Nordic publisher Schibsted launched web-TV channel VGTV in 2013 as a counterpart to its Norwegian daily tabloid paper, VG. At the beginning of 2017, VGTV claimed 420,000 daily unique viewers and more than 25 million video stream starts per month on its own platform. Norway has a population of just 5 million. VGTV, now 70 employees, took in 83 million Norwegian krone ($10 million) in revenue in 2016. This March, VGTV’s advertising revenues surpassed VG’s print advertising revenues. Digiday spoke to VGTV CEO Helje Solberg about Schibsted’s business model, six-second video ads and learning from Facebook and Snapchat. Our conversation has been edited for clarity.

Schibsted has previously created separate independent companies and then integrated them. Why does this model work?
If we’re to invest in video, we need to be focused. You have to be prepared for deficits — it might take three years to be profitable — but it’s important to make the investment before it’s too late. We are convinced the shift in consumption to video will pay off also in revenue. If VG is to keep its position as the largest online news site in Norway, video is essential to success. This is essential to establish a learning culture and adjust to change.

How integrated are you with VG’s site?
We work closely with VG, especially during breaking-news events; we share the same office. We are run as two separate companies; we will merge at some point, and it will be different, but not dramatically.

Explain your revenue model.
Pre-roll and so-called bumper ads are the main source of income. But we also have branded content, sponsorships, a long-term partnership with Discovery, distribution revenue through a linear TV channel and some revenue from Snapchat, but that’s still an investment. Video ads are a huge opportunity, but we need to push more user-friendly products.

How are you doing that?
We are experimenting with six-second ads: 30 seconds of muted autoplay video content, then a bumper ad, and that has been very successful; it’s a good user experience. It’s possible to tell an engaging story in six seconds. Thirty seconds on mobile is an eternity. Video drives loyalty, time spent and engagement, but we need to deliver a better user experience, lower the frequency and limit interaction on mobile. We need a combination of a click-to-play model and a seamless video experience.

How do you distribute video on platforms?
We publish on YouTube, Facebook and Snapchat to learn and experiment, but the most important is our platform. Eighty percent of traffic to VG.no is direct. The financial value is high, so it’s important we keep that position and keep people coming back.

Schibsted has long been vocal about pushing back on the duopoly’s power.
Schibsted’s regional brands have a strong position. Distribution is important, but destination is paramount. I am not impressed by the business model Facebook can offer publishers: It’s not difficult to get big distribution on Facebook, but it’s far more challenging to get revenue. You have to be extremely conscious why you are on Facebook and what you want to achieve.

Other publishers have gone all-in on video. How is Schibsted’s approach different?
Video will be increasingly part of the journalism, not as a separate element. We have to look at news as one story where different techniques are mixed seamlessly. The future of news is not just an article but likely a combination video, text, still images, live video, graphics and social media.

Hear more from Solberg, who is speaking at Digiday’s Publishing Summit Europe this October in Berlin.

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