A glimpse into future digital life
Germany's largest magazine publisher is pioneering a trail into frontiers of new media.
NEW YORK (FORTUNE) - Should you be able to video yourself being interrogated by the police? With many of today's camera-cellphones, it's trivially easy to do from a technical standpoint. But it took Hubert Burda Media, Germany's largest magazine publisher, to get me thinking about it.
Two weeks ago in Munich, Burda hosted an innovative event it calls Digital Lifestyle Day. There Gabe McIntyre, a well-known blogger who lives in Amsterdam, showed a video of himself in a real-life experiment. Even in the relatively benign precincts of Amsterdam, he demonstrated that the police may not be pleased.
But it was Burda that gave him the platform to show it. This company is pioneering a trail into new media with what may be the most savvy and considered electronic strategy of any magazine publisher on the planet.
CEO Hubert Burda aims to take his private, family-controlled company, with about $2.4 billion in annual revenues and 7,300 employees, aggressively into the online era. In 2004, the last year for which Burda has published financials, it generated about $150 million from its digital businesses. Most notable is Focus Online, the online version of Burda's flagship Focus Magazine, a Time-like German weekly. Focus online is a partnership with Microsoft's MSN.
Burda -- both the company and man -- is working to figure this stuff out in a period when many media companies elsewhere, especially in the U.S., feel beleaguered and defensive.
CEO Burda is resolutely optimistic. He likens Digital Lifestyle Day (DLD) to a "Fourteenth-century fair" where traders arrived from all over with exciting new goods. "'What can we do with silk?' 'What can we do with paper?' They had not the slightest idea what to do with paper before the Gutenberg invention," says Burda. So now he is gathering "the most cutting-edge, freshest, newest things people are bringing from abroad or that we have developed." What can we do with video blogging?
I conducted a panel at DLD on the wide-open topic of "What's Next?" It included Google (Research) search chief Marissa Mayer, tech pundit Esther Dyson, and Argentinian telecom entrepreneur Martin Varsavsky. One conclusion of the panelists: the developing world is where much of the most important new technology will arise and be used best.
Other conference speakers included Star TV head Michelle Guthrie of Hong Kong, U.S. new-media expert and author Dan Gillmor, Andrew Robertson, CEO of ad agency BBDO Worldwide, top French blogger Loic Le Meur, and Korean social networking entrepreneur Rick Kim.
At dinner, Gillmor said of DLD: "This is the most brilliant public relations move of any publisher I've seen. It proves that Hubert is the one looking forward in publishing."
Along with Robert Friedman, Fortune's international editor, I sat down with Burda a few days later at the World Economic Forum in Davos, and marveled at his erudition and his humanism. "What's your business model for online," Robert asked Burda. The reply: "Creating communities."
"I don't own magazines, radio stations, TV, Web sites. I own brands," he said. "And I have to guide these brands into one marketplace. My definition of marketplace is from the Cluetrain Manifesto: markets are conversations. The more I can bring people to this marketplace the more I can build up communities, and then I have a health community, a finance community and so forth."
Focus Online embraces blogs, unlike most U.S. publishers, who are still wrestling with issues of control and seldom think about communities. But Burda's more advanced attitude seems to be paying off.
"Last year we broke even on Focus Online," says CEO Burda. "This year the first three months are 33 percent above last year. Everything now coming on top is pure profit, because we have almost no scaling costs."
Does Burda give away the entire content of his magazines online? "Never," he replied firmly. "It's like in music-theme and variation. You create the attention through traditional media, and then you bring it to the web. Then you can of course get others -- the bloggers -- to comment on this. But it is another kind of content. The main mistake publishers are making is believing that 'I own content and now I distribute it on other surfaces and interfaces.' No. Every interface is another aesthetic dimension."
You'd never hear this from any U.S. publisher I know, but Burda talks proudly about having studied art history for six years. He thinks that helped him come to the right conclusions about extending his brands in a digital age.
"Many people just believe we take the magazine to the Web. My god. No," he says. "If you have not the understanding about aesthetics that a sculpture is a sculpture, oil is oil, and fresco is yet another interface, then you make these mistakes."
You may think it a far cry from that to video blogging, but for Hubert Burda it all makes sense. Leaving our meeting with him, I felt for the first time that I might actually see the future for my own industry.