“The Most Urgent Challenge for Newspapers Comes from Google and Facebook.”

By Anna Holmquist Aug 27, 2018

Tags Publisher

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The Swedish Media Publishers’ Association (TU) is the trade association for Sweden’s newspapers and other media companies. Strossle’s Anna Holmquist had a chat with their Managing Director, Ms. Jeanette Gustafsdotter, about the current situation, and the future, for news publishers.

We’ve seen a number of years with severe challenges for news publishers, such as declining circulation, weak digital business models and lack of trust in some groups in society. What’s the spirit among Swedish newspapers today?

Overall, there’s a positive mood. The years after the financial crisis in 2008 were really difficult for most media companies, many curves went in the wrong direction for a long time. Now there’s a different spirit. Several important steps towards new business models have been taken. More and more users are willing to pay for news, both in print and online. And the media houses launch new products for advertisers, try new editorial formats and continue to add more revenue streams. In addition, there’s an election coming up soon. Here the daily press plays an absolutely crucial role, and that’s inspiring of course.

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Looking forward, what will be the most important questions for news media?

The news media will–just like the the rest of our society – be deeply affected by the digital revolution. We will have to deal with the shift towards e-commerce, voice recognition and other new consumption patterns. But the most urgent challenge comes from global IT giants, like Google and Facebook. All over the world, these platforms grow at the expense of other channels. Almost all growth in the digital advertising market lands with these companies. And they pay almost no local tax on their income. That creates an imbalance in the market. It makes it harder for other media to compete with their services and their products. In Sweden, the Nordic countries, the EU and within the OECD we work hard to find a solution. And I think we’re about to solve to the tax problem.

Another tax issue is the high VAT on digital news in Sweden. It must be removed as soon as possible. Today, a printed magazine has a VAT of six percent while a digital publisher has a VAT of 25 percent. That’s unreasonable. It hinders the media from offering their users content in the way they want it.

We also need to find a better balance between the publicly funded media (public service), and the privately financed media. Both are needed. Together, we can give citizens a more comprehensive coverage. But if we want it, public service must have clear limitations for its business. Just as the judiciary has a framework for its operation, public service needs it. Otherwise, we will see more blind spots on the map and a get less vital media landscape. We have about 160 newspapers in this country, and to a large extent that’s where the democratic discussions take place. That’s far too important to risk.

Finally, it’s fundamentally important to maintain and deepen people’s trust in the daily press. Most people in this country have confidence in their newspapers. This has been proven in a wide range of studies, such as EBU's European Studies, and Studies by the SOM Institute of Gothenburg University. Here, of course, press ethics plays an important role. It’s central and we must cherish it.

What mistakes do you think news publishers have committed in recent years?

It's not my mission to point finger at individual companies. Nor is it anything I wish. But sure, there are always things that can be improved and refined. My impression, from what the industry media write, the reports I read and my travels in the country, is that news publishers work intensely on testing new things, promoting new products and finding new markets. In that process, you need to fail sometimes. Apple's first personal computer was no success, quite the opposite. The first smartphone was no hit. But it gave lots of insights. So my image is not a road filled with failures, but a long series of valuable trials and lessons that can be successful examples. In only a few years, we have gone from a situation where ja couple of percent of the population paid for digital news, to around 26 percent today, according to the Reuters Digital News Report 2018, I think that’s deeply impressive.

We now live in a post-GDPR society. How has it affected the media industry?

I may be a bit boring, but I must say it is too early to say. The new law has given us a number of challenges, challenges we share with much of the business world in general. But we are working actively to make this transition as smooth as possible for the industry.

Have the newspapers really understood the consequences of the GDPR?

No one understands the full consequences of the GDPR, yet. We will only know in a few years. But we’ve offered education for publishers, organized conversations and experience exchange and I can assure you there’s a deep commitment to the issue. The wish to do the right thing is unmistakable.

What players in the media ecosystem will be hit the hardest by GDPR?

The entire industry is covered by the new Act. We must all adapt, and we do. It’s not always easy, but we’ll obviously adapt to this too. In Sweden, we have had news media since the mid-1600s. A wide variety of laws have been put in force since then. Over the centuries, the industry has adapted, developed new products and found provision for its services and products. GDPR will not be the bullet that stops this development.

Will we see a newspaper death in the next few years?

Tomorrow's media market will look different than it does today. That’s obvious. The fact that some publishers are added and others disappear is part of the game. But we have about as many daily newspapers today as we had in the early 1970s. All of these will not be in print in the future, but many will. It’s the market that decides. If consumers want their news in their smartphone, as a pod or whatever it may be, the industry will deliver the news in the desired way.

What’s your advice for newspapers that want to grow?

Again, I may be a bit boring and say that it is not my role to advise on product development. Those who work with these questions do it so much better than I. But if they are not already members of The Swedish Media Publishers’ Association, I hope of course that they will be. So that can be my advice: "Join TU".

 

 

 

 

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