In 2023, Mediahuis, the European news publishing group operating in six countries, drew up a strategic plan to shift from a 70% print margin to a 70% digital margin within seven years, coined its “7-7-7” goal. Paul Verwilt, the group’s Chief Operating Officer, concedes that with new forces at work, the goal is ambitious and difficult to operationalise.
Forecasting models predicted that the shift could lead to a revenue gap of over €100 million by 2030 that would need to be plugged if the group were to maintain its momentum and keep funding quality journalism, Verwilt told the Asian Media Leaders Summit in Singapore in early November.
Mediahuis, formed in 2014, saw significant growth in revenue from €300 million in 2014 to over €1.2 billion, all without outside investment; instead, by acquisition and scale. Although highly profitable, there has been no growth in revenue or operating profit in recent years. The leadership team is “very concerned” about how to reach its north star targets by 2030 and thereby maintain its ability to support its journalism.
Subscription success and pricing
Despite the flat growth lines, there have been some successes: “Where we have done well is on the volume of subscriptions, average digital subscription revenue. We’ve moved average digital subscriptions from six to eight euros to seventeen to eighteen Euros, which has made a huge difference.”
He felt pricing power was often underestimated, but data proves it works. “Even when customers feel uncomfortable, churn is lower than expected.”
The group is falling short on digital advertising growth, and print distribution costs (sometimes up to 80 cents per copy) are much worse than anticipated.
Now, “AI and automation are changing news production and discovery. Creators and influencers are competing for audience attention outside publisher platforms,” Verwilt said.
Creators and young audiences
Engaging young audiences is a key challenge: “If we stop being the destination, our model collapses,” Verwilt said. “We must keep audiences coming to us, or create value wherever they are.”
“How do we reach and monetise young audiences? We don’t know exactly, so we use scenario analysis to guide possible futures.”
The strategic playbook includes six building blocks to reach future audiences:
- Creator Economy Strategy: driven by a Future Insights Board, in place to challenge group thinking
- Capacity Building Programmes: and talent development. They move skilled staff around and experiment.
- Mergers and Acquisitions: Looking for opportunities in adjacent creative industries to expand reach and capabilities
- Build Dedicated Communities: to engage young people around specific topics
- Off-Platform Monetisation: Research and develop revenue streams on third-party platforms such as YouTube (where they have a deal to sell their own advertising)
- Youth-focused news brands and social-first news projects to experiment with video and social formats.
AI and automation
AI and automation are now central to Mediahuis’s operations, organised around four pillars.
1. Foundation: organisation, processes, and technical infrastructure.
2. Transform the Company: using tools and AI applications in workflows (about 15 tools are in use).
3. Transform the Product: Experimentation and testing AI in journalism products and audience engagement.
4. Transform the Business: Exploring different platforms for Age of AI.
“AI helps free staff from repetitive tasks, allowing more focus on journalism and strategic innovation,” Verwilt said. Automation is also playing a key role in print operations and distribution – helping to cut costs and enabling reinvestment in digital products.
Collaboration and scale
Verwilt also emphasised the importance of collaboration within the industry on key issues such as printing, distribution and licensing.
“It doesn’t make sense for competitors to duplicate effort, for example, delivering newspapers in the same area or separately developing distribution technology.”
“Scale and synergies matter. Working together can save money and allow investment in unique journalism.”