Near the start of the year, The Economist took a typically wide-ranging look at the relative success of Nordic companies. The key takeaway was that, relative to their combined size, Norway, Sweden, Finland and Denmark have produced a surprising number of internationally successful businesses. “The Nordic region accounts for about 1% of the world’s GDP and 0.3% of its population,” read the piece. “Yet it has produced an impressive list of corporate giants.”
The likes of Ikea, Lego, Nokia and Ericsson have certainly hit above the weight of their home countries, and the comparative out-performance also holds to a degree in media, despite what might be seen as an additional barrier in terms of languages.
Norway’s Schibsted, a now legendary news and marketing business, and Finland’s education and news provider Sanoma, have a reputation for digital innovation and each bring in revenues of over €1.3bn, roughly comparable to the US’s Gannett.
Sweden’s Bonnier, primarily a news and book publishing business, bought up a swathe of Time’s US magazines in 2007 and only last year acquired digital subscription service Readly. Though it has since sold off some of its US titles, it still brings in close to €2bn in revenues, around the same as Conde Nast. The smaller Danish Aller Media, which publishes newspapers and magazines across the Nordic region alongside online marketing and travel businesses, has revenues of over €500mn, roughly equivalent to the New York Times or UK national and regional pnews ublisher Reach. All that with a population of under 30mn combined, half the UK’s or less than a tenth of the US.
The Economist attributed some of the wider success of Nordic companies to a Viking-like enthusiasm for “foreign adventures” necessitated by the small size of their home markets. As the piece highlighted: “Among the Nordics’ 10 most-valuable companies for which data are available, the median share of revenues generated at home is just 2%, compared with 12% for their counterparts in the rest of Europe and 46% for those in America.”
When you drill down into media companies, the picture is a little more complex. For a start, both language barriers and comparative size actually do a fair bit to protect Nordic media companies from international competition.
“I think the language disadvantage is actually also a language advantage,” says Enders Analysis CEO Douglas McCabe. “Lots of English language media might at least think about creating a Spanish version of their product or a French version of their product, but they’re never ever going to create a Norwegian version of their product. It really is a barrier.”
At the same time, Nordic media businesses have had international success, particularly across the region as a whole, but also further afield. Schibsted’s business outside Norway accounts for more than half of its total revenues. Sanoma’s key education division generates €745mn in revenue, but just €82mn of that comes from Finland, with the bulk of the rest made in the Netherlands, Spain and Poland. For comparison, Axel Springer has also derived a significant portion of its revenues from outside its home market – about half – but that has been boosted by the acquisitions of US-based entities such as Politico, Insider and Morning Brew. Meanwhile, News Corp, arguably the quintessential international English-language media conglomerate, is a $10bn business that generates only about $2bn of that from its UK and Australian news operations.
The key underlying driver of Nordic media’s success at home and abroad has been their early adoption of digital, something that is true across Nordic industry. Spotify may have emerged at just the right time to solve the piracy problem of music businesses piracy, but it also had some of the best technology. Getting digital right and quickly has, of course, been especially important for media companies, and the simple geography of the region may have helped in delivering a head start, says McCabe.
“Norway is a relatively small population and a gigantic geography, and that is one of the reasons why it has adopted digital. You’re talking about a country that has about 5mn people living in it. But you look at the size of Norway on a map, it’s just got a huge, long, geographic spread. Obviously there are centers of population like Oslo and Bergen and so on, but it’s a very dispersed population as a whole.”
“I remember talking to people from Schibsted quite early in the 2000s and they were talking about reverse engineering their entire journalism product at this point. They were saying – and this is 20 years ago – effectively the way that we do this now, the way the newsroom functions, is we create digital news services, and from that we generate a print product as an end output at a certain point towards the end of the day.”
That early adoption has helped create a company culture far more open to digital transition, and thus quicker to adapt to the big challenges facing media over the past decades.
“One of the things that they are very, very good at, is recognising the need to both define and properly prioritise this concept of product,” says McCabe of Norway. “It’s not quite the journalism in the newsroom. It’s not quite the revenue streams generated from either the advertising model or the audience model, subscriptions or paper or whatever that model looks like.”
“They have product expertise right at the heart of the business. At very senior positions, either on a board or reporting into a board. That person has authority within the organisation.”
A similar culture is likely at play across other Nordic media businesses, in a way it hasn’t been in other Western countries, says McCabe.
“We don’t really have that forensic focus on ‘what does product development look like? How does that lead the business?’ We often think about product as a sort of very practical day-to-day problem solver.”
There has been a lot of catchup in approach to product development outside the Nordics but part of why the region’s media companies have continued to thrive is down to combining it with attention to detail. They not only drill down into the minutiae of how a digital media product needs to be built to meet consumer and market needs, but they also make sure that it isn’t just then grafted on to new markets, but instead deeply researched and built for the new environment.
“It’s hard to fully capture the attention to detail, the quality of the detail and decision making that they have made on the ground,” says McCabe. “Always assuming every single time they make a decision that it’s probably slightly right and slightly wrong and it’s always testing and testing and testing and testing. And that sort of obsessive attention to detail is such a winning formula for developing these kinds of digital products.”
A mindset open to change and attention to detail might not quite fit the stereotypical view of the war-like Vikings, but those traits have been integral to the rapid and effective adoption of digital that has helped Nordic media businesses thrive.
