Insights into the new media landscape from the chief executive officer of The Huffington Post
Last year, The Huffington Post launched in Germany and Japan, and this year in Brazil and India. For a media company, growth and expansion calls for ever-increasing amounts of content. Is this sustainable?
Our model is working very well for us and that is why we’re expanding globally. When you have a free news site and are able to create scale around that, and monetise that scale, then the bigger you become, the better monetisation you get and the more profitable you will be. So from our perspective, the bigger we can grow our free news site the better it is for our business. That’s not something that’s sustainable for everyone out there and, for the news industry to thrive and survive this paradigm shift, we need different models. The Huffington Post is just one model and definitely not the only one that will work. But for us it is working very well and scale has been important
Can you give us an indication of how the expansion is progressing?
When we started launching internationally we planned to launch in 15 markets before the end of 2015 and hoped we would be able to get 200 million readers. We started off with 45 million two and a half years ago and we are now at 94 million unique visitors on a monthly basis, based on comScore. Forty-four per cent of our traffic is now international. So in two and a half years we have almost doubled our traffic. As you can hear from these numbers the businesses in local markets are gaining a lot of momentum and are really starting to pay back the investments that we have made in those markets.
Another element of your strategy is online video. Why is that so important to the future of media?
We have ambitions to be a global media company and that means we need to be able to provide news other than in a text-based format. There are many eyeballs moving online – if you look at millennials, that is where they watch the majority of programmes. People in that age demographic are not really watching television anymore. It is important to figure out how we can capture a huge online audience with video. And HuffPost Live was that big bet for us. We launched very big, with five days a week, 12 hours every day. During the day we have 20 or 25-minute segments and then after the fact we cut them down into two-minute segments, which means every month we have more than 3,000-5,000 news clips in our library. Our journalists can draw on the library and insert relevant video into their text-based journalism, and by adding a context-relevant video the engagement on the page increases. When we have relevant video on our pages we see high engagement because people like to consume video, it is a great way of getting a message across.
How does HuffPost Live differ to a regular news television channel?
We want it to be different from television, we want it to be accessible for people. We want people who have opinions to be able to dial into the conversation with the politicians, the professors and the host in the studio. We have had more than 20,000 people in the last 18 months taking part in the different segments via Google Hang Out or Skype and that’s another innovative way of trying to use the medium in a way that underlines where things are going. Media has been democratised, we’re moving away from a broadcasting model to a model where people are participating. If you look at social media, people have something to say, they want to take part in the conversation, they want to share things, and that is why The Huffington Post has been successful. We’re not just another news site, we are a news community, a platform where people come to read news but also because they have opinions and they want to have conversations. We have had more than 300 million comments on our platform and every time we have a big story there is a very engaged audience discussing it. We want to activate people, we want them to not just lean back and look at what’s going on in the world but to lean forward and dive into the conversation. So far that is what we’ve been successful in doing, combining traditional news with social media and creating a news community.
After new markets and video, the third part of your three-pillar strategy is diversification. Could you tell us a bit more about this?
It is a consolidation of what we have done over the last three or four years. The Huffington Post has gone from having 10 or 15 verticals to more than 50. Because in contrast to a print magazine, if you have a niche audience online you can easily serve an offering that is just for them. Let us say that people are coming to The Huffington Post but a lot of them leave for bridal sites. We can create a category or vertical for brides. Why send them somewhere else if there’s an audience at The Huffington Post that wants to see that content? What we have done over the last two years is consolidate that. We are focussing on four big areas right now, namely Politics and News, which is our DNA, it’s where the business came from; Lifestyle, which aggregates our different lifestyle offerings and where we have more than 25 million readers on a monthly basis here in the US. No lifestyle publication has that size, so we invest a lot in that both editorially but also how we package it for advertisers so we can monetise that audience. The same with Entertainment, another area with more than 25 million readers a month. And lastly we have Business and Technology with 11 million readers a month.
What about paid or sponsored content – are these necessary to support high-quality journalism?
Native advertising and content marketing is a very big area for us because a lot of brands are starting to realise that they need to produce more content to be relevant to their audience. In many ways that means that brands need to start to act as newsrooms, it means that they need to find a way to come out on a daily basis with news that’s not just about the brand but has a narrative and is interesting to the audience. That is why we have doubled down on that. We have launched HuffPost Partner Studio, a content studio where our business editors write just for advertisers and create interesting narratives. For example, we are running a huge programme over here with Chipotle called Food For Thought which puts a lot of focus on healthy and organic food. In many ways it is content that we might have written anyway, but Chipotle wanted to put extra focus on it and we are happy to help them do that. Of course when it sits on our site it is very clear that this is brought to you by Chipotle, but since it is actually stuff we feel comfortable with editorially, we’re not seeing engagement that is much less than we are seeing on our traditional article pages. Which is why this is a great format for us. With traditional advertising, people are getting increasingly cynical and are not clicking on it, whereas if you can do content that is appealing to a broad audience, as an advertiser I think that is very interesting. This year we believe native and content marketing will be about a third of our advertising revenue, so it is a big part of our future.
How do you see the use of paywalls as a continued source of monetisation?
It needs to be more sophisticated than paywalls. I think without any doubt there are publishers out there that need to have a model with some kind of subscription, and if the model is right then over time there will be enough people willing to pay. Right now there is not a lot of people. Reuters Institute has done a study across all big markets and found that between 13 and 20 per cent people are willing to pay for quality news. So only a small part of every market is willing to pay. The problem I see in a paywall around all your content is that it is too much something that publishers want to do and it’s not really taking into account what the consumer wants. I want something different than you want, so why isn’t there an individualised model where I can get something for 9.99? I do not believe in one size fits all but in sophisticated models, and since we have the technology to create individualised models, I believe that is where we need to go.
But will the idea of people paying for news be valid in the future?
I don’t believe you can charge for general news. Quality news is free and just one click away. Take the BBC as an example. It is free, it is a fantastic news source, and unless you have something that’s better than that, how on earth do you believe you are going to be able to charge for it? So you need to figure out what you can offer, whether that’s analysis, reporting or investigative journalism. But general news is very difficult to charge for. Also, news is in a place now that’s not very different from where music was before iTunes. Previously, 90 per cent of all music was downloaded for free, then iTunes came along with new technology but also with a different model. Suddenly you didn’t have to buy the whole CD, you could buy a single track if you wanted. The model was more sophisticated and allowed the user to do some testing without having to buy the whole package. That is what we will need to see within the news industry. That said I do believe there will be enough out there that will be willing to pay for quality news or investigative reporting if the subscription model is sophisticated enough.
You were chosen to lead The Huffington Post partly because of your entrepreneurial background. Do other major media players have an aptitude for entrepreneurship and innovation?
A lot of these great publishers have innovative people, but they have a legacy they have to deal with first. Print subscriptions are going down, print advertising is going down, so they first need to downsize so that the business is healthy. That is the big difference for us. We are a digital first business, which makes it much easier for me. I don’t have to restructure my newsroom and talk with the unions and say “we need people to do things differently” because we came in with a creative, new formula. So from that perspective, it is easier to be in my chair. That said, they need to look at the business with innovative eyes. I do think there are innovative people there but they have problems that they still have not fully worked through, and only when they are done with that we will start to see more innovation happening from their side. And that is also why I’m moving so fast with The Huffington Post on getting a global platform with global reach, because eventually the traditional players will have sorted out their problems and then this window will be closed and they will start to be aggressive again internationally.
Given your entrepreneurial background, how did you manage the transition to working for and within huge corporations?
As an entrepreneur you are used to making decisions and doubling down and moving fast in one direction. Here you need to make sure that everything is aligned. That is the most difficult part. But at the same time it’s also great for both parties that they paid a lot of money for my last business, which means that I don’t need this job. We are dependent on each other and we want to build a global media company, so when the going gets tough we can remind each other that sometimes we need to make tough decisions. Sometimes we need to do things that might not be right for the owner of The Huffington Post in the short term, but in the long term strategically it is the right thing for The Huffington Post. Those are the things that are causing discussions but that is part of being part of a big corporate and so far I’ve been able to manage that. The day I’m not, I will probably be doing something else.
Finally, you are a Dane at the helm of a huge global media project with strong roots in the US. Does your national background affect the way you approach your work?
I consider myself first and foremost a global Danish citizen. I have lived in different cultures, had to deal with different people, and that is a strength. Whereas many companies have a very American approach, I think what I bring to this and one of the reasons that we’ve been able to move so fast, is that I have more of a global outlook because I’ve lived around the world. It’s not an American-first approach, it is an approach where we very much embrace and work closely with our partners and respect them. That has been useful in these situations where we’ve had to roll out The Huffington Post in 11 markets in a couple of years. Hopefully that is what I bring to this business.
Interview: Dafydd Phillips
Image: Johannes Worsøe Berg