While Springer’s digital segment already contributes 39 percent of company revenues, and that number is rising, its legacy segment is losing ground. By the company’s own calculations, revenues collected by all German publishers combined from online banner ads are a mere tenth of what Google Germany collects in search ads. “We didn’t have a product in place,” says Christoph Keese, an executive vice president at Springer. “Why? Because we weren’t looking. This should never happen again.”
They met with a who’s who of Silicon Valley: designers, hackers, heads of Palo Alto’s biggest companies, professors, and financiers like Plug and Play Tech Center. These middle-aged Germans even listened to a teenage whiz kid who was already getting his master’s degree at Stanford—then they hired him as an intern.
In March 2013, Springer announced a new corporate strategy. It would introduce digital subscriptions for its news sites, radically change its corporate culture, and start its own media incubator. The company already has purchased or started online classified-ad sites across Europe for jobs, cars, and real estate. It was the first in Germany to add apps for tablets and smartphones, and to erect paywalls. It lobbied for—and won—a change in the nation’s copyright law so that curators and aggregators must now pay for any content they use.
But that wasn’t enough. Springer decided to sell a slew of magazines and regional papers, including the Hamburger Abendblatt, the first daily founded by Axel Springer in 1948. Its daily print holdings in France were jettisoned, too. It set up a permanent presence in Palo Alto, where Springer managers will learn from digital giants in a visiting fellows program. Before the fellows program began, Kai Diekmann, editor in chief of Bild, Germany’s largest-circulation tabloid, led a team of three Springer executives who spent a year in California. “I learned never to ask your secretary to get a coffee . . . And do your emails on your own,” Diekmann, 49, joked in a YouTube video recorded at a party in California October 1, 2012.
Before he spent his year abroad, clean-shaven Diekmann slicked back his curly, strawberry-blonde hair with gel and wore casual chic in the office. He has since abandoned the hair gel but still wears jeans, chucks, and a hoodie over a buttondown shirt. Impish by nature, Diekmann shows off his pair of Google glasses, one of only two known to exist in Germany. But that is not the only thing he gained during his California sojourn. He conducts all editorial meetings standing up; he’s changed workflows and challenges his staff to experiment. “It’s part of a change in attitude, change in culture,” he says. “I love this DIY attitude.”
Back home in Germany, though, he acknowledges some cultural differences. Europeans do not embrace all the technological advances that come out of California, especially if they infringe on a deeply held desire to protect privacy. His company also was trashed in the press for trying to sell its regional papers, accused of selling out to digital fluff. Springer tried to defuse the criticism with a series of tongue-in-cheek videos. One proclaims Springer’s real roots were in a Silicon Valley garage. It did not go over well. The critics howled that the videos proved their point.
Diekmann remains unapologetic. Just as founder Axel Springer was the first to introduce large-format photo tabloids to Germany, the company will remain innovative, he says. Springer will invest in a new newsroom for Die Welt, its respected national daily, and build a digital-media campus to house its growing stable of digital subsidiaries on a lot across the street from Springer headquarters in Berlin that used to be behind the Berlin Wall. When finished, the campus also will be the home for its accelerator. For now, Axel Springer Plug and Play is a few blocks away from the Springer offices, encompassing the entire second floor of a nondescript 1960s office block. Its walls are spraypainted with red and black graffiti. Tables with laminate tops and folding chairs stand in the middle.