Looking to Europe for news-industry innovation, Part 1: Sanoma’s big bundled success

NiemanJournalismLab reporting:
The news business is an insular one. It is still largely bound by national borders, one of the few industries largely uninfluenced by the rampant globalization of business. That’s beginning to change (“The newsonomics of the global media imperative“), but slowly, and only for a relative handful of companies.
News Corp., the largest news company in revenues worldwide, is the most diversified, with 44 percent of revenues in Europe, the Middle East, and Africa, 39 percent in the Americas, and 17 percent in Asia Pacific. Gannett, the largest U.S. news publisher and second worldwide, is a little bit global, taking in about 14 percent of its revenues from its U.K. Newsquest division. But even if most companies aren’t global, the issues they face are. Except in the fastest-growing markets — Brazil, Latin America more generally, and parts of Asia — the business trends are starkly similar.
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But Americans, for the most part, don’t look eastward. Yes, many digital trends have grown out of Silicon Valley — but Europe represents still represents about a fifth of the $93-billion-in-revenue worldwide newspaper industry. More to the point, in European innovation Americans can see models worth learning and adapting. In this three-day series, we’ll focus on three European companies — each in its own way offering intriguing digital revenue models from which other publishers can learn. There are dozens of European companies innovating, of course, but let’s start by looking at three:

• Part 1: Sanoma, Finland’s largest news company, is an early leader in charging for digital access, having signed up — and charged a premium to — a third of the print subscribers to its Helsinki daily, the leading paper by circulation in Scandinavia.
• ... What sets Sanoma apart is the success it has had with upselling its print subscribers. In the U.S., most newspapers that have dared to charge for digital content have bundled it for free with a print subscription. But even print subscribers of Sanoma’s Helsingin Sanomat must pay an extra €36 a year (about $48) to get digital access — online, iPad, and mobile. Helsingin Sanomat, also known as HS or Hesari, is the largest paper in Scandinavia; Sanoma owns the second and fourth leading websites in Finland. The price point is €340 (about $450) a year for all-access, print and digital, versus €304 for seven-day print only. Of the 390,000 subscribers to the print edition, 130,000 — a third — have taken the upcharge. That’s resulted in a substantial new revenue stream.
  Helsingin Sanomat’s latest iPad product debuted Feb. 2, adding ads to the product for the first time. It also incorporates rich media ads and news videos from Sanoma’s Finnish TV station Nelonen, itself a fast grower, with 8.5 percent compounded growth in sales over the last five years. Helsingin Sanomat now has two iPad apps, the second a photo/video one.
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