Just for myself I think this will fail

“Axel Springer aims to create the leading digital media publisher in the democratic world,” the company told the Financial Times in August.

Bets on a string of US online news ventures have followed the failed tussle for the FT and the buyout of Business Insider, but success has been mixed.

Springer has a minority stake in Thrillist, the online entertainment and travel website with a dedicated section on cannabis culture.

They’ve just bought Politico, are eyeing up Axios apparently. Didn’t they end up with HuffPo too?

The strategy is obvious enough, it’s like Murdoch decades back with newspapers. Buy up a swathe of established brands and have a secure position with significant market power. Well, OK.

Except there’re two ways to think of these new media brands.

1) It’s a landrace, whoever colonises gets it for all time. Buying, hopefully cheap, those with the landclaims is an excellent strategy.

2) It’s easy enough – note that I’ve not achieved it but still – to set up a new brand and grow it. Therefore it’s not in fact a landrace, it’s a viciously competitive market, the value of any incumbency is low. Buying low value incumbents is not sensible.

The strategy depends upon 1) being true. I have a strong feeling that 2) is closer to the mark.

That makes this strategy more like GEC after Weinstock. Which didn’t, as we know, work out well.

10 thoughts on “Just for myself I think this will fail”

  1. Myspace
    Alta Vista
    Netscape

    All market leaders, you may recall several others. If your memory is good enough.

  2. Personally I put my own failures and yours down to the lack of a network effect. Large media properties are more stable than smaller ones. All local papers are gone but inexplicably the Guardian remains.

  3. AOL?
    Ask Jeeves?
    Anyone of the many email providers before Gmail killed them?

    The internet is “unlimited” so there is no scarcity of “land” that has value – just think of a new domain name and off you go.

    Getting traffic is the thing to spend on. Buy traffic instead of buying existing brands and you’ll probably do better – yes the existing brands have traffic but as the names above all prove, that’s only temporary!

  4. The brand really has little value, because there’s little cost and risk to consumers. They’re not selling $500 in-depth reports on which decisions of 10s of thousands will be made. They’re selling ad-supported or subscription-based business trash/entertainment.

    The only reason newspapers were such strong businesses was the limited area at news stands which created a network effect. Anyone opening a newsagents knew to carry The Sun, Mirror, Times, Guardian, Telegraph and FT. Which then meant that was what people bought, which reinforced them. If you were a new newspaper, you were in the list where people could order you, or you only got to be in larger newsagents. Internet meant anyone could read anything so this got broken.

  5. Huffer’s not on AS’ portfolio list.

    Which seems to have an awful lot of “historic” brands (and mainly German unsurprisingly, with a smidgeon of other European titles), so difficult to discern what the new strategy might be right now, but…

    1. Might be correct, if the aim is to have multiple titles with a specific audience space. There’s a couple of computing, general tech titles, and several motoring titles, motorsports, classic, performance, what-have-you.

    AS would own multiple titles, with several generic brands (same design language, style guides) depending on the segment. But would otherwise be agnostic on actual content.

    2. Seems to imply that individual titles would be potentially volatile. High turnover in AS’ portfolio over a good few years, if it’s aggressively managed by vintage/revenue.

    It does look like AS is building a portfolio of specialists, rather than a collection of generics.

  6. Dennis, Satan's Editor-In-Chief

    “[Insert Name Here] aims to create the leading digital media publisher in the democratic world,”

    Not the first time we’ve heard this bullshit, and it never ends well for shareholders. This is more about idiots with money than it is about publishing. The buying part is the easy part. The making it interesting, relevant and profitable part isn’t.

    Remember when VICE was going to remake the digital landscape? Same press release as above…

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