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Aller Media all-in with video future, but cautious with investment

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Aller Media all-in with video future, but cautious with investment

Aller Media is a modern media group that is part of Aller Holding A/S, with offices in Denmark, Sweden, Norway and Finland. The company is one of the Nordic region's largest publishers of magazines and newspapers with a weekly circulation of around 3.2 million copies.

At Aller Media, Granhaug has financial responsibility for all of the company's digital media outlets in Norway, including tech and product development. He's also in charge of maintaining major partnerships with external players such as Google’s Digital News Initiative and various social media.

In this interview with WAN-IFRA's Ralf Ressmann, Granhaug describes how Aller is using video to strengthen its business and prepare for the future. Granhaug will also be a speaker at our upcoming Digital Media Europe conference, which takes place in Copenhagen in April.

WAN-IFRA: At Aller Media you've used the lean startup methodology to build up a new video business. How does this work in a classical publishing house?

Stephan GranhaugStephan GranhaugStephan Granhaug: After seeing that the output from our innovation efforts over several years were very variable, we realized we needed a different approach to how we create new products and bring them to market.

Fortunately, the basics of lean startup are easy to communicate, and the advantages in terms of speed, accuracy and lower risk hard to reject.

However, onboarding stakeholders to accept that an initial investment based on lean start up sets out with very few answers and many questions, with no definite promise of what you are going to achieve, requires effort.

Our solution was to run a pilot in the form of a training programme with selected attendees from the whole organization. The programme’s final was a startup pitch to our top management. Two projects were selected to enter a next phase of exploration and customer development, of which the current project, TOPPtube, was one.

What is the new video product you could establish based on this methodology?

Central to lean startup and associated concepts such as "design thinking," is to start with customer development.

We had a well established print magazine brand for young teenagers, that saw its circulation numbers and advertising revenues going down and was on our closure list.

However, exactly because the brand was really well recognized, had a strong following and employees with a very high dedication to this audience group, we wanted to explore alternatives before eliminating the brand all together.

One of the editors was also on our lean startup-pilot programme. After running a series of interviews with readers in the typical target audience for the magazine, a hypothesis was that a substitution for the print magazine should not be primarily based on e.g. revamping the magazine’s website, but rather go straight to where this audience spend most of its media-time: On YouTube.

Next came defining a concept to be tested by asking the question 'What does Anna (16) want?,' and this is basically what we’ve been doing since.

We’ve built, measured and learned our way to TOPPtube, six channels on YouTube with a still small, but growing and very dedicated, following among a target group that all our other brands really struggle to be relevant for.

Next, is to enter a similar phase of customer development on the revenue side to identify business models that can transgress the pre- and post-roll paradigm.

How important is video in your overall mix of digital revenues?

Right now video accounts for a low, but growing, share of our revenue mix.

For one thing, we see that despite a huge demand for volume and reach among advertisers, the price you can attain for pre-, post- and mid-rolls are still too low.

In our opinion, the price is too low to justify the kind of large scale, broadcast approach we see among many of our competitors and benchmark sites abroad.

On the other hand, we see that the audience has become accustomed to consuming video as an integral part of their web experience.

In order to maintain and grow our audience, especially through social media, video is a necessity. So video is important and will likely be more important looking ahead. But we’re still careful regarding the costs we accept to carry and are eager to find additional revenue streams and business models that can justify really scaling on video.

How do you organize your video content and what are the thoughts behind that?

All our brands produce video, both through dedicated video people, wired content, and journalists who do video as part of their reporting. Everything we produce is uploaded to YouTube’s Player for Publishers (PfP), and made accessible both on each brand’s own website and on YouTube.com.

Our choice of YouTube PfP has allowed us the combination of really low costs for basic infrastructure, access to the best video delivery technology and a model we know scales well when we decide to do so.

Hence, we can grow in more attune with the revenue side and as we find the specific content formats that will really carry well on the web rather than mimic traditional linear broadcasting.

Video is distributed across all channels, our own websites still being the largest, though the highest growth is achieved on YouTube and social media.

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WAN-IFRA

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2017-02-24 15:50

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