Mathias Döpfner, digital counterrevolutionary

Axel Springer chief predicts US will eventually join Europe in the fight against the dominance of Google, Facebook, and other tech titans

The digital counterrevolution is underway in Europe, where national governments and bureaucrats in Brussels are enacting measures to curtail the power of American tech giants, such as the controversial “right to be forgotten,” and challenging the fairness of Google’s search-engine criteria. In May 2014, a coalition of European telecoms, media companies, and other businesses formed an anti-Google lobbying group called the Open Internet Project. This lobby gained an important ally with the ascension of the new European Union commissioner, Jean-Claude Juncker, who has stressed the need for European competitors to the Silicon Valley giants. Juncker’s election was widely credited to the efforts of an influential press baron: Mathias Döpfner.

Döpfner, 51, is the chief executive of Axel Springer, Europe’s largest publishing company. Born in the former West Germany, Döpfner got his start in journalism as an 18-year-old freelance music critic. After getting a PhD in musicology, he worked his way up through German newspapers until he landed his current job in 2002. His path was “very unusual, very un-German,” Döpfner says. “From a musician and a musicologist and a journalist to a CEO of a media company—that is actually not allowed.”

Döpfner initially gained some notice outside Germany for returning Axel Springer to profitability and expanding its footprint in Europe. In 2006, he joined Time Warner as a corporate director. But it wasn’t until last spring that Döpfner picked the fight that made him a kind of international spokesman for the organized resistance to Big Tech.

On April 17, 2014, he published an open letter to Google chairman Eric Schmidt in the Frankfurter Allgemeine Zeitung, which had recently published an op-ed by Schmidt that equated European publishers’ resistance to Google to an “attack on the entire Internet and its magic.” Döpfner’s blunt response caused an international stir. His arguments sounded more like a fervid dispatch from Julian Assange than a careful statement from an international media tycoon. “We are afraid of Google,” Döpfner wrote. “I must state this very clearly and frankly, because few of my colleagues dare do so publicly.”

He accused Google and Facebook of having a “totalitarian” mentality, like the “Stasi or other secret police in service of a dictatorship.” He claimed that Google, with its investments in drone fleets, internet-enabled appliances, and driverless cars, wants to build a “superstate that can navigate its floating kingdom undisturbed by any and all nation-states and their laws.”

In subsequent speeches, Döpfner framed the discussion in a way that’s particularly relevant for journalists and publishers: “Will technology companies be the new and only distributor of content?” he said in a keynote at the Deutsche Welle Global Media Forum in August. “Will they control the process of weighing and evaluating events? Or will the traditional publishing houses manage to uphold the traditional journalistic code as a competitive advantage?”

Corey Pein interviewed Döpfner for CJR in October at his offices in Berlin. They discussed how to avoid a dystopian, Google-controlled future, Axel Springer’s new partnership with Politico, and why he thinks America will soon join Europe in the struggle against digital dictatorship. (A month later, Axel lost a round when it was forced to opt back in to Google News after it’s Web traffic plummeted.)

It wasn’t Google that tapped Angela Merkel’s cellphone. Are you more afraid of Google than of the NSA? It is not a question of who I’m more afraid of, I just thought it was important to have a debate about tech monopolies and their role in the digital ecosystem. If you reach a certain market size—market domination or a quasi-monopoly status—there may be new challenges with regard to transparency and fairness of search criteria.

It was on the agenda because of the Brussels cartel case [before the European Commission, concerning Google’s internet-search dominance]. I thought that a response to Eric Schmidt’s remarks was a good way to open a public debate. That debate happened, I’m glad it happened, and honestly speaking I’m now a little tired of talking about it, because I have to run a media company and Google is but one of the topics that we have to deal with; it is not my personal hobby.

The debate has gone farther in Europe than in the US. You said there are other media executives who had this anxiety but have not spoken out publicly. Why would people who buy ink by the barrel be reticent? The debate has opened people’s mouths and freed up the courage to express thoughts. That is very important because, again, it is about a healthy, competitive environment. The question about transparent and fair search criteria is crucial. If you own a 90 percent market share—or, in some countries, even 99 percent—you are de facto the entry gate to the digital business world. And if a player in that position can discriminate against competitors, or promote its own products without fully disclosing the criteria, then this can lead to unhealthy market domination. This is the fundament of the Brussels case and that is why there are so many businesses affected. It is not mainly an issue of publishers, of media companies. A lot of industries are involved, in particular e-commerce.

Why stop with search criteria? My letter was not motivated by a desire to lobby for our own purpose. Of course we are defending our interest on the side of content, copyright, and publishers’ rights. That is basically a media-oriented debate. The debate about search criteria is interesting for the entire society.

How did you come to this perspective, which is distinct from where a lot of media executives in the US are at in terms of their response to the growing power of Google, Facebook, and Amazon? It’s interesting to see the difference between the US debate on data protection, data security, transparency and how this issue is handled in Europe. In the US, the perception is, “What’s the problem? If you have nothing to hide, you have nothing to fear. We can share everything with everybody, and being able to take advantage of data is great.” In Europe it’s totally different. There is a huge concern about what institutions—commercial institutions and political institutions—can do with your data. The US representatives tend to say, “Those are the back-looking Europeans; they have an outdated view. The tech economy is based on data.”

I’m saying this as probably the most pro-American European that exists, and somebody who is in his soul probably more American than European: In this case, the Europeans are ahead of the game. I definitely cannot imagine that the lighthouse of freedom in the world, the United States of America—where individual rights are the fundament of the creation of the society—will accept in the long term a society where you have total transparency of personal data and, with that, total transparency of the individual and, with that, unlimited possibilities to control and abuse individuals’ data and behavior.

I bet that in 10 years we will have more sensitivity to the matter in America than in Europe. As it was in the case of affirmative action, America used to be the most racist country in the world, and it’s now probably the most concerned about diversity. As was the case with regard to food and health, America used to have some of the unhealthiest food in the world and now probably has one of the most sensitive approaches toward fitness, health food, and so on. So America confronts problems sometimes a little later, but it solves them more quickly, and in a more pragmatic way.

In Europe there is more sensitivity because of the history. The Europeans know that total transparency and total control of data leads to totalitarian societies. The Nazi system and the socialist system were based on total transparency. The Holocaust happened because the Nazis knew exactly who was a Jew, where a Jew was living, how and at what time they could get him; every Jew got a number as a tattoo on his arm before they were gassed in the concentration camps.

What evidence do you see that the mindset is beginning to change in America? The reason for my optimism is twofold. First, I believe in the instincts of freedom in American society. The second reason is, I’m talking a lot to young people living and working in America, in particular in the tech industries. Those are the real insiders, who really know how the machinery of the digital economy works. And the younger they are, and the more competent they are, the more skeptical they get about certain things.

Let me give you one concrete example: Snapchat [an app that allows you to send photos and other media that will disappear after a short time]. This is a super-successful young company that is probably so successful because I’m not the only person who’s a little scared about what could happen, 15 years from now, to a photo you shared with family and friends that is in the hands of other people who want to do something with it that has nothing to do with your original intentions. So Snapchat is for me a positive example that there is something happening.

How does this concern inform your approach at Axel Springer? Because when you took charge, you set a digital strategy very early. In 2002 we defined the strategy of digitization. Today, more than 50 percent of our sales come from digital businesses, 66 percent of our operating profits are coming from digital, and roughly three-quarters of our revenues are coming from digital. We are probably the most digitized traditional media company in the world. And it is from that position I am making my remarks: As a beneficiary of digitization, not as someone who is skeptical of it in general. This is very important to understand. We want to benefit. We want to become the leading digital publisher, and that means remaining a publisher—so the business model is based on content—but with digital as the basis of basically everything.

You did something different to achieve this position: You sent Axel Springer managers to Silicon Valley to learn how they did things. In America the approach has been, “Let’s hire a consultant to tell us what we should do.” It’s well known in Europe that we are we are not fans of strategic consultancies and restructuring consultancies. I think that’s something that management should do themselves. We are more in that camp of trying to learn and benefit and collect experience and information all over the world. If you are talking about our digitization and the Silicon Valley experience, this is just one tiny element and we should not overrate it. But yes, we sent three of our top executives—our most important editor, our most important business guy, and our most important IT guy—to Silicon Valley. They were living for nine months like students in a dormitory, and were simply asked to connect themselves with the most interesting people in the Valley, learn from their mentality, learn what we can do differently. They came back as cultural change agents.

It makes me think how Yahoo, Amazon, and Facebook are all hiring journalists, but they don’t have the culture of journalism. I have serious doubts whether a company is able to change it’s genetic code and adopt a totally different business and culture. I doubt that a tech company becomes a content company, and I doubt that a content company becomes a tech company. Of course, for a content business, technology is a lot more important today. But I think the huge opportunity in the digital world—and this creates my optimism with regard to the future of journalism—is that there is a whole new era of launches, of new content products and content companies. It is a bit like in the 19th century when the big newspapers were built, or after the Second World War when in Europe new magazines and new print products were created. Print is now over. I mean, the print business will still exist and make money but there is no growth in the print business. The crucial question is, are we able to emancipate the idea of a newspaper from paper. And I’m working for that objective basically every day.

You can debate, “Is BuzzFeed serious enough to play a journalistic role?” Perhaps in 10 years, they will be more relevant than The New York Times. You can debate the possibilities of whether smaller companies can really replace the big brands. We have just invested [$20 million] in a Silicon Valley digital magazine project called Ozy. They have in a very short order gained a tremendous readership with serious journalism that’s presented in a fashionable and modern and edgy way that is more attractive for a younger audience than a traditional brand like The Washington Post.

Another example is Politico. We have agreed to roll out Politico in Europe, based on a joint venture. Look at Politico. Today it is one of the most influential platforms for political journalism in the United States. It employs 350 people [Politico confirms “more than 300”]. It’s a serious source of credible and trustworthy and relevant journalism, and it’s basically all digital. I think journalism has tremendous opportunities if we, the publishers and the journalists, are doing our job right.

Politico is somewhat peculiar to the insider culture of DC. What makes you think that will work in Europe? Politico started in Washington with an approach that said, “We want to be on the office desks of the 10 most relevant people in Washington. If we reach them, we will sooner or later reach the 100,000 most influential people interested in politics, and then it can become a huge brand and a serious business.” Of course, Washington politics is not a mass-market interest in the United States. But the crowd that is interested in that is large enough to build an important brand. And now in Europe I think the need is even greater. You have Brussels at the political center, and 28 member countries that are represented there. You have people in the member countries of the EU, and in countries that may want to become a member, or do not want to become a member. So there is a huge interest in what is happening in Brussels and in the political centers of these member countries, and there is not a European platform to capture that. So I think [Politico Europe] has the potential also to broaden and be a comparable success. But of course we have to see.

Concerning the Open Internet Project: I’m not sure that everyone is going to be persuaded that this anti-Google lobbying effort is not simply about defending the commercial self-interest of Axel Springer and the rest of the companies that have signed on. What do you think a “healthy digital ecosystem” looks like? What room is there for smaller, independent publishers who, right now, may think they get a better deal from the Googles and the Amazons of the world? If you create this dependency on a few monopolists it’s a very shortsighted approach. A healthy ecosystem is one in which you have some very strong and very relevant infrastructure and tech players. But at the same time you have a big number of smaller or mid-sized content brands, or even large content brands that are competing against one another for the best argument, the best story, the best investigation, the best service. And this variety of content brands can and should have very different business models. Some may offer their content for free and monetize just by advertising. That is particularly successful for more news-oriented, general-interest approaches. Others—those more premium-content brands that produce substantial and expensive content; investigations that involve travel and lots of research—could be monetized by subscription and advertising revenues. Others may test auction models. I think there is no limit for various business models.

I think the idea that we should have an internet in which all content is available to everybody for free is just nonsense. This is pure ideology or pure lobbying by some very few businesses that take advantage of the content others have generated at great cost. They take it for free and monetize it to advertising clients in a different context. That is not a sustainable ecosystem, because sooner or later the content producers will stop producing, and then the content aggregators or search engines or pirate brands cannot exist. In the long run, you need several sources of revenue, and the paying reader is an important pillar of that.

There’s been nothing—no law, no regulatory force—to stop publishers from experimenting with pay models. So what’s the problem? Isn’t it simply that there is a larger audience for free content and a smaller audience for paying content? That is exactly how it is going to develop. On the way, though, there are some issues that need to be resolved having to do with a legal system. If publishers’ rights and copyright are nonexistent, and everybody can take whatever he or she wants, then there is no incentive to invest in expensive content. You need a certain fairness in the usage of other people’s content. I think it’s wonderful that you can share and link information, and the network effects provide wonderful opportunities not only for readers but also for journalists. But I think in a new digital economy we need to develop new and fair rules that help content and services of the highest possible quality to flourish, and that help the largest number of players to flourish.

Is there any role for the public sector? I’m against the role of the public sector. I think media should be private competition. Only media that are a good and successful business will in the long run be independent media. Media that depend on state money will be in the long run state media. I’m also against media as a recipient of foundation money and philanthropic initiatives. I think journalism is not a philanthropic issue. Journalism is essential to society.

But you do see a role for governments to ensure that the competition is fair? Yes, yes, yes. And that does not mean overregulation or crazy regulation, it just means an appropriate legal framework. And nobody knows exactly today what that is. It’s a process.

Is any government—the European Commission, any public agency—up to the task? No. And I don’t blame them. They can’t be. Because progress is happening so fast. Technology developments are changing so fast that it is hard for the most up-to-date businesspeople to keep the pace. How should politicians understand everything? What we have to do is define the priorities. There is now in Europe, for example, a commission for the digital agenda. There are three people in the commission, I think, dealing with digital issues. That’s a good sign. That at least shows me that they’ve started to understand the importance. In every government there should be a widespread competence about digital developments, because in the end it is eminently political.

Hasn’t the process of consolidation and transformation happened so fast that the dystopian scenario you’ve described is already largely in place? The Obama administration is a great example of a campaign and a presidency that thinks it can circumvent the news media. The tech companies have a coalition of governments and consumers who basically go along with whatever they want. So in some ways isn’t it already too late? I don’t think that it’s too late. I’m a structural and cultural optimist. There is always the movement of the pendulum. And the pendulum may have swung at the moment a little too far to the direction of, “Actually, we don’t need journalism, we don’t need big brands, we only need direct communication with the consumer”—very decentralized, fragmented structures. I’m 100-percent sure the pendulum will swing back toward credible brands, brands that take responsibility; toward experts that know how to write great stories and do the research and that take responsibility when they publish inaccurate information. This is also in the interest of the consumer. If you rely entirely on social media, how could you distinguish rumor from fact? Please don’t get me wrong: I think social media are a tremendous enrichment of journalism and communication and of society. But they are not going to replace professional journalism. There is a growing hunger for trustworthy, branded content.

If Europe enacts more regulations such as those you’ve suggested, the internet in Europe could start to look very different from the internet in the US. Doesn’t balkanization threaten some of the promise of these new technologies? First of all, I’m not advocating more regulation as such. In general, I’m a fan of minimalistic regulation. The second point is that we need global solutions. The digital economy is an entirely global economy. National law and national regulation can be a starting point, but it’s never going to resolve anything.

That’s my point, though: Russia and China already are apart from the internet we see in the West. Isn’t there a risk that, if America and Europe pursue different courses, that global connection gets broken? A break between the connection of Europe and America would be terrible, and we have to do everything to avoid that. If some non-democracies like China and Russia are trying to go another way, a protectionist way, a non-democratic way, a way where there’s no free press, they can do it. We will see in the long run which system is going to prevail: Democracy or dictatorship.

There’s a different challenge to democracy, though, and it’s something you’ve alluded to: The idea that the larger digital companies are beyond the scope of government control, and therefore of democracy. Well, we cannot blame a very successful company for wanting to conquer the world. That’s the healthy instinct of every entrepreneur. But it’s the duty of people living in a democracy—“the consumer”—and of politicians to set limits and define interests. And if a company thinks that it doesn’t need to comply with existing laws because it has such great ideas, that also should be a breach of law in the digital world. Just because somebody’s pretending to do something good, or genuinely wants to do something good, it does not allow everything.

Is there anyone in the United States who could carry this torch? I think that this is not only a European debate, or a Europe-against-America debate. I feel it, I see it, I hear it when I am in America, and I’m there at least once a month. It is already a debate in America. Perhaps the mass audience is not participating. But the tech elites, the younger people, intellectual people are. Why do you ask if you are not interested?

But among your cohort, though—the executives, the people at the top—is there anyone in America? Because it’s fine for all the young techies have skepticism, but they don’t have that kind of platform and influence. I have had many conversations and I could give you names but I think that would not be appropriate. My experience is, the younger the people get, the more interested they are. If you are in your twenties, then people start to really think, “What’s the world going to look like in 10 or 20 years?” If you do that then you automatically have to deal with these issues. That is true for journalists, who of course have the particular duty to express that and to make other people interested—but not only for journalists. It is also true for entrepreneurs. It is true for tech people, for developers. It is true for a younger generation of politicians and intellectuals, scientists. We do not rely on two or three representatives of the old guard to have that discussion. It’s a discussion of the young generation.

Apart from the conversations you alluded to, do you have any examples? Again, look to the business world, to the companies that are having a very successful start. The range goes from Alex Karp’s company, Palantir, to Snapchat. Not to mention many new startups and companies that are trying to build safer alternatives, where data is more protected. The fact that there are these companies that are more data security-oriented, more privacy-oriented, shows me there is a debate, there is a reaction, there is something happening with regard to data. On the content and the journalistic side, there is Vox Media and Flipboard and Ozy and Politico. There is a lot happening at the moment. Just look to the recent valuations. Vice Media is $2.5 billion. Marc Andreessen has invested $50 million in BuzzFeed at $850 million valuation. Why do they do it? Because they think it has no future? No. They believe in it.

Doesn’t that reflect a certain amount of bubble investing? The bubbles are elsewhere. I think the content industry is at the beginning of appropriate valuation. And it reflects growing interest in that industry and in the need for great content—be it an aggregator, a branded digital magazine, or any other innovative concept where you combine algorithm-driven content and human curation, like Digg.

Is there anything you want to add? For a company like Axel Springer, the digital economy provides many more opportunities than threats. It also provides new markets. In the analog world, national boundaries were logistical boundaries. To launch a newspaper in France you had to own printing plants, or have contracts with printing plants. You had to organize distribution, and that was difficult to impossible. In the digital world, the only border you have is language. Apart from that, the world is your market. Because of that, entering the English-speaking world is a big priority for us. You can interpret the investments in Ozy, in Politico, and in other English-speaking initiatives to come in that context.

There’s a bit of opportunism in that, right? Because the same problems that have put the US media on its knees before the likes of Google and Facebook must have lowered the price to enter the US market for a company like Springer. Absolutely. The coin very often has two sides.

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Corey Pein was an assistant editor at CJR. Tags: , , , ,