The many ways media companies can use data

Since 2011 it has not only harnessed large amounts of data, it has also created new revenue sources from that information as well using the it to create news content. In some instances the data has even helped to hold the nation's politicians to account.

Here Ole Petter Pedersen, News Editor of Kommunal Rapport explains how his newspaper adopted its unique approach which has data very much at its core.

At DIS he will explain this transformation in much greater detail.

About DIS:

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First of all tell me a bit about yourself and about Kommunal Rapport?

Well, I'm the News Editor of Kommunal Rapport, which translates as Municipal Report, which is a niche newspaper that has been subscription-based, since it was founded in 1987. Our prime target is the local politicians and the administrators of the 426 municipalities in Norway.

We are basically a business-to-business organisation that works solely in the public sector. The leaders of the public and municipal sectors are the main readership.

So, one important aspect is that the people who read us don't tend to pay for the content themselves. We are a bit like the financial newspapers where the employer pays for the content. This makes us a bit different from the regular newspapers that are read by the general public.

Having said that, I still think that the key to any successful media enterprise is to offer value for money. Our readers might have big budgets, but they also have loads of people who want a piece of that budget, including us. And unless we can prove that we are useful to them, and that means every day in this digital age, they won't pay.

When was your digital launch and how did the offering evolve?

Initially, like many others, we launched an online copy of our weekly newspaper. We just wanted to see if we could build a readership.

But in 2000 we changed direction and launched what was a fairly modern website, with daily news. We ran this alongside the weekly newspaper as a loss-operation for many, many years. We did attract advertising, but since we are very niche, we can’t really survive on programmatic advertising. We need real income for the page views. Also advertisers in our group are fairly conservative and were pretty late in moving to digital.

So, by early 2011 we thought "well we can’t go on like this, it's stupid to. We need to expand digitally." One option was to try to be a massively big news site read by lots of people in Norway – but this would also mean that we needed to change the content.

We decided that we'd stick with the core readership and concluded that they would be willing to pay if we delivered the journalism well enough. And we'd also start charging online. But we'd do something else which most other people don't do – we'll introduce a new publication.  Basically a digital daily newspaper, which is not the same as the weekly newspaper, and is fundamentally different in content, meaning that stories which go online do not appear on paper, and vice-versa.

We saw that a lot of newspapers were starting to add a premium to the subscription fee, maybe 10% or 20% in dramatic cases, and then giving every subscriber the benefit of the digital version as well. The problem with that bubble is as soon as you’ve moved everyone over to digital, there is really very little room for price improvement. We wanted to generate extra streams of revenue digitally that were sustainable and independent of the newspaper.

How successful was the launch from a revenue perspective?

From 2010 to 2016, our total revenue grew about 40% almost exclusively because of the digital content. We have almost stayed on the same turnover on the paper part in that time with a very, very gradual decline. The advertising on the digital site has gone up slightly, but it's basically our digital content with subscriptions in various forms which have gained this extra income. And we have gone from having one publication in 2011, to today having four digital content revenue streams. We are going to add three more this year. We need to generate money in order to produce journalism, and the bottom line is that every story has to offer the reader, or the user, something very specific that no-one else has.

Have you introduced any other key innovations?

Since we reach 426 municipalities, we have always been a newspaper with a national view. Obviously we can't really go around writing about each of the 426, however with the automation processes that are being developed, we can start to do this.

So one thing I’ve done over the past couple of years, is to automate journalism – particularly big data journalism and analytical journalism – so we can actually offer editorial analysis of how each municipality performs.

You still need a journalist to understand what's good and what's bad and interpret this data. And this is the main difference. There are so many visualisations around these days that you can drown the reader in them. But you need to add a way for the reader to understand what they're seeing. And the reader isn’t really interested in looking at loads of visualisations; a reader wants to understand what's going on.

Visualisations are an interesting way of helping the reader, but you also need to add that interpretation and that's where the journalists take over. We are experts in interpreting what's new, what's important, and why it is important. And that separates journalism from loads of analytics companies, that only offer loads of  graphs and tables, which are basically useless to read. You need someone to actually sit down and tell the computer "this is a good thing", "this is a bad thing", "if this happens, that’s good", "if that happens, that’s a sign of something bad to come".

Ultimately then you have a subscription model - how does this work our in practice?

If you visit our site you have two choices. Actually, if you're not a subscriber then you have three choices. Obviously you can just go away. If you've never read us before, you can sign up for a seven day free trial, where you can read anything. Or, if you have spent those seven days, weren't really convinced, but are still interested, you can buy that particular article for 19 Krone (NOK), which in UK-terms is roughly £2.

Do you find that people make those micropayments?

No. I think micropayments is an interesting concept, but it's completely irrelevant to sustaining business for a niche paper, anyway. Basically, the amount of money is too small. But it is very handy for helping people who would definitely like to read that particular article – and you don't want to compromise on giving too much away for free in general. They will be happy, and they will still not be in your core group of readers, but they will have been able to read the article, and hopefully they will have found the experience a pleasant one, and think, "they did a good job of that".

What would be the key thing that has enabled you to be successful when compared with others are still trying to find that elusive business model?

Obviously one good thing for us, and the Wall Street Journal and all those other high-end business titles, is that we are coming from almost a  monopoly situation – there are virtually no competitors at the same level. Of course, the newspapers – the dailies – in Norway, write about local communities, and the transformation that happens in the public sector in Norway, but nobody does it as consistently, and over time, as we do.

I also have a self-developed theory, that the willingness to pay stands in direct opposition to the number of stupid stories and clickbait that you produce. So I think what has been important to us is that when a user comes to our site, at least 60-70% of those stories are our stories. They can't be bureau stories, or general stories that you could read anywhere else. I think a lot of newspapers are caught in the middle of quite a few places – they invest resources in good journalism that is being hidden by clickbait.  In many ways, good journalism often needs a bit more space and more time to be discovered.

I have always liked The Guardian, though I think their opposition to actually charging readers is flawed. I find it interesting to see how they let stories live on the front page for quite some time. But I think in journalism, we are so often mislead by our own view of how fast people consume news. And for ourselves, it's important that good journalism can actually be discovered in 24 or 48 hours in some cases.

But I believe you really need to give room to the quality journalism, and you need to stop writing so many stories about stupid TV shows – it’s really not journalism.

Is there anything else you particularly use data for as that's clearly an important part of your skill set?

We've started to collect some really massive data sets. One thing that we're doing, that is envied by the public sector itself, is we're now collecting data on all vendors in the municipal sector. So basically, if you have sold something to any municipality, we will publish it in a database on a yearly basis.

This obviously makes it possible to both track the connection between the politicians' companies and the revenue they get in the same municipality. This is a complex thing to do, but as soon as you have the right data, you can combine these data sets, which makes it possible to do completely new journalism. This was impossible to do before because all the data was scattered around the country.
We get a good view of who are the main competitors in the various sectors which creates more transparency around bids for public contracts. This is very interesting in a democratic way, because it gives the readers, and also the public, more information than they have ever had before about who is actually getting the money.

It has also shown that we can actually create another niche market, because we sell subscriptions to a refined data set that is way too big to publish online. So that has evolved as our fourth subscription-based offer.

Have you created a story where you’ve found somebody whose company is buying something and it's had political repercussions?

Yeah we've done a few stories. The most notable one was a second rank politician in a municipality. He actually won a contract with the municipality – the total contract was around six million Krone (NOK), which is around £600,000, or 700,000 Euros. And the point was that he actually sat through all the political negotiations on the municipality's side, and he never told anyone that he actually controlled half of the other company. So, when this was found out, it was a bit of a political scandal.

So, one of the key things you're using data for is to hold local government employees and representatives to account?

Yes. I think the world is much more complex than before, and we need to be able to use data in such a way, because it can very often give us an insight which is not possible if you just look at pieces of data here and there.

Can you tell me about the media in Norway in general? Is there a national newspaper offers subscriptions, or runs a paywall?

VG, the main newspaper in Norway has a main website, which is free. But they have also created what they call "VG+". In Norway, lots of the digital paid-for content is branded under a plus sign. But VG+ in itself is our fifth biggest media publication when you count subscription and newsstand sales.

So they have created also a new publication which has done really well. It is very good. It competes against the weekly fashion and the home magazines, but in a more "newsy" package.

Over the last three or four years most newspapers that are evolving from an original paper model, have gone through a phase from where almost everything was open online. Now anywhere between 20-80% of their stories are also behind the subscription-login online.