Publishers and ARD Show Willingness to Compromise on Tagesschau App, But No Final Agreement Yet
The opening of the International Media Congress with Keynotes by Germany’s Minister of State for Culture, Bernd Neumann, and Axel Springer CEO, Mathias Döpfner – The Industry Discusses the Architecture of a New Digital Media World
International Media Congress Gets Underway
Berlin – After a welcome greeting by Medienboard managing director Elmar Gigliner, the opening debate of the International Media Congress at this year’s Medienwoche@IFA in Berlin got underway on Monday morning with a discussion of what form the architecture of the media industry should take in the digital era. After keynote speeches from Germany’s Minister of State for Culture and Media, Bernd Neumann, and Mathias Döpfner, CEO of Axel Springer AG, a number of high-ranking participants joined the discussion, including ZDF Program Director Thomas Bellut, wooga founder and CEO Jens Begemann, Christian Franckenstein, management board spokesman MME Moviement, RBB director general Dagmar Reim, Marco de Ruiter, COO, MTV Networks North, and René Schuster, CEO Telefónica Germany. The discussion was hosted and moderated by Frank Thomsen, editor-in-chief of stern.de.
In his keynote address entitled “Taking Advantage of the Opportunities of Digitalization – Supporting Culture and Creativity,” Minister of State for Culture Bernd Neumann showcased the diverse opportunities and challenges facing the cultural and creative industries in the age of digitalization. He argued that the starting point for all legal deliberations relating to digitalization should be authors themselves. The mass distribution of illegal copies on the Internet and the popular attitude that everything on the Web should be free pose a tremendous danger to the existence of artists and creative professionals. With this in mind, Neumann emphasized the need for a more reasonable form of copyright law. “Cultural diversity cannot exist without creative authors,” he noted. Neumann argued that in order to better protect intellectual property, we must extend the legal framework to include a so-called “warning model” that would serve to warn illegal users. This would be followed up with actual warning fees. In the field of journalism, Neumann spoke of the need to introduce ancillary copyright laws and made it clear that journalists, too, should be able to profit from a strengthening of publishers’ legal position. Neumann welcomed the founding of the Content Alliance by private and public media companies and said that he would also welcome the participation of publishers in this initiative. He also noted the need for further development in media concentration law. “It simply should not be the case that German media companies are prohibited from taking over parts of other German media companies – and thus to ensure their own existence – while on the other hand non-German media oligarchs with a much higher level of power are permitted to buy these companies up and subsequently ransack them financially,” said the Minister, who called on Germany’s federal states to get more involved.
"Generation iPad – The Future of Journalism on the Internet: Innovations, Opportunities, Perspectives." This was the title of Axel Springer CEO Mathias Döpfner’s address on the challenges facing publishers in the digital era. He made it clear that the answer to these challenges could not come in the form of a mutually exclusive technical or content-related approach. He argued that what is required is the integration of both approaches in the creation of published products. At the same time, he made it clear that possible growth for publishers was to be found less in online products and much more in the mobile product area. In a pointed analysis of the opportunities of a fictive publishing product – one he called the “Süddeutsche Allgemeine Welt” – Döpfner described the breadth of possible scenarios open to publishers in the next ten years. Based on each company’s ability to take advantage of digitalization, these scenarios range from bankruptcy to highly positive economic development. According to Döpfner, however, even when private companies make the right strategic decisions, they are still faced with limits due to public broadcasting products – such as the free Tagesschau app – which he described as nothing more than an electronic newspaper. Döpfner spoke in favor of fair rules of competition and a long-term balanced architecture for the digital landscape. Dopfner’s suggested compromise: on the one hand, subscription-based videos and audio files should be allowed to be distributed digitally free of charge. On the other hand, additional text offerings that compete directly with the content provided by publishers would have to be charged for at market prices. Döpfner argued that he is against restrictions in principle and hopes that all parties will be able to come together to find a solution that makes it possible to generate a level of diversity, quality and fair competition that benefits all participants and users.
The follow-up podium discussion examined the opportunities and risks posed by digitalization for Germany as a content producer.
Thomas Bellut emphasized that ZDF had pulled its “heute app” for now and that he considers it desirable to come to an agreement with publishers in this matter. With respect to the upheaval surrounding a possible successor to Thomas Gottschalk’s popular show “Wetten, dass…?”, Bellut explained that the final discussions will only take place in December. With respect to producers’ participation in the entire value added chain, Bellut noted that the VoD project “Germany’s Gold” was just one example of a project in which cooperation and a sharing of revenues with producers was possible.
Dagmar Reim stated that even with all the willingness to compromise brought to the table by “people committed to quality journalism,” she could not support a compromise in the case of the Tagesschau app that would require it to become financed by user revenues.
Christian Franckenstein made it clear that digitalization – at least from the perspective of content producers – is nothing more than a new distribution path. This new path, however, does not necessarily bring in additional revenue. Television producers have been facing this problem for several years now, seeing as their clients’ revenue from traditional business models (ad revenues/fees) has continued to dwindle. At the same time, producers have had to invest in the opening-up of digital platforms and distribution strategies. However, in doing so, they couldn’t count on any noteworthy compensation from this new business sector. As a result, the only solution possible is to “pay for digital services,” i.e. for consumers to pay for the comforts of greater individuality.
Jens Begemann provided insights into the wooga’s successful business model. The free online game offerings provided by his company now have 38 million users and are refinanced completely via the voluntary purchase of virtual goods by 1 million users. Based on his experience, however, Begemann thinks it would be very difficult to achieve success using additional fee-based offerings within free offerings from traditional media providers.
Marco de Ruiter emphasized that the decision to transform MTV’s main program into a pay service was a logical decision that emerged from within the design of the digital value chain of the four corporate brands. In this new design, content is offered at a certain time and price in a certain window and/or on a certain media platform. According to de Ruiter, financing based entirely on advertising is simply no longer possible for MTV as a small broadcaster active in an ad-space market dominated by the two large free-TV families. De Ruiter also lamented the competitive distortions caused by subscription-based broadcasters with respect to the purchasing of program rights.
René Schuster made it clear that Telefonica will never see itself as a traditional content provider, although the company offers its clients content that generates added value, such as financial and health-related services. He emphasized the growing use of mobile services and prophesized the end of “push” offerings. According to Schuster, the future will be based on individual offerings where users can decide what, when and where they want to use content.
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