CASE: E-610

DATE: 11/03/16

Ryan Kissick (MBA 2014); Robert A. Burgelman, Edmund W. Littlefield Professor of Management; and Robert

Siegel, Lecturer in Management, prepared this case as the basis for class discussion rather than to illustrate either

effective or ineffective handling of an administrative situation.

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AXEL SPRINGER IN 2016:

FROM TRANSFORMATION TO ACCELERATION?

Mathias Döpfner, chief executive officer (CEO) of Axel Springer SE, had successfully

transitioned the German publishing house through a major digital transformation in the world of

journalism. Given the massive disruption that had occurred over the previous two decades with

how people consumed news, this was no small feat. During this time, many newspapers,

magazines, and journals failed to keep up with the rapidly changing industry. Historically, print

advertising constituted the majority of revenue for large publishers. But the digital revolution in

journalism meant that print advertising revenues dropped precipitously. According to the

Newspaper Association of America, American print advertising revenues fell from $44.9 billion

in 2003 to $16.4 billion in 2014. 1 This downward trend in print advertising revenues happened

around the globe, with traditional publishers cutting thousands of jobs. And many publishers

were forced to declare bankruptcy during this period.

In spite of these industry headwinds, Axel Springer was thriving. As of the middle of 2016, the

company’s main newspaper, Bild, had a print circulation of close to 2 million and more than

340,000 digital subscribers, far more than competitor publications such as Süddeutsche Zeitung

and Frankfurter Allgemeine Zeitung. Axel Springer’s annual revenue had grown from €2.1

billion in 2009 to €3.3 billion in 2015 (see Exhibit 1 for Axel Springer’s historical revenue and

Exhibit 2 for Axel Springer’s historical EBITDA). In 2009, digital media constituted 21.2

percent of the company’s total revenue 2 ; in 2015, digital media constituted 61.7 percent of the

company’s total revenue (see Exhibit 3 for Axel Springer’s digital revenue as a percentage of

1 Dan Kennedy, “Print Is Dying, Digital Is No Savior: The Long, Ugly Decline of The Newspaper Business

Continues Apace,” WGHB News, January 26, 2016, http://news.wgbh.org/2016/01/26/local-news/print-dying-

digital-no-savior-long-ugly-decline-newspaper-business-continues (July 16, 2016). 2 “Axel Springer 2010 Annual Report,” Axel Springer, http://www.axelspringer.de/dl/431754/Annual_report_2010

_Axel_Springer_AG.pdf (July 16, 2016).

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Axel Springer in 2016: From Transformation to Acceleration? E-610

p. 2

total revenue over time and Exhibit 4 for Axel Springer’s digital EBITDA as a percentage of

total EBITDA over time). 3

Döpfner had transformed Axel Springer through a two-stage digital transformation strategy

process. Starting in 2006, Axel Springer first focused on organic growth and late-stage digital

acquisitions, which infused digitization into Axel Springer’s corporate culture. 4 In 2013, the

second stage centered around Döpfner’s mission to become “The Leading Digital Publisher”;

Axel Springer would be defined not by its distribution channels, but by its (content) brands and

services. 5

Having successfully transformed Axel Springer from a print-only company to a thriving print

and digital media conglomerate, Döpfner wanted to accelerate Axel Springer’s growth even

further. He believed that Axel Springer was well positioned to succeed not only in their core

German market, but also more broadly on the world stage. Through a series of strategic

initiatives and acquisitions, Döpfner felt confident that Axel Springer could engage consumers

far beyond Germany’s borders with content that spanned many languages.

Yet he knew this path to becoming a global media powerhouse would not be straightforward,

especially given the rapid changes occurring within the media and publishing realm. In a world

in which people were consuming content from a variety of sources—traditional print media and

digital news sources, such as social media, e-mail, news alerts, or mobile applications—Axel

Springer would continuously need to assess how it provided content to consumers as well as who

it considered competition.

Against this backdrop, Döpfner wondered how Axel Springer could sustain its powerful brands

and monetize its digital content. Companies such as Facebook, Twitter, and Snapchat, none of

which had been founded as traditional news companies, were on Döpfner’s radar. Döpfner

elaborated:

My number one priority [as of 2016] is to define the rules with social media

companies. Millions of people are consuming content on Facebook and other

social media platforms, and it’s important that we take a fair share of the business,

including data access and advertising revenues. It’s also critical that we maintain

sales of our own content and services, including subscription models. Social

media is the distribution of the future, and if we don’t figure out the right business

model—a way to monetize our digital content—we are in danger. 6

In addition to the threat posed by large technology and social media companies, Döpfner

wondered how Axel Springer could successfully enter foreign markets, including the United

3 “Axel Springer 2015 Annual Report,” Axel Springer, http://www.axelspringer.de/dl/22446733/Axel_Springer_

Annual_Report_2015.pdf (July 16, 2016). 4 For further information, see “Axel Springer in 2014: Strategic Leadership of the Digital Media Transformation,”

GSB No. E-522, p. 1. 5 Ibid.

6 Interview with Mathias Döpfner on September 22, 2016. All quotations are from this interview unless otherwise

noted.

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Axel Springer in 2016: From Transformation to Acceleration? E-610

p. 3

States. Axel Springer had established itself as a leader in the German media market, yet Döpfner

knew that success outside of Germany was an entirely different challenge with a new set of

competitors and consumer tastes.

Finally, in an increasingly complex and global media industry, Döpfner wondered how Axel

Springer could continue to provide value to its many business units and subsidiaries. He

explained:

Throughout Axel Springer’s digital transformation, it’s been important to make

sure that we are one company with one set of fundamental values and some

cultural common denominators that make people say, “I’m proud to be part of

Axel Springer.” Yet it’s also important to make sure that we’re structured in a

way that creates the most value for Axel Springer, whether that’s bringing worlds

together or instead creating clearly delineated power centers. For me, this is

always a tough question and top priority.

By the end of 2016, Döpfner was thrilled with Axel Springer’s progress over the past decade and

optimistic about the company’s prospects of becoming a global and digitally focused company,

yet he knew that navigating this complex environment would require overcoming many

challenges. Adding to Axel Springer’s urgency were vast declines in print advertising revenue;

global spending on newspaper print ads was expected to decrease by 8.7 percent in 2016, which

would be the largest drop since the global recession in 2008. 7 With these massive industry

headwinds, Döpfner needed to figure out how to monetize Axel Springer’s digital content on a

grand scale, and quickly.

TURNING DISRUPTIVE INTO SUSTAINING TECHNOLOGICAL CHANGE

The Evolution of Journalism in a Digital Era

Near the end of the 20th century, new technology began to change the landscape of media and

journalism across the world. The evolution occurred primarily due to the proliferation of

personal computers and increased access to the Internet, then continued in the 2000s with the

emergence of smartphones. 8 Prior to this digital revolution, most publishing houses operated

through a similar business model. They generated editorial content through employed

journalists, aggregated reach, and monetized the printed content through sales, advertising, and

classified revenues. 9 However, the raft of technological innovations drastically shifted this

traditional model, resulting in new media distribution strategies and vastly different consumer

preferences.

Using their smartphones, tablets, or personal computers, consumers could access news and

media content from anywhere they liked (see Exhibit 5 for a summary of where Americans

7 Suzanne Vranica and Jack Marshall, “Plummeting Newspaper Ad Revenue Sparks New Wave of Changes,” The

Wall Street Journal, October 20, 2016, http://www.wsj.com/articles/plummeting-newspaper-ad-revenue-sparks-

new-wave-of-changes-1476955801 (October 21, 2016). 8 Ibid.

9 Ibid.

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Axel Springer in 2016: From Transformation to Acceleration? E-610

p. 4

received their news content from 1991 to 2012). Consumers could browse media content on a

variety of channels, such as dedicated news websites, search engines, mobile applications, blogs,

and social media, many of which were free for consumers to access (see Exhibit 6 for data

relating to global trends in news consumption). Content was also available in a variety of

formats, including text, pictures, and videos, all of which could be accessed at the click of a

button. The ubiquity of news content allowed for a new type of news aggregator, such as the

Huffington Post, which collected content from across the Internet and then monetized the content

without having to generate the content themselves. Technology companies, including Apple and

Samsung, also began to include native news aggregator applications on their mobile devices.

In addition, many sites allowed non-journalists to contribute content, many of whom were not

paid by the corporation. For example, in the early 2010s, Forbes developed a platform whereby

thousands of individuals—business leaders, authors, academics, and other topic experts—could

contribute content on the Forbes.com website, without serving as full-time employees. 10

Using

the contributor model, companies could generate new content at a much lower cost, and they

could vastly increase the number of contributors publishing on their platform. 11

The rise of social media also played a dramatic role in the digital revolution of media and

journalism. Instead of simply absorbing media, consumers were actively involved in the creation

and distribution of content. Social media platforms allowed users to share stories publicly and

see what their friends were reading or watching. More and more companies incorporated social

media features into their media distribution, encouraging users to share and comment on news

stories. In this way, news shifted from a private read to a communal experience. Social media

also drove a shift towards the personalization of news content, in which consumers could access

media specifically targeted to their unique preferences. For example, Facebook’s proprietary

news feed algorithm ensured that users were shown only the content that mattered most to them

while filtering out the material that was of less importance. 12

Axel Springer’s History: The Early Years

Axel Springer was founded in Hamburg, Germany in 1946. Publisher Hinrich Springer and his

son Axel created the company as a means to bring popular content to the German people. 13

By

1959, Axel Springer had established itself as one of the major players in the German industry

with several popular publications including Nordwestdeutsche Hefte, Hörzu, Hamburger

Abendblatt, Bild, Die Welt, and Berliner Morgenpost. These offerings spanned a variety of

genres, including news, popular culture, and political commentary.

10

Lewis DVorkin, “Inside Forbes: In Journalism, What’s New Is Actually Old… and ‘That’s the Way It Is,’”

Forbes, May 29, 2012, http://www.forbes.com/sites/lewisdvorkin/2012/05/29/inside-forbes-in-journalism-whats-

new-is-actually-old-and-thats-the-way-it-is/#2683f8ac359f (August 2, 2016). 11

Jeff Sonderman, “What the Forbes Model of Contributed Content Means for Journalism,” Poynter, May 29, 2012,

http://www.poynter.org/2012/what-the-forbes-model-of-contributed-content-means-for-journalism/173743/

(August 2, 2016). 12

Victor Luckerson, “Here’s How Facebook’s News Feed Actually Works,” Time, July 9, 2015,

http://time.com/3950525/facebook-news-feed-algorithm/ (July 17, 2016). 13

For further information, see “Axel Springer in 2014: Strategic Leadership of the Digital Media Transformation,”

GSB No. E-522, p. 2.

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Axel Springer in 2016: From Transformation to Acceleration? E-610

p. 5

Throughout the next few decades, Axel Springer expanded its reach to attract an even broader

audience, developing a portfolio of magazines for sports, automobile, photography, and

international art enthusiasts. By the 1990s, Axel Springer’s publications had distribution in more

than 20 countries around the globe, and the company had established a presence in radio as well

as television. 14

Digital Evolution at Axel Springer

When Mathias Döpfner became CEO of Axel Springer in January 2002, he had a clear vision for

the company: Axel Springer would be the winner of digitalization in the European media

business. 15

In January 2006, however, Germany’s antitrust body blocked Axel Springer’s

attempt to acquire Germany’s biggest television broadcaster, ProSiebenSat.1, which prompted

Döpfner to reconsider Axel Springer’s digital strategy. 16

Turning his attention to online

channels, Döpfner challenged Axel Springer to generate half of its revenue and profit from

digital products within the next 10 years. This was a tall task given that less than 1 percent of the

company’s revenue came from digital products in 2006. 17

Yet, Axel Springer was able to achieve these goals by focusing on three success factors: not

fearing self-cannibalization from print to digital divisions; accepting diverse and entrepreneurial

personalities; and not allowing the creation of silos within Axel Springer. 18

Döpfner did not

want winners or losers to emerge within the organization; as such, he infused a digital culture

within each of Axel Springer’s three key business segments: classified advertisements,

marketing, and paid content. The classified advertisement segment generated revenue primarily

through job, car, and real estate advertisements. The marketing segment earned revenue from its

advertising clients, whereas the paid content segment generated revenue through paid readers

and viewers. As of 2015, the classified advertisement segment comprised 23 percent of Axel

Springer’s revenue, while marketing and paid content made up 27 percent and 48 percent,

respectively. 19

With employees singularly focused on what was best for the company as a whole, Axel Springer

was able to recognize unique opportunities for growth that blended the worlds of digital and

print. Ulf Poschardt, editor-in-chief of Axel Springer’s WeltN24, explained the company’s

unified approach: “A few years ago, I started a blog on Porsche. It started as a personal side

project, but it quickly became very popular with thousands of readers. So we decided to create

official digital and print products focused on Porsche, and advertisers came to us immediately.

This is just one small example, but it shows the integrated way that we looked at new

opportunities.” 20

14

Ibid, p. 3. 15

Ibid, p. 7. 16

Ibid, p. 7. 17

Ibid, p. 8. 18

Ibid, p. 8. 19

“Axel Springer 2015 Annual Report,” Axel Springer, http://www.axelspringer.de/dl/22446733/Axel_Springer_

Annual_Report_2015.pdf (July 16, 2016). 20

Interview with Ulf Poschardt on September 22, 2016. All quotations are from this interview unless otherwise

noted.

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Axel Springer in 2016: From Transformation to Acceleration? E-610

p. 6

Pioneers in Paid Digital Content

Döpfner knew that Axel Springer’s digital evolution would require much more than simply

moving content from print format to the Internet. The company had to experiment with new

distribution and monetization models, partnerships, and content solutions. Jan Bayer, president,

Paid Models, and member of the company’s Executive Board, explained Axel Springer’s

pioneering attitude in its digital endeavors:

When we introduced a paid component to our digital products in Germany, we

expected the other publishers to do the same. We were convinced that journalism

could only be a viable business if people paid for it. It’s not possible to finance a

newsroom and a worldwide network of correspondents with advertising only. At

least that’s the case in a comparably small market like Germany, where language

differences pose a natural barrier for reach. In the end, we were the only

publisher in Germany to introduce paid content. Obviously, there was a risk. If

you are the only one offering paid content, free content is your biggest

competitor. But we trusted that we had a premium product—something that

people would be willing to pay for. We were proved right. Eventually other

publishers followed the same path. 21

One of Axel Springer’s first digital solutions, iKiosk, was released on December 12, 2011. 22

Ulrich Schmitz, chief technical officer (CTO) of Axel Springer’s Electronic Media Division,

described the product: “iKiosk is a distribution platform for full newspaper and magazine

editions, but in PDF format. It started with our own publications, and step-by-step we added

almost the entire German market on iKiosk. Almost every major publication is now on iKiosk.

Essentially, people could pay to get the entire edition of the publication they wanted. It was a

natural transition from print.” 23

Less than three years later, Axel Springer, in conjunction with the New York Times, invested €3

million in the Dutch start-up Blendle, a company that described itself as the “iTunes for

journalism.” 24

Whereas iKiosk only allowed users to purchase the entire edition of a publication,

Blendle allowed users to pay on a per-article basis. Döpfner explained the investment, “As a

publisher we want to convince users to pay for great journalism, also in the digital age. Blendle

has the potential to attract young, Internet-savvy readers.” 25

21

Interview with Jan Bayer on November 5, 2016. All quotations are from this interview unless otherwise noted. 22

Christian Garrels, “Axel Springer opens iKIOSK: New Version of the iPad App Offers more than 100

Newspapers and Magazines for the Launch,” Axel Springer, December 12, 2011,

http://www.axelspringer.de/en/presse/Axel-Springer-opens-iKIOSK-New-version-of-the-iPad-app-offers-more-

than-100-newspapers-and-magazines-for-the-launch_2146017.html (July 17, 2016). 23

Interviews with Ulrich Schmitz on January 27 and September, 2016. All quotations are from these interviews

unless otherwise noted. 24

Maarten Van Tartwijk, “New York Times, Axel Springer Invest in Dutch Startup Blendle,” The Wall Street

Journal, October 27, 2014, http://www.wsj.com/articles/new-york-times-axel-springer-invest-in-dutch-startup-

blendle-1414408997 (July 17, 2016). 25

Ibid.

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Axel Springer in 2016: From Transformation to Acceleration? E-610

p. 7

At the same time as the Blendle investment, Axel Springer learned about another start-up called

Readly. For a monthly fee of €9.99 per month, users could access thousands of articles from

hundreds of publications across the globe. Axel Springer introduced its flagship publication Bild

as a freemium digital subscription model. Anyone could access the publication’s free articles,

but only paid subscribers could access premium content. Müffelmann, then head of the

company’s digital media division before he became President of Axel Springer USA and CEO of

Axel Springer Digital Ventures, explained these various approaches:

There are parallels to the music industry. Before, you bought full records with all

the songs on it as a bundle, and then suddenly Apple iTunes came with unbundled

paying per song, which is similar to the Blendle approach. And with Readly,

that’s similar to Spotify, where you pay a monthly fee and have access to all

articles, all publications, etcetera. At Axel Springer, we are opportunistic and not

dogmatic on one approach. 26

Maintaining a Leadership Position in the German Market

Through this approach, Axel Springer was able to gain a significant edge over its German

competitors, especially in the digital market (see Exhibit 7 for the reach of various German

media brands and publications). By the middle of 2016, Bild Online had more than 340,000

digital subscribers. On the one hand, this number was small compared to Bild’s print circulation

of close to 2 million readers. On the other hand, when compared to the circulation of other

German newspapers, it was clear that Axel Springer’s digital platform was thriving. Bild’s

digital subscriber base was larger than the print subscriber base of both Süddeutsche Zeitung and

Frankfurter Allgemeine Zeitung, Germany’s top daily newspapers.

To Döpfner, this was a great sign that Axel Springer had established itself as a leader in the

German digital media market. However, he was confident that Axel Springer’s German

competitors were working hard to erase this gap. He also knew that in order to maintain Axel

Springer’s lead, they would need to continue generating premium content across all of Axel

Springer’s publications. Donata Hopfen, publishing director and head of the management board

of BILD Group, explained one of the challenges:

One issue is that journalists want to be published. They want to be read by a wide

audience. With technology, journalists are now aware of exactly how many

people read their article, and they use this as a metric. For us, we will often have

shorter reach because we’re using a paid subscription model. The key for us was

to make it a sign of quality to get an article in the subscriber-only section, even if

these articles attracted fewer readers. This is crucial to keeping our journalists

happy. 27

26

Interviews with Jens Müffelmann on January 27 and September 23, 2016. All quotations are from these

interviews unless otherwise noted. 27

Interview with Donata Hopfen on November 2, 2016. All quotations are from this interview unless otherwise

noted.

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Axel Springer in 2016: From Transformation to Acceleration? E-610

p. 8

Hopfen described another issue related to Axel Springer’s brands, “Bild has always been a really

strong brand. This helped us when people had to search for content. First, they went to the Bild

website. Then they searched for Bild on Google. People had to find the content. But now, with

the proliferation of social media, the content finds you. With this distribution shift, maintaining

our brand is going to be a challenge.”

As Döpfner surveyed the German digital media market in the middle of 2016, he felt confident

that Axel Springer had developed a leading position. In addition, Axel Springer had established

many initiatives to build upon this lead and begin focusing on international growth (see Exhibit

8 for a summary of top digital media brands across the world). However, he knew that

international acceleration could only happen if Axel Springer secured its leadership position

against its core German competitors, as well as against a series of new competitors in the form of

cross-boundary disruptors.

WINNING WITH AND AGAINST CROSS-BOUNDARY DISRUPTORS

What are Cross-Boundary Disruptors?

In a 2007 article in the Strategic Entrepreneurship Journal, Robert A. Burgelman and Andrew S.

Grove explored the notion of cross-boundary disruptors, “powerful entrepreneurial change

agents whose strategic actions materially affect the equilibrium in an adjacent or neighboring

industry.” 28

In the article, Burgelman and Grove explored Apple’s role in disrupting the music

and cellular phone industries.

Prior to Apple’s entry into the music industry, six large recording companies controlled the vast

majority of the music value chain. For decades, the dynamics in the music industry did not

dramatically change. While new technologies were introduced, such as the compact disc, they

did not change the balance of power within the industry. 29

However, the Internet did alter

industry dynamics, and Apple was able to take advantage with products such as iTunes and the

iPod. 30

In a similar fashion, Apple played a major part in disrupting the cellular phone industry

with its introduction of the iPhone in 2007. 31

Cross-Boundary Disruptors in Media and Journalism

Similar to the music and cellular phone industries, the media and journalism industries faced

dramatically shifting industry dynamics in the 2000s and 2010s, due to the digital revolution.

Axel Springer, which had competed with the same publishing houses since the 1950s, was

suddenly confronted with several new sources of competition, many of which had existed for a

couple of decades or less. As an additional complexity, while many of these cross-boundary

disruptors were threats, they also benefitted Axel Springer. For example, Facebook’s news feed

drove a significant amount of traffic to Axel Springer’s websites. Yet Döpfner knew that Axel

Springer would have to monitor its relationships with technology giants such as Google, 28

Robert A. Burgelman and Andrew S. Grove, “Cross-Boundary Disruptors: Powerful Interindustry Entrepreneurial

Change Agents,” Strategic Entrepreneurship Journal, 2007: 315-327. 29

Ibid. 30

Ibid. 31

Ibid.

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Axel Springer in 2016: From Transformation to Acceleration? E-610

p. 9

Facebook, and Snapchat—all drove readers to Axel Springer’s content and websites, but were

also potential competitors.

Google

With 2015 annual revenue of $74.5 billion, Google was one of the largest companies on the

planet. 32

Best known for its search engine, Google had a variety of popular technologies and

services, including Gmail, Google Chrome (web browser), Google Maps, and YouTube. For

Axel Springer, Google was an important distribution channel, driving millions of users to Axel

Springer’s content. At the same time, Google had the potential to take significant value from

Axel Springer. Christoph Keese, executive vice president at Axel Springer, explained:

Obviously, we appreciate that Google brings traffic to our articles. However, the

value created by journalistic content for Google’s ecosystem is greater than the

monetary value of the traffic directed to our sites. Google’s news aggregation

partly substitutes publishers’ products when catering to consumers who are just

looking for a short news update, which is a significant portion of the market. We

also see a pattern of market dominance abusing behavior by Google. They use

their power to distort markets through preferential treatment of their own

products. We acknowledge the ownership of their search algorithm. We also

accept the fact that this algorithm changes frequently to produce even better

search results. But we are critical of their practice of rigging their own algorithm

to always favor their own products over all competing products. 33

In addition, Google had developed a product called Google News, a service which aggregated

news content from a variety of content providers across the world. This service had the potential

to increase Google’s branding with regard to digital content, as consumers would associate the

content with Google even if it originated with Axel Springer.

Facebook

Founded in 2004, Facebook quickly grew into the largest social media company in the world. As

of April 2016, it had 1.59 billion active monthly users. 34

Similar to Google, Facebook was a

significant distribution channel for Axel Springer because of its ability to spread Axel Springer’s

content to a global audience. In addition, it lowered Axel Springer’s reliance on Google, while

also providing interesting new opportunities, such as Instant Articles. Launched in May 2015,

Instant Articles allowed publishers to create fast, interactive articles for the Facebook platform,

which vastly improved the consumer experience. 35

Similarly, Facebook developed new

32

“Annual Revenue of Google from 2002 to 2015 (in Billion U.S. dollars),” Statista,

http://www.statista.com/statistics/266206/googles-annual-global-revenue/ (July 17, 2016). 33

Interview with Christoph Keese on November 2, 2016. All quotations are from this interview unless otherwise

noted. 34

“Leading Social Networks Worldwide as of April 2016, Ranked by Number of Active Users (in Millions),”

Statista, http://www.statista.com/statistics/272014/global-social-networks-ranked-by-number-of-users/ (July 17,

2016). 35

Casey Newton, “Facebook’s Instant Articles Arrive to Speed up the News Feed,” The Verge, May 13, 2015,

http://www.theverge.com/2015/5/13/8595263/facebooks-instant-articles-arrive-to-speed-up-the-news-feed

(July 18, 2016).

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Axel Springer in 2016: From Transformation to Acceleration? E-610

p. 10

technology related to the distribution of content, including context-sensitive distribution that

factored in criteria such as an individual’s location, time of day, and events specifically relevant

to the consumer.

Despite these benefits, Facebook also posed a threat to Axel Springer. Like Google, Facebook

had the ability to dramatically impact the business of publishers by altering its algorithm,

adjusting its teasers, or changing how it monetized published content. In June 2016, Facebook

announced that it planned to make several changes to its news feed algorithm, which would

prioritize content posted by the friends of users while deprioritizing content posted by

publishers. 36

Facebook anticipated that these adjustments would result in significantly less

traffic for hundreds of news media sites. 37

However, Facebook also anticipated that the impact

would be less severe for publishers whose traffic came from users sharing and commenting on

stories versus those whose traffic came from sponsored posts. 38

Snapchat

Initially released in 2011, Snapchat was a rapidly growing image messaging and multimedia

mobile application targeted at younger demographics. As of June 2016, Snapchat had 150

million people using its service every day. 39

Through its wide array of messaging features,

which included innovative image-processing software as well as the ability to annotate photos

and videos, Snapchat made communicating fun. Schmitz explained, “Snapchat was such a new

platform that it was challenging to figure out exactly how they would impact our business. But it

was clear that they had found a way to engage a younger generation, something that is crucial for

our business.”

In 2015, Snapchat released its Discover feature, which allowed Snapchat users to view news in

the form of Snapchat stories. Similar to other Snapchat stories, content disappeared after 24

hours and was replaced with new content. 40

Within a year of Discover’s launch, 23 publishers

were creating content specifically targeted for Snapchat. For many publishers, Discover

generated millions of views and unique visitors per month. 41

As such, several publishers created

teams of five to ten employees dedicated exclusively to Discover. 42

36

Mike Isaac and Sydney Ember, “Facebook to Change News Feed to Focus on Friends and Family,” The New York

Times, June 29, 2016, http://www.nytimes.com/2016/06/30/technology/facebook-to-change-news-feed-to-focus-on-

friends-and-family.html?_r=0 (August 2, 2016). 37

Ibid. 38

Ibid. 39

Sarah Frier, “Snapchat Passes Twitter in Daily Usage,” Bloomberg, June 2, 2016,

http://www.bloomberg.com/news/articles/2016-06-02/snapchat-passes-twitter-in-daily-usage (July 18, 2016). 40

Steven Tweedie, “How To Use Snapchat's New ‘Discover’ Feature,” Business Insider, January 27, 2015,

http://www.businessinsider.com/how-to-use-snapchat-discover-feature-2015-1 (August 2, 2016). 41

Kerry Flynn, “Snapchat Discover One Year Later: How 23 Media Companies Are Building Stories For Evan

Spiegel,” International Business Times, January 27, 2016, http://www.ibtimes.com/snapchat-discover-one-year-

later-how-23-media-companies-are-building-stories-evan-2281851 (August 2, 2016). 42

Ibid.

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Responding to New Competition

Döpfner knew that it would be important for Axel Springer to avoid becoming dependent on

these large technology companies. Yet navigating the relationships with these cross-boundary

disruptors would be a delicate balancing act for several reasons. First, several of these

technology companies were far bigger than Axel Springer in terms of financial resources (see

Exhibit 9 for select company corporate revenues). Although they were not experts in branded

digital content, they were adept at navigating complex technologies and had the resources to

explore many new industries and avenues for growth. On top of that, as of 2016, these cross-

boundary disruptors were not yet direct competitors to Axel Springer. Axel Springer benefitted

from the additional traffic generated by Google, Facebook, and Snapchat, while these companies

benefitted from Axel Springer’s premium content. As such, it was a mutually beneficial

relationship. Yet Döpfner knew that this dynamic could shift quickly.

Against that backdrop, Döpfner needed to decide how he wanted to approach these companies.

Should Axel Springer treat them as partners, competitors, or something in between? To address

this question, Axel Springer created teams specifically dedicated to each of these platforms.

Schmitz explained, “As soon as Facebook started to grow, we created a team fully dedicated to

it. That team is tasked with managing our approach to Facebook and fully understanding it. We

now have similar teams for any platform that starts to take off, including Twitter, Snapchat—we

want to be aware of all of these companies to position Axel Springer for future success.”

In addition to creating company-specific teams, Axel Springer began targeting content for each

of these platforms. This would enhance the value of Axel Springer’s content to consumers,

which would in turn maximize Axel Springer’s value to the platforms.

Upday

To avoid becoming too dependent on third-party platforms and social media companies for

traffic, Axel Springer built a news aggregation platform called Upday, which was launched in

September 2015. 43

Through a partnership with Samsung, Upday was pre-installed on Samsung’s

newest smartphones and tablets, such as the Samsung S7, and was available for download on

older mobile devices. 44

As of February 2016, more than 1,200 publishers provided content on

Upday. 45

Articles were separated into “Need to Know” news, which was curated by a local team

of journalists, and “Want to Know” articles, which were sourced by a computer algorithm and

based on the preferences of individual consumers. 46

Both Samsung and Axel Springer benefitted

from the partnership, as explained by Upday’s CEO Peter Würtenberger:

Samsung had all of these great products—interconnected home devices,

smartphones, tablets, watches, screens—but what they were missing was great

content solutions. Apple had iTunes and their news app, but Samsung didn’t have

this. So they decided to partner with us, because we knew content, and together

43

Lucinda Southern, “Inside Axel Springer’s answer to Facebook’s Instant Articles,” Digiday, February 24, 2016,

http://digiday.com/publishers/whats-upday-axel-springers-news-aggregator-platform/ (October 20, 2016). 44

Ibid. 45

Ibid. 46

Ibid.

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we could build the right solution. And for us, the partnership gave us immediate

and widespread distribution. Many companies—especially technology start-

ups—spend so much time and money on acquiring customers. Because of our

partnership with Samsung, we had instant access to new customers. 47

Upday allowed publishers to maintain a unique branding experience while also gaining access to

the data generated by consumers. Jan-Eric Peters, Upday’s chief product officer, elaborated on

the mutually beneficial relationship between Upday and publishers, “Upday’s early usage and

growth numbers have been fantastic, and this benefits all parties. Consumers like the product

because they can get all of their news without having to move across multiple platforms, and

publishers like the product because Upday is not a substitute for other brands; instead, it helps

promote other brands.”

Even with the launch of Upday, as well as the creation of platform-specific teams focused on

integrating more closely with the likes of Facebook and Snapchat, Döpfner had a number of

questions. Were there other strategic moves Axel Springer should make in order to improve the

balance of power with these cross-boundary disruptors? Similarly, Döpfner, Würtenberger, and

Peters contemplated this issue: How could Axel Springer maintain power in its relationship with

Samsung, especially as Upday continued its rapid growth? And while Axel Springer was well

aware of large technology and social media players such as Google, Facebook, and Snapchat,

what other companies should be on Axel Springer’s radar as potential threats? Getting these

questions right would be imperative as Axel Springer prepared to expand its digital presence

internationally.

AXEL SPRINGER’S GLOBAL STRATEGY

Transformation Strategy: Protecting Axel Springer’s Core

As Döpfner considered Axel Springer’s international strategy, he realized that it would be

composed of two pieces: a defensive strategy, which involved protecting Axel Springer’s core

market from international competition; and an offensive strategy, which involved monetizing

Axel Springer’s content globally. Coinciding with the digital revolution in media, many global

publishers utilized new technologies and distribution channels to take market share from local

incumbents. For example, to counteract the erosion in its traditional print revenue, the New York

Times announced in April 2016 that it would invest more than $50 million to expand its digital

content internationally. 48

In May 2016, less than three years after being purchased by Amazon

CEO Jeff Bezos, the Washington Post announced its intentions to expand its digital presence in

Europe. 49

47

Interview with Peter Würtenberger on September 23, 2016. All quotations are from this interview unless

otherwise noted. 48

Sydney Ember, “New York Times Plans International Digital Expansion,” The New York Times, April 14, 2016,

http://www.nytimes.com/2016/04/15/business/media/new-york-times-plans-international-digital-

expansion.html?_r=0 (July 18, 2016). 49

“The Washington Post begins global expansion of Opinions,” The Washington Post, May 24, 2016,

https://www.washingtonpost.com/pr/wp/2016/05/24/the-washington-post-begins-global-expansion-of-opinions/

(July 18, 2016).

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Within the span of two months, two of the world’s largest print publications had announced their

intention to expand into Axel Springer’s home market. On the one hand, Döpfner felt confident

about Axel Springer’s ability to protect its core market. In 2014, Axel Springer entered into a

joint venture with Politico, an American political journalism organization best known for its

digital content. 50

Döpfner believed the venture would bolster Axel Springer’s position within

Europe. Yet Döpfner knew that Axel Springer could not take these new competitors lightly.

Also on Döpfner’s radar were digital-only publishers, such as Buzzfeed, Vice, and Vox, which

were established without print business units. Similarly, news aggregators such as Flipboard and

Google News collected news stories from around the world and displayed them on their web and

mobile applications. In an increasingly digital era, these companies benefitted from their lack of

print infrastructure. As such, they were able to expand their readership rapidly across the globe,

including into Germany. Döpfner would need to keep these companies in mind if Axel Springer

were to maintain its leadership position in the home market.

Expansion Strategy: Turning Axel Springer into a Global Digital Publisher

In addition to transforming and strengthening Axel Springer in its core market, Döpfner wanted

to turn the company into a global publisher. Following a period of strategic positioning and

gaining an understanding of the local market dynamics, Axel Springer acquired strategic assets

with a strong focus on content in the United States. Furthermore, it brought successful and

established offerings from existing markets into new geographies, which was possible because of

Axel Springer’s ability to exchange ideas and collaborate within the organization.

Axel Springer’s Silicon Valley Footprint

In 2012, Döpfner became intrigued by the U.S. Silicon Valley, aware that the region had a strong

reputation for developing high-functioning and successful international organizations. 51

Wanting

to learn more, Döpfner asked three of Axel Springer’s top managers—Kai Diekmann, then

editor-in-chief of Bild; Peter Würtenberger, CMO of Axel Springer (prior to becoming CEO of

Upday); and Martin Sinner, founder and managing director of the recently acquired technology

start-up Idealo—to visit the region on a six-month fact-finding mission. 52

During this time, each

of the three managers were exempt from their day-to-day responsibilities; their only tasks were

to build relationships and learn from thought leaders in the region. 53

During their visit, Diekmann, Würtenberger, and Sinner realized that if Axel Springer were to

thrive on a global stage, the company would need to assume a less hierarchical organizational

structure with more fluid communication channels. They also believed that Axel Springer

needed to adopt new technologies and digitization strategies more rapidly than management had

previously anticipated. Eager to implement these findings, Döpfner held a three-day

management summit in Silicon Valley in 2013, which was attended by more than 70 of Axel 50

Dylan Byers, “Politico Partners with Axel Springer to Launch European Product,” Politico, September 9, 2014,

http://www.politico.com/blogs/media/2014/09/politico-partners-with-axel-springer-to-launch-european-product-

195154 (July 18, 2016). 51

For further information, see “Axel Springer in 2014: Strategic Leadership of the Digital Media Transformation,”

GSB No. E-522, p. 12. 52

Ibid, p. 12. 53

Ibid, p. 12.

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Springer’s top executives. 54

In addition, Döpfner established a six-to-ten week rotational

program called Visiting Fellows that provided dozens of Axel Springer employees the

opportunity to learn about the latest developments in technology and media. 55

Döpfner believed

that this exposure to Silicon Valley was critical to establish meaningful change within Axel

Springer.

Along with the Visiting Fellows program, Axel Springer collaborated with the “Plug and Play

Tech Center” in Sunnyvale, California, to create a Berlin-based start-up accelerator targeted at

digital entrepreneurs. The three-month program in Germany provided entrepreneurs with office

space, €25,000, workshops, and mentorship opportunities. 56

The initiative provided Axel

Springer with insights into new technologies as well as connections to up-and-coming talent,

both of which would undoubtedly benefit the company in its efforts to expand globally.

These initiatives served as a strong foundation for successful expansion into the United States.

Key Acquisitions and Investments

One of Axel Springer’s most prominent acquisitions of the 2010s was Business Insider. Having

previously invested in Business Insider (a nine percent stake), Axel Springer decided to increase

its shares to 97 percent for a purchase price of $343 million in September 2015. 57

In addition to

Business Insider’s large, primarily American consumer base, Axel Springer was excited to learn

from the digital-only platform. Müffelmann recalled:

In 2015, Business Insider came up with Insider, a lifestyle news arm of its core

brand. Insider launched without a homepage initially. All of its content was

published straight to social platforms, such as Facebook. There was no owned

and operated dot-com address—the content existed in a fully distributed

environment. This approach worked extremely well and generated significant

reach and visibility in a very short amount of time. The insights that we gained

from this launch are now successfully applied to other digital properties within the

group.

In October 2016, Axel Springer and Business Insider launched MarketsInsider.com, a globally

focused markets data and news operation. 58

Markets Insider was powered and provided with

data by Finanzen.net, the leading German finance portal and Axel Springer subsidiary. The team

54

Ibid, p. 12. 55

“Axel Springer Extends its Presence in Silicon Valley with new Personnel,” Axel Springer, November 2, 2013,

http://www.axelspringer.de/en/presse/Axel-Springer-extends-its-presence-in-Silicon-Valley-with-new-

personnel_16674966.html (August 2, 2016). 56

For further information, see “Axel Springer in 2014: Strategic Leadership of the Digital Media Transformation,”

GSB No. E-522, p. 14. 57

Alyson Shontell, “German Publishing Powerhouse Axel Springer buys Business Insider at a Whopping $442

Million Valuation,” Business Insider, September 29, 2015, http://www.businessinsider.com/axel-springer-

acquiresbusiness-insider-for-450-million-2015-9 (July 18, 2016). 58

Lukas I. Alpert, “Business Insider Launches Markets Data Site with Help from Axel Springer,” The Wall Street

Journal, October 24, 2016, http://www.wsj.com/articles/business-insider-launches-markets-data-site-with-help-

from-axel-springer-1477303201 (October 24, 2016).

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optimized the site for mobile devices and offered tools such as personalized portfolios, watch

lists, and customizable charts. 59

Another example was the acquisition of eMarketer in June 2016, in which Axel Springer paid

$242 million for a 93 percent stake in the company. 60

Döpfner believed that eMarketer, a

leading provider of high-quality analyses, reports, and digital market data for companies and

institutions, would supplement Axel Springer’s paid content businesses globally while also

providing the company valuable insights into the American market.

Even prior to the Business Insider and eMarketer acquisitions, Axel Springer had invested in

several U.S. companies, including Airbnb, virtual-reality platform Jaunt, news platform

Mic.com, social video news company NowThisMedia, and lifestyle portal Thrillist.com (see

Exhibit 10 for a summary of Axel Springer’s digital investments). 61

In October 2016, Group

Nine Media was founded with the announcement that it would combine the brands Thrillist,

NowThis Media, The Dodo, and Seeker into a single entity. 62

Axel Springer was the second-

largest shareholder in this new organization. 63

Ben Lerer, Group Nine Media’s CEO (and former

CEO of Thrillist), explained the benefits for Group Nine Media:

This is truly a ‘win-win’ scenario, allowing our brands the opportunity to remain

independent and build our own future, while at the same time having the support

of one of the best media and entertainment companies in the world. Each of our

brands has found great success independently, but with consolidation of digital

content companies around the corner, there is extraordinary value in all existing

under one multi-brand roof. We will be stronger brands working together—we

will have more influence; we will have better data and insights; we will be better

partners to our advertisers; and most importantly, we will be substantial enough to

make a real difference and stay ahead of the market.

During 2016, Axel Springer established its U.S. headquarters in New York to strengthen the

collaboration with its U.S. portfolio. Döpfner explained, “New York City is the center of digital

journalism in the U.S., where Axel Springer is highly active as a strategic media investor.”

Döpfner also reaffirmed Axel Springer’s interest in learning from Silicon Valley, exclaiming,

“We will continue our fellowship program. From a technology perspective, Silicon Valley

remains very important for Axel Springer.”

59

Ibid. 60

Kim McLaughlin, “Axel Springer Buys eMarketer, Extending U.S. and Digital Push,” Bloomberg, June 10, 2016,

http://www.bloomberg.com/news/articles/2016-06-10/axel-springer-buys-emarketer-extending-u-s-digital-push

(July 18, 2016). 61

“eMarketer to Be Acquired by Axel Springer,” eMarketer, June 13, 2016,

http://www.emarketer.com/Article/eMarketer-Acquired-by-Axel-Springer/1014077 (July 18, 2016). 62

Ibid. 63

Bianca-Maria Dardon Mota, “Axel Springer is Second Largest Shareholder in Group Nine Media,” Axel

Springer, October 13, 2016, http://www.axelspringer.de/en/presse/Axel-Springer-is-second-largest-shareholder-in-

Group-Nine-Media_29170955.html (October 24, 2016).

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Collaboration

A major aspect of Axel Springer’s U.S. strategy was what the company called its DICE strategy:

Develop, Invest, Collaborate, Expand. Müffelmann described this approach, “The DICE strategy

relates to Axel Springer’s portfolio approach in the United States. With this approach, it’s not

just about investing in another company. It’s also about value creation through collaboration,

with the group of portfolio companies being more than just the sum-of-the-parts. This is what

differentiates a strategic investor like Axel Springer from an exit-driven financial investor.”

Collaboration was not limited to Axel Springer’s U.S. operations. For Axel Springer,

investments and acquisitions were as much about learning as they were teaching and gaining

strategic assets. Schmitz expanded:

At our accelerator called Axel Springer Plug and Play, we invest beyond media

into adjacent verticals. This is different from the typical corporate accelerator

where banks invest in fintech start-ups and automotive companies in car start-ups.

We think it’s important to have the best entrepreneurs from very diverse areas

working together. With this approach, everyone gets a lot out of the experience.

For direct investments out of Axel Springer Digital Ventures, we focus on topics

with strategic relevance. This is also the case for later-stage investments, where

we look even more at how the deal fits with our digital strategy. This creates a

valuable knowledge network for all parties.

To reinforce the culture of learning from investments, Axel Springer held multi-day workshops

for portfolio companies. During the workshops, entrepreneurs and executives from across the

globe would gather to discuss lessons learned and topics such as trends in media and technology,

customer acquisition, marketing, data analytics, and human capital (see Exhibit 11 for a sample

overview of an Axel Springer portfolio company workshop). The workshops provided great

networking and learning opportunities for Axel Springer’s employees as well as the company’s

vast array of start-ups.

CONCLUSION: STAYING AHEAD OF THE DISRUPTION

By August 2016, Döpfner was thrilled with the progress Axel Springer had made in navigating

the digital revolution. The company had established itself as one of the leading digital publishers

in Europe; between October 2011 and October 2016, Axel Springer’s stock price increased by

more than 60 percent, and the company was poised to monetize its premium brands and services

globally (see Exhibit 12 for Axel Springer’s stock performance from October 2011 to 2016). In

addition, due to Axel Springer’s strategic initiatives and acquisitions related to digital media,

Döpfner felt confident that Axel Springer would continue to be at the forefront of new trends

within the industry. Furthermore, in such a rapidly changing landscape, Döpfner knew that Axel

Springer had opportunities to move from disrupted to disruptor. Julian Reichelt, editor-in-chief

of Axel Springer’s Bild Online, described the possibilities:

Today, almost every single reporter uses his or her camera in his phone, or even

Facebook Live, as a kind of notebook. Technology allows reporters to capture

high-quality video wherever they go. Yet when I took over as editor-in-chief,

video recording was an afterthought. Reporters would finish their story and then

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think, “Oh, now I have to do a video.” We had to change this mindset, because

you can turn video into writing, but you can’t turn writing into video. Also, video

is great for internationalization. One of the most stellar examples was Paul

Ronzheimer, who covered the Syrian refugee crisis. He met a refugee in Lesbos,

and livestreamed two weeks of walking through Europe, and the whole world

followed. Great technologies open up new ways for telling great stories. If we

embrace this new technology—things like mobile, live, and social—we are not

the disrupted anymore. Instead, we can become the disruptor as we attack the

television industry. 64

In a world with such rapid technological transition, establishing consistent entrepreneurial

learning mechanisms was crucial to future success. If Axel Springer wanted to stay atop the

European media market they would need to stay at the forefront of innovation. As Müffelmann

aptly summarized, “Things are happening so quickly that the disruptors are already being

disrupted. In this type of environment, we have to continue to change aggressively. If we don’t,

there’s no doubt somebody else will take advantage. As Mathias Döpfner has always

proclaimed: ‘Only the paranoid will survive!’”

64

Interview with Julian Reichelt on September 23, 2016. All quotations are from this interview unless otherwise

noted.

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Exhibit 1

Axel Springer Revenue: 2010 to 2015 (€ million)

2010 2011 2012 2013 2014 2015

Total Revenue 2,893.9 3,184.9 2,737.3 2,801.4 3,037.9 3,294.9

Digital Media

Revenue Share (%)

27.4% 30.9% 44.6% 47.9% 55.3% 61.7%

By Segment

Paid Models N/A N/A 1,582.9 1,521.5 1,617.5 1,582.2

Marketing Models N/A N/A 662.8 716.5 794.1 878.9

Classified Ad Models N/A N/A 330.2 402.6 512.0 753.1

Services/Holding N/A N/A 161.4 160.8 114.4 80.7

Note: Prior to 2012, revenue was reported in the following segments: Newspapers National, Magazines National,

Print International, Digital Media, and Services/Holding.

Source: Axel Springer Annual Reports: 2011, 2013, and 2015.

Exhibit 2

Axel Springer EBITDA: 2010 to 2015 (€ million)

2010 2011 2012 2013 2014 2015

Total EBITDA 510.6 593.4 498.8 454.3 507.1 559.0

Digital Media

EBITDA Share (%)

16.8% 26.6% 49.4% 61.8% 62.4% 69.6%

By Segment

Paid Models N/A N/A 301.8 250.1 251.4 223.2

Marketing Models N/A N/A 98.1 103.4 106.5 88.0

Classified Ad Models N/A N/A 133.6 163.8 217.7 305.0

Services/Holding N/A N/A -34.8 -63.0 -68.5 -57.1

Note: Prior to 2012, EBITDA was reported in the following segments: Newspapers National, Magazines National,

Print International, Digital Media, and Services/Holding.

Source: Axel Springer Annual Reports: 2011, 2013, and 2015.

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Exhibit 3

Axel Springer Digital and Non-Digital Revenue as a Percent of Total Revenue:

2007 to 2015

Note: Prior to 2012, EBITDA was reported in the following segments: Newspapers National, Magazines National,

Print International, Digital Media, and Services/Holding.

*Non-Digital EBITDA includes Services/Holding segment.

Source: Axel Springer Annual Reports: 2010, 2011, 2013, and 2015.

Exhibit 4

Axel Springer Digital and Non-Digital EBITDA as a Percent of Total EBITDA:

2007 to 2015

Note: Prior to 2012, EBITDA was reported in the following segments: Newspapers National, Magazines National,

Print International, Digital Media, and Services/Holding.

*Non-Digital EBITDA includes Services/Holding segment.

Source: Axel Springer Annual Reports: 2010, 2011, 2013, and 2015.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009 2010 2011 2012 2013 2014 2015

Axel Springer Digital and Non-Digital Revenue as Percent of

Total Revenue: 2007 to 2015

Digital Non-Digital*

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009 2010 2011 2012 2013 2014 2015

Axel Springer Digital and Non-Digital EBITDA as Percent of

Total EBITDA: 2007 to 2015

Digital Non-Digital*

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Exhibit 5

Summary of Where Americans Received News Content from a

Given News Source “Yesterday”: 1991 to 2012

Source: Elaine C. Kamarck and Ashley Gabriele, “The News Today: 7 Trends in Old and New Media,” Center for

Effective Public Management at Brookings, November 2015, https://www.brookings.edu/wp-

content/uploads/2016/07/new-media.pdf (August 4, 2016).

0%

10%

20%

30%

40%

50%

60%

70%

80%

1991 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Any Digital News Online Newspaper Radio TV

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Exhibit 6

Select Charts and Graphs Related to News Consumption:

2015 Reuters Digital News Report

Survey Question: Which, if any, of the following have you used in the last week as a source of

news?

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015

United States Sources of News: 2012 to 2015

TV Online (Incl. social media) Printed newspapers Social

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015

United Kingdom Sources of News: 2012 to 2015

TV Online (Incl. social media) Printed newspapers Social

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015

Germany Sources of News: 2012 to 2015

TV Online (Incl. social media) Printed newspapers Social

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Axel Springer in 2016: From Transformation to Acceleration? E-610

p. 22

Exhibit 6 (continued)

Select Charts and Graphs Related to News Consumption:

2015 Reuters Digital News Report

Survey Question: You say you’ve used these sources of news in the last week, which would you

say is your MAIN source of news??

0%

10%

20%

30%

40%

50%

60%

70%

Main Source of News by Country

TV Online (Incl. social media) Printed newspapers Social

0%

10%

20%

30%

40%

50%

60%

70%

Online Social Media Radio Print TV

Main Source of News by Age Group

18 – 24 25 – 34 35 – 44 45 – 54 55+

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This document is authorized for use only by Anett Carpio in STRATEGIC MANAGEMENT SUMMER 2024 COURSEPACK-1-1-1 taught by CHARLES NEWMAN, Florida International University from May 2024 to Nov 2024.

Axel Springer in 2016: From Transformation to Acceleration? E-610

p. 23

Exhibit 6 (continued)

Select Charts and Graphs Related to News Consumption:

2015 Reuters Digital News Report

Survey Question: Which, if any, of the following have you used for any purpose in the last

week? Which, if any, of the following have you used for finding, reading, watching, sharing

or discussing news in the last week? Please select all that apply.

Survey Question: Thinking about how you got news online (via computer, mobile, or any device)

in the last week, which were the ways in which you came across news stories? Please

select all that apply.

Direct to

News Brand Search Social Media E-mail

Mobile

Notifications

and Alerts

United Kingdom 52% 32% 28% 10% 10%

United States 36% 40% 35% 25% 13%

France 27% 40% 21% 21% 14%

Germany 26% 45% 20% 15% 9%

Ireland 44% 46% 36% 9% 9%

Denmark 54% 29% 38% 24% 9%

Finland 63% 26% 28% 9% 7%

Italy 20% 66% 33% 17% 7%

Spain 36% 54% 35% 14% 8%

Japan 15% 54% 14% 15% 7%

Brazil 46% 52% 48% 23% 11%

Australia 33% 49% 41% 20% 9%

Source: Nic Newman, David A. L. Levy, and Rasmus Kleis Nielsen, “Reuters Institute Digital News Report 2015,"

University of Oxford, https://reutersinstitute.politics.ox.ac.uk/sites/default/files/Digital-News-Report-2016.pdf

(August 4, 2016).

65

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30

40

50

60

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For the exclusive use of A. Carpio, 2024.

This document is authorized for use only by Anett Carpio in STRATEGIC MANAGEMENT SUMMER 2024 COURSEPACK-1-1-1 taught by CHARLES NEWMAN, Florida International University from May 2024 to Nov 2024.

Axel Springer in 2016: From Transformation to Acceleration? E-610

p. 25

Exhibit 8

Top Digital Brands Globally: 2015 Reuters Digital News Report

Huffington Post Buzzfeed Vice MSN Yahoo

United States 22% 10% 3% 11% 23%

United

Kingdom

12% 5% 1% 5% 8%

France 8% 1% 1% 7% 8%

Germany 6% 1% 1% 4% 5%

Spain 8% 1% 1% 9% 8%

Italy 7% 1% 1% 8% 11%

Ireland 8% 6% 1% 5% 9%

Brazil 2% 2% 1% 20% 18%

Australia 12% 7% 1% 25% 21%

Japan 2% 1% – 10% 52%

Weighted* 10% 4% 1% 8% 18%

Note: Data gathered from responses to the following question: Which, if any, of the following have you used to

access news in the last week? Via online platforms (web, mobile, tablet, e-reader).

*Weighted percentage calculated using population data from Internet World Stats and the World Bank:

weighted = (country population x percentage adults x percentage accessed)/total population of all countries

surveyed.

Source: Nic Newman, David A. L. Levy, and Rasmus Kleis Nielsen, “Reuters Institute Digital News Report 2015,"

University of Oxford, https://reutersinstitute.politics.ox.ac.uk/sites/default/files/Digital-News-Report-2016.pdf

(August 4, 2016).

Exhibit 9

Select Company Corporate Revenues ($ million)

2012 2013 2014 2015

Amazon 61,093 74,452 88,988 107,006

Apple* 156,508 170,910 182,795 233,715

Axel Springer** 3,612 3,863 3,688.3 3,587.2

Facebook 5,089 7,872 12,466 17,928

Google/Alphabet 46,039 55,519 66,001 74,989

The New York Times 1,595 1,577 1,589 1,579

News Corporation*** 8,654 8,891 8,574 8,633

*Fiscal year ends in September. All other companies have December year ends unless otherwise noted.

**Financials are reported in Euros. Figures in chart have been converted to USD as of December 31 of the

respective year. Conversion data was derived from the European Central Bank’s website at

https://www.ecb.europa.eu/stats/exchange/eurofxref/html/eurofxref-graph-usd.en.html.

***Fiscal year ends in June.

Source: Company annual reports.

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This document is authorized for use only by Anett Carpio in STRATEGIC MANAGEMENT SUMMER 2024 COURSEPACK-1-1-1 taught by CHARLES NEWMAN, Florida International University from May 2024 to Nov 2024.

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For the exclusive use of A. Carpio, 2024.

This document is authorized for use only by Anett Carpio in STRATEGIC MANAGEMENT SUMMER 2024 COURSEPACK-1-1-1 taught by CHARLES NEWMAN, Florida International University from May 2024 to Nov 2024.

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For the exclusive use of A. Carpio, 2024.

This document is authorized for use only by Anett Carpio in STRATEGIC MANAGEMENT SUMMER 2024 COURSEPACK-1-1-1 taught by CHARLES NEWMAN, Florida International University from May 2024 to Nov 2024.