Times is winning in the US, these three massive publishers are winning in Norway. But what about the rest?

There are many things that publishers in Norway are not doing that I would recommend they should do. For instance, one thing we have seen from other publishers around the world is how important it is to explain to people why they should subscribe. In Norway, they are just saying "subscribe for 10 NOK for 10 weeks".

This is such a bad way of selling something, but they make up for it with their personalization algorithms, which they have because they are getting people to login.

But for other publishers, this model wouldn't work. For instance, here in Denmark we have a newspaper called Zetland (which I wrote about here). They are trying to change the way we think about news, and so their growth is all about explaining this concept and using their readers as brand ambassadors to get the word out.

If Zetland had just said: "Get Zetland for 10 weeks for 10 DKK", they would not have been a success today. More than that, Zetland is only publishing about 2 articles per day, so they need to make every article relevant to every reader. They don't have the volume to do the kind of personalization that Amedia is doing.

Or look at something like the Guardian. Here voluntary donations are defining their focus. How do you make that work? Well, again, you get really good at explaining why people should support them (and they are very good at this).

The key here is that there are many models that work, and what you should learn from Norway isn't necessarily to copy their specific model, but how they have put it together.

Amedia looked at their situation. They realized the potential of having 79 newspapers working together under a shared ID. But to make a shared ID work, you need to get people to login, so a metered paywall wouldn't be any good. Instead, they needed a paywall designed around logins (aka a premium paywall). But creating a premium model reduces the time people have to really know you, so they needed something to fix that. The answer was personalization, their insanely good onboarding processes, and tailoring everything to the individual.

This is what is amazing about Norway. It's not any of the individual things, but the process of how they made them work.

And this is what you should learn from them. You might have a very different situation, so identify what model works for you, but then go through the process and add all the other steps to fix whatever obstacles you have.

Most of all, Norway is winning because the reader is at the core of their model. Most newspapers just send out a newsletter with random articles for random people. In Norway, they send out a newsletter to you!

This is where the magic really is.

 
 
 

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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé

 

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