Sitting in their respective offices in the port city of Antwerp, Gert Ysebaert and Marc Vangeel form a rather disarming duo. Conducting interviews with more than one person is always a notoriously tricky, and sometimes prickly, business, but there is a natural rapport between the two Belgians that eases the process. Both are engaged on the issues and engaging in how they address them.

As chief executive of the Belgian media group Mediahuis, Ysebaert is the point man on group strategy, international media trends and finance. It is a position he has held since November 2013, when the group was formed following a merger of two Flemish media groups. 

Vangeel, meanwhile, heads up the group’s Irish operation and takes the lead on the granular detail about Mediahuis Ireland, known as Independent News & Media (INM) until a corporate rebrand last month. 

They have a shared history with the expanding media group and, over the course of our lengthy interview, they come across more as friends than as business associates. Both are self-deprecating, curious, and regularly defer questions to each other.  

However, when you peel back the polite tone, there is a steel and a focus there also. Mediahuis may be a relative newcomer to the Irish media industry, but Ysebaert and Vangeel have developed strong, at times strident, views on the legal landscape and on the competition. And they are not afraid to share those views. 

Take RTÉ, the state-owned broadcaster funded through both commercial advertising and the public purse. “Is the purpose to have just one publisher, RTÉ, and the rest will die?” Vangeel asks, adding that although he exaggerates for effect, RTÉ has an ingrained competitive advantage.

Or Ireland’s libel laws? “The freedom of journalism is in danger. You are reluctant when you write things,” Vangeel says. 

Ireland’s competition rules, meanwhile, are too severe and could well hamper future Mediahuis expansion here, while Ysebaert argues passionately that the group’s biggest challenge are the social media platforms, and how the “rules of the internet are defined by a handful of players”. 

They are equally open about the issues they encountered when they acquired INM two years ago, and about the gradual overhaul that they have presided over since then. Ysebaert, for example, believes that the printed newspaper will be around for a long time to come, although they may just be published at weekends, while he also sees a period of consolidation within the industry, arguing that this will ultimately be good for both competition and the reader. 

As they outline their plans to scale and grow in Ireland – and the strategies that will drive that growth – they remain decidedly on message about their commitment to both Ireland and quality journalism. 

“From our perspective, we are here to stay,” Vangeel says. “We are not just here for a couple of years. We are here to stay forever.”

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The rebranding of INM to Mediahuis Ireland was the latest in a series of changes that have been implemented since Mediahuis acquired INM in mid-2019 for just over €145 million, a remarkably low price for a company that had market-leading national and regional titles as well as cash in the bank of nearly €82 million. Stripping out that cash, Mediahuis acquired INM for less than three years’ annual profits.

But it also acquired a business that was being investigated by High Court inspectors, and one that had seen its market capitalisation fall from a June 2007 peak of €3 billion to just €65 million when the acquisition was rubber-stamped. Shareholder strife had impacted company performance and also staff morale. With its content free online, it was essentially competing against itself. Margins and circulation, meanwhile, were both in steady decline. 

Since the acquisition, Mediahuis has attempted a subtle rehabilitation. Content for its marquee brands such as The Irish Independent, The Sunday Independent and The Belfast Telegraph has been paywalled. It has sold its 50 per cent stake in The Irish Daily Star, bought the motoring data firm Cartell.ie and shut its printing press in Citywest in west Dublin.  

Combined, it’s a significant body of work. Meanwhile, it is also dealing with historic issues such as the ongoing ODCE probe. Indeed, days after we spoke, Stephen Rae, the former editor-in-chief of the group under its previous owners, issued a High Court writ against the company claiming his rights and privacy were breached during an alleged data hacking.

Mediahuis has long harboured ambitions to expand into English-speaking markets. But given the legacy issues and the structure of the Irish market, just what prompted it to buy INM? It is on this topic that we begin the interview. 

Ian Kehoe (IK): I want to take you back to that period when you decided to invest in the Irish market and make a bid for INM. At the time, it was seen as a struggling brand with a depressed share price in a sector where most observers were downbeat on the long-term outlook. What was the genesis for the deal?

Gert Ysebaert (GY): You need to understand the history of our company. Our company, as Mediahuis, started in 2013, 2014, but we also have a long history and some of our brands are more than 100 years old. The beginning of Mediahuis was in 2013, 2014, and Marc and I were there at the beginning. Two Belgian companies came to the conclusion that to face the challenges of our industry – the digital transformation, the global competition, advertising pressures and so on – it was better to combine forces and to make sure that we have more power. That was the start of Mediahuis. It was that idea of how we can combine our forces to become stronger, that was the whole idea at the beginning. And it still is.

When we started, it was a huge success immediately because we were more efficient. Our brands started to grow. We were able to accelerate our digital transformation and, soon after our start, we said that if we really want power, we should look beyond our Belgian borders. And for us, it was obvious to look to the North, to the Netherlands, because that is also a Dutch-speaking market. We were lucky that there were opportunities, and we did not miss those opportunities. Three or four years later, we were quite a strong group in Belgium and the Netherlands. The things we did were quite successful. Everything was going well and that made us dream of becoming more of a European media player and looking beyond the Dutch-speaking borders. That is how we came to Ireland. 

We looked at Ireland. Ireland is an interesting market because it has a good size to start from – it is like Flanders, which has six million people. It has a strong identity, a strong culture, and it has a good newspaper tradition. Of course, it was also an entry into the English language market, which is a much larger market than the Dutch-speaking market. We also thought that the Irish culture fits with our culture. 

And then there was INM; an interesting player, because it is the market leader with some very strong brands. INM at that time already had a strong online presence, but they were lagging behind in the digital transformation. They were also present on the entire island with the presence in Northern Ireland through the Belfast Telegraph. A lot of things were going on. That is what we understood from reading the press and doing some investigations. We felt there was an opportunity to convince the shareholders to leave the history behind and allow us to make a new start.

We managed to convince them, and the rest is history, and we are now two years in Ireland.

IK: Was it tough to pull off the deal because it was an unwieldy and fragmented shareholder base? Also, in relation to something you said, everyone else was contracting and cost-cutting at that time. And you were looking to expand. What was the secret to the model that allowed you to expand?

GY: Doing the deal was not easy. We had to convince the major shareholder and there was another big shareholder. There were also smaller shareholders because it was a listed company on the stock exchange. We convinced them with our track record. It was important for the former shareholders that we had that track record, and they trusted that this European player would look after INM in a good way and do what they haven’t been capable of and make that digital transition. So that was important for them. They also wanted to leave everything behind, and this was an opportunity for them. It took a couple of months, but looking back, it was not that difficult. It came as a surprise. Nobody expected it. There was no leak. That means that there was trust between the main players. 

On your second question, it all starts with having faith in the business, having faith in news media, having faith in journalism. It seems that a lot of players around the globe have lost that faith that good journalism is needed in society and also that it can be a good business. We have both. We understand that journalism is a mission, that it is needed and something you have to do with conviction and passion. But also, that you have to run it as a business. Combining both is part of our success. 

We also understand that we are operating in a local market with local brands – local identity is very important, and you have to preserve that. But the competition has become global. Today, it is not the Independent against The Irish Times. Of course, there is competition and there needs to be competition. But we are operating against a much broader competition. Now, it is Facebook and Google, Amazon and Apple, and what they are doing has become much more important. So, understanding that local relevance and identity is very important. And you combine that with group power, sharing expertise, sharing technology – understanding that combination is part of the history of our success in the last number of years. 

IK: Just drawing from what you said. There seems to be an intent that Ireland could act as a springboard into other English-speaking markets. Is that the ambition, and how is the plan progressing?

GY: We have always been clear that we have ambition to grow our group internationally and to become an even stronger European player than we are today. That means that we are open for opportunities – on the Irish market and also in the English market. But we are also patient. The opportunities have to come, and they have to come at the right time and under the right conditions. So, if there are good opportunities, we will look at them. But there is still a lot of work to do to be successful in our existing markets, so there is no pressure. But we have the expertise and the balance sheet to allow us to make new steps if there are opportunities. 

“We said to the organisation: ‘Cost is important but also your top line is important’.”

Marc Vangeel

IK: I am really interested in the integration piece. You go into INM. Peter Vandermeersch has spoken to me before about the morale being low. How do you resolve that? You have taken on a very historic asset and one that goes back a century. But it is at a low ebb in its history.

Marc Vangeel (MV): This is no fixed format of remedy for how you integrate a new chamber in the Mediahuis building. But when you looked at INM, and you mentioned morale was low, it was caused by the fact that INM as a PLC was driven by a quarter-by-quarter, half-year-by-half-year, cost-cutting and so on. It was not really focused on what a publisher has to do. We really believe that with good journalism, we contribute to a community. We can make the life of the Irish a little bit better by doing our job well. But we do it also by running it as an efficient company. When you entered INM, you saw that you had a state-of-the-art financial control, a very efficient low-cost operation, but no vision as to where the company should go. There was a year-over-year churn of sales per copy. Print advertising was churning year over year. There was no vision. 

That will change because it is do or die – we think that our future is in subscriptions. We went for the paid-for content. It took us six to eight months to set it up, but it took off well. We said to the organisation: “Cost is important but also your top line is important.” We have to grow; we have to realise our own future. We will bring some knowledge and tricks from Belgium and Holland but also, we have to do it here. That worked out quite well. We brought our culture of being very transparent with our people. Every two to three months, we have an all-staff meeting. We tell them what is going on in the business. We are open. When it is good it is good. When it is not good, it is not good. That started to work. I think also, and a big thanks to Peter and Richard who did most of the work, we did what we said we would. 

There is still a lot of work to be done, but step by step we are getting there. People can see from their peers in Holland and Belgium that you can be successful. They want to be a part of it and that makes a shift. But you should ask people who work in INM.

*****

*****

In an industry accustomed to managing decline, Mediahuis is something of an outlier. Last year, it grew revenues and boosted profits while simultaneously managing to cut debt. The group, which counts De Telegraaf in the Netherlands and De Standaard in Belgium among its titles, continued to expand, acquiring Dutch company NDC Mediagroep before the end of the year.

Overall group turnover grew to €990.5 million in 2020 – up 15 per cent on the year before – with the company saying that visitors to its news sites and apps “went through the roof” as a result of the pandemic. The number includes revenues at INM, which contributed around 18 per cent of overall group revenue. 

It posted earnings before tax, interest and write-offs of €171.5 million and operating profit of €121.9 million. This latter figure was up 85 per cent from €65.9 million the previous year. Its “net result” totalled €58.6 million, almost quadrupling year on year.

Key to the group’s success has been growth in online subscriptions, many of which in Belgium and Holland come with a weekend printed newspaper. It is a model that has served the group well on the continent, and one that Gert Ysebaert and Marc Vangeel believe could well be the future in Ireland also. 

From a standing start in Ireland, it now has 40,000 digital subscribers, at a churn rate of 22 per cent. The 2021 target is 45,000 by the end of the year. The company meanwhile says that it has seen an improvement in digital advertising, again something that is against the grain given the dominance of Facebook and Google in this market segment. 

To help this transition, the group has reduced its exposure to print by moving its newspaper print production from Citywest to its plant in Newry, Co Down with the Cork-based printer Webprint taking over INM’s Citywest newspaper press. “The reader will decide when we will stop printing newspapers during the week.  Our customers will decide,” Vangeel says. “We have to see that we don’t have a big legacy problem with the printing plants. You have to make sure it does not become a stone in your shoe which does not allow you to follow the market. We are agile on that part. We have printing plants in every country, but we also have a plan that it does not become counterproductive and not do what we have to do because we are invested in material where you have depreciation and so on. You have to be careful.”  

IK: You talk about the future of subscriptions – it is almost like media as a service. Publishers are migrating there because digital advertising has not worked for mainstream publishers. Take me through the process of getting the content behind a paywall.

MV: It begins with what Peter told you last year: less reporting, more journalism. You have to bring stories that people want to pay for. That is really the start. That is what we are trying to improve every day. We were able to hire new journalism in the editorial department and improve the quality of our journalism. At a certain moment, you go for the paywall. 

In the beginning, it was about traffic and clicks, just for digital advertising and programmatic. It is part of our business model, but our real future is in consumers, readers who want to read us and are willing to pay for what we do. That will be the basement of our business model.

It is no longer about delivering a product as we always did, where you make a product once a day and the next day you make a new product. It is delivering a service. It is a continuous process. That requires a complete mind shift.

IK: Is this a reaction to Facebook and Google taking so much digital advertising revenue? Because mainstream publishers are struggling in this area.

GY: Digital advertising has to go up. That is not a problem. But the money is going to a handful of international players, to Google and to Facebook mainly. The advertising market has shifted to digital without any doubt.

IK: But not to conventional, traditional publishers?

GY: For traditional publishers, we have had a hard time. We missed the boat in a sense. But now we are catching up. In Ireland, for example, we are really growing our digital advertising. It took us a while to understand how programmatic advertising is working because that is a completely new game. It is not that we go to advertisers and convince them to buy a page in the newspaper. Rather, it involves the technology and the right people who understand which buttons they need to press. It took us a while, but we are now catching up, and in Ireland, with the help of the group, we are doing quite well. 

We are starting to compete with the big players. Of course, we are not giving up on advertising. But we want a level playing field and that is the problem. 

MV: We do much better within Mediahuis Ireland, the former INM, on digital advertising than we did one year ago thanks to the technology we got from Mediahuis in the Netherlands and thanks to some know-how and to the people that Karen Preston managed to hire; they are young and talented, and they add their nous and knowledge to it. 

As traditional publishers and broadcasters, if we want to gear up our digital advertising, we have to think about working together. We have a fantastic initiative in Belgium now, where several players, including telcos, cooperate in ads and data. They try to serve the advertisers better with reach, and also data. This technology is a game-changer. We really can achieve something if publishers have the vision that in some markets they compete and in other markets they can really make each other stronger by cooperation. 

IK: I want to touch briefly upon the performance of the titles. The Herald is struggling but overall, you are still selling a lot of newspapers. How does this impact the transformation to digital when you have so much revenue from the printed paper?

MV:  We still sell a lot of newspapers, and we also do in Holland and in Belgium. And we will continue in doing so. We have a long future in selling newspapers, especially at the weekend in combination with the digital offer during the week. We believe that this is a really good offer that our readers want. We will defend our sales per copy as strongly as we can. Why shouldn’t we? Because people like it and it is a good yield business. It is not like we are not interested in it anymore.

IK: So, it is a case of transitioning to a weekend printed paper with less printed product during the week? 

MV: In the Irish market, the Sunday and weekend sales are really outstanding. In Holland and Belgium, we don’t have Sunday papers. We only have weekend papers. So, a big volume of our copy sales come on Saturday and Sunday and I can imagine at a certain moment that you go to a model that you publish printed newspapers at the weekend and not during the week. But that is not for tomorrow. I have no crystal ball, but it is not for tomorrow. 

“The combination of reading digitally during the week and having the print newspaper experience during the weekend is very popular and that will be the future.”

Gert Ysebaert

GY: I agree. It is not in the near future. Our philosophy is that it is up to the readers. They will decide on the pace of this transformation. It is clear, not just in Ireland but in our other markets, that the weekend paper has become hugely important. It is double what we do during the week, or even more. The combination of reading digitally during the week and having the print newspaper experience during the weekend is very popular and that will be the future. Having said that, as long as there is interest in a print newspaper during the week and I believe that will still be in a number of years, we will keep on investing in it.

In Ireland, there was a backlash at the lockdown, because people did not go to work and were not picking up their newspaper. But after the lockdown, I think we will recover. We have no strict plan. We manage in the direction that the market is going, and it is all about journalism. It is journalism first. But I don’t think we will see the disappearance of the printed newspaper in my lifetime.  

IK: Have you been happy with the uptake of subscriptions? I saw a figure of 22 per cent churn, which seems high. 

MV: No. In the business we are in, no. And we see a continuous growth in it, and we made even higher plans for the next three years and I am quite confident we will achieve it. If you see how we grow in Ireland and compare it with the other markets we know quite well, it is going very well. 

But there is an inflow and outflow of subscribers. It is ok as long as it grows. Some people who churn come back later on. You have to match your churn and you have to reduce it as much as it can be. But subscription is not a block, it is a moving thing with inflow and outflow.

*****

*****

The wider media industry – both in Ireland and abroad – is experiencing a period of profound change. It was that profound change that prompted the establishment of Mediahuis in the first place, and it is a change that will also determine its future. 

The rise of the social media publishers such as Facebook and Google has distorted the market further and pushed a large volume of digital advertising money into a small number of hands. It has also given rise to disinformation and changed the relationship between the publisher and the consumer.  And having monopolised the digital advertising market, they are now looking to grow their interaction with consumers. 

The print industry is, in a sense, caught between old and new; still reliant on print sales and print advertising, but attempting to transition to the future. With circulations of so many titles falling, budgets are under threat, and so too the capacity of newsrooms to fulfil their core functions.

These are international trends. Ireland, of course, has its own issues. The defamation laws in the country are among the most draconian in Europe, while a commission on the future of the media is attempting to find a sustainable path for the national broadcaster RTÉ as well as the wider media industry.   

With its strong balance sheet and its history of online growth, Gert Ysebaert and Marc Vangeel believe that Mediahuis is well-positioned to meet these challenges. But they also accept they are not immune from them. 

They want an overhaul of Ireland’s defamation laws and have lobbied the media commission to create a level playing field between RTÉ and other publishers. 

IK: Globally, what trends are you seeing emerge within media? 

GY: From my perspective, the major challenge for publishers today – and it will be for the coming years – will be to define our relationship with the global platforms. That is our main challenge. It is not competition with The Irish Times. Yes, we are competing with The Irish Times and that is good for the market. But our main challenge is how we define ourselves in relation to these platforms. 

The rules on the internet are defined by a handful of players, and they say how a browser is working, how apps are working, and we have to adapt. It is not a black-and-white discussion because we try to work together. For instance, we have quite a good relationship with Google, and we do some projects together. But on the other hand, it is not always clear what their intention is. 

“Google and Facebook are completely advertising-driven – but in the near future I think they will also try to get more revenues from the consumer.”

Gert Ysebaert

For us, we always try to keep in mind a couple of things when we talk to these players. The first is that we want people to engage on our own platforms. That is really our conviction because there is no business model in which people consume our news on Facebook or Google or whatever. Consumers have to engage on our own platforms. So, everything we do with social media, with Google and so on, it needs to bring people to our platform. 

Secondly, we want a direct relationship with the consumer. People pay us for our subscriptions. But we also want a direct relationship with the advertiser. And this has become difficult with programmatic [advertising]. But it is a rule we want to stick to. For instance, now in the conversation with Google and what they are setting up with Showcase and so on, we want people not to engage on that platform but on our platform. 

Thirdly, we want a level playing field, where the rules are equal for everyone – on privacy and cookies. 

I believe there will be a shift. Digital advertising will not grow forever. At the moment, they are completely advertising-driven – Google and Facebook are completely advertising-driven – but in the near future I think they will also try to get more revenues from the consumer, and they are looking at more revenue models for the consumer. And that is why they are interested in having as much attention time as possible on their platforms. That is the real challenge and that is the reason we need the authorities on the European level – and also on a country level – to make sure there is good legislation. Because without good legislation, we will lose this battle. 

IK: But there seems to be a hesitancy, a resistance, at a European level to fully regulate the social media platforms.

GY: We are not trying to threaten the free internet. But we want to make sure that we stay in control of our own content, that we are in control of our connection with consumers, and we need help from legislation.

IK: We have a media commission ongoing. Are you confident that it can achieve a sustainable path for media? And what would you like it to report back on?

MV: I don’t know. We provided the commission with a document on six or seven topics where we had an opinion. We had a chance to speak to the chairman and the secretary and explain what we think. I was positively surprised by how they both understood our business. They will make their report and offer advice to the government, and we will see. But with the many interviews they had with so many people, they really know that they have to do something. And not just on what Gert just explained, but on other topics. And I hope and am confident that they will give advice to the government which will help us in the future. I am confident. They did their job quite well.

IK: I am sure one of the areas you mentioned to them was defamation. You have come from a different country. Can you compare and contrast the regime abroad and here?

MV: Defamation in Belgium costs you zero euro. In Holland, it’s €20,000. In Ireland? €2 million. Every year. On one hand, I understand that as a publisher and as a journalist, you have to do your job properly. But what we see in Ireland is that it is abused. The freedom of journalism is in danger. You are reluctant when you write things. In my opinion, the government has to act on this topic. Is it easy? No. But it is necessary? Yes. And, in my personal opinion, I see with the new GDPR legislation, it becomes worse. It is an abuse of the law. We try to do it very well to reduce the cost every year. We have dedicated legal people in the company helping us, so we don’t make mistakes. But it has to change because it has become a business and we are paying for it. It adds nothing for the public. 

IK: RTÉ. What is your view on its place and the level of public funding?

MV: RTÉ has a role to play, and we don’t say that it has to disappear. It has a role. But the basement of our future is people paying for what we publish. This is difficult where you compete with somebody who can go to the advertising market, to the public market and also offer quality journalism for free. As Gert has said, there has to be a level playing field. We exaggerate it a bit by asking the commission is the purpose to have just one publisher, RTÉ, and the rest will die? Everyone understands that this is not the goal, but I think that like in a lot of countries, there has to be some restrictions towards RTÉ or that RTÉ works together with commercial media. Maybe on advertising we have to work together? Maybe, what they produce on video, they have to offer it to the commercial players? RTÉ has to act in between some boundaries. If you just leave them to do everything, it is not fair competition. 

IK: Do you anticipate more consolidation in the media? Where do you see the industry migrating to? 

GY: It will be very difficult for smaller players and smaller brands to stay in the market in the coming years and the coming decade. There will be more consolidation and I hope that consolidation does not lead to less plurality, to less brands. Consolidation is a way to preserve the market, to ensure that there is still choice for the consumer.  We do not try and make newsrooms work together, but we work together on technology, back office and so on. Consolidation should be the way to preserve the plurality of media. In Ireland, there are not too many players so I am not sure if there will be much more consolidation, and there is also strong and severe competition law. In other markets, you will see more consolidation and we want to be part of it because we decided that Mediahuis wants to be one of the leading media players in Europe in the coming years. We believe that we have the right mode to do so and the right organisation of people. 

IK: And what has been your overview of the Irish market? 

GY: From our perspective, we are here to stay. We are not just here for a couple of years. We are here to stay forever. There is still a lot of work to do here. We have strong brands, the strongest news brands in Ireland, and what we will do is further develop our journalism and make sure we have a sound digital model. We are only at the beginning of it – 40,000 digital subscribers, but that will have to grow in the coming years, and it will grow. Compared to our other markets, there are still a lot of people who can be convinced to pay for journalism. There is a huge opportunity in the market. We also hope, because we did not have time to focus on it, we also hope to come with a better service for the Irish diaspora because there is an opportunity there with the number of people who are connected to Ireland. We can do better to serve these people and it is on our list for the coming years.

Hopefully, we can also use Ireland and Dublin as a springboard to do more in the English-language market.

From INM to Mediahuis Ireland

Gert Ysebaert says it was always the plan to rebrand the business, as the company and the people working within it had a desire to leave everything behind. “INM, while it is very much linked to the past and things that happened, they wanted to make a fresh start. It was the wish of the people in the company to become Mediahuis. But it is all about the brands – it is all about the Independent, it is about The Sunday Independent, about The Belfast Telegraph and so on,” he says. “It was also to make clear to the outside world that we are one group and we act as one group, and we share a common vision and a common ambition. That is very helpful to make sure there is cohesion within the group. We encourage people in Ireland to take up a position within the group; that it is not all people from Antwerp. People in Ireland are working on group projects and taking up group roles. We don’t have a heavy corporate structure. We are very lean at the top. We engage the best people within the group to contribute to what we are doing. That is also something we want to show with the rebranding.”