Bonnier News is in a strong position today thanks to a comprehensive transformation process that began eight years ago, said Anders Eriksson, CEO of Bonnier News.

“It obviously is a digital transformation, and a business model transformation, from advertising to subscription,“ he said.

“But also, very much an operating model transformation, from a very decentralised, silo-based organisation to an integrated organisation.”

Eriksson discussed the publisher’s transformation journey during our recent World News Media Congress in Copenhagen.

Bonnier News is the largest news media company in the Nordic countries, with almost 2,500 journalists and a broad portfolio of titles including national and local news, mainly in Sweden, such as the country’s largest morning newspaper, Dagens Nyheter. The publisher also produces business media titles in 12 European countries, as well as lifestyle and feature magazines, and audio and video content.

When the company embarked on its transformation process, it based its strategy on a “flywheel” model, built around a commitment to free speech, Eriksson explained.

This circular model “starts with investing in unique quality journalism for our relevant audiences and target groups,” he said.

“Then, a lot of focus has been on scaling our ecosystem and moving from individual newspaper titles into an integrated structure,” while also aiming to increase the value of their products by building a more personalised user experience.

These steps help the company deliver more content to more people: “There’s a lot of our content, a lot of our journalism, that doesn’t reach the right audience,” Eriksson said. A print paper was very much a “one-size-fits-all” product, but in the digital world “you can optimise the content much more towards you audiences,” he added.

Finally, reaching more people also helps Bonnier News monetise their journalism more effectively, growing revenues and profits and allowing them to invest more in its journalism.

Building a more integrated company structure

A key step in the transformation strategy has been the implementation of a new integrated operating model that creates efficiencies – a goal that has been “a really important part of our transformation,” Eriksson said.

Previously, Bonnier had a very decentralised structure and the company’s culture was heavily based around decentralisation, he explained.

“The cultural transformation has been a huge change and been a lot of work.

“The very decentralised model worked really well in the print logic, but doesn’t work that well in a digital context, where you can get much more benefit out of scale and the ecosystem. So we have put a lot of work into this, in terms of technology, platforms, etc. and we’ll continue to do so,” he said.

Today, Bonnier News is organised around cross-functional teams, grouping together areas related to:

Commercial activities
Tech platforms
Support functions.

“It’s a completely different organisation, a different culture in terms of how we operate,” Eriksson said.

He added: “The newsrooms are still operating independently, but pretty much the rest of the organisation is integrated. That’s been crucial and key for us.”

Business transformation driven by digital and subscriptions

Alongside the organisational restructuring, the publisher’s business model has also seen major changes, Eriksson said.

“Last year, we reached the point where digital – and some other growth like events – is now more than half of our revenue. And print is now less [than half]. So that was certainly a milestone,” he said.

“But even more importantly, if we look eight, nine years back, we had 90% of revenue coming out of print. And all the profitability, but also all of the contribution margins came from print. Digital was an important part of our business already then in terms of audience and traffic and so forth, but not from a business model standpoint.

“Now that has turned around. Now revenue [from digital] is larger, but also 70% of the contribution margin is coming from digital, and 30% from print. So it’s a huge shift.”

A key driver of the change has been the new integrated and scalable operating model mentioned above: thanks to the new structure “we’re actually getting much greater margins out of digital than we ever got out of print. Probably even in the heyday of advertising.”

As for the print side of business, “obviously the print margin is going down, but it also remains profitable,” Eriksson said.

Another shift in the business model is the new focus on subscriptions, which now account for more than half of revenues, whereas advertising used to drive the business, Eriksson said.

With subscriptions, the goal used to be to have “individual subscribers to individual titles,” but now the publisher aims to engage households (and companies in the case of business media).

“So we try to get the household to subscribe, and then we try to get users in that household to register and then create personalised, customised user experiences and products for those individual users. That’s the direction we’re taking,” he said.

Strong position in the local market

These strategic decisions have enabled Bonnier News to build a strong position in the Swedish media landscape.

“We more than doubled in size. And we have tripled in profitability,” Eriksson said.

In 2016, the company’s total revenue was 4.7 billion SEK (418 million euros), while this year its estimated total revenue is 10.6 billion SEK (940 million euros). In 2016, its operating profit was 0.3 billion SEK (27 million euros); this year its estimated operating profit is 0.9 billion SEK (80 million euros).

Eriksson said Bonnier News is now a clear market leader in terms of building digital subscriptions in the Swedish news media market.

“Eight years ago, we had half a million subscribers in Bonnier News, and now we have 2.6 million,” he said. (For reference, Sweden has a population of 10.5 million people.)

Read more: How Sweden’s Bonnier News amassed 2.2 million subscribers

In terms of its footprint in the Swedish market, Bonnier News now has 37% of the advertising market share, 46% of the traditional print bundle subscriptions, and 58% of digital subscriptions, Eriksson said.

Digital bundle: ‘There is a demand for this kind of product’

Eriksson also gave an update on Bonnier News’s bundle product +Allt, launched in February last year, which combines the publisher’s digital content from more than 70 titles, including national and local news and feature magazine content, behind a single login.

+Allt has great potential to accelerate the company’s subscription strategy, Eriksson said.

“We think it’s been a huge success. We have 270,000 active subscribers on this product,” which the publisher also expanded to its print subscribers, adding another half a million users.

“I think in 14 months, we’ve proven that there is a demand for this kind of product in the marketplace,” he said.

Adding value with AI-driven personalisation

The next step with +Allt is to enhance it with more personalisation features, with the aim of helping users find relevant content from the different sources included in the bundle.

“There’s a lot of our content, a lot of our journalism, that doesn’t reach the right audience,” Eriksson said.

“When you get access to so much content, there is a lot of good journalism, but a lot of it is not relevant for you because it’s in a city or a place you don’t live in or never visit […] So there is a much greater need for personalisation, customisation, and for us to be able to deliver value through product development.”

AI has a key role in creating these more customised content experiences, and the company is developing an AI-powered aggregation tool that users can use to discover relevant content.

Eriksson said they can see that an improved content discovery process “increases engagement, increases readership, reduces churn, and increases your willingness to pay for the value delivered. And so this is going to be a really important part of our next development.”

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