Measuring revenue makes for easier media transformation

By Tord Overå

Product Manager, Sports Platform

Schibsted

Oslo, Norway

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In Norway, we have two kinds of mass media companies: state-funded (NRK is the only one) and private (there are many of these). I work at VG, one of the large private ones.

At VG, we often joke that NRK starts the year with a full bank account, and we start at zero as a way of distinguishing how different our operations are. It also often highlights a challenge (earning money) they're relieved of.

Revenue matters when it comes to needed transitions in the media space.

That said, NRK never shies away from critically covering its funders. And, it is in no way an example of state-fuelled propaganda. It does an amazing job within news, entertainment, and sports.

At a friend's party a few weeks ago, I met a guy who is a product leader, which is a very similar role as mine. However, he works at NRK. We really hit it off and started sharing challenges we face across our two media companies regarding news avoidance among young users; Artificial Intelligence; balancing video, text, and audio content; and the organisational changes needed to overcome these challenges.

It was a highly interesting conversation. I'm pretty sure we both shared more than our leaders would have felt comfortable with, but it surfaced a really interesting point for me: If you can't measure revenue as a success factor, it is much harder to navigate product and content development, and, most importantly, organisational change.

The point surfaced when we started discussing the balance between product development and the journalistic missions within VG and NRK.

This can be simplified with this conversation:

Journalist: We should cover this story, because it is our duty to inform the public about it.

Product person: I see, but we have numbers indicating that very few people care about topic A. How about we cover topic B instead? It is very hot these days.

Journalist: Why? I'm not here for the numbers, I'm here as a free journalist covering stories the public should hear about, not what they want to hear about.

Clearly, the journalist has a valid point. As a product person, it can be hard to argue against this. Interestingly, this is where the conversation starts looking very different in VG and NRK:

Product person (VG): I understand, but if we never follow the numbers, VG will go bankrupt, and we won't be able to cover any of the stories people should hear about.

Journalist (VG): I don't like it, but I understand. Let's do it your way this time, as long as I see an acceptable balance going forward that maintains my integrity.

I've never worked at NRK, but the bankruptcy argument above clearly doesn't carry any weight when your revenue is 100% state funded. Let's play it out, to the best of my imagination:

Product person (NRK): I understand, but long term, if we can't prove that we create content that engages enough people, our public funding might be politically challenged, and we might lose some of our budget.

Journalist (NRK): That's a lot of maybes for me to not do what I think is right.

You can argue VG and NRK should fill different roles in Norwegian society and having both is good for Norway as a whole, with which I agree. You could also argue there are many other numbers for navigation than commercial ones, which is true. I'm simply saying I don't see another number that has the potential to create a sense of urgency like revenue - or, rather, a loss of it.

The trivial bullet-point discussion above is just a small example of the interface between product and editorial mindsets - and is in itself not a problem.

However, a significant problem arises when you want to drive organisational transformation to set yourself up for a radically different world where text is no longer king, AI needs to be an integral part of your work process, and competition for people's attention is infinitely fiercer than just a few years ago.

The sense of urgency it creates when everyone simply understands "well, if we don't earn money, this ship will sink," is an instrumental component in successfully executing the needed change processes within media right now.

The fundamental motivation for a healthy private media company will never be to maximise profit for shareholders, but rather to create a self-sustaining business. Or as the founder, Tinius Nagell-Erichsen, of VG's owning trust put it: "Only a profitable newspaper can be truly independent."

In addition, the sense of urgency created internally by knowing that "if we lose money for too long, we also end up losing the ability to execute on our journalistic mission" is, in my mind, a key part of what will enable us to successfully implement the change needed to stay relevant in the future. This, in turn, is what will keep our business sustainable.

NRK produces some truly amazing content and journalism, and I'm not in any way saying it is doomed. But I never recognised the challenge it faces in executing transformational change when not having revenue as a success factor.

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About Tord Overå

Tord Overå is product manager of the sports platform at Schibsted in Oslo, Norway. Tord can be reached at [email protected].

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