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Below, I've included my portion of a group project for Media Management Leadership, Fall 2015. Summary Bonnier was founded in 1804 and is the oldest publishing house in Scandinavia. In 2012, its businesses included a host of newspapers, television channels and movie theatres in Sweden as well as nearly 40 special interest and “action-sports” magazines such as Popular Science and TransWorld Snowboarding. As of 2012, Bonnier comprised 175 firms operating in 16 countries. Though the rise of digital technologies through the 1990s did not have an immediate effect on print media, the emergence of “Web 2.0” in 2003 began to dramatically shift the customer relationship to content (Applegate 2). This shift, paired with recession and an industry-wide decision to post content online for free, caused newspaper and magazine companies like Bonnier to lose circulation numbers, subscription income and advertising revenue at prodigious rates. “Where the online services had all paid newspapers and other publishers for content, and had charged consumers for a combination of the ability to get online and to make use of that content when they did so, now the businesses of access and content diverged. And on the web, much of the content ... was offered without charge” (Tofel 49).
Failure to Capitalize on Success To address the threat of declining circulation, lost subscriptions and flagging ad revenue, Ӧhrvall’s R&D team began working on a digital magazine in 2009. “Based on the general understanding that Bonnier’s magazine business was under threat and its digital delivery was not satisfactory, the task was to create a digital publishing product that customers would be willing to pay for” (Applegate 5). At that time, the future of tablets was unclear. The Kindle reader, released in 2007, saw some success but the iPad had not yet been unveiled. Having heard rumors that Apple was about to release a full-color, touchscreen tablet, Ӧhrvall doubled down on the opportunity to release magazines for that platform. To test their idea with potential customers, the team decided to create and release a prototype video. It was posted on Dec. 16, 2009. As tech reporters and interested consumers were speculating about the iPad, this video captured imaginations. Influential media and tech bloggers picked up the story and, according to Applegate, the video went viral. Ӧhrvall was in the audience on January 27, 2010 when Steve Jobs unveiled the iPad. She instructed the team to download the software developer's’ kit (SDK) and get to work implementing the prototype immediately. Bonnier published its own title, Popular Science, in April 2010 — just three months after the iPad was unveiled and the same month that the iPad became available for purchase. At an Apple event, Jobs called Popular Science+ “‘the king of the hill’ among magazine apps” (Applegate 7). In the first four months of the iPad and Popular Science+, digital edition sales averaged 12.7% of total circulation for the magazine. The Mag+ team had built an incredible springboard for success. Recommendation According to Jim Collins and Morten T. Hansen in their book Great by Choice: Uncertainty, Chaos, and Luck — Why Some Thrive Despite Them All, an event must meet three strict criteria to be considered lucky. It must occur independent of the actors, the event must have a potentially significant consequence and, lastly, the event must be largely unpredictable (Collins 154). After creating the prototype video, the Mag+ team contacted influential journalists and tech bloggers. They sought press coverage, were well-positioned to do so and had a flashy, newsworthy video. This was not luck. Ӧhrvall’s decision to move forward by developing the Mag+ platform for the iPad was also not luck. However, no one predicted that Jobs would praise Popular Science+ and recommend it to iPad users right as the iPad became available. This created incredible buzz (a huge short-term bump in circulation), but the Mag+ team was unable to convert on this luck. The short-term decision to ensure the success of one title, Popular Science+, came at the expense of creating a diverse content ecosystem that could have catapulted the digital magazine into a touchstone feature for the iPad and other tablets like it. Though Job’s announcement tacked on an average of 14,989 subscriptions through July, we hypothesize that some of the momentum slowed after the novelty of both Popular Science+ and the iPad wore off. The Mag+ team found a product that sat perfectly at the intersection of its economic engine, passion and expertise and it accumulated visible results (hedgehog concept). If unable to find titles past Popular Science+, it’s unlikely that customers would line up to help turn the flywheel and build momentum (Collins 187). For these reasons, we recommend that in the days and weeks following Job’s mention of Popular Science+ on the Apple stage, that the team work tirelessly and scale quickly to manually onboard additional titles from Bonnier and outside publishers. “Getting a high return on luck requires throwing yourself at the luck event with ferocious intensity, disrupting your life, and not letting up,” according to Collins and Hansen (Collins 166). Implication Because the content management system for Mag+ had not yet been built (it was made available to outside publishers in April 2011), quickly scaling the platform would have been an incredibly labor-intensive effort. To incentivize Bonnier’s magazine teams and external publishers to participate, it’s likely that Mag+ designers and developers would have had to onboard each issue of each publication while simultaneously developing the Mag+ platform. Without being assured of success, this would have been an incredibly risky endeavour for the small team. It’s possible that this rush to onboard additional titles would have caused Moving Media+ CEO Staffan Ekholm to miss a critical component of the product design — it needed to fit within existing workflows, e.g. use of Adobe InDesign (Applegate 8). It’s possible that subscriptions could have continued to flag or the revenue model would collapse. However, as hindsight is 20/20, it’s clear that taking this risk could have benefitted Mag+ in a number of ways. First, it could have captured market share over competitors Adobe, Zinio, WoodWing and Quark. With platform market share, competing titles become less of a threat. Bonnier would have earned some revenue by hosting titles like Wired and even offered recommendations to readers for its own titles. Additionally, by earning a more significant return on its luck, Mag+ could have vaulted itself into a partnership with Apple or other tablet makers. This could have expanded the reach and ubiquity of digital magazines. “Despite the giant leaps in digital circulation for some publications, the results still fall far short of the gap created by the heavy decline in print circulation,” according to a 2013 report in The Guardian (Sedghi 1). Works Cited
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