By Sven Gösmann and Anna Ringle, dpa l Monday, January 23, 2023
BERLIN – Mathias Döpfner, the head of Axel Springer, says he has ambitious plans for the German media giant to expand its foothold in the United States, even as he reviews the company’s operations in its home market – including the end of printed newspapers.
Axel Springer’s portfolio includes the influential German tabloid Bild, the newspaper Die Welt, and Politico, a site popular with power brokers and policy makers in Washington and Brussels. It also has a large digital classifieds business that includes jobs site StepStone and real estate-focused AVIV.
The Berlin-based company has generated headlines in recent years – namely for its business deals and a scandal involving former Bild editor-in-chief Julian Reichelt, who was fired for abuse of power in 2021. Döpfner, 60, has been the chief executive of Axel Springer SE since 2002. He spoke to dpa about where he intends to take the company.
dpa: You have just turned 60. Some of today’s TV journalists would ask at this point: 60, how does that make you feel?
Döpfner: The whole 60 thing must be a misunderstanding! After all, I’ve only just started. I still feel like I’m in training for the job and learning every day. The best phase for Axel Springer is only beginning. I see it like this: Accelerated change for accelerated growth.
dpa: You are a former music critic. What is the song that best describes your current state of mind?
Döpfner: A techno track without lyrics. “Transit 0.2” by Marcel Dettmann.
dpa: In recent years, there have been many things that must have caused you concern. The scandal surrounding ex-Bild editor-in-chief Julian Reichelt, leaked messages from you appearing in the press, personnel confusion, a debate about your doctoral thesis. What has bothered you the most?
Döpfner: There is little point in getting upset. We have dealt with a number of issues and learned our lessons. Now we are looking ahead.
dpa: In retrospect, do you blame yourself for the Reichelt scandal, which involved allegations of abuse of power?
Döpfner: Of course. We have learned and changed a lot in terms of cultural development at Bild. Otherwise, I could just repeat what we’ve said so many times before. And I don’t want to do that anymore. We’re done with it, and that’s also legitimate after two years.
dpa: And how did things go during the 2022 financial year?
Döpfner: It was an exceptionally successful year for us, one of the most successful in the company’s history. We had double-digit organic sales growth for the second year in a row, following 2021. The company has not seen that for four decades.
In total, we generated around €3.9 billion in sales in 2022, with a bottom line of around three-quarters of a billion in profit. That was more than we had originally budgeted. The fact that we achieved this despite the war, inflation, and the energy crisis shows the tremendous dedication of our employees, whom I would like to thank from the bottom of my heart.
If you look back 20 years: back then, we were a German and purely analogue company that made a loss of 200 million. Today, we are the fourth-largest publisher in the US when it comes to reach. We have hired 400 journalists there in the last 15 months. Globally, we generate more than 2 billion in revenue from journalism, half of which comes from abroad.
In digital classifieds, StepStone is the champion of the portfolio and had the best year in its history with more than €1 billion in revenue – twice as much as two years ago. So, all together, we are very satisfied with the 2022 financial year – despite all the trouble spots.
dpa: Springer withdrew from the stock market years ago. Now you are planning an IPO of part of your portfolio with the digital recruitment platform StepStone. What is the current status?
Döpfner: StepStone has prepared thoroughly for an IPO in recent months. But an IPO always depends on a good overall environment and the right timing. At the moment, the markets are such that while an IPO would be possible it would be a waste of value. We are ready, but we are in no hurry. We will wait to see exactly what an IPO will look like and what share we will bring to the market.
dpa: Are you also planning an IPO for other areas?
Döpfner: We could envisage the same StepStone model for AVIV – in other words, for the real estate market in addition to the recruitment market. I also wouldn’t rule it out for other parts of the company that are not in the journalism area. But there are no concrete plans.
dpa: You’ve been Springer CEO for over 20 years. How do you view your own record?
Döpfner: When I took over as CEO 20 years ago, I defined three strategic fields for my work. First, a strategic necessity: the digitalization of our business. Second, the strategic goal of making quality journalism a successful business model, including digitally – keyword: paid content. And third, the strategic ambition to one day expand our business into the US, the world’s biggest media market. We have already achieved a great deal in all three areas.
The publishing house has largely been digitally transformed. 85% of our sales and more than 95% of our profits come from our digital business. We reach almost 400 million unique users.
The company has proven that quality journalism can also be a business model in the digital age. Two-thirds of our subscriptions worldwide, more than one million, now come from digital. With Politico, Insider, and Morning Brew, we rank fourth in the US. We now employ a total of 3,400 journalists, an ever-increasing proportion of whom are in the US. That’s twice as many journalists as the New York Times or the Wall Street Journal, and more than the BBC and News Corp.
Journalistically, we’ve had the most successful year in our history. Insider won the Pulitzer Prize, Welt and Bild set new standards with their coverage of the war in Ukraine and won numerous awards for this. And Politico landed one of the biggest scoops in the history of American journalism by revealing the proposed Supreme Court ruling on abortion rights, according to leading media outlets like CNN, the New York Times, and the Washington Post. That all constitutes a good starting position.
dpa: Where will Springer be in five years?
Döpfner: For the next five years, I would like to see the company make even more progress in all three fields. In the US, we want to continue to grow. We can go from fourth place to third, from third to second, maybe even one day from second to first. It’s not impossible. Paid content will play an even more important role. Politico will expand in the US and also in Europe and can become a real international brand. With Insider, we are already in 19 different countries today. Perhaps we will also buy more news publications. And start up our own.
dpa: When the Politico acquisition in 2021 became the biggest corporate takeover in the company’s history, people in Germany asked: Will the product, i.e., a digital media brand specializing in politics with a newsletter subscription model for a particularly interested and educated audience, also be available here in Germany?
Döpfner: It is conceivable, yes. Politico has recently announced its expansion in the US to California and New York. In Europe, Brussels will be followed by London and Paris initially.
dpa: What else do you want to achieve over the next five years?
Döpfner: My goal is to complete the digital transformation and turn Axel Springer into a purely digital company. First there was digital too – in other words, digital in addition to print. Then came digital first. At some point there will be digital only.
dpa: That means that by 2028 there will no longer be a print edition of Bild.
Döpfner: I don’t know exactly when. But it is absolutely clear that one day there will no longer be a print edition of Bild, or of Welt, or any printed newspapers at all at Axel Springer. Except perhaps for special editions. In any case, we want to continue to proactively shape the digital transformation. Just as we have done over the last 20 years. The best lies ahead of us: Journalism in its digital form will be qualitatively better and economically more attractive than ever before.
dpa: Who is your main international competitor?
Döpfner: Our competitors can be divided into three groups. There are the so-called legacy publishers. These are the big traditional publishers. In the next 10 or 20 years, there will only be a few very large international super brands like the FT, the Wall Street Journal, and the New York Times left. That is not who we regard as our primary competitors.
The second group are the tech platforms, which actually have a different business model. But they are interfering massively with our business models by marketing our journalistic content through extremely smart advertising models without having to invest in the costs of creation. Their market power and capital reserves are almost limitless. It would be megalomania to compare ourselves with these platforms. But they are a competitive threat.
And third, the digital native publishers, which are new media companies such as, for example, Axios, Puck, Semafor, Punchbowl, Athletic, VOX Media. Digital start-ups aimed at young audiences are actually who I regard as our real competitors. The most dangerous competitors are the ones we don’t even know about today.
Believe me, the era of the old media moguls is over. The other day someone referred to me as: “Döpfner, the new media mogul” – that’s almost an insult to me. If there’s one thing I’ve never been and never wanted to be, it’s a media mogul. That’s a dying breed. I look at the start-ups – and they are the competitors that really interest me.
dpa: Do you want to move the company headquarters from Berlin to America?
Döpfner: If you ask anyone in America, in Washington, New York or Los Angeles, about Axel Springer, the first thing they’re interested in is Politico, followed by Insider and Morning Brew. Then they say: Oh, they still have something in Berlin and Warsaw, and what exactly is Bild?
Over the next few years, the growth engine of Axel Springer’s media business will be much more in America than in Germany or other European markets. It then follows naturally that there will be something like a second location. However, I think it is unlikely that the headquarters will be formally moved from Berlin to America. Axel Springer is a trans-Atlantic media company.
dpa: Springer wanted to accelerate its own growth by bringing the US financial investor Kohlberg Kravis Roberts (KKR) on board in 2019. When will KKR pull out again?
Döpfner:: When they came on board, they told us they had a timescale of at least five years, more like seven, maybe 10. But that is not an issue at all at the moment. We are extremely satisfied with the cooperation with KKR.
dpa: How much has your company been weakened by the crises such as Ukraine war, inflation and energy?
Döpfner: The juxtaposition and concurrence of crises such as a pandemic, war, energy crisis, inflation and then also a doubling of the price of paper – this is extraordinary and is acting as an accelerator for structural digital change. This can also create opportunities for us because we are well prepared.
Individual macroeconomic aspects have even had a positive impact: Digital subscription models have gained enormous momentum over the last few years. The shortage of skilled workers has been very beneficial for StepStone and its recruitment platform business model, just as the pandemic’s e-commerce boom has been for the Idealo platform. At the same time, however, the price of paper has not left the remaining print business unscathed, nor has the structural decline in print advertising. To meet the challenges, we have also created new, more entrepreneurial structures at Bild and Welt. More entrepreneurship. We have to ensure that each business is and remains economically sound in its own right.
dpa: So, there will be layoffs at the German national media brands Bild and Welt?
Döpfner:: Staff restructuring certainly. There will be fewer staff in one place and more in another. That also means that some employees will leave.
dpa: Are the scale and timing known yet?
dpa: Can you imagine ever parting with the Bild brand?
Döpfner: No, I can’t imagine that. Bild is part of Axel Springer’s DNA. It’s just a question of how Bild develops further. I find the current projects on short-form video, social media strategy, Web 3, and young target groups very encouraging.
dpa: At the same time, you have just more or less closed the fledgling Bild TV channel.
Döpfner: It’s a different Bild TV now. Let’s see where Bild TV is in five years. In retrospect, this highly ambitious news channel concept was not the right idea. I’m a big proponent of ambitious ideas. But then you also need to be able to self-reflect and quickly correct course if an idea develops in the wrong direction.
dpa: In Germany, Springer is still very much associated with the Bild brand, despite its business in America. If you look at the company, however, that no longer corresponds to the real key figures. What is your strategy for Bild?
Döpfner: We never contradict this narrow perception because we are incredibly proud of Bild and think there’s a reason that Bild has the greatest reach in Germany and is the biggest mass media brand in Europe. Bild is also the most cited media brand in Germany.
Incidentally, this also casts the criticism of Bild by our dear colleagues in an ambivalent light. Either Bild is “trash.” Then that would mean that German quality media prefer to quote “trash.” Which I find hard to believe. Or Bild is simply journalistically relevant. Only one of the two can be true. We believe that Bild has a huge future.
But Axel Springer has long been much more than Bild. That’s why we’re driving innovation everywhere. America is a very big priority. But we also want to try out a lot more in Europe and Germany. And technology will play a major role in this. Artificial intelligence can already support journalism today. Open AI features like ChatGPT show what’s possible. A culturally pessimistic attitude would be foolish.
dpa: What exactly do you have in mind?
Döpfner: I’m interested in how this technology can help us improve journalism, help us so that people can focus even more on the things that machines cannot do better in the foreseeable future. In journalism, that is going out, observing reality, finding out things that shouldn’t be revealed, investigative journalism, reportage journalism, analysis, opinions. But when it comes to everything that has a quantitative focus and involves very large amounts of knowledge and data, artificial intelligence already has an advantage today. Perhaps we will soon see the first editor-in-chief as avatar in the Metaverse.
dpa: What else is conceivable?
Döpfner: A second field is short-form video. We have to find ways to use short, playfully-staged forms to attract young target groups to our products. Another area of development is podcasts. I still see a lot of potential for us there. And finally, the question arises: How can media use blockchain? Perhaps new forms of participation, of authentication.
dpa: There will be a new co-chief editor at Bild: Focus editor-in-chief Robert Schneider. When is he starting?
Döpfner: We are very much looking forward to welcoming him. We don’t know exactly when he’ll be joining us, because Burda first has to decide on his successor.
dpa: The whole personnel sideshow looked a bit unfortunate again. German media reported that Springer insisted he take a drug test. Did he have to take one in the end, and did Reichelt’s successor and Bild editor-in-chief Johannes Boie also have to take one? How did this whole personnel debate come about?
Döpfner: Bild criticizes others a lot and loudly, so of course it always has to withstand a lot of criticism itself. The fact that, like many other international companies, we define certain hiring requirements for certain management positions – which can then include a drug test – that’s one thing. But the way in which this was made a public issue was a pretty unprecedented attack on the personality of the individual concerned. But we remain undauntedly cheerful.
dpa: Drug testing, has this been a practice for a long time or is it a new development at the company?
Döpfner: It is a new development that is becoming increasingly common internationally.
dpa: Was there ever a moment when you thought you would retire from active management?
Döpfner: No, there hasn’t. I still have plenty to do.