Gazeta Wyborcza is a national daily newspaper in Poland. First issue published in 1989, had 8 pages and was printed in black and white. Started by the Solidarity movement that discussed with the Communists how to transition to a democracy. The Communists had lots of newspapers, but the Solidarity movement had nothing, so they started Gazeta Wyborcza to provide information for the first elections. Decided to keep the newspaper going even after the elections. First office was in a kindergarten, so had editorial meetings in a playground sandpit.
Now has 6 million readers, selling 450k copies, per week. Has internet portal, 50 websites, 6m unique users. No longer just a newspaper – magazines, 24 radio stations, outdoor business (billboards).
Poland has changed in last 20 years, so going to tell some stories about the transitions. In 20 years, so many things happened, in media market, went through development of media that took the West 200 years. Same thing happening in Ukraine, but doing it in five years.
GDP has grown 68% in 20 years, from 1990 to present. A lot of former Soviet countries had a strong slowdown after initial growth, but Poland kept growing, has about a third the wealth of Spain, so catching up. Ukraine as much more work to do.
In 1981, coal miners went on strike and the tanks came in and shot people. Now, protests involves voting. Press freedom in the 80s – censorship meant that stories about strikes were cut out. In more recent elections, they kept a percentage of the newspapers blank to illustrate the percentage of people who didn’t vote, trying to encourage voting. Published four versions of the paper with four headline slogans to encourage voting, as submitted by readers.
Shops have changed. In early 80s, shops were empty. Now there is a boom in shopping, and with it, massive amounts of billboard ads. Is some concern about how the massive billboards are hiding the bits of Warsaw that tourists might want to see, so published a guide to ‘what’s behind the hoardings’.
Need to look at the whole picture to see what are the chances and problems of digital media in your own country.
Post 1989, circulation is going down, not because of internet or TV, but because of a massive change in the situation. No one trusted newspapers in Communist times, so no one bought them after Communism collapsed. In magazines, massive growth. State used to control magazines, so when that opened up, suddenly there could be more variation in the magazine market. Newspaper market was overdeveloped, magazine market was underdeveloped.
Three points where something momentus happened: 1989, 1993, 2000.
Re-evaluation of media, 89-93. Trybuna Ludu, was official Communist paper, and it collapsed after the change, Gazeta became best-sellig daily, but real demand much lower than the artificial demand forced by adherence to Communism. Only a few state newspapers remained, and are not very popular now – mainly local dailies, and one business paper.
Lots of foreign publishing companies came to Poland to start newspapers, but they didn’t survive because they weren’t serving needs of the Polish. Market leaders were born just after the transition.
Was a crisis of readership after collapse of Communism. Got very high unemployment after transition, because companies closed that were hiring people under Communism but weren’t actually producing anything. Also psychological problems, a move from a non-compete environment, people were cheating the state if they could, and no one would complain about apathetic colleagues. After Communism, people did care, there was competition, so people didn’t buy newspapers so much because they had other things to worry about.
1994, first licenses for TV & Radio. Was three state-owned channels, and first open licences granted in ’94, and that really changed the market. Circulation of newspapers and magazines dropped dramatically.
1998, second waive of licences for TV & Radio, so there was more competition and that also affected the newspaper and magazine market negatively too.
Then in 2003, another change. In 94, a lot of new magazines launched and they stole readers from newspapers, but in 2003, new dailies stole readers from magazines.
Free dailies entered the market in 2004, and so circulation grew for newspapers and magazines. Could not have been launched earlier, because depend on advertising. Free newspapers are for rich countries.
Then there were two internet revolutions. The bubble, 2000 – 2001, very bad because economy slowed down, and the internet slowed down, but it took off several years later in 2005.
98-93: Re-evalution of media
94-97: Invasion of mass media
97-02: Deathmatch
03-08: Newspaper innovations, silent digital revolution & marketing challenge
In 1994, Polish readers and media discovered mass media. Magazines and newspapers were very serious before then, even magazines for women were about how to find a better job. In 1994, invasion of foreign publishers with very down-market publication, nothing serious or difficult, they were telling a different stories: beautiful is better than ugly, funny better than serious, colour better than B&W, scandal is better than politics… a lot of readers stopped reading newspapers, especially women. Magazines grabbed those readers and newspapers didn’t recover for many years. But this type of content is now grabbed by digital media.
Another thing that happened was the first licences for commercial TV. They also discovered mass taste – was all about entertainment. Wasn’t about education or public mission, as state TV had been.
Advertising market developed. Newspapers had 17% of total ad market. When commercial TV arrives in a country, that’s the last moment to grow the market share of the newspapers and develop the ad market.
In 2006, newspapers had 13%, although net worth of total market is larger, so are getting more money, but share is not growing any more and it will not grow. When you look at Spain or Germany, newspapers have much larger share of advertising because they were developed before commercial TV changed the way that people spent time. If you can do something about it in your country, fight with commercial TV and do something so that it will be launched later!
In 1998, the competition strengthened. Second wave of national TV licences. More entertainment – Big Brother, people having sex in the bath, and it grabbed the attention from all the other media.
Growing competition for ads killed the market – was an ad price war between TV and the dailies. TV lowered their prices, and newspapers had to do something similar, so was losing share and losing revenue. TV broadcasts 24 hours, so the cheaper the ads are, the more they can run, which means they spend less on programming. More ads is cheap for TV. For newspapers, more ads means more pages, more paper, etc. So too much advertising is not good for newspapers.
So prices went down, competition stronger, so companies started to merge. Concentration of ownership became an issue. Four groups control 80% of market – Axel Springer (Germany), Mecom (UK), Verlagsgruppe Passau (Germany), Agora (only Polish group). After collapse of Communism, there was no money – no Polish companies had the money to buy the publishing companies. State gave companies to the journalists, but they had no money so they sold them to foreign companies. They then start merging titles. Got a very concentrated market, with a minor influence of Polish owned companies.
But this isn’t necessarily bad – no evidence that German-owned newspapers force German-centrive views on Polish papers. Some evidence of German car reviews re-published from German sister titles, but no evidence of ideological views being forced on Polish press.
In 2003, newspapers still in an emergent market, and Polish papers responded with innovation. In Poland, no newspaper delivery, so you have to buy from a shop or stand. This is a valuable thing because 60k points of sale, which means can deliver any product to any place in Poland. So started to publish books, DVDs, games, maps, language courses. It’s a lot of money you can make on that. At one point 15% of revenue came from that.
At news stand you can decide if you want just a newspaper, or newspaper with a move, book, etc. It’s a cultural offer – you guide people to watch certain movies on TV, so can also guide them to buy a movie because you think it’s a good movie.
Other innovations, last five years have seen seven new national daily newspapers launched. When you read in US that newspaper industry is dying, well, it depends on the market, on how innovative is the industry. In Poland, very innovative. Lots of types of paper, from tabloid to quality to free dailies. So can still expand market and make money on it.
Because of competition, some newspapers co-operate with foriegn brands, so can buy translations of Wall Street Journal, Financial Times, The Times, and you can buy the NYT in English as an educational supplement to a Polish paper.
The silent digital revolution – not only internet. Digital TV. 20 years ago there were 3 channels, 10 years ago there were 7 channels, now you can connect to cable or satellite, and there is 150 Polish channels. Changes the way you spend time with TV. Means you cannot devote same amount of time to one channel. Say 10 years ago, 30% of people were watching one soap opera, now it’s not possible to have such a large percentage of the audience because there are so many soap operas. So TV cannot gather the audience to sell the ads; they promise the advertiser that they will show the ad to 2m people, so if they don’t get that on first showing they have to repeat the ad for free. Cannot broadcast more than 12 minutes of ads per hour, and they are full now so the money is going to newspapers.
Internet ad market share is 7%.
News TV is important – it is much more dangerous than internet to newspapers, because it gives more coverage to news than saw on TV before. Not watched by young people, but 40 – 80 yo, so newspaper readers. See connection between rise of newspapers and decline of readership. People wake up, turn on news channel automatically. People wait for every last bit of news, especially breaking news. TV gives a sense of urgency. People get excited.
Broadband is getting popular. 44% of Poles have access to the net, and 24% of total population have access to broadband. It’s very cheap, and it changes a lot, e.g. makes video possible.
When websites were launched in Poland, in 1995-ish, everyone thought the web was about information and the news. Between 2000 and now we discovered that it’s not about information and news, it could be about finding old schoolmates – 11m users from 38m national population a schoolmates website.
This isn’t an area that newspapers have really been interested in, but now it’s a gold mine. The four students that launched the website, it was sold first for $4m, then for $100m.
In Poland, huge growth in community sites. Mobile services are emerging. Can surf with computer, connected via phone, with speed comparable to broadband. Mobile services becoming more sophisticated. Gazeta has a sport mobile portal, including news, movies, fantasy football, etc.
New mobile services educate customers, e.g. GPS service for cars, educates people in how to use technology. GPS navigation systems are getting ads, e.g. some petrol stations are paying to be shown on the map and for the GPS to not show the other petrol stations. So this services are competing with papers for ad revenue. No other real touch screen devices as iPod Touch and iPhone not really widely available.
Google estimate that 1 billion people have access to the net at least once a month. What do they do?
They look for information – 1 billion Google searches per day. Important factor.
They communicate – 80 billion emails and instant messages sent daily.
They buy/sell – EU e-commerce is worth 130 billion euros, not just shops but also online banking.
They join communities – 250m of users are on a social network of some sort.
They are looking for entertainment – 500 million YouTube playbacks per day.
How many hours people spent online, in any category, forecast by Google. Expect that community will grow from 1.5 hours today to 7 hours in 2012. Expect entertainment will grow from 2 hours to 6.5 hours per month.
See that happening in Poland. Entertainment is top, then news, both quite stable, but lifestyle information and communities are growing quickly. If, as a news company, all you do is provide news you will not be successful online. Other audiences beyond news are important because that’s here the growth is and they will quickly outstrip news.
50% of Polish internet users are younger than 25, so that affects the type of information that they will look for. Older readers are not so fast in adopting he internet.
It’s possible that in 20 years the current crop of under 25s will get interested in politics, but at the moment it doesn’t work. So the whole content of the newspaper is not good enough to be successful on he net because it only appeals to a niche audience.
So launched a lot of new websites with content that’s not at all suitable for the newspaper. Most of there content is for people under 25. Focused on soap operas designed for the net, or music listening. Have a joint venture with Bebo, so can blog, have profile, share, etc. Have a site like YouTube for funny movies. Have a site aimed at girls between 10 and 12. Site about fashion for 15 year olds. One for sports for boys at school, and separate one for sports aimed at girls. There are a lot of girls on the net and there haven’t been many websites for them.
If you compare Gazeta’s position on the net with other newspapers online, doesn’t compare at all. Gazeta trounces all the others. Has a specialised online news gathering team unrelated to the newspaper.
All the journalists had to work for the net, so total integration. It wasn’t growing as much as was needed. Noticed there are so many differences between newspaper or internet, we decided to break it apart. Integration didn’t work. Mistake – people think the internet is like newspaper but endless, but in fact internet behaves more like broadcast. 80% of your traffic comes to 20% of content. Have to produce very rich media content, with video, audio, photos. That’s what makes you successful. Because you need to make this content very rich, you have to put a lot of resources to do it in the right way.
Imagine you have a press conference. Years ago, they thought one good journalist could do everything, so can file braking news with a. laptop, then can write something longer, and later can investigate, so the story will develop. Then will also have camera so can do photography, and then maybe video too and can shoot the conference. That was the thinking at the time, but they found that whilst it could be done, the result was that the photos were not that good, the articles for the newspaper was poor because it was the same as the online article, so what’s the reason to publish it the next day? Don’t need breaking news during the event, but need them to think about what is behind it? Need more in depth thinking. Need journalist to stay around to ask questions. Expect him to think about the story, what’s really going on? What’s the angle?
Couldn’t find a way to effectively combine it. Better to send three journalists from website to press conference – one person shooting video, one person photos, one person write. They write more like broadcast, because also have a product to manage the team, have to have another person at HQ to look for background, t make infographics. etc.
So much better to have a team of journalists that can work in that way and will focus on a certain amount of news and will make it really rich. Those stories will ive us better traffic than poor stories written by journalists trying to do multimedia.
Have two newsrooms – one for the newspaper, and one for the portal which co-operates more with the radio journalists who work in a way that’s more useful to the online journalists, because their work is more about breaking news, and they are trained to do something in an hour. We could change the whole culture, but it was not effective. We are integrating the newsrooms for all the radio stations with the portal newsroom, and are creating a video newsroom, producing 300 news videos per week, each no longer than 2 minutes. Are also buying video from other sources. Probably 150 of these are about entertainment.
About 650 people in editorial at the newspaper, and online newsroom is no more than 30 people. Publish a national daily with 21 local sections, so those 650 are not just working on national paper but also the local inserts and for local websites.
Marketing team (readership, not ad sales) is about 20 people and half of those are journalists, because you can’t market the paper without thinking about editorial. Messages are created in a different way an the promotional thing are chosen in a different way than we would expect from a marketing manager from a product company. Tried to hire specialist from Coca Cola and they were trying to sell the paper like Coke, but it’s not Coke.
Polish economy still growing, but cannot achieve same growth in newspapers as can with internet. If we invest money now then will earn more later. Also focusing on outdoor and TV, in readiness for terrestrial digital to come to Poland, when they’ll be able to have their own TV station.
Some things online they do charge for, but not a huge revenue, so most of money comes from advertising. Why should advertisers still need newspapers as intermediaries. Advertisers can communicate directly and for free online. Reach is the key thing – getting in front of more people. Issue is justifying price.
Newspaper 24/7: breaks news and updates, adds background info, video audio content, interaction, invites users to become journalists.
But they were looking for a different idea, a different way of working and a different view of convergence. After they tried integration, and it failed, they tried to think about it differently. Didn’t think about integration, thought about the topic, about solving problems, then talking with internet people about how they could achieve results.
E.g.: Poland €70 billion to spend. Question – how should this money be spent. Asked the question in the newspaper. 21 regions, and used the local newspapers and journalists to write a front page commentary “Seven sins of my city”, and to list the worst things about their cities. Was quite a shaking experience, because most local editors believe they have to write nicely and kindly about their city. Launched an internal blog only editors in chief could see it, and did an online workshop on how to discuss their sins of their cities, and talking about their article. Then published articles after 3/4 weeks.
Organised local debate, but promoted it nationally. Result was amazing – 70k letters, emails and calls on this topic. Asked readers for feedback, and got it! People like to discuss it with the newspapers. Also had a focused blog just on this campaign, so people could discuss online too. Local TV and radio stations organised news shows about it, despite not being related to Gazeta.
Did a research study, 6332 people polled, asked about their needs, e.g. what would you pay more taxes for? Roads? More police? Playgrounds? Church? etc. People were deciding what they thought was most important.
Asked readers to make a snapshot of one day, from 12am to 12pm, and got 1000 photos, and published best photos, and got the stories behind it. Editorial project done together with readers.
Worked with PwC for professional strategy for seven largest cities. PwC did it pro bono.
Discovered that you have to find something around which people can rally, a period from history. The 1944 uprising was the one thing that people were proud of in Warsaw, despite the fact that failed and resulted in the the flattening of the city, but that wasn’t the sort of thing that people could celebrate. Need an intriguing target for the city to catch people’s imagination. Roads and bridges are boring, but saying “Let’s put our city forward for the Euro football tournament” captured people’s imagination. People need an understandable goal.
People need a common place, somewhere that people can go and gather and feel proud. Problem with that – after Communism, people gather in shopping centres. Need a forum for debate. After this campaign, newspapers started to organise local meetings to discuss future of their cities, and people are happy to attend. Anyone who can influence the city was involved – e.g. large employers.
