Two
German entrepreneurs are setting up a new kind of home delivered newspaper
among worldwide news print failures. On November 16th the brave
young businessmen are venturing into the industry with an innovative newspaper
service - the first of its kind in Europe - at arguably the worst time, and for
a limited Berlin-only market. But its very unorthodoxy, the essence Wanja
Oberhof's and Hendrik Tiedmann's Niiu personalized newspaper, could be its saving grace.
Niiu Beginnings
The
Niiu started with an idea, two and a half
years ago, ultimately about information convenience. Having grown up in a
newspaper-reading household, Mr. Oberhof became used to reading multiple papers
to pursue the news and information he was interested in. Having to juggle multiple national,
local, and international papers to find one's interests would inevitably become
a chore, especially vis-à-vis the speed and convenience of internet news. The
same behavioral phenomenon is in fact the very reason why the internet seems to
be ruining traditional newspapers; people, especially young adults and
students, are tending find their news and information from a variety of sources
on the internet rather than a single source that marked the newspaper's
monopoly and success in the 20th century.
Oberhof's
resulting idea was simple and clear: an individualized newspaper, composed of
selected pages and sections from papers, delivered each morning to one's door
just like a regular paper. This combination of paper format and internet
convenience and accessibility found Oberhof a business partner in Hendrik
Tiedmann, who shared the same idea. Together they founded InterTi GmbH, Niuu's parent company, funded out of
their own pockets, and began doing their homework.
"The
whole idea was based on our own behavior research and experience; [as young
people] we're used to very different information sources. The main idea was to
combine all the varying sources of news and information, because it is normal
for young people who have grown up with the internet to have not one source of
information but many," Mr. Obherof said in a telephone interview with The
Editor's Weblog. But why a newspaper
format? Surely a less risky and lower-cost alternative would be setting up a
personal news aggregator.
Oberhof
disagrees. "We asked this target group which is the most comfortable and which
is the best distribution channel; is it an e-paper, is it only on mobile, is it
printed or online? The feedback was that for now, paper is still the best
distribution channel." Hence the simple combination of the internet and printed
paper that is the essence of Niiu.
Interestingly,
the founders have no particular allegiance to print, it just happens to be the
currently favored distribution channel. "The vision that we offer is all the
information that is relevant for the reader. As a next step it is the reader's
choice which distribution channel they will use, whether it's a mobile phone,
e-paper, the internet, or whatever else." Their focus is information
amalgamation and distribution, the particular channel being largely irrelevant
and ultimately the client's choice. This is quite an unusual position for a
company entering the print industry, which these days seems to require a great
deal of faith.
What Niiu is and How
it Works (The Technical Bit)
On
the client's side the process is very simple. After signing up for a short-term
subscription (more on that later), they have until 2 p.m. to choose their news
sources for the following morning's paper. On Niiu's website they can select from a wide variety of publications and online sources; from
national, local or international newspapers like the New York
Times, or internet
news sources and blogs. A 24-page personalized paper, researched from and
composed of their choices, then appears on the subscriber's doorstep the next
morning.
"At
this first step, for the reader it is only possible to select whole pages or
sections," says Oberhof. From newspapers the readers can select pages or
sections, from the internet providers they choose from over 600 very diverse
rss feeds, from "Women's tennis blogs to local garden pages, we have lots of
special interest content available." Clients currently cannot access their
personalized paper online, as this would basically defeat the purpose of the
delivered print format.
On
Oberhof and Tiedmann's side, however, things are a bit more complicated. It is
no easy feat to compile, print, and distribute thousands of individual papers.
Over the past two years, InterTi GmbH has had to create a specialized software
for compiling sources and setting the layout, arrange digital printing deals,
close licensing contracts with news sources, attract advertisers, create a new
business model and work out delivery schedules. So how did they do all that?
"We
outsource everything," says Oberhof. "We don't have an editorial team, we don't
have the printing machines, we don't have a delivery structure; we have
partners. First we had to create software, so we got a partner with a Swiss web
and print specialist service. They produced our software that combines all the
pages and articles and news for each reader into a print-ready .pdf that is
sent to the digital printing machines from the Netherlands, and a German copy
house takes care of the actual printing. Then we have an agreement with a
Berlin delivery service that delivers all the international newspapers that
will also now deliver Niiu." Given all
this outsourcing and subcontracting, one wonders whether circulation revenue
will cover the costs.
Luckily
there is another revenue source, the very one that is ruining traditional
papers, and where the Niiu shines most
brightly: it offers a space for highly targeted advertising, something already
optimistic advertisers will pay dearly for. At first, during the 'trial phase'
of the first few months, advertising will be more general because the Niiu is new and won't have a large circulation. But with
an expanded subscriber base ads will become more targeted, focusing on
neighborhoods their corresponding socio-economic groups.
Oberhof
is confident of his advertising model. "We have had large amounts of positive
feedback from advertising clients, and they have several different ideas such
as at first only distinguishing between male and female readers, then
differentiating by neighborhood and age in Berlin. Some big German car players
are interested and have said 'different cars for different people' based on the
interests of the readers, like the family man being interested in the new X5 or
the young student being shown the BMW 1." Who the people are and more
particularly what their interests are would be clear from their choice of news
sources for their Niiu's composition.
Ignoring
that their proclaimed audience is exclusively young students and not old people and family men, this raises some
questions about whether using personal information for advertising violates
some privacy protections. But this is doubtful as various advertisers and
distributors have used similar techniques for years: think about those
supermarket coupon promotional catalogues, also known as 'junk mail,' which you
might get at your front door. They differ per neighborhood using the same
concept (in my experience, I got Pioneer Supermarket rice coupons up in Harlem, while my friends downtown
got brochures for Citarella).
Of
course, a paper cannot live on adverts alone. In terms of subscriptions, Niiu continues to be innovative. The subscription
packages are aimed towards young readers and students, the paper's perennial
target audience (and probably one of the more difficult market sectors to
enter, especially in media and technology).
Mr.
Oberhof explains: "We have several different packages, not a traditional
subscription but a pre-paid system. You load up money for packages, like the
one-day trial, or the longer-term packages over 25, 75 or 150 days. It's not a
classical subscription at all, that's an important point for us, because many
young people, according to our feedback, don't want a subscription for a year
because they do not know where they will be in the near future, whether
studying in a different city, or doing an international internship or living at
home, so they want short-term packages." Currently Niiu is priced at €1.80 per issue, €1.20 for students.
Is
this really a good way to build subscriber loyalty? There is a risk of high
turnover, potentially running through the market potential before they get
established. However this model makes sense
for their target demographic. Personally I find this an appealing arrangement.
Not really knowing where I will be in six months has prevented me from
subscribing to my publications of choice, so I read online news while I would
prefer the print editions.
Challenges
One
of the biggest questions I had for Mr. Oberhof was regarding the licensing and
use of articles and content from news providers. In the context of the current
debate over paid online content and the associated problem of the cost of news
and journalism, this is quite a pressing concern and I was most interested in
what Niiu's arrangements were.
Surprisingly, it was unsurprising and rather simple.
Niiu has a contract with each newspaper and online
provider, in which "we have a little license fee which we pay for every used
page," Oberhof explains. The licenses, and thus the copies of Niiu itself, are based on pages: "we pay a fixed fee for
each page we use...because we take one-to-one pages from each newspaper," meaning
the pages of Niiu are exact
replicas of the original page from the source. This setup will be the working
model for the first few trial months.
"The
newspapers give us access to everything they have. That means every page and
article that is used in the New York Times we can have the next day in Niiu," although details on how blogs and internet sources
would be presented are a bit fuzzy. It would be safe to assume that they would
appear in Niiu as they would in
your browser, albeit reformatted and resized.
An
obvious question regards how newspaper publishers feel about Niiu and why they would allow access to their articles,
when this could very well cannibalize their own sales. While some certainly
think so, the majority of publishers approached by Oberhof and Tiedmann have
embraced the idea and accepted licensing contracts.
"Most
of [the news publishers] think it's an interesting new project for a target
group which doesn't read much newspapers. The young people, the students, in
Germany don't read that much newspaper so for [the newspaper publishers] it's
an experience; they want to have a look at the feedback and to test it out.
Most of them also don't think that we will take the long-term single paper
reader away from them, since our audience is the reader who doesn't know which
paper is right for them or likes a variety of news sources," Oberhof asserts.
So,
in theory, there is no direct competition because they target different
audiences. However, the Niiu provides
the same service as the internet but in print form; it is hard to see why
publishers who would blame the internet and the news aggregators (which is
basically what Niiu is doing) as
the newspaper's bane would embrace that service in their own industry.
Some industry experts are not so optimistic. Joachim Blum, a digital media consultant, voices 'considerable
doubts' over Niiu's future. He says the idea is interesting, but
it just won't work because the target audience has left paper behind: "People
who read newspapers are office workers, not students," Blum tells Spiegel
Online. This is
similar to the problem discussed above, where it seems that the assumption has
been made that students who are used to getting news quickly and for free
online will suddenly start paying for it to be physically manifested; they
surely won't be paying for the service, as they can do it themselves. They
would therefore be paying for the physical product, the newspaper, and its
aesthetic appeal. But we all know how fickle young people and students are when
it comes to aesthetics.
Another
issue is more topical as to how Niiu relates
to traditional newspaper and the internet, its status in between and bridging
these media forms. For all its supposed innovation, "Niiu shares the same
dilemma of print journalism in the age of the Internet: every paper you read in
the morning only contains yesterday's news," says Stephan Weichert,
a journalism professor at the Macromedia University of Applied Sciences in
Hamburg. "The Web offers news every second and gives the option to link to
blogs and other websites. Why would people read and even buy a story or
information, which they select on the Internet the day before? It's old-school
journalism," he tells Time. Again, the same underlying problem is pointed out; the
combination of paper and internet has great potential, but it also combines the
weak points of both and confuses the primary audiences of both mediums.
Time
will tell whether these criticisms will stand or whether Niiu will live up to its potential.
The Future!
For
the time being it seems like the main challenges for Oberhof and Tiedmann have
been surmounted. They are looking forward to the November 16th
launch, for the time being to serve Berlin only. The circulation scope for now
is limited because of the high quality but rather slow digital printing. "You
can't compare it to a classical offset machine that could print 200,000 copies
of Niiu in an hour; our digital printers
can only do about 2000 in an hour," Oberhof explains. "That means it is not
possible to deliver from one printing machine to several cities, so we start in
Berlin. But obviously it's planned to expand to other cities in Germany and Europe,"
if the paper gets off the ground with the aim of around 5000 subscribers by
the first 6 months.
However
Oberhof knows there is much to be done, and that the work is far from finished.
"For the next month the biggest challenge will be whether the whole work flows
as we want it to. The first actual non-test paper will [hopefully] have around
5000 subscribers and this will be a lot to handle since every newspaper is
individual. We might not actually know or can't imagine what the real work flow
will be, what will come, and that's definitely the hardest thing." Meanwhile,
he already has plans for future products and services once Niiu gets going and is established in the market.
Oberhof
and Tiedmann's mission is more about giving the market what it wants, i.e.
providing whatever information the reader desires in whatever format they
prefer, rather than innovating the newspaper industry (which seems to be a side
effect of their project). So if the market preference shifts, so will their
products and services.
Having
recognized that newspaper may only be around for so long, InterTi GmbH is
planning "to offer an e-paper as a second step, probably by the end of this
year," Oberhof revealed. Other editions are in the works, but no plans have
been formally announced given that the formal launch is still a few days away.
"For the future, I think that things like the Kindle will be very interesting
for our product developments, but for now its not actually enough, not many
people use e-readers at all," Oberhof confides. However, given the company's service-oriented vision, we can reasonably expect an e-reader version once the market for them
takes off.
Whether
you think newspapers are doomed or just in a rough spot right now, there is no
denying the simple ingenuity and appeal (however limited) of Niiu. Its combination of the strengths (and unfortunately some of the
weaknesses) of printed news and online news could make it a product to be reckoned
with, even for those newspaper publishers who feel no competition from it. The potential for newspaper innovation through individualization is
huge, and it remains to be seen whether Niiu will capitalize and profit from that potential
The
Editor's Weblog wishes the best of luck to Oberhof and Tiedmann. It is now up to the Berlin public to decide the fate of Niiu.
Mr. Wanja Oberhof will be speaking at the WAN 2009 16th World Editors Forum in Hyderabad
Sources: Personal interview with Mr. Oberhof.
Spiegel Online
PrintWeek
Time
