Shifting its business from print to digital media has helped Axel Springer generate higher revenues and increase outreach
Key facts
- Headquartered in Berlin, Axel Springer¹ employs 14,000 people across more than 40 countries and is currently one of the largest European publishing houses.
- Axel Springer is currently divided into four operating segments: paid models, marketing models, classified-ad models and services/holding.
- In 2014, the company achieved €3.0 billion in revenues and €460 million in EBITDA (15%).
Uniqueness
- Axel Springer’s business was primarily focused on print media, magazines and TV, but has been driven by digital disruption Springer has steadily increased its footprint across digital channels and digital media.
- The digital business ranges from paid models generating revenue through pay-per-use models using digital newspapers magazines or related services, marketing models focusing on ad performance and reach, classified ad models bundling classified offerings that target clients looking to place real estate and job adverts.
Value
- Axel Springer’s shift towards new digital business models has enabled it to reverse the traditional trend of declining revenues for publishers. Its revenues have increased from €2.7 billion in 2012 to €3.2 billion in the year to September 2015.
- Market capitalization for Axel Springer has increased from €3.5 billion in 2010 to €5.1 billion in 2015.
- Currently, digital media accounts for 50% of the company’s revenues and more than 70% of the EBITDA.
- Axel Springer has increased the reach of its offerings through digitization. Its worldwide digital audience increased to nearly 200 million users.
Approach
- The tipping point for Axel Springer’s shift towards becoming a digital business was the decline in their “classical core business” – print media.
- Springer has chosen a buy, invest and incubate strategy to grow its digital business. Acquisitions include Business Insider (online news), kaufDa (classified ads), Vertical Media, CarWale. Their investments include their venture-capital arm and their Plug and Play accelerator.
- One key success factor has been their willingness to cannibalize the print business by shifting to online media.
Footnote
Sources: Axel Springer Corporate Information; WEF/Accenture Analysis
Axel Springer is one of more than 100 case studies identified as part of the World Economic Forum’s Digital Transformation of Industries initiative. An overview of the DTI program can be found here.