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INSIDE

The magazine for employees – November 2017

Innovations
Stories about
people, projects
and products

The World‘s Publisher


Bertelsmann now owns 75 percent
of Penguin Random House
A Variety of Languages
The current issue of INSIDE is available in your
language with content tailored especially for you.
IDE
P • WIL DS
RTL GR OU

LSM AN N
IÓN @BE RTE
INN OVAC

dorada
Una época internaciona
l de la ser
e que Wildsi
ión
ie de televis filial
de,
de el triunfo por Jude Law, se sab ada cuando se tra
ta
y tarde des a tac e
Como mu Pope”, protagonizad una productora des los cerebros de est
“The Young Fremantle Media, es alta calidad. Uno de sejero delegado de CERISE
GRUNER + JAHR • GROUPE
italiana de miento televisivo de r de Wildside y con
de entretenienzo Mieli, cofundado MANN
éxito es Lor dia Italia. INNOVATION@B ERTELS
Me
Fremantle

Quand tradition
rime avec innovation
-
dios univer
r sus estu da
s termina ó de dar rien
Nada má Mieli trat

C
aba al me
nos Lorenzo ón como
niño, pas sitarios, la televisi
uando era televi- pasión por e de corto-
viendo la suelta a su a una seri devenu du
hor as al día ro de- ó tod s de en 2016, Prisma Media est
le rachat du Groupe Cerise
co li, conseje Rod má
cin director. sica, ade
numéro un en matière de
sión”. Lor
enzo Mie
Media Ital
ia,
trajes y víd
eos de mú tió extre- Avec in le groupe de médias français mation numérique d’un
Fremantle do me as; y se sin ple- jour au lendema
legado de ro delega películas
publicitari odiaba, sim 9,vidéo en ligne. Un jalon important dans
la transfor
y conseje infeliz. “Lo
undador frase e En 199 e.
éditeur de magazine classiqu
o cof e esta ent da.
así com dside, dic madam ”, recuer
ductora Wil sación y contest
a era lo mío r la toalla,
de la pro ver mente no to de tira
io de la con licenciado ba a pun avezado
ya al inic cómo un cuando esta ión con un
gunta de ocio de la conversac en Nueva
York.
así a la pre ado al neg tuvo una
televisión cisión
ía ha lleg otras ductor de ra con pre
en Filosof va. Lo que bajo pro exp lica
n televisi ecido un ió que le ceso que
le
producció haber par Este le pid tes del pro
cias podría tor italian
o n las par taban en
abso-
cuáles era

U
circunstan el produc no le gus ceso teurs à Paris et à
académico, ado la gustaban
y cuáles aba el pro hommes. Ses 120 collabora
desastre rte. “He am or me encant ne légende sur la fondation
du
4 000 vidéos pour
ra una sue y este am dije que orber una porte ce Lille produisent près de
lo conside era niño, luto. “Le tener o abs Groupe Cerise veut qu’il mois. Le fait que
des de que
el ent onc es le
ont rar ide as,
» était ces sites Web. Et ce par
televisión . Ya por aqu de la de enc nom parce que « Pomme vidéos soient extrêmement courtes
dec lara ersi dad Ce groupe ses
perdura”, ente la div déjà pris par… Apple.
– entre 60 ou au maximum
90 secondes –
ticularm e a “show” encore jeune mais
fascinó par ir” de seri de médias numériques fait partie des secrets du
succès de Cerise.
ción, el “flu
a
“Me encant y
programa etcétera. leader en France ne manque
donc pas de Frédéric Daruty,
ometraje, c- « Par ailleurs », énumère
ental a larg ido, y ahora es prá confiance en lui. Aussi
peu que de puis- suivent de
a docum « tous les thèmes des vidéos
idea
orb
r lo he abs
tener una rla”.
te flui de trab ajo —dice sance d’innova tion. C’est celle-ci qui a ciblée les tendance s actuelles. Ils
“Es io manière se
mi princip Hoy realizo conduit en mai 2016 au
rachat du Groupe quement de nom- ng Pope”
ticamente visión—. attirent ainsi automati “The You
el produc
tor de tele
ductor tod
os los géneros que
todos se
vi y
influ- desarro lla Cerise par Prisma Media.
française de G+J, il s’agissait
Pour la filiale
d’une étape breux internautes. Et, troisième
ment, l’en- en septiembre
e estr
du
enó
la performance techniqu de 2016 en el Fest
ival
como pro onces, y INNOVATION@BERTELSM
sa transfor- semble de ANN
aquel ent stratégique importante
dans sorte que les utilisa- de Venecia. Esta
amé por ENZ O MIELI ation site est formidable, de de Cine ón
GRUNER + JAHR • BARBARA DIGITAL
mente ”. sola LOR mation numériq ue. Une transform
teurs s’y arrêtent longtemp
s. » « C’est jus-
ora prod ucci
yen mutua a hacer una , c’est-à-dire prometed
se nunca trillados, qui va de pair avec la tradition tement parce que le Groupe
Cerise dispose fica fue
“No limitar caminos de magazines, cinematográ
arse de los s avecan-les activités classiques razoÀnes du Groupe
cosa, alej combinarla que me enc Chief una de las Lille et Paris, 120 employés
s cosas y arrollarla; quele souligne Philipp Schmidt, e par mois. tout à fait exact :

« Les histoires seront


li comme antl produisent 4 000 vidéos
absorber
mu cha com o Mie
idea y lue
go des je.
y el monta Transform
Lo seur Frem
por las que Cerise Mais « présent » n’est pas
vo”, así es ha con- r guiones ation Officer. Son prédéces nous n’avons pas
r algo nue en el
el trabajoFrédéric Daruty, aujourd’hui patron de dió adquirir « En effet, dans ces pays,
para crea la que se taba escribi Media deci
a nada, era
contées en images
sofía con tonces Frédéric Daruty,
e la filo tore s má s
me gus tab Mie li. “En rachat en 2015. Il était part icipa ción de succursales », précise
describ produc no , dice Cerise, avait initié ce una ble des pro-
en uno de los s de Ital ia. Lo tó de televisión” sen tenció el u – et la première année à la suite orita ria en Wildside « mais l’évolutivité remarqua

animées. »
ver tido exitoso pla fect o”, convainc may . une telle présence 21
es y más mar de los ductor per cticament
e
a donné raison – d’avoir sto de 2015 duits de Cerise permet
innovador puede afir eres el pro Mieli prá de cerazó n; lui
marché ya en ago le produit original
e Mieli, se ha pro- ción que internationale. » Outre

„Ich bin nicht seltsam,


colega, fun tenía cerise vraiment magni-
mismo, dic con los que onces. “Y ainsi cueilli s une des versions d’Ohmy-
creativos programa
s a hasta ent mucho má même si elle n’atteignait
peut-être PHILIPP SCHMIDT
français, onREtrouve
IEMB DE
2017
, portugais,
numerosos ares de horas de desconocí tor abarca fique, ent aussi des spots pour les
publicitaires. Mais / NOV Gentside en espagnol
ctam e
de
s durante
ANN et
ten de produc taille d’une pomme. Ce INSIDE BERT
ELSM mag
ducido cen tod os los género el trabajo nci ació n, era exapas tout à fait la du jour au revenons à Cerise – car la compétence en italien et allemand – toutes
déjà rentables

sondern eine
ón de no solo fina a fait de Prisma Media prometteur est
de televisi tre ellos que buscar ría hacer”. rachat matière de vidéo n’a pas
été la seule raison après un an. Un projet
s años. “En sino tam
bién sabía y que ó en el añoin le numéro un en France en Media de t d’un site
los último televisión, s lo que yo rim iento llev
lendema
de ligne. L’entrepri se dans le décisive du rachat par Prisma encore en attente : le lancemen
s en icos, aut ore cub tora de vidéo en ble 2011, et dont le l’été
hay experto istas, crít Este des de la pro
ducmatière
→effet l’agilité d’un nouvel ac- d’une expertise aussi remarqua cette entreprise créée en anglophone est en effet
prévu pour
s, period impor- imiento e en ligne et de l’info- et à Lille (Hauts Cerise un énorme

Limited Edition“
arquitecto aún más 2000 al nac der (posteriorment
combine domaine de la vidéo en siège social se situe à Paris prochain et recèle pour
y lo que es nos Wil teur numériq ue avec plus de 70 millions a été, pour Prisma Media, t aussi de ma- trouve l’inter-
o profeso
res,
s míos, algu televisi ón
mois et l’expérience
tainment qu’il
de France). Cerise répondai potentiel. Frédéric Daruty
tod os son amigo deDE
RE 2017 vues par
vidéos un candidat au rachat de première catégo- exemplai re aux deux autres critères nationalisation extrêmem
ent passion-
tante: / NOVIEMB 180 millions « car tout nière
colegio”. ELSMANN d’un gros éditeur qui vend rie », explique Philipp Schmidt, de la filiale que c’est aussi
incluso del INSIDE BERT qui veut aussi stratégiques d’investissement nante – notamment parce
de magazines par an – mais laisse augurer, qu’à l’avenir, les histoires Il faut Media que le
les attentes de de G+J : la mobilité et les
données. la première fois pour Prisma
2015
à l’avenir brachte
dépasser encore
Gruner + Jahr das Magazin
seront „Barbara“
de plus en auf contées en images
plusden Markt, in diesem ajouter une présence exceptionnelle et un INNOVATION@ BERTEgroupe est présent au-delà des frontière
s
Jahretbekam
de ses clients par de nou- l’éditeur de ma- LSMAN N
„Barbara“ zusätzlich so-
services einanimées.
digitales» Gesicht.
20 son public ses versions
„Barbara
C’est pourquoi Digital“ heißt enracinement profond dans les médias françaises. « De nombreu
die neueetWebsite,
veaux contenus de nouveaux
hinter der eine eigene Onlineredaktion
autrefois classique Prisma Presse,
und ein innovatives maison supérieure, le jour ici, à Lille »,
à l’aide d’un concept
gazines
par hasard en ciaux, une technologie linguistiques voient
Webkonzept
en ligne et hors ligne,stehen. Christina Hollstein,
devenuRedaktionsleitung
certainem ent pas
„Barbara Digital“, une évolutivité convainc ante, des groupes explique Frédéric Daruty et Philipp Sch-
PENGU IN RANDO
undiaChristine
». Nieland, Managing Director s’est décidé notam- é d’inter- concret : « Quand M HOUSE • OUT
« full-med
de visites par 2012 G+J
Prisma Digital
Media,Products, über den cibles attrayant s et une possibilit midt donne un exemple droite) OF PRINT
Charakter
ses 101 millions
der digitalen Barbara. vidéo am- en cuisine, cette et Gentside (pour hommes,
Avec ment en faveur d’une stratégie nationalisation – aujourd’h
ui, le Groupe Cerise tourne une vidéo Les sites Internet Ohmymag
(pour femmes, à gauche)
fait partie des cinq studios →
mois, le Groupe Cerise bitieuse. Rien que ce mois-ci, dans 25 pays et en tement
en France. Il Cerise est déjà présent vidéo est toujours immédia 31
groupes de médias leaders créés pour pro-
Ohmymag – de vidéo tout neufs seront langues. INSIDE BERTELSMANN /
NOVEMBRE 2017
apparaît par ses deux portails rédactionnelles, et cinq
– pour les duire des contributions
pour les femmes – et Gentside

B
NOVEMBRE 2017
INSIDE BERTELSMANN /
30
arbara hat keine Stirnfalten, son- gründung des Magazins im Oktober 2015 Konzept Ende des vergangenen Jahres in
dern ein Sixpack vom Denken.“ hatten wir bereits einen Facebook-Auftritt

The Book Is Only


der Ideenschmiede von Gruner + Jahr, dem
„Barbara ist nicht seltsam, son- der ‚Barbara‘ ins Leben gerufen“, erzählt Greenhouse Innovation Lab, drei Monate
dern eine Limited Edition.“ Und Christine Nieland, Managing Director im lang auf Herz und Nieren geprüft, daran
„Barbara hat genau das richtige Alter, sie Bereich G+J Digital Products. „Mit ‚Barbara getüftelt und gefeilt und mit den Leserin-

the Beginning
muss nur noch herausfinden, wofür …“ Digital‘ haben wir nun eine eigene Online- nen gesprochen, die es mit seinen Inhal-
So und nicht anders ist sie: die „Barbara“, redaktion, die täglich neue Inhalte allein ten erreichen wollte. Auf Grundlage von
das erfolgreiche Monatsmagazin von für unseren Facebook-Kanal und unsere User-Befragungen, persönlichen Gesprä-
Gruner + Jahr, dem die deutsche Moderato- Website aufbereitet.“ Das Vorhaben trägt chen und zahlreichen Messungen wurde
rin und Entertainerin Barbara Schöneberger bereits Früchte, wie unter anderem die das redaktionelle Konzept entwickelt, das
als Editor-at-Large ihre persönliche Note stetig wachsende Zahl der Facebook-Fans More and more reader
von der Grundidee her dem Printmagazin
their favorit s want to show their
verleiht. Und genauso ist auch „Barbara zeigt: Waren es im März vor dem Launch „Barbara“ ähnelt, aber trotzdem e books and make them affinity to the stories
Digital“, die neue Website des etwas an- einen ei-
Randoangepass- partSchöneberger
Barbara (links) und ChristinainHollstein, Redaktionsleiterin „Barbara Digital“.
of their everyd
der neuen Website noch 50.000, sind es genen, der digitalen Zielgruppe m House US has ay lives.
deren Frauenmagazins. Frech, fröhlich drei Monate danach rund 115.000 Fans. ten Stil hat. content to adults. The recognized the potential in the marke Penguin „Selbst-
und frei Schnauze widmet sich „Barbara“ acquisition earlier this ting of literary
Dass „Barbara Digital“ bei ihrer Ziel- and other projects year of Out of
im Heft wie auf der Internetseite aktu-
ellen Themen, die Frauen bewegen, und
gruppe gut ankommen würde, daran
hatte das Team um Christine Nieland und
Ironie als Stilmittel
licensed-merchand
take the publishing
ise
group’s activities in
marke
Print Clothing
the
t to a new level. boomi
ng
optimierung
ist für uns
Es fängt damit an, dass „Barbara Digital“ steht. Alles Themengebiete, die sich auch
erinnert ihre Leserinnen mit einer großen Redaktionsleiterin Christina Hollstein denken und sich vorstellen können, wie
keine klassische Homepage besitzt. Statt- in anderen Frauenmagazinen und -porta-
Portion Selbstironie und einem leichten keinen Zweifel. Schließlich hatte es das sie das Geschriebene sagt“, ergänzt Chris-
Augenzwinkern daran, das Leben und sich
dessen hat die Website für jeden Tag der len finden lassen – jedoch mit dem klei- tina Hollstein. kein Thema.“

D
Woche eine eigene Homepage mit einem nen, aber feinen Unterschied, den eben
selbst nicht immer so ernst zu nehmen.
eigenen Thema: Am Montag dreht sich Influencerin Barbara Schöneberger aus- Wortwitz und Händegefuchtel CHRISTINA HOLLSTEIN
„Diese spezielle
Eineinhalb Jahre nach der Neugrün-
alles um „Mode“; dienstags ist „Genuss“arth Vader and Captain macht. Denn ein elementares Stilmittel,
dung des Magazins „Barbara“ ging „Barbara Kirk Bei der Vorstellungskraft allein muss es
angesagt, wobei sich dies nicht nur T-shirts
auf , Frodo and Jon Snow
‚Barbara‘-Tonalität
Digital“ im April dieses Jahres an den im Heft wie auf der Website, ist die Ironie. jedoch nicht bleiben. An jedem Tag der
Essen, sondern beispielsweise auch coffee
aufcups, Batman and
Start. Die neue Website sollte dabei aber „Es ist vor allem diese spezielle ‚Bar- Woche kommt die Galionsfigur des Maga-
ein gutes Buch beziehen kann; der Spiderm
begeistert unsere
nicht einfach nur das digitale Pendant Mitt- an bedding – by bara-Schöneberger-Tonalität‘, ihre humor-
now, zins in kurzen Videos selbst zu Wort und
woch bringt Reportagenthere und is a hardly a consum
Geschichten
des erfolgreichen Printprodukts sein, er-product cate-volle, ironische und nahbare Sicht auf die beantwortet passend zur Rubrik des Tages
gorydonnerstags
without license
Leserinnen.“
aus dem „Leben“ mit sich; ist d images of an
sondern mit exklusiven Inhalten auch die icon Dinge, die unsere Leserinnen begeistert“, eine Frage der Redaktion. „Barbara, was
das Thema „Design“ anfrom hit motion
der Reihe; pictures, television
es folgt
Social-Media-Kanäle der „Barbara“ voran- or video series schildert Christine Nieland. „Und die Iro- sagst du zum Thema: Mascara?“, heißt es
der „Beauty“-Freitag, bevor games. The enterta
am Samstag
treiben und ausbauen. „Parallel zur Neu- inment indus- nie funktioniert, weil unsere Leserinnen
CHRISTINE NIELAND und Sonntag „Relax“ auf trydem
has Programm
long recognized the dann beispielsweise oder: „Barbara, was
potential for bei den Texten an Barbara Schöneberger sagst du zum Thema Wandtattoos?“
further monetization →
30 of its creative con-
INSIDE BERTELSMANN / NOVEMBER 2017 tent through mercha
ndising. In 2016,
worldwide revenu total INSIDE BERTELSMANN / NOVEMBER 2017
es from licensed-imag 31
clothing, toys, home e
goods, collectibles
and more exceede
d $250 billion. The
music industry alone
generates approxi
mately 15 percent -
of its revenue from
chandise. By compar mer-
ison, merchandising
in the trade-book

All versions in BENET:


business has been
gible. Now, with its negli-
recent acquisition
Out of Print Clothin of Alison Rich, Senior
g (OOP), the pioneer Vice President, Author
creator and retailer ing Platforms and Publishin ties to display their
of licensed illustrat g Development at bonds with particu
literary-themed produc ed Random House US Penguin titles or a general lar Founders Todd Lawton
ts, Penguin Random love of reading more duction and distribu
House US has greatly publicly, we are extendi tion of non-book and Jeffrey LeBlanc
expanded the brand- ng and expanding literary products. build on their produc
It creates and sells
“What you
based merchandising the conversation its t agreements with

www.benet.bertelsmann.com/inside
opportunities for around our books high-quality T-shirts outside partners,
books and authors its authors. With Out and , adult and childre as well as with their
. of Print, we now have apparel, accessories, n’s in-house Penguin new
read says
“What you read telegrap the capacity to develop and home goods Random House col-
hs something exclusive collect- turing book-cover fea- leagues.
about who you are,” ibles from our books art and original designs
explains Alison Rich,
something about
that allow fans to in over 1,000 booksto Classic authors and
Senior Vice Preside literally wear their res and fashion, titles ranging from
nt, Author Platform book love on their college and gift retailer William Shakespeare
and Publishing Develop s sleeves.” s, as well as on and Jane Austen to

www.benet.bertelsmann.de/inside who you are.”


ment, Penguin its own popular online “The Great Gatsby”
Random House US, Founded in 2010 destination: and “Sherlock Holmes
to whom OOP reports by Todd Lawton and outofprintclothing.com are highly called ”
“By giving readers . Jeffrey LeBlanc, two childho . The company en- for as motifs at OOP,
even more opportu od friends, joys enduring relation are products derived as
ni- OOP has proven preemi ships with many from George Orwell’
ALISON RICH nent expertise in prominent authors “1984”; Franz Kafka’s s
26 product sourcing, , author estates, pub- “Metamorphosis”;
licensing, design, lishers, visual artists Ransom Riggs’ “Miss

www.benet.bertelsmann.fr/inside
INSIDE
pro- and designers, and Peregrine” series;
BERTELSMANN / NOVEMBE censing agencies, li- “The Very Hungry
R 2017 and they continu Caterpillar,” written
e to illustrated by Eric and
Carle; and R. J.

INSIDE BERTELSMANN
/ NOVEMBER 2017

www.benet.bertelsmann.es/inside
27
EDITORIAL

Tradition Meets
Innovation

F
or over 180 years, the history of our company has
been inseparably associated with books. This year,
we added a new chapter to the story: Bertelsmann
increased its stake in Penguin Random House, the
world’s largest trade book publishing group, to
75 percent. Read all about this strategic milestone in this issue
of INSIDE, which includes an article by our CEO Thomas Rabe
and an interview with Markus Dohle, CEO of Penguin Random
House.
From this time-honored Bertelsmann tradition, the issue
segues directly to the innovations that shape our company just
as strongly. Bertelsmann has always been innovative – and is
so to this day. INSIDE presents examples from all eight divi-
sions: from the Fremantle Media production “The Young Pope”
to the use of data glasses at Arvato SCM to the programming
of self-driving cars with the help of Udacity.
A new book by Corporate Communications presents
more such model cases for innovations across our company:
“Innovation@Bertelsmann.” You can order your copy anytime at
benet@bertelsmann.com.
For now, however, I wish you an informative read with this
latest issue of INSIDE, and, as always, look forward to your
feedback.
Karin Schlautmann,
Yours, Head of Corporate Communications,
Karin Schlautmann Bertelsmann SE & Co. KGaA

INSIDE BERTELSMANN / NOVEMBER 2017 3


CONTENTS

INSIDE
BOOKS@BERTELSMANN
06 Increase
In July, Bertelsmann increased its stake in Penguin Random House to
75 percent – a clear commitment to the book as a communications
medium.

08 Facts
Publishing houses, authors and bestsellers of Penguin Random
House.

10 Introduction
Thomas Rabe on the background to the new strategic three-
10
quarters majority interest in the largest trade publisher in the world. STRATEGIC DECISION
Thomas Rabe and Markus Dohle on increasing
12 Interview the stake in Penguin Random House.
Markus Dohle on one of the most successful merger and integration
processes in the history of the media industry.

INNOVATION@BERTELSMANN
18 Examples
Innovative people, projects and products. 38
LOGISTICS
20 RTL Group Smart glasses are
Italian Fremantle Media subsidiary Wildside is a leading producer of being used to improve
high-quality television entertainment. workflows at Arvato SCM
Solutions.
26 Penguin Random House
With the takeover of Out of Print, the publishing group has
expanded its activities in the United States in the booming
merchandising market.

30 Gruner + Jahr
The acquisition of Groupe Cerise in 2016 was a milestone in the
digital transformation process for the French media group
Prisma Media.
48 Bertelsmann Education Group
34 BMG The online university Udacity became a pioneer worldwide with the
The music company has responded to the needs of singers and launch of its compact study program “Self-Driving Car Engineer.”
songwriters with a new billing model.
52 Bertelsmann Investments
38 Arvato The Chinese start-up Mobike wants to apply innovative approaches
In a pilot project, Arvato SCM Solutions is using smart glasses for to revolutionize bike sharing.
order picking.

44 Bertelsmann Printing Group 56 Magazine


Since there were no suitable machines available for producing News from the world of Bertelsmann
Ultra HD Blu-ray discs, Sonopress employees got straight to work
building them. 67 Imprint
4 INSIDE BERTELSMANN / NOVEMBER 2017
INSIDE • NOVEMBER 2017

20
HOTBED OF CREATIVITY
The Italian TV production company
Wildside developed formats like
“The Young Pope” and “1993.”

44
PIONEER
Sonopress has
been successful
with Ultra HD
Blu-rays.

48
IT TRAINING
Udacity is providing training
for the job of “Self-Driving
Car Engineer.”

INSIDE BERTELSMANN / NOVEMBER 2017 5


BOOKS@BERTELSMANN

Books at
Bertelsmann

182 years
in publishing

6 INSIDE BERTELSMANN / NOVEMBER 2017


PENGUIN RANDOM HOUSE

75%
share in
Penguin Random House

10,594
employees 2016

19.5%
share of Group sales in 2016

INSIDE BERTELSMANN / NOVEMBER 2017 7


BOOKS@BERTELSMANN

Penguin Random House –


A Global Success Story
In 2013, Penguin Random House was founded as the world’s first truly global
publishing house. Its establishment was one of the biggest and most important
transactions for Bertelsmann – whose own history began with books 182 years
ago – and marked the beginning of a unique success story that reached another
peak this year when Bertelsmann increased its shareholding in Penguin Random
House to 75 percent.

When Bertelsmann
increased its
ownership stake in
Penguin Random House
to 75 percent, it took
out large ads in the
middle of New York.

250 PUBLISHING HOUSES

independent publishers
on five continents

8 INSIDE BERTELSMANN / NOVEMBER 2017


PENGUIN RANDOM HOUSE

800 million
books, e-books and
audiobooks sold per year (in 2016)

Global bestsellers
AUTHORS Mario Vargas Llosa, Dan Brown,
António Lobo Antunes, Margaret Atwood, Dan Brown, Ken Follett, Paula Hawkins and
Patricia Cornwell, Ken Follett, Elizabeth George, Salman Rushdie (clockwise)
John Grisham, Paula Hawkins, Stefan Heym, Walter
Kempowski, Charlotte Link, Mario Vargas Llosa,
Javier Marías, Terézia Mora, Jamie Oliver, Christopher
Paolini, Arturo Pérez-Reverte, Salman Rushdie, Saša
Stanišíc, Danielle Steel, Minette Walters

15,000
new releases worldwide
per year
CURRENT BESTSELLERS

INSIDE BERTELSMANN / NOVEMBER 2017 9


BOOKS@BERTELSMANN

A Commitment
to Books
In July, Bertelsmann increased its stake in Penguin Random House to
75 percent, so it now holds a strategic three-quarter majority of the world’s
largest public publishing house. Thomas Rabe talks about the rationale
behind the move.

B
ertelsmann now owns 75 percent increase is that it is commercially attrac-
of shares in the world’s largest tive for ­Bertelsmann: It will increase the
trade book publishing group. In ­Bertelsmann shareholders’ profit share by
addition to our 53 percent stake, more than €60 million. Penguin Random
we have acquired another 22 percent in House has given us a lot of joy since it was
Penguin Random House from our partner founded. We have seen an impressive best-
Pearson, who remains a co-shareholder seller performance, and, based on that, a
with 25 percent. As a result, we now own strong commercial result. Its integration
the shareholding in Penguin Random has gone smoothly, with ­significant syner-
House that we have been striving for – and gies leveraged. The same is true for the sub­
Penguin Random House can continue to sequent acquisitions of the Santillana and
base its publishing on a stable shareholder Ediciones B publishing groups. Moreover,
structure. in the months ahead we can look forward to
Bertelsmann and Pearson are and will major new bestsellers from authors such as
remain good partners, even as the equity John Grisham, Dan Brown, Ken Follett and
will shift further in favor of Bertelsmann. John Green. And with Barack and Michelle
In addition to the CEO, for example, we Obama’s books, we are ­looking forward to
now also appoint the Chairman of Penguin thrilling international publishing events.
Random House and have four of six seats One hundred eighty-two years after
on the Board. Markus Dohle, who has the publication of the first Bertelsmann
managed the company very successfully book, this step, which will make our com-
since its formation, will remain CEO. pany the 75 percent owner of the ­world’s
This share increase underscores our
commitment to books and publishing. It
largest and most international book
publishing group, has quite a historical
“We now have
is also in line with Bertelsmann’s strategic dimension for us. We can be proud of the interest we
wanted in Penguin
priorities. With Penguin Random House, ­Penguin Random House’s achievements –
we strengthen our oldest core business. and we can look forward to the future of
Penguin Random House is driving the
book industry’s digital transformation like
the book business at Bertelsmann.
For Penguin Random House itself, this Random House.”
no other publisher. The publishing group step ensures continuity and long-term
is our most international media business, direction. From many conversations with THOMAS RABE
with a strong presence in the United Penguin Random House’s management
­States; leading positions in major markets and employees, I know that this is exactly
such as the United Kingdom, Spain and what they want. The 250 publishers of the
Latin America; and clear growth potential group will be able to continue pursuing
there and in the growth regions of China, their editorial work independently – for
India and Brazil. that is the only way to explain all the best-
Beyond the strategic rationale, an- sellers, both those of the past and those
other reason in support of the share yet to come. 

10 INSIDE BERTELSMANN / NOVEMBER 2017


PENGUIN RANDOM HOUSE

Thomas Rabe,
CEO of Bertelsmann and
Chairman of the Penguin
Random House Board of
Directors as of January 1, 2018

INSIDE BERTELSMANN / NOVEMBER 2017 11


BOOKS@BERTELSMANN

“Best Possible
Solution for Penguin
Random House”
Markus Dohle has been at the helm of Penguin Random House since
the day it was founded, July 1, 2013. In an INSIDE interview after the share
increase four years later, the CEO looks back on one of the most successful
merger and integration processes in the history of the media industry.

M
r. Dohle, what does today I would have been honored that they
mean for you personally? would trust me to do that – although
Markus Dohle: If, like me, before my actual move to the helm of
you’ve been at Bertelsmann Random House in 2008, I had never even
for over 23 years, and the culture of this thought about it. Today I feel all the more
company and of its founder, Reinhard privileged and delighted to have been
Mohn, has had a formative influence on entrusted with this still very exciting
you, then you know that this is a good responsibility. This is and remains one
step for Penguin Random House. Belief of the most wonderful jobs in the media
in fundamental values like creative entre- world, at a fabulous company with great
preneurship, decentralized management colleagues and an unparalleled roster of
and publishing autonomy are what made authors.
Bertelsmann’s long success story possible

“That’s a sign
in the first place. These values also create
an ideal environment for Penguin Random
House. The acquisition of the 75 percent
majority further strengthens Bertelsmann’s of great continuity Markus Dohle,
cultural influence on our company.
and stability.” CEO of Penguin
Random House
If 10 years ago, when you were still a MARKUS DOHLE
member of the Arvato Board, someone
had told you that you would one day
manage the world’s biggest book pub- Has the share increase had any visible
lishing group, which would be majority impact on Penguin Random House’s
owned by Bertelsmann … work? →

12 INSIDE BERTELSMANN / NOVEMBER 2017


PENGUIN RANDOM HOUSE

INSIDE BERTELSMANN / NOVEMBER 2017 13


BOOKS@BERTELSMANN

The shareholders set the framework for


our business. What Bertelsmann and
Pearson negotiated and decided in sum-
mer is, first and foremost, a signal of
great continuity and stability for Penguin
Random House – which makes it the best
solution for our authors, partners, pub-
lishers and employees. We can and will
continue to focus on our authors’ creative
works, and with that, on publishing the
finest books and stories for our readers.
That has always been our primary goal,
even and especially during the merger and
integration process.

So is that the secret to the success of the


process?
You could say that. I define Penguin
Random House as a community of 250
creatively and entrepreneurially inde-
pendent publishers. In other words, our
editors and publishers are the ones who
are responsible for the books we publish.
The creation of Penguin Random House
has resulted not in a monolith, but in a
combined umbrella that manages a broad
portfolio of creative homes, each with a
very distinct start-up mentality.

Can you explain this comparison in more


detail?
The book publishing business, as we run
it, actually has a lot in common with
the start-up world. Year after year, we
invest €700 million in 15,000 new ideas,
which take shape in the form of stories
and books. Each new book is like its own
start-up – and Penguin Random House is
the incubator. “Successful integra-
Besides this mentality, were there other tion is the result of
factors that were crucial to the success of
great teamwork.”
tions. The goal was to bring our market-
the integration? leading creativity and reach to an even
It probably helped that Random House and higher level in all of our territories. We
Penguin had many beliefs and values in succeeded at this, and with that fulfilled MARKUS DOHLE
common even before the merger. Based on our shareholders’ goals and expectations,
this, it was possible for a shared Penguin both culturally and commercially.
Random House culture to emerge unusu-
ally quickly. Also, both publishing groups What were your personal goals for the
were financially sound. And finally, it integration, and how did you achieve
was crucial that we opted for a quiet inte- them? tion plans with the local CEOs for their
gration. At the time, I often spoke a little Our goal was clear from the outset: Penguin respective countries. We had excellent
provocatively about it being the “most Random House was created in order to global project management, supported by
boring merger in publishing history.” shape the future of books and reading Bertelsmann. As always, successful inte-
for future generations. We designed the gration was the result of great teamwork –
And what did you mean by that? new company and organization as a de- both locally and globally.
That, with very few exceptions, the inte- centralized, multilocal publishing house
gration would be limited to back-end with strong territories and no overhead. The smooth integration alone probably
functions like IT, finance, HR and, of With a small, effective team, we managed doesn’t fully explain the success story of
course, supply chain and sales. It would the details of the integration in the key the first four years of Penguin Random
also be adapted to country-specific condi- US market and coordinated the integra- House. What else was needed?

14 INSIDE BERTELSMANN / NOVEMBER 2017


PENGUIN RANDOM HOUSE

Of course those are special moments in


my job. And as CEO, like all my colleagues,
I see my work very much as service to
our authors. Meeting them regularly is of
course a privilege. However, our outstand-
ing publishers don’t need an uber-
publisher, but rather a leader who gives
them the resources and freedom to do their
very best work. That is my role as CEO.

Though the political conditions for


this are rather difficult at the moment,
wouldn’t you say?
It is an unprecedented situation. Freedom
of expression is essential for what we do
as publishers. It is the foundation of our
business – and Penguin Random House,
with our diverse publishing programs and
roster of authors, is committed to being an
advocate for free speech. We are partner-
ing with authors, publishers’ associations
and organizations such as PEN America,
of which I am on the Board of Trustees. As
market leader, we have a special responsi-
bility – and we will live up to it.

Thank you for taking the time to talk


to us – in closing, would you mind
finishing these sentences for us?
I’d be happy to.

I see Penguin Random House as …


… a community of 250 publishing compa-
nies, home to 10,000 book lovers.

Our mission is …
… to nurture a universal passion for
When the world’s largest publishing group, reading.
Penguin Random House, was formed in 2013,
Bertelsmann CEO Thomas Rabe (right) and Printed books …
Markus Dohle, CEO of the new company, gave … will still be around in a hundred years.
That’s true. The core of our success is a positive assessment of its strategic importance
based on publishing the best and most for Bertelsmann as a whole. The key challenge lies in …
compelling stories and books. That is … discovering new voices and stories every
the only way to sustainable commercial year and connecting them with as many
success in the publishing business. We readers as possible around the world.
have proven this year after year since the
merger – four out of five Pulitzer Prize As the world’s biggest book publisher,
winners this year are a clear testament we are in a unique position to …
to the quality of our creative output, as is …. shape the future of books and reading
the awarding of the Nobel Prize for Liter- the past four years. Our robust bestseller for generations to come.
ature to Kazuo Ishiguro. This is Penguin pipeline, with Dan Brown and John Green
Random House’s fourth Nobel Prize since in the fall, and the Obama books in the … and have a responsibility …
2013. We have combined the quality of our years ahead, inspires confidence about … to publish diverse voices, opinions
books with maximum efficiency, reach our future. and ideas and to fight any restriction
and economies of scale – customized of diversity. 
for each country in which we operate. Speaking of which, you played tennis
Our goal is to become the most author- with Dan Brown and negotiated the
focused, retail-oriented and reader-centric Obama books. Doesn’t that awaken
book publisher. We have made great prog­ the inner publisher in the CEO Markus
ress in all three of these dimensions in Dohle?

INSIDE BERTELSMANN / NOVEMBER 2017 15


BOOKS@BERTELSMANN

Prize-Worthy
­Combination
Some 250 publishers, 15,000 new releases, and 750 million books sold ­ onoree by PEN America in May 2015.
H
per year – right from its launch on July 1, 2013, Penguin Random House The name Penguin Random House is not
was the world’s largest trade book publishing group. But above all, as CEO only associated with numerous literary
Markus Dohle announced at the start, Penguin Random House would also prizes, but is also synonymous with some
be “a global creative powerhouse.” The fact that he was right, and that the of the greatest bestsellers and publishing
success stories of the past few years, even
new group’s global publishers have lost none of their creative impetus in
decades – above all, the “Fifty Shades”
the challenging integration process, is proven by the numerous awards trilogy by the British author E. L. James,
and many bestsellers the group’s publishers have notched up around the whose books have sold more than 100 mil-
world since 2013. lion copies worldwide. But other works,
too, like the young-adult book “The Fault
in Our Stars” by John Green, the thriller
“Girl on the Train” by Paula Hawkins, Jojo
Moyes’s novels, Jamie Oliver’s cookbooks,

M
and Jeff Kinney’s “Diary of a Wimpy Kid”
ere weeks after the launch of Since the brilliant kick-off in 2013, the comic-book series, have topped the an-
Penguin Random House, the picture has been similar year after year. nual bestseller lists since 2013, selling
publishing group was able to When it comes to the world’s great book millions of copies around the world. Add
announce numerous nomina- prizes, there is no getting around Penguin to that literary sensations such as the
tions for some of the most important liter- Random House and its many famous rediscovered novel “Go Set a Watchman”
ary awards in the English-speaking world publishers like Penguin, Random House, by the US author Harper Lee, and Colson
in September 2013: 15 nominees for the Putnam, Doubleday, Viking, Vintage, Whitehead’s multi-award-winning novel
National Book Award in the United States, Transworld, Crown, Bantam, Ballantine, “The Underground Railroad.” Meanwhile,
six for Canada’s Scotiabank Giller Prize, McClelland & Stewart, DK, Lumen, new novels by the likes of Dan Brown
and three for Britain’s Man Booker Prize. Debolsillo and Plaza & Janés – to name (“Origin”) and Ken Follett (“A Column of
They culminated in the National Book just a few. This is true of the great prizes Fire”), as well as the upcoming books by
Award for Penguin author James McBride such as the Pulitzer Prize, the National Barack and Michelle Obama, show that the
and the Man Booker Prize for McClelland Book Awards and the awards of the PEN publishing group’s bestseller pipeline is
& Stewart author Eleanor Catton, in ad- writers’ association in the United States; absolutely full. 
dition to four Pulitzer Prizes for Penguin the Man Booker Prize, the Costa Award
Random House authors and numerous and the British Book Awards in the United
other awards in 2013 alone. Kingdom; and smaller prizes like the
The first high point in a stream of “L. A. Times” Book Prize, the American
Bestseller placements
awards that would continue unabated in Library Association awards, and the Story
in the United States
the following years came as early as Oc- Prize for short stories.

2016:
tober 2013, when Canadian author Alice
Munro won the Nobel Prize in Literature. “Publisher of the Year”
Her works are published in the world’s
main English- and Spanish-speaking mar-
And its authors also regularly win import-
ant national literary awards in other coun- 585 titles*
101 of them at no. 1
kets by various Penguin Random House tries where Penguin Random House has
publishers. Penguin Random House also
had every reason to be pleased about the
its own publishing operations: Canada’s
Scotiabank Giller Prize; Spain’s Premio
2014:

2014 Nobel Prize in Literature, which went Nacional de las Letras Españolas, Premio 502 titles
to Patrick Modiano, some of whose books Príncipe de Asturias and Premio Liber; 64 of them at no. 1
are published in Britain by Harvill Secker, and the China Book Award. There are also
a Penguin Random House UK imprint. regular Grammys for the best audiobook
Penguin Random House was also involved productions of a given year, and individ-
in the 2015 Nobel Prize in Literature. The ual Penguin Random House publishers are
works of the excellent Belarusian author repeatedly voted Publisher of the Year by
Svetlana Alexievich are published in their industry colleagues across the entire
the Spanish-speaking world by Penguin English-speaking world. This is also the
­Random House Grupo Editorial and by case for the group’s CEO Markus Dohle,
Random House in the United States. who was recently named a Publisher *First six months of 2017: 263 titles, 37 at no. 1

16 INSIDE BERTELSMANN / NOVEMBER 2017


PENGUIN RANDOM HOUSE

Nobel Prize in Literature

2017:

Kazuo Ishiguro
(Penguin Random House)

2015:

The winner of the Svetlana Alexievich


Nobel Prize in (Penguin Random House Grupo Editorial)
Literature for 2017,
Kazuo Ishiguro, is
published by Penguin
Random House in the 2014:
United States, Canada Patrick Modiano
and Brazil, and by (Penguin Random House UK)
Verlagsgruppe Random
House in Germany.

2013:

Alice Munro
(Penguin Random House)

Colson Whitehead,
winner of the Pulitzer
National Book Awards Prize and National
Book Award

2016:

The Underground Railroad


by Colson Whitehead (Doubleday)
Pulitzer Prizes

2015: 2017: The Underground Railroad by Colson Whitehead (Doubleday)


Fortune Smiles: Stories

Evicted: Poverty and Profit in the American City
by Matthew Desmond (Crown)
by Adam Johnson (Random House)
The Return: Fathers, Sons and the Land in Between
Between the World and Me by Hisham Matar (Random House)
by Ta-Nehisi Coates (Spiegel & Grau)
Blood in the Water: The Attica Prison Uprising of 1971 and Its Legacy
Voyage Of The Sable Venus by Heather Ann Thompson (Pantheon)
by Robin Coste Lewis (Knopf)
2016: Black Flags: The Rise of ISIS by Joby Warrick (Doubleday)
2014:


Barbarian Days: A Surfing Life by William Finnegan (Penguin Press)
Custer’s Trials: A Life on the Frontier of a New America by T. J. Stiles (Knopf)
Redeployment
by Phil Klay (Penguin Press) 2015: The Pope and Mussolini by David I. Kertzer (Random House)
Brown Girl Dreaming
by Jacqueline Woodson (Nancy Paulsen Books) 2014: Toms River: A Story of Science and Salvation by Dan Fagin (Bantam)
INSIDE BERTELSMANN / NOVEMBER 2017 17
INNOVATION@BERTELSMANN

More Innovative
Than Ever
Stories about innovative people,
projects and products – in the
new book “What’s Your Story?”
and in BENET.
www.benet.bertelsmann.com

@
Corporate Communications

Innovation @
Bertelsmann
Twenty-four stories about innovative people,
projects and products
Innovation @ Bertelsmann – What’s Your Story?

What’s Your Story?


Volume 5

18 INSIDE BERTELSMANN / NOVEMBER 2017


Revenue Share
Pick by Vision
Ultra HD Blu-ray 100
Udacity
Mobike
Wildside
Teleportation
YouTube Channel
Out of Print
Ediciones B
Barbara Digital
Groupe Cerise

INSIDE BERTELSMANN / NOVEMBER 2017 19


INNOVATION@BERTELSMANN

The Golden Age


Even before the global success of the TV series “The Young Pope” starring
Jude Law, Fremantle Media’s Italian subsidiary Wildside was recognized as
a leading producer of high-quality television entertainment. Now, the sky’s
the limit. One of the creative minds behind this success is Lorenzo Mieli,
cofounder and CEO of Wildside and CEO of Fremantle Media Italia.

A
s a child, I watched television After university, Mieli initially tried to
for at least five hours a day,” says realize his love of television as a director.
Lorenzo Mieli, CEO of Fremantle He made a whole series of short films and
Media Italia, and cofounder and music videos, including commercials –
CEO of the production company Wildside, and was desperately unhappy. “I hated it. It
at the very beginning of the interview – just wasn’t my thing,” he recalls. He was on
thus immediately answering the question the brink of quitting the industry entirely,
as to why a philosophy graduate ended up when he talked to an experienced TV pro-
in the TV production business. The Italian ducer in New York in 1999 and explained
TV producer now feels that what might exactly which parts of the process he liked
sound like a catastrophic approach to and which ones he didn’t. “I told him that
child-rearing in other circumstances was I love brainstorming. I love getting an idea
a great stroke of luck. “I loved watching or picking up on one and running with
TV as a child, and still do,” he says. Even it; that I like scriptwriting and editing a
back then, he was fascinated by the vari-
ety of programing, the “flow” from series
to show to documentary to movie and so
on. “I absorbed this flow, and today it’s
“I love having
practically become the principle behind
my work, both because I produce all the
an idea and then
genres I watched and loved, and because
they all mutually influence and affect each
refining it.”
other,” says the TV producer. LORENZO MIELI
“Never just make one thing, don’t take
the well-trodden paths, incorporate a lot
of things, mix them together and create lot – but what I absolutely did not like was
something new” is how Mieli describes his working on set,” says Mieli. “Then you’re
philosophy, which has served to establish the perfect producer” was the opinion
him as one of Italy’s most innovative and of the television professional, a job that
successful producers. The same applies would have been almost inconceivable to
to the many creatives with whom he has Mieli until then. “And he was quite right.
produced hundreds of hours of television A producer’s work encompasses much
programs across all genres over the years. more than just securing the financing – it’s
“They are not only people ‘native’ to the exactly what I do well and what I wanted
field, but also architects, journalists, crit- to do.”
ics, authors and teachers – and more im- This realization marked the birth of
portantly, they’re all friends of mine, some Wilder (later Wildside), a TV production
of them high school or college classmates.” company Mieli founded in Rome in →

20 INSIDE BERTELSMANN / NOVEMBER 2017


RTL GROUP • WILDSIDE

“The Young Pope”


debuted at the
Venice Film Festival
in September 2016.
This promising film
production gave
Fremantle Media an
incentive to acquire
a majority interest in
Wildside in August
2015.

INSIDE BERTELSMANN / NOVEMBER 2017 21


INNOVATION@BERTELSMANN

2001 with friends from other industries. series “The Young Pope.” But more about
“We started as a creative company without that later.
a specific medium, but it quickly became Mieli and his company Wilder took
clear that television offered by far the most an important step forward with a daily
opportunities,” says Mieli. At the time, he talk show that they produced for a small
gained an insight that would serve him channel on the Sky network. The channel
very well for years. “Back then, in Italy as was Planet, and the talk show was called
elsewhere, there was this pretty snobbish “Planet 430” – the number stood for the
idea that quality only exists on the big film channel’s position in the program direc-
screen, and that, by the same token, what tory, “so you can see it wasn’t exactly the
you see on TV is not as prestigious,” he country’s most important channel,” Mieli
says. But the Italian film industry was in says with a smile. The talk show’s recipe
crisis, its movie theaters old and in need for success was its extensive, never-boring
of renovation, funding new movie projects mix of topics, which kept viewers coming
was difficult, “and, besides, I had no wish back for more. “The program didn’t cost
to have some stupid fluke – a lousy review, much and was very well received, so Sky
a rainy opening weekend – suddenly en- gave us free rein,” says the producer, who
danger the work of two years.” again developed the topics for “Planet 430”
On the other hand, Mieli says Ital- with a group of old friends from a wide
ian television wasn’t, for the most part, range of disciplines. “That was one of the
very good at the time, and it was a bit best times of my life,” he says. “We had
self-oriented, even though the underlying complete freedom and really talked about
structures would have made better, more everything.” And 99 percent of the group of
professional work possible. So why not creatives that was formed at that time still
combine the sophistication and power work at Wildside, he says.
of cinema with the possibilities of televi- Mieli sees this type of teamwork – the
sion? Why not make higher-quality, more mutual trust that allows ideas and topics

“Creativity and
entertaining television? Mind you, this to be openly and candidly discussed – as
was long before US channels like HBO and essential to his work and to Wildside’s

innovation AMC, and later also Netflix and Amazon


Prime, showed how high-quality serial
success. “Creativity and innovation are
unimaginable without open discussion

are inconceivable entertainment made to cinema standards


can work. The new production company
and trust. They go hand in hand,” says the
producer. He sees his work as an essential
without open Wilder’s first attempt in this direction was
an ambitious TV channel show on the sub-
part of his life, which is why it’s so im-
portant to him that he works not merely
discussion and trust.” ject of books, which the team developed
for Tele+, the predecessor of pay-TV plat-
with coworkers, but with friends and old
classmates. And not only in the office but
LORENZO MIELI form Sky, and the French pay TV channel also in his own home, at the corner café or
Canal+. But then came September 11, 2001, at a party – places where he socializes and
and the platform’s priorities suddenly networks. “Basically, I work around the
shifted, and the book show came to noth- clock, but without being too stressed and
ing. “Fortunately,” says Mieli. “Today, I without neglecting the family,” says the
think it would have been a disaster.” father of two.
But the work for Tele+ and Canal+
wasn’t wasted. “We developed a lot of in- Exceptionally innovative
novative shows for the occasion, which we production company
have been gradually implementing ever Documentary series, documentary films
since,” the producer recalls. The first was a and talk shows were soon followed by
six-part documentary series for RAI about Wilder’s first entertainment series. “The
the political events in Italy in 1992, when Italian series that ran on the big chan-
the country’s established party system nels like RAI Uno at the time were a bit
collapsed. Mieli picked up on this material soapish,” recalls TV fan Mieli. In the early
again in 2015 when he produced the drama 2000s, the US channels showed that there
series “1992,” which premiered on Sky was another way, with a whole new kind of
Atlantic. It was a great success, as was the series: exciting, with complex characters
sequel “1993,” which also premiered on Sky and storylines. “I watched ‘The Sopranos’
Atlantic in 2017. “This has happened to me and it changed my life,” says Mieli. “It was
quite often – subjects that I thought I was so incredibly good, and my only thought
done with returned to me,” says Mieli. This was: Will I ever be capable of bringing
Lorenzo Mieli, also happened with his biggest success to something of this quality to Italy?”
CEO of Fremantle Media Italia date as a producer – the award-winning At the time, that was still unthink- →

22 INSIDE BERTELSMANN / NOVEMBER 2017


RTL GROUP • WILDSIDE

The Italian political thriller series


“1993” is the sequel to “1992” from
the year 2015. Both productions
were available to viewers of German
pay TV broadcaster Sky Atlantic.
“1993” continues the story, beginning
with the chaos that prevails in
Italian political life following the
corruption scandal of the preceding
series.

INSIDE BERTELSMANN / NOVEMBER 2017 23


INNOVATION@BERTELSMANN

able, but Mieli and his friends at Wilder


found their own, innovative way of using
as their subject matter the kitsch Italian
series that were popular at the time. In
2007, they offered Fox Italia a comedy se-
ries that poked fun at precisely this kind
of series. “Boris,” the name of the comedy
series, was about a fictitious TV soap “Gli
occhi del cuore” (“The Eyes of the Heart”),
and described the absurdities of the pro-
duction routine on set. The series’ three
gag writers did not come from the TV
industry; Mieli had discovered them work-
ing in theater. They still work with him
today. “Boris” was a success with viewers
and critics alike, and Wilder now had the
reputation of being an exceptionally inno-
vative hotbed of creativity.
From April 2010 onward, Mieli was
able to realize his philosophy of recruiting
TV creators from all kinds of sectors, even
beyond the TV industry and in another TV
genre: talent shows. It was precisely this
that led him to take over management of
Fremantle Media Italia, in addition to his
other duties. Fremantle Media Italia was
particularly successful with the Italian “In Treatment” is the Italian
version of the talent show “The X Factor,” adaptation of a US series that was
and despite the fact that it was already broadcast for three seasons. It deals
an audience hit, Mieli and his team pro-
ceeded to completely change the show,
with a psychotherapist and the regular
patients he sees every week. The
“To think bigger
which had previously been produced by series is produced by Wildside. whenever possible,
take risks.”
another external production company for
Fremantle Media Italia. “We took a huge
risk, and in 2011 promptly moved from the
public broadcaster RAI Due to the pay TV LORENZO MIELI
channel Sky Uno, with a newly conceived
show,” says Mieli. With success: “The new
‘X Factor’ became the most talked-about
entertainment show in Italy from its very
first day. After six years it’s still number
one, and now has an average weekly view-
ership of four million.”

24 INSIDE BERTELSMANN / NOVEMBER 2017


RTL GROUP • WILDSIDE

Mieli says the continued success of “The X says Mieli. And a major project with the
Factor” is primarily because of the judges US cable company HBO was always going
selected for the show. “TV is good if it’s to be a risk, especially in financial terms –
made by people who aren’t in television but it has paid off royally for Wildside, as
first and foremost,” believes the producer, well as for Mieli personally.
and he applied this belief to “The X Factor” “The Young Pope” project was so in-
as well. “The judges are serious musi- teresting and promising that Fremantle
cians, and this is shown time and again,” Media bought a majority 62.5 percent stake
explains Mieli, who has to work hard to in Wildside at the beginning of production
recruit and retain the judges. “We’ve had in August 2015. At the time, Cécile Frot-
judges who have a love-hate Coutaz, CEO of Fremantle Media, had long
relationship with the show and who are declared the expansion of the scripted-
constantly on the verge of quitting the entertainment business as a focus of her
panel while the cameras are running. But strategy – and Wildside, with its ambitious
this is exactly what the show needs.” projects, was a perfect fit. It was clear from
The producer repeatedly emphasizes the beginning that Fremantle Media Inter-
that he abhors being limited to individual national would handle the international
creative fields such as only television, distribution of “The Young Pope.”
so it made perfect sense that in 2009 he
and his partners merged Wilder with Series goes global Wildside
Offside, an Italian producer of highbrow “The Young Pope” premiered at the Venice
cinema, to form the new production com- Film Festival in September 2016. It was one →Wildside, one of the leading TV and
film production companies in Italy, has
pany Wildside. “Offside founder Mario of the first times a series had been part of been part of Fremantle Media since 2015.
Gianani, still a partner at Wildside, had the festival program, and it garnered crit- The Rome-based company was created
worked with movie greats like Bernardo ical acclaim from all sides. After Venice, in 2009 by producers Lorenzo Mieli and
Mario Gianani as well as by screenwriters
Bertolucci, and had shot a lot of sophis- the series aired on numerous TV channels and directors Marco Martani, Fausto Brizzi
ticated art house movies, so Offside gave worldwide and was loved by an audience and Saverio Costanzo through the merger
us really first-class movie expertise,” of millions. “The Young Pope” had the best of the production companies Wilder and
Offside. Wildside quickly established itself
explains the Wildside boss. At a stroke, premiere of a new series on Sky in Italy as one of the best-known producers of
Mieli had become a serious contact for and the biggest launch of an international ambitious drama formats for the Italian
major-league Italian directors. “Without series on Canal+ in France, and was named and international markets. Their successful
series include the Italian version of “In
this background, we would never have the third-best new drama of 2016 for Sky Treatment,” the Sky series “1992” and
been able to secure impressive movie Atlantic in the United Kingdom. Its most “1993” and the RAI series “The Mafia Kills
directors like Paolo Sorrentino, who won recent success was its nomination in two Only in Summer,” which is based on the
theatrical release of the same name. Some
an Oscar for his film ‘La Grande Bellezza’ Emmy categories this summer – the first of Wildside’s successful film productions
(‘The Great Beauty’) in 2014, for a TV proj- nominations in decades for a TV series are the award-winning “Hungry Hearts,”
ect,” says Mieli. “We managed to convince produced in Italy. directed by Saverio Costanzo with Adam
Driver in the lead role; the comedy “The
Sorrentino and other directors with our “The success of ‘The Young Pope’ has Mafia Kills Only in Summer,” which was
mix of TV and movies. As a result, they opened up tremendous opportunities for recognized as best comedy at the 2014
now see a whole new way of developing us,” says Mieli. “The market for English- European Film Awards; the award-winning
film “Me and You” by Bernardo Bertolucci;
and telling stories over a period of several language series is now wide open to us.” and “The Solitude of Prime Numbers,” which
hours in a series, and they feel at home at He says that Wildside has used the past was nominated for the Golden Lion at the
Wildside.” two years to initiate further international Venice International Film Festival in 2010.
In 2015, Mieli felt the time had come projects. For instance, starting late next
for Paolo Sorrentino to shoot his first TV year director Paolo Sorrentino will shoot “The Young Pope“
series. In Italy, both RAI and Mediaset another series about a papacy for HBO, →Paolo Sorrentino’s first series,
produced successful TV series about the “The New Pope,” which is also set in the “The Young Pope,” had its premiere in
September 2016 at the Venice International
Capuchin monk Padre Pio, one of Italy’s world of “The Young Pope.” And this year, Film Festival. It was the first time that a
most popular saints. The producer wanted filming starts in Naples on an adaptation series was part of the festival program.
to revisit this topic to create an elaborate of Elena Ferrante’s worldwide bestseller From Venice, “The Young Pope” then found
its way to numerous TV broadcasters
and provocative Padre Pio series for the “L’amica genial” (“My Brilliant Friend”), worldwide, and the series has already
new player, Sky, together with Sorrentino. the first of four novels by the author set in thrilled millions of viewers. It tells the
The director was not averse to the idea, 1950s Naples. Director Saverio Constanzo, fictional story of Lenny Belardo, played by
Jude Law, who becomes Pius XIII, the first
and there was a lot of discussion; eventu- who has also worked with Wildside for pope from the United States. Formerly
ally the concept took on a life of its own many years, will turn the material into an the archbishop of New York, he is also
and culminated in a plan to shoot an ex- eight-part TV series, which HBO will air the youngest man ever to become pope.
Following his selection as the new pope,
citing, upmarket series about a fictitious in Italian in prime time. “That would have Pius XIII must manage Vatican affairs and
pope – Wildside’s first-ever international been absolutely impossible before,” says grapple with various obstacles while being
series in English. “That, too, is part of my Mieli. “Today we have the freedom to do torn between tradition and modernity. In
late 2018, Sorrentino will begin filming a
job as a producer – to think big wherever just about everything – this is the golden new series (“The New Pope”) that is set in
possible, and sometimes to take risks,” age of TV production.”  the same world as “The Young Pope.”

INSIDE BERTELSMANN / NOVEMBER 2017 25


INNOVATION@BERTELSMANN

The Book Is Only


the Beginning
More and more readers want to show their affinity to the stories in
their favorite books and make them part of their everyday lives. Penguin
Random House US has recognized the potential in the marketing of literary
content to adults. The acquisition earlier this year of Out of Print Clothing
and other projects take the publishing group’s activities in the booming
licensed-merchandise market to a new level.

D
arth Vader and Captain Kirk
T-shirts, Frodo and Jon Snow
coffee cups, Batman and
Spiderman bedding – by now,
there is a hardly a consumer-product cate-
gory without licensed images of an icon
from hit motion pictures, television series
or video games. The entertainment indus-
try has long recognized the potential for
further monetization of its creative con-
tent through merchandising. In 2016, total
worldwide revenues from licensed-image
clothing, toys, home goods, collectibles
and more exceeded $250 billion. The
music industry alone generates approxi-
mately 15 percent of its revenue from mer-
chandise. By comparison, merchandising
in the trade-book business has been negli-
gible. Now, with its recent acquisition of Alison Rich, Senior Vice President, Author ties to display their bonds with particular
Out of Print Clothing (OOP), the pioneering Platforms and Publishing Development at Penguin titles or a general love of reading more
creator and retailer of licensed illustrated Random House US publicly, we are extending and expanding
literary-themed products, Penguin Random the conversation around our books and
House US has greatly expanded the brand-
based merchandising opportunities for its “What you authors. With Out of Print, we now have
the capacity to develop exclusive collect-
books and authors.
“What you read telegraphs something
read says ibles from our books that allow fans to
literally wear their book love on their
about who you are,” explains Alison Rich,
Senior Vice President, Author Platforms
something about sleeves.”
Founded in 2010 by Todd Lawton and
and Publishing Development, Penguin
Random House US, to whom OOP reports.
who you are.” Jeffrey LeBlanc, two childhood friends,
OOP has proven preeminent expertise in
“By giving readers even more opportuni- ALISON RICH product sourcing, licensing, design, pro-

26 INSIDE BERTELSMANN / NOVEMBER 2017


PENGUIN RANDOM HOUSE • OUT OF PRINT

Founders Todd Lawton


and Jeffrey LeBlanc

duction and distribution of non-book build on their product agreements with


literary products. It creates and sells its outside partners, as well as with their new
high-quality T-shirts, adult and children’s in-house Penguin Random House col-
apparel, accessories, and home goods fea- leagues.
turing book-cover art and original designs Classic authors and titles ranging from
in over 1,000 bookstores and fashion, William Shakespeare and Jane Austen to
college and gift retailers, as well as on “The Great Gatsby” and “Sherlock Holmes”
its own popular online destination: are highly called for as motifs at OOP, as
outofprintclothing.com. The company en- are products derived from George Orwell’s
joys enduring relationships with many “1984”; Franz Kafka’s “Metamorphosis”;
prominent authors, author estates, pub- Ransom Riggs’ “Miss Peregrine” series;
lishers, visual artists and designers, and li- “The Very Hungry Caterpillar,” written and
censing agencies, and they continue to illustrated by Eric Carle; and R. J. →

INSIDE BERTELSMANN / NOVEMBER 2017 27


INNOVATION@BERTELSMANN

“The authors
love our creative
concepts.”
ALISON RICH

Palacio’s “Wonder”: all titles published or


distributed by Penguin Random House.
Among the most in-demand literary
products from OOP are those inspired by
Margaret Atwood’s “The Handmaid’s Tale,”
thanks to the hit television series on Hulu,
which has announced a second season
coming in 2018. “With films and other big
publishing events, the ability to produce
merchandise from our classic cover art
enables us to make an even bigger brand
statement with our retail partners,” ex-
plains Rich.
Historically, US licensing activity at
Penguin Random House’s imprints and di-
visions has been concentrated on authors
and intellectual property from the chil-
dren’s publishing programs. Brands like
Mad Libs, Corduroy, Ladybug Girl and
Wonder are just a few of the series and
individual titles that already have healthy
licensing programs embedded within the
Random House Children’s Books and
Penguin Young Readers US divisions.
And while OOP has an expanding line of
children’s products, including onesies,
T-shirts, kid-sized totes and baby socks,
Rich sees untapped potential for them in
the adult market. “Devoted book readers
of all ages now don’t just want to consume
content, they want to use it. Online and
also offline at conventions like Comic-­ Clothing, cups, bags and many other items are
Con, we have seen fans clamoring for available for purchase from Penguin Random
themed-licensed product beyond the book House US via Out of Print.
from their favorite authors.”
Rich went on to explain that print-on-
demand technology is making the delivery
of short-run, exclusive products more
seamless, and of course social media

28 INSIDE BERTELSMANN / NOVEMBER 2017


PENGUIN RANDOM HOUSE • OUT OF PRINT

Out of Print Clothing (OOP)


→ A pioneer in the business of literary-
themed licensed products (e.g.,
articles of clothing, accessories and
household items)
→ Founded in 2010 by Todd Lawton
and Jeffrey LeBlanc; owned by
Penguin Random House US since 2017
→ Offers its products at more than 1,000
booksellers, campus stores and gift
shops in the United States – and its
own online shop
→ Approximately 20 percent sales (and
growing) now from outside of the
United States
→ Customers from roughly 90 different
countries through the online shop
Naturally, T-shirts are very popular.

makes it easier to spread the word. Down OOP’s product offerings and distribution prints in a selection of sizes is available for
the line, Penguin Random House sees abroad. Penguin Random House authors sale, and each purchase is accompanied by
opportunity to create micro-shops for are open to the publishing group’s mer- a certificate of authenticity signed by the
best-selling authors, release limited runs chandising activities. “They love many of illustrator. “Bringing these illustrations
of exclusive product for author tours and our creative concepts, and they are as ex- off the page and onto the walls of readers’
other special events, and even unlock cited and motivated as we are to create a homes allows families to experience our
e-commerce for some of the robust online whole new content world around a story authors’ and illustrators’ stories in an en-
communities it manages, including the of theirs,” says Rich. tirely new way,” said Rich. Another pilot in
company’s Facebook pages for immortal progress, Cover Me, unlocks book-cover el-
authors like Austen and Shakespeare. With A lovely picture for your wall ements for fans to customize and person-
OOP potentially powering all these pro- As OOP ramps up specializing in alize when creating and sharing online.
grams, Penguin Random House also hopes apparel and accessories, other innovative Working in collaboration with the
to see incremental revenue from book initiatives around non-book-content-­ various Penguin Random House publish-
sales on the OOP site, where titles can be centric products are also unfolding at ing divisions and imprints, Rich and her
sold either separately or bundled with the Penguin Random House. This summer saw colleagues in the Author Platforms and
corresponding merchandise. the launch of Penguin Print House, a pilot Publishing Development team continue
As new members, with their staff, of program in which the Penguin Young to explore and develop programs to grow
the Penguin Random House family, co- Readers division of Penguin Random reach and revenue for authors, while
founders and now Managing Directors House has teamed up with Framebridge, also giving fans new ways to extend the
Lawton and LeBlanc also hope to grow an online framing company, to release a conversation around the books they love.
OOP’s international presence. The com- collection of framed wall art featuring il- As for long-term job dedication at Penguin
pany generates about 20 percent of its rev- lustrations from 15 of their children’s Random House, it is ideal if your profes-
enue outside the United States, and books. These range from vintage child- sional passion is manifested in the per-
customers from over 90 countries have hood favorites to contemporary classics sonal sphere as well: Rich’s children wear
previously purchased OOP products. Rich like “Dragons Love Tacos” by Adam Rubin customized socks and pins, and she
is excited to collaborate with licensing col- and illustrated by Daniel Salmieri and herself has a T-shirt with the inscription
leagues from Penguin Random House UK, “Llama, Llama, Red Pajama” by Anna “When in doubt, go to the library.” All from
China and Grupo Editorial to help expand Dewdney. A limited number of framed OOP, of course. 

INSIDE BERTELSMANN / NOVEMBER 2017 29


INNOVATION@BERTELSMANN

Tradition Meets
Innovation
With the acquisition of Groupe Cerise in 2016, Prisma Media became the
number-one French media group in matters of online video, overnight. It was
a milestone in the digital transformation of a traditional magazine publisher.

C
erise means cherry. Legend has it mum of 90 seconds – is one of the secrets
that Groupe Cerise is called this of Cerise’s success. “Also,” says Daruty, “all
because “apple” was already taken the videos’ topics are spot on with the lat-
by... well, Apple. France’s young est trends – so they automatically attract
but market-leading digital media group is a lot of users. And third, the site’s overall
hardly lacking in self-confidence. Or in- technical performance is top-notch, so
novation. The latter led to Groupe Cerise’s users spend more time on it.”
takeover by Prisma Media in May 2016. “Groupe Cerise was a first-class ac-
For the French G+J subsidiary, it was a quisition candidate for Prisma Media
major strategic step in its transformation precisely because of its strong exper-
to digital; a transformation that goes hand tise in online video and infotainment,”
in hand with tradition, i.e., the classic mag- explains Philipp Schmidt. “Everything
azine business, as Chief Transformation indicates that in future more and more
Officer Philipp Schmidt reports. His pre- stories will be told in video.” This is why
decessor Frédéric Daruty, now Managing
Director of Cerise, arranged this takeover In Lille and Paris, 120 employees of Groupe
in 2015. He was convinced – and the first Cerise produce 4,000 videos per month.
year after the deal has proven him right –
that this was a truly gorgeous cherry to
“Stories will
pick, though perhaps not quite the size of
an apple. The acquisition turned Prisma
be told in video.”
Media into France’s number one in online PHILIPP SCHMIDT
video overnight. It combines the agility
of a new digital player with more than
70 million video views a month with the criteria: mobile and data. Add to that
experience of a major publishing company major strength and deep roots in social
that sells 180 million magazines a year. the once-­traditional magazine publisher media, superior, proprietary technology,
But one that wants to keep surpassing the Prisma Presse became Prisma Media in impressive scalability, attractive target
expectations of its audience and custom- 2012, and, among other things, embraced groups, and the possibility of internation-
ers with new content and services, online an ambitious video strategy. In the next alization – Groupe Cerise is now active in
and offline, with the help of a “full media” few months alone, five brand-new video 25 countries and five languages.
concept. studios are being built to produce curated There are, of course, different degrees
With 101 million monthly visits, content, as well as commercials for adver- of “active.” “We don’t have our own sub-
Groupe Cerise is one of France’s leading tisers. sidiaries in those countries,” says Frédéric
digital media groups. The Group is mainly But back to Cerise, which was founded Daruty, “but the excellent scalability of
known for the two portals Ohmymag for in 2011 and is based in Paris, and Lille in Cerise’s products makes this kind of inter-
women and Gentside for men. Its 120 northern France. The company’s video national presence possible.” In addition
employees in Paris and Lille produce expertise wasn’t the only decisive factor to the French original, Ohmymag and
almost 4,000 videos for these websites – in its purchase by Prisma Media; Cerise Gentside now have offshoots in Spanish,
per month! The fact that these videos are also beautifully fulfilled two of the G+J Portuguese, Italian and German – and all
extremely short – between 60 and a maxi- subsidiary’s other strategic investment of them are already profitable after just

30 INSIDE BERTELSMANN / NOVEMBER 2017


GRUNER + JAHR • GROUPE CERISE

one year. One promising project is still in


the pipeline: The launch of an English-
language site is planned for next summer
and has enormous potential for Cerise.
Daruty finds this internationalization “ex-
tremely exciting” – especially considering
that this is Prisma Media’s first venture
beyond French borders as well. “All of the
different language versions are created
here in Lille,” explains Daruty, and Philipp
Schmidt gives a specific example: “When
Cerise shoots a cooking video, the video
is always designed and recorded in a stan-
dardized way so that soundtracks in other
languages can be easily and inexpensively
overlaid. That kind of project is perfectly
scalable.” → The online portals Ohmymag (for women, left) and Gentside (for men, right).

INSIDE BERTELSMANN / NOVEMBER 2017 31


INNOVATION@BERTELSMANN

Scaling, standardization, internation-


alization – there no longer seems to be
much common ground with traditional
magazine publishing, Prisma Media’s orig-
inal business. This becomes clear from a
glance at the composition of Cerise’s 120
employees. They are content managers,
audience managers, or community man-
agers. Their job, like those of their journal-
ist predecessors, is to create high-quality
content that reaches a maximum audience.
“It’s true, Cerise approaches things “Groupe Cerise was a
more with the industrial thinking of engi-
neers,” says Philipp Schmidt. He sees this
first-class acquisition
as one of Cerise’s most important USPs,
and a complement to the classic publish-
candidate.”
ing mindset at companies like Prisma PHILIPP SCHMIDT
Media: “When developing a medium, a
publisher will start with the content and Philipp Schmidt, Chief Transformation
look for the best possible packaging for it. Officer, Prisma Media
Cerise does it the other way around: They
ask themselves: What medium is the best
way to make money? – and come up with
video. Then they ask themselves: What
topics make a video profitable? – and pro-
duce the relevant content.” Of course, this
content has to appeal to target groups that Ohmymag, because only there can we magazines sold each year to the collabo-
are attractive for advertisers. Following monetize our content.” ration. “Our strength can only come from
this logic, Gentside and Ohmymag are On all these points, Prisma Media the mixture of both,” believes Schmidt.
aimed at people aged between 18 and 35. rounds off its own portfolio with the take-
And they reach them on a massive scale over, gaining additional expertise, and Not a one-way street
using social media. Cerise has 58 million a dynamic team with an average age of The Bertelsmann network that Prisma
fans on Facebook alone. 27, younger than that of Prisma Media’s Media brings to the partnership should
Its close ties to social media are no workforce. All this aside, the effects of not be underestimated in its possible
coincidence – this is, in fact, the core of the acquisition are by no means a one- benefits for Cerise: “The Group’s great in-
Groupe Cerise’s strategy and business way street, emphasizes Schmidt. On the ternational visibility made Gruner + Jahr
model: “Cerise has developed a technology contrary: “We must succeed in combin- and Bertelsmann attractive for Cerise,”
that closely scans current social media ing tradition and innovation. That is our believes Frédéric Daruty. Cerise has long
trends and tells us what topics people leitmotif at Prisma Media,” explains the partnered with “Neon,” “Femme Actuelle”
are talking about, what they are reading, company’s Chief Transformation Officer. and “Télé-Loisirs” in France and “Stern”
listening to, and watching, and what So while acquired companies such as and “Brigitte” in Germany on content syn-
they like, comment on, and share,” says Cerise contribute video and social know- dication, and has also extended its feelers
Frédéric Daruty. “We then produce our how, performance measurability, and data beyond Gruner + Jahr to RTL Group com-
videos on exactly those topics. The videos analysis, he says Prisma Media contributes panies like Smartclip and IP in Belgium.
spread virally on social media, where its quality brands, content, reach, top ad- These contacts are seen as very promising
the traffic is diverted to Gentside and vertising customers, and the 180 million in Paris and Lille.

32 INSIDE BERTELSMANN / NOVEMBER 2017


GRUNER + JAHR • GROUPE CERISE

“We’re always
working to optimize
our technology.”
FRÉDÉRIC DARUTY
With Gentside, Groupe Cerise publishes content for its male audience.

Prisma Media has deliberately preserved Cerise is constantly evolving. At the top
Groupe Cerise’s start-up mentality and of the list is the aforementioned launch
identity instead of insisting on a complete of English-language websites for Gentside Groupe Cerise
integration. “We wanted to retain Cerise’s and Ohmymag as the next stage in its in- →Groupe Cerise was founded in 2011.
teams with all their agility,” says Daruty. ternational expansion. The launch of new Its headquarters are in Paris and in the
“We never wanted, for example, to make special-interest channels is also planned – northern French town of Lille. In 2016,
Groupe Cerise was acquired by the French
Gentside a Prisma Media brand.” The idea it currently has 13. “At the same time, we’re G+J subsidiary Prisma Media. Shortly after
wasn’t for Prisma Media and Cerise to always working to optimize our technol- the takeover, top Prisma Media manager
merge, but to develop new things together. ogy,” says Daruty, “In particular, we can Frédéric Daruty was appointed managing
director. Groupe Cerise publishes the two
For example, the online magazine Gentside and will continue to significantly expand portals Ohmymag and Gentside, the former
and the business magazine “Capital” have automation.” And finally, Cerise wants for women, and the latter for men. The
set up a new community on Facebook to reduce its dependence on Facebook “a company has 120 employees involved in
producing almost 4,000 videos for the two
called “Club du pouvoir achat,” and little.” “It is by far the biggest social net- websites every month. In addition to the
Ohmymag and the TV guide “Télé-­Loisirs” work at the moment,” as Frédéric Daruty French original, the portals are now also
have done the same with “Nos séries points out, “but no one knows how long published in Italian, Spanish, Portuguese
and German. Since October 2017, there
préférées.” Both are about bringing people that will remain so. In any case, including has been an English-language version of
with overlapping interests together and Snapchat, Instagram, WhatsApp and other Ohmymag. An English version of Gentside
linking them to the companies’ brands – social media is definitely a winning prop- will soon follow. With more than 100 million
visits registered by its websites each month,
a business model that Frédéric Daruty osition on all counts.”  Groupe Cerise numbers among the leading
feels is becoming increasingly important. digital media groups in France.

INSIDE BERTELSMANN / NOVEMBER 2017 33


INNOVATION@BERTELSMANN

Building Trust
Artists like things clear – and fair: The music company BMG, which has
been transforming the music industry since 2008, responded to the needs
of singers and songwriters with a new billing model.

D
id you know that there is such ent and mutually fair commission-based
a thing as truckloads of MP3 model (“Revenue Share Model”). Not only
songs? According to clauses in in its original music-rights business but
the contracts that were common also in the recording business, which
between music companies and artists in was added later, and is now booming.
the past, there really were. If not physi- The recording business involves a more
cally, at least juristically. Based on this, a comprehensive service package for art-
“technology deduction” was subtracted ists: from recording a new record to its
from the royalty payments a musician distribution and marketing. The artists
would receive from their record company are very pleased with this solution: Many
for their song. This was intended as a flat- stars have switched to BMG because of it,
rate charge for, among other things, trans- and many newcomers are entrusting their
porting CDs or for damaged CDs and their careers to BMG from the very start for the
disposal – and the artist was expected to same reason. And several other music
pay for part of these costs. When music companies find themselves forced to now
became digital, for some unknown reason obligated suit.
this flat-rate charge was applied to MP3 “These days, it’s really almost impos-
formats as well – hence the proverbial sible to imagine anymore what it was like
“truckloads of MP3s,” which actually di- for an artist to sign such an onerous
minished the revenues of musicians not contract with a music company,” says
insignificantly. Those days are gone, at Dominique Kulling, Managing Director,
least at BMG. BMG, Germany, Austria and Switzer-
Because BMG – founded in 2008 and land, where she is responsible for BMG’s
now the world’s fourth-largest music German music publishing and record
company – has built its business model business. “For a long time, the contracts
on, among other things, contracts whose contained a whole string of phrases that
core elements include a simple, transpar- enabled record companies to reduce →

34 INSIDE BERTELSMANN / NOVEMBER 2017


BMG • REVENUE SHARE MODEL

“The business The successful German BMG singer and


songwriter Max Giesinger feels in good hands with

model is really his music at BMG. At left, his successful album


“Der Junge, der rennt” (“The Boy Who Runs”).

wonderful.”
MAX GIESINGER

INSIDE BERTELSMANN / NOVEMBER 2017 35


INNOVATION@BERTELSMANN

the artist’s promised financial participa-


tion in a record’s success in every imag-
inable way.” For example, in the case of
songs that were used for compilations, i.e.,
newly organized collections of songs by
various artists, a full third was deducted.
Similar deductions applied for songs sold
abroad or – who knows how this was de-
termined? – that were advertised in the
media. “With the digitization of music
and, above all, with streaming as a new
sales channel for music, such constructs
become yet more complex,” says Kulling,
describing the at-times absurd conditions
that led among other things to the earlier
example of the imaginary truckloads of
MP3s, and which the new BMG rejects.
“What percentage of the originally agreed
sum does the artist get for what type
of use? Over the years, this has become
nearly untraceable for many artists.” Over
time, these working relationships between
artists and record companies led to absurd
new formulations – such as the defini-
tion of a music recording. In the 1970s
and 1980s, phrases like the “dog barking
clause” were invented, according to which
a dog’s bark cannot be considered a music Roger Waters, cofounder of the band Pink Floyd, has been under contract at BMG with his Pink Floyd
recording. The background to this was that songs since 2016. He too benefits from the new billing model.
in order to fulfill his contractual obliga-
tions to his record company, a musician
submitted 12 tracks of his dog barking –
not something that is likely to happen in a
working relationship between partners.
“Such clauses, and such treatment of
artists in general, attest to a deep lack of “Other companies digital distribution and licensing. “We also
agree with the artist, in advance, how high
understanding of this special business
relationship – and that is not our way,”
can‘t offer that.” the promotional and advertising budget
should be,” explains Kulling. “As soon as
says Kulling. “We want to establish close, that budget has been covered by earnings,
DOMINIQUE KULLING
trustworthy relationships with our song- a percentage of the income is paid out.”
writers and artists. In our recorded-music
business, we offer them a transparent con- Origin in catalog business
tract model that is financially attractive This approach has gone down very well
for them as well. It clearly states that they with artists. One of them is Max Giesinger,
receive a fixed proportion of all revenues a BMG singer-songwriter whose song
from their music – regardless of the coun- “80 Millionen” spent weeks at the top of
try or medium where it is sold.” In 2008, the German charts in 2016. “The business
BMG was set up with Hartwig Masuch at model is really great. It ensures that my
the helm to take advantage of the upheav- management team and I are heavily in-
als the music industry was undergoing at volved in all decision-making processes,
the time due to digitalization, and to offer and I’m always kept in the picture. This
artists a new, fair model. Kulling says that creates a great team feeling, which leads to
usually 75 percent of the proceeds go to an excellent working atmosphere. I feel at
the artist, and 25 percent to BMG for its in- home at BMG with my music.” As an artist,
dividual support, marketing, physical and he says BMG is “the ideal record company,”

36 INSIDE BERTELSMANN / NOVEMBER 2017


BMG • REVENUE SHARE MODEL

and adds: “Since they don’t just sign ev- churning machinery of a record company’s
eryone to inflate the roster, every artist is large, overtaxed staff. We adjust to each
given a very high priority. The working at- artist’s individual requirements while
mosphere is very informal, and I’ve grown also leveraging the strengths of a media
very close to many of my BMG colleagues. group. As BMG, we can of course offer
BMG
Everyone knows each other.” our artists an all-inclusive package – plus
This has its origins in BMG’s com- the option for potentially launching →BMG was formed by Bertelsmann
in 2008 specifically to respond to the
mission system in Germany, which is all additional projects with other Bertelsmann challenges of the digital age in the music
but revolutionary for the industry, and divisions, such as books with a Penguin market. In contrast to the usual practice,
especially in the “catalog” business. Artists Random House publisher, or inclusion in BMG represents both publishing and
recording rights via a single platform. BMG
whose works had been released a long Fremantle Media formats. Other compa- is now the fourth-largest music publisher
time ago, and whose rights were repre- nies can’t offer that.”   in the world and the first new global player
sented by BMG for new recordings, e.g., in decades to have established itself in the
recording business. At BMG, fairness and
were able to obtain a contract with truly transparency are of paramount importance,
transparent terms for the first time when and there is a constant focus on protecting
the new music company was founded in the interests of artists and composers.
With 14 branches in 12 important music
2008, or when it acquired their rights cata- markets, BMG now represents more than
log. In some cases, lifelong contracts of the 2.5 million titles and recordings, including
former kind were changed in the artists’ the catalogs of Chrysalis, Bug, Virgin,
Mute, Sanctuary, Primary Wave and Talpa
favor. The recording business followed, as Music, as well as thousands of artists and
did other countries including, gradually, composers who like its innovative approach.
the United Kingdom and the United States. With its versatile platforms, the integrated
technology platform and its efforts to
“Others thought we were crazy to sign such secure the maximum income for artists,
contracts,” recalls Kulling. “Now they are BMG wants to be the best business partner
under pressure to offer similar models and in the music business.
some have already done so. So BMG be-
came a trailblazer in the worldwide music Focus on artists
business.”
→Recording contracts of the past
BMG’s transparent commission model
Record companies used to make a
also includes clear statements of account. number of deductions from the income
In the music publishing sector – and soon, resulting from sales of CDs and other
in the recording business – statements can music recordings. For example, there were
deductions for songs that were used in
be viewed and analyzed using an online compilations and for pieces that were sold
tool that replaces the conventional mail- abroad or advertised in the media. Often
ing of thousands of pages of quarterly doc- there was also an “engineering” deduction
as a flat cost that covered, among other
uments. The billing clearly shows which things, the transport of CDs, the cost of
songs were successful in which country damaged CDs and their disposal – and this
during a given period – and how much Dominique Kulling, Managing Director, BMG, deduction was later used, at the expense
of the artist, even in the case of songs
revenue was generated. “The system is Germany, Austria and Switzerland that were distributed digitally. As a result,
intended to make income streams under- the artist’s share of the proceeds became
standable. It shows which funds are still smaller and smaller.
outstanding, and it also provides informa- →The BMG model today
tion on sales figures as well as copyright As a rule, 75 percent of the revenue goes
notifications.” to the artist, and 25 percent remains
with BMG – a simple and transparent

Artists taken care of “We want a commission model that is fair to both sides.
For its part, the company serves as liaison
Kulling believes that this modern type of
contractual design has also led to the trend
close, trusting and support contact for the artist and takes
care of the marketing, the physical and

relationship.”
digital distribution, and the billing involved
toward artists having their own promotion in all licensing transactions.
and marketing teams. “Many managers
now manage their artists’ releases them- DOMINIQUE KULLING
selves and determine their future direc-
tion,” says the BMG manager. “They rely
on small, individual, focused teams and
no longer even want to become part of the

INSIDE BERTELSMANN / NOVEMBER 2017 37


INNOVATION@BERTELSMANN

The Eyes Have It


In a pilot project for its international client Sennheiser, Arvato SCM
Solutions uses smart glasses to improve the workflow in order picking.
The technology offers many possibilities – and is by no means the
only innovation whose potential Arvato wants to exploit for the future
of supply chain management.

T
his is no ordinary pair of glasses. screen follows your gaze. A message ap-
That much becomes clear as soon pears on the display: “Ready for next job.”
as you try them on. Like regular To start it, all you have to do is tap your
glasses, they have frames, temples index finger lightly against the right side
and earpieces – but there are three major of the frame. A multidigit number imme-
differences: First is the small screen at- diately appears in the field of view. Control
tached to the top right of the frame. No and command inputs aren’t found on ordi-
matter where you look in Logistics Hall 19 nary glasses, either. The number indicates
of Arvato SCM Solutions in Gütersloh, the that the object you are looking for is →

38 INSIDE BERTELSMANN / NOVEMBER 2017


ARVATO • SCM SOLUTIONS

Since the end of 2016,


the Hightech & Entertainment
business unit of Arvato SCM
Solutions has been using smart
glasses for order picking.

INSIDE BERTELSMANN / NOVEMBER 2017 39


INNOVATION@BERTELSMANN

located in corridor 2, shelf 4, compartment


11. Once you arrive at that destination,
another tap of the finger takes you to the
next step, and the display changes into a
camera screen with a grid. This is the third
difference. Now, you retrieve the article
from the compartment and scan its bar
code with the camera. Not an easy feat,
the first time you try it, but after the third
attempt a message flashes: “Scan success-
ful.” A tap on the frame, and off you go to
the next order.
This is how order picking using smart
glasses works at Arvato SCM Solutions.
Since the end of 2016, the Hightech &
Entertainment department has used the
innovative process for its client Sennheiser
at the Gütersloh site, from which Arvato
supplies European markets as part of its
worldwide supply chain management for
the renowned manufacturer of micro-
phones and headphones. The project is
called “Pick by Vision”: Employees carry
out the picking process, i.e., the retrieval
and recording of an ordered item from the
stocks, using the information displayed on
the data display.
“The technology navigates the employee
through the process and ensures that their
hands are kept free,” explains Alexander
Jeske, Head of Innovation at Arvato SCM
Solutions Hightech & Entertainment.
“Ideally, in the long term, we want to use
it to optimize our processes and under-
score our innovative capacity.” At this
point, Arvato uses the smart glasses only
for Sennheiser, and only at the Gütersloh
site. The project serves to get to know the
new technology, to identify strengths and
weaknesses, and to find the best way to in- Yüksel Dogan retrieves and records
tegrate it into the overall logistics process. ordered products from the warehouse
“It is clearly still at an experimental stage, using the information displayed in
not a standard process,” emphasizes Jeske. smart glasses.
Which is why Arvato SCM Solutions
currently uses just two pairs of smart
glasses. They are based on Google Glass
technology, specially adapted to meet the
requirements of the logistics industry by
the software developer Picavi. Besides
“Pick by Vision,” Jeske and his team are
also looking at several other processes de-
the storage locations are separated by
larger distances. Each method has its pros “It’s definitely
signed to facilitate picking for staff using
various signals. “Pick by Voice,” for exam-
and cons. According to Jeske, it is always a
question of figuring out which technology
still a sandbox.”
ple, talks you through the shortest route to makes the most sense for which process.
ALEXANDER JESKE
the storage location. Meanwhile, “Pick by The most important thing, he says, is that
Light” uses multicolored illuminated pan- it “brings a tangible benefit for employees,
els to show which compartment the next and that they accept the device.”
article is located. This is particularly suit- Most of the feedback from his col-
able for picking jobs that are carried out leagues in picking is positive. They say it
in a small area where all the shelves are in is very practical to have both hands free,
view. However, it makes little sense when and that the process is intuitive and easy

40 INSIDE BERTELSMANN / NOVEMBER 2017


ARVATO • SCM SOLUTIONS

to learn. Apparently, they got used to wear-


ing the apparatus very quickly – but that
at first it took several attempts to scan a
QR code using the integrated camera, as
the perspective was unfamiliar, and the
display is relatively small. For this rea-
son, some employees use a ring scanner
on their arm in addition to their smart
glasses, because they can work faster
using the familiar tool. “Given the rapid
progress made in this technology, further
improvements are likely to be made soon,
and we’re excited to see how much value
they will add,” says Jeske.
Sennheiser had initiated “Pick by
Vision” to test the expectations under real
working conditions and explore the pos-
sibilities of the technology, and it found
a like-minded project partner in Arvato.
“We’re delighted to have a service provider
like Arvato at our side, one that not only
shares our attitude to innovation and
development, but actually invests in put-
ting it into practice,” says Günther Maaß,
Global Logistics Manager at Sennheiser.
Arvato’s competitors now use the
process too, Jeske says. “But we were one
of the first, which gave us a small but not
insignificant lead.”

Trial phase continues


The response to “Pick by Vision” encour-
ages him to continue the experimentation
phase: “Both the market in general and our
clients in particular take a very positive
view of the project and monitor our prog-
ress with interest. The high level of curi-
osity is shown in the many times we’ve
already demonstrated it to our clients
here.” Jeske adds that it is quite conceiv-
able that in the foreseeable future Arvato’s
other two Sennheiser sites – Pleasant
Prairie (Wisconsin) in the United States,
and Hong Kong – will introduce the smart
glasses to complement existing technol-
ogy. Other Arvato SCM Solutions business
units are also eager to benefit from the
technology and have begun to test its use
for their daily processes.
In any case, Jeske sees “Pick by Vision”
as just the beginning of this development:
“When augmented-reality technology
comes into play here, it will open up some
very exciting possibilities.” The smart
glasses could, for example, show employ-
ees the shortest way to the next shelf in
real time, or how they can stack several
items on a pallet to save space. “It would
be a bit like playing Tetris,” grins Jeske.
Alexander Jeske, Arvato SCM Solutions Smart glasses won’t be the only inno-
Hightech & Entertainment vative technical aids available to →

INSIDE BERTELSMANN / NOVEMBER 2017 41


INNOVATION@BERTELSMANN

So far, Arvato has used the smart glasses only for Sennheiser, and only at the Gütersloh location.

logistics service providers going forward. packing station. Another possible idea – in 3-D printing open up new options in the
“We’re simultaneously looking at a lot albeit not one that will be realized anytime supply of spare parts. And finally, mega-
of trends and initiating pilot projects soon – is the use of drones to transport trends like big data, artificial intelligence,
to assess the potential of digital and articles by air, especially at peak times. the Internet of Things and mobility offer
machine-­assisted processes,” says Jeske. In another pilot project, Arvato is fitting a wide range of touch points for logistics
For instance, he and his team are working packages with intelligent GPS transmitters services providers.
with colleagues in the Logistics Engineer- that not only track the delivery route in
ing department to examine the viability of real time but also record external influ- Innovative companies
various automated picking systems that ences, such as impacts caused by injury, Given this broad spectrum of options,
use robots to retrieve the goods from the falls, extreme temperatures or unautho- Alexander Jeske and his team cannot com-
storage location and transport them to the rized opening. Meanwhile, major advances plain about a lack of work. They have set

42 INSIDE BERTELSMANN / NOVEMBER 2017


ARVATO • SCM SOLUTIONS

Logistics 2.0
→The use of smart glasses and
“Pick by Vision” is just one example of
the new technological tools that Arvato
SCM Solutions is using to make logistics
processes faster, easier and more secure.
At the distribution center in Düren (North
Rhine-Westphalia), extra video cameras
have also been installed at the packaging
stations and conveyor belts. These
cameras record the entire order-picking
and packaging process and document
the path of a shipment up to the point
of dispatch. This increases security in
the process as a whole and helps to
resolve issues in the event of customer
complaints. To keep an eye on deliveries
as they go from the logistics center to
the end customer, Arvato SCM Solutions
has launched pilot projects with the
solution “Connected Freight.” This involves
equipping the package with a sensor that
records its route and documents important
information like temperature changes,
vibrations, unexpected opening and other
variables. This data can be downloaded
by the customer in real time, bringing an
unprecedented level of transparency to the
shipment process. Furthermore, automation
is also playing an ever-greater role in the
logistics business. Arvato SCM Solutions is
already testing the use of robots in order
picking, for example.

Products that have been recorded and gathered


using the smart glasses are conveyed via
carts to the shipping area. From there, they are
delivered throughout Europe.

up the Innovation Lab, an ideas workshop advantage for ourselves and our clients,
where they are constantly experimenting and promote Arvato’s perception as a
with new approaches that will ideally be highly innovative company.” No one can
turned into concrete projects. In addition, say with certainty what devices will help
they organize innovation workshops with a product get from A to B in the future –
clients in order to jointly initiate new glasses, drones, robots or other things that
ideas – as in the case of Sennheiser and haven’t yet been imagined.
the smart glasses. Be open to new ways of Which is why, at Arvato SCM Solutions,
doing, is their motto. “Innovation is a core the smartest option is to keep your eyes
element of our strategic vision,” says Jeske. open – and not just when wearing smart
“We want to use it to create a competitive glasses. 

INSIDE BERTELSMANN / NOVEMBER 2017 43


INNOVATION@BERTELSMANN

No Can Do? No Way!


With the production of Ultra HD Blu-rays, Sonopress has become a pioneer
in opening up an emerging market. A decisive factor for this was the
innovation of its employees. Because the right manufacturing machines
were not yet available, they built one themselves without further ado, and
as a result they attracted much industry attention.

I
t is difficult to focus on the view. Doz- simply wasn’t sufficient for the current distance between the pits and lands is five
ens of silver shiny discs move swiftly nonpareil in data discs, the UHD-BD 100. times smaller than on a CD, allowing more
and precisely from station to station. “The goal was to set up production for the information to be stored on it. A shortwave
They are transported, turned, stacked UHD-BD 100 as quickly as possible, to give laser precisely scans these fine structures
and processed by gadgetry in a wide range us a competitive edge,” says Detlef Eifler, with light that glows blue-violet due to its
of shapes and sizes. Though they may describing the initial situation. As the wavelength – hence the name Blu-ray.
look like ordinary DVDs or Blu-ray discs, person responsible for quality assurance The second factor that affects capacity
the optical data carriers running through at Sonopress, he played a key role in this is the number of layers: 25 gigabytes can
the 6 x 6 meter (20 x 20 feet) machine at project. be stored on a single-layer Blu-ray layer
the main Sonopress plant in Gütersloh A look at the technical composition and up to 66 gigabytes on a double-layer
represent the latest generation in enter- of a Blu-ray disc helps to understand the disc. For a 100-gigabyte Blu-ray, three lay-
tainment media: Ultra High Definition challenge Eifler and his colleagues faced. ers have to be applied in quick succession.
Blu-rays (UHD-BD). With a storage capacity Like a CD or DVD, it is a digital optical But Sonopress lacked the equipment to
of up to 100 gigabytes, they enable users to storage medium. The data is stored in one produce this triple-layer version. Ideas
watch movies in a maximum resolution of or more layers, each consisting of micro- were needed.
3,840 x 2,160 pixels – four times that of a scopic grooves and ridges known as “pits” “At first, we thought of distributing
conventional Blu-ray disc. and “lands,” in technical jargon. When the production to two devices, producing two
Sonopress can produce up to 10,000 light from a laser hits a layer, it is reflected layers on one machine and the third on the
of these discs on the machine in a off a pit and blocked by a land. This creates second,” says Tappe. “But then we came
24-hour period. What is special about this a digital binary code of zeros (no light) and up with the idea of combining the two
is that the machine wasn’t shipped and ones (light), which make up the data that machines and building a new, contiguous
assembled on-site by a manufacturer, as is combined into a movie or video game production line.” That was in October 2015.
is usually the case; this one was built and when the disc is played. With Blu-rays, the Immediately after coming up with the
configured in-house by the company’s first viable concept, Sonopress presented
own employees. “There were simply no the idea to Warner Bros. – as one of the six
machines on the market that could meet largest film studios in the United States,
our requirements, so we got to work it is a key customer for the replication
building one,” says Frank Tappe, head of
the Process Technology department at
“There were simply specialists from Gütersloh. “Warner Bros.
was impressed by our proposal, which of
Sonopress. no machines course boosted our motivation no end,”

on the market.”
Some modifications to the plant’s says Eifler. The whole team worked fever-
facilities for manufacturing standard ishly over the winter to prepare the new
Blu-rays with a capacity of 50 gigabytes system for use – all of it during regular op-
(BD 50) made it possible for the machines FRANK TAPPE erations. “Fortunately, we had already com-
to produce 66 gigabyte Ultra HD Blu-rays pleted the holiday season business at that
(UHD-BD 66), but the existing technology point,” recalls Tappe with a smile. →

44 INSIDE BERTELSMANN / NOVEMBER 2017


BERTELSMANN PRINTING GROUP • SONOPRESS

Sonopress can make up to


10,000 Ultra High Definition
Blu-ray discs per day.

INSIDE BERTELSMANN / NOVEMBER 2017 45


INNOVATION@BERTELSMANN

This wasn’t the first time Sonopress had


modernized existing technology itself.
“There were no suitable machines on the
market when CD and later DVD production
began, either, so we built the first ma-
chines ourselves at the time,” says Tappe.
“It was only when manufacturers had suit-
able models on offer that we bought them.”
So the team, which consists of many
long-standing employees, already had
some experience. Tappe says that in put-
ting the idea into practice, the mechanical
work (i.e., assembling the components)
was the comparatively simple part: “Pro-
gramming the software was much more
difficult. We had to teach the two ma-
chines to communicate with each other.
Besides, we were racing against time.”

First orders from Hollywood


Warner Bros. was so impressed with the
success of the UHD-BD production “made
by Sonopress” that the Hollywood studio
immediately placed its first few orders for
spring 2016. However, the smooth opera-
tion of the new machine alone wouldn’t
have been sufficient to start; Sonopress
needed certification by the Blu-ray Disc
Over five million
Association (BDA). The industry associa-
discs so far:
tion, in which all well-known manufac-
The Ultra HD Blu-
turers of entertainment electronics are
rays produced at
represented, establishes standards for for-
Sonopress include
mats, monitors them and grants licenses
movies and games.
based on this. No certificate, no produc-
tion, so the required specimen copies of
the BD 66 and BD 100 needed to be sent to
the BDA as quickly as possible.
It was anything but helpful that the
supplier of the matrices suddenly stopped team immediately powered up the new
delivery, without warning. The matrices machine. “Man of Steel” and “Superman
are made of nickel and are used as printing vs. Batman” were among the first movies
plates, so to speak, to which all the infor- Sonopress produced on behalf of Warner
mation that is later contained on the Bros. as a UHD-BD 100 for the US market.
Blu-ray is transferred. “This put us into a By September 2016 Sonopress had shipped
bit of a lather/panic,” recalls Eifler. Jörg one million discs in the UHD-BD 66 and
Dickenhorst, Co-Managing Director of 100 formats. A year later, it has shipped
Sonopress, contacted a Japanese manufac- five million. The market is still small, but
turer who supplied the Gütersloh-based growing rapidly.
company with new matrices. “Without “It was the right decision to focus on
that agreement, we would have been production of the Ultra HD Blu-ray,” says Detlef Eifler is responsible for quality assurance at
stranded,” says Eifler. Sonopress CEO Sven Deutschmann. “The Sonopress.
The Sonopress team waited tensely format represents a quantum leap in the
and with growing impatience for the in- development of digital storage media.
dustry association’s decision. Detlef Eifler We’re very proud to be a trailblazer for
kept contacting the BDA to find out how
things were going. The relief when the
the entire industry in this innovative
technology.” Frank Tappe estimates that
“That gave
e-mails giving them the green light arrived
in his mailbox was immense. Sonopress
building its own fully automated pro-
duction line gave Sonopress a good six
us a big dose
received its certificate for UHD-BD 66
production in early February 2016, and
months’ lead over the competition. A
decent window for acquiring orders. “We
of motivation.”
for the UHD-BD 100 in mid-May. The are currently the leading manufacturer DETLEF EIFLER

46 INSIDE BERTELSMANN / NOVEMBER 2017


BERTELSMANN PRINTING GROUP • SONOPRESS

Sonopress Managing Director


Sven Deutschmann with the UHD project team
Ilhan Das, Klaus Böhnke, Reinhold Lübbers,
Frank Tappe, Jörg Dickenhorst, Waldemar
Mrozek and Detlef Eifler (from left).

of UHD-BD 100 worldwide,” emphasizes presented Sonopress with its Digital


Deutschmann. Product Innovation Award for its role in
For Sonopress the new discs are a the introduction of the Ultra HD Blu-ray.
resounding success. The entertainment So many orders have now been received
industry is relying on media produced in that production with one machine is al-
UHD or 4K to sell high-definition TVs and ready reaching its limits. “In July we set up
also to re-market older blockbusters in a second plant, and we’ve already prepared
even sharper, more colorful new editions. plans for a third,” says Tappe. In order to Looking sharp
Video games will also be increasingly have to buy as few parts as possible, the
→The ultra-high-definition (UHD)
released in 4K. Microsoft, another major team is moving machines from Australia video format is one of the growth drivers
Sonopress customer, has fitted its new and the United States, where they are no in the entertainment industry. Forecasts
Xbox X console with a UHD-BD drive. longer required, to Gütersloh. However, indicate that the market for high-resolution
UHD televisions will have a global volume
Since only very few private Internet lines additional investment is also planned, of more than €320 billion in 2025. As high-
currently have sufficient bandwidth to such as in improved measurement tech- resolution TVs become more prevalent,
smoothly download 4K content, physical nology for quality control. the demand for movies and video games
in UHD resolution is growing too. As a
data carriers have a competitive edge over Besides the gratifying order pipeline, result, in addition to the new movies being
streaming services in this area. the Sonopress team’s talent for improvisa- made in this super-crisp format, Hollywood
tion while setting up UHD-BD 100 produc- studios are also gradually publishing
Quantum leap in storage tion has had a positive side effect, as Detlef
older blockbusters in UHD. The number
of TV programs being broadcast in UHD
Sonopress’s achievement has not gone Eifler notes: “In the course of the project, worldwide is also growing. The format is
unnoticed in the industry. At the begin- we felt a pioneering spirit that we last had often referred to as 4K, since the maximum
resolution of 4,096 by 2,160 pixels is
ning of 2017, the Digital Entertainment during the early days of CD production in approximately four times that of full HD
Group (DEG), a US industry association, the mid-1980s. It’s a good feeling.”  resolution.

INSIDE BERTELSMANN / NOVEMBER 2017 47


INNOVATION@BERTELSMANN

At the Center
of the Revolution
In 2016, the online university Udacity became a global pioneer with the
launch of its new Nanodegree (condensed degree program) for self-
driving car engineers. Today, thousands of people around the world benefit
from the innovative IT training – as do the automotive and technology
corporations that are urgently seeking such experts.

D
igitization is increasingly im- At the time, massive open online courses
pacting the world of technology (MOOCs) were very popular – free, down-
itself as well. The rapid advance loadable university lectures. Stanford
of digital can be seen, among professor Sebastian Thrun was a pioneer
other things, in the fact that some IT in MOOCs who in 2011 founded the online
experts believe that even the design and education provider Udacity based on his
manufacture of computer chips is no lon- experience with such courses. Sung would
ger one of the most promising emerging soon encounter Udacity in his research.
industries. In their opinion, people’s vi- “In any case, I learned a lot about topics
sions of the future are now fueled instead such as web and Android development,
by increasingly complex software applica- machine learning and artificial intelli-
tions for industry and everyday life. One gence, and in this way found out what
of these IT experts is George Sung, a young interests me the most,” he said, describing
American who graduated in 2009 with a his decision-making process. He soon re-
degree in computer and electrical engi- alized that he wanted to work in the areas
neering, and then spent a couple of years of machine learning (ML) and artificial
working for the US chip manufacturer intelligence. When Udacity launched its
AMD before deciding to shift his focus to compact course on machine learning in
more future-oriented fields. Fields that September 2015, complete with a Nano­
will revolutionize our world, like artifi- degree certificate that had just been accred-
cial intelligence and self-driving cars. He ited by the IT industry, Sung signed up.
found an ideal way to study and acquire “I had briefly considered studying at
training in these emerging disciplines: the a traditional university, but would rather
practically unique Nanodegree programs not because of length of time it took to
offered by the online education provider complete the course, the high course fees
Udacity – one of whose biggest strategic
partners is Bertelsmann. Nor has George
and unpredictable job opportunities,” says
the Udacity graduate. However, studying “The market for
Sung regretted his decision: He promptly
got an attractive job with the carmaker
at Udacity takes only six to nine months,
costs from $200 a month – and thanks self-driving cars
BMW at its technology center in Silicon
Valley, California.
to the university’s partnership with well-
known IT companies, practically comes
is huge.”
“Around late 2014 I started feeling the with a built-in job guarantee, as it later SEBASTIAN THRUN
semiconductor industry was stagnating,” turned out. After Sung had handed in
the Udacity graduate recalls in his post his notice in January 2016 following six
on Medium.com. “And I wanted to be in years at AMD, and he devoted himself to
an industry with high growth potential.” machine learning and a front-end →

48 INSIDE BERTELSMANN / NOVEMBER 2017


BERTELSMANN EDUCATION GROUP • UDACITY

The Udacity team poses with a


self-driving car. In the middle is
Udacity founder Sebastian Thrun.

INSIDE BERTELSMANN / NOVEMBER 2017 49


INNOVATION@BERTELSMANN

developer Nanodegree in the following works with has surged. In early 2016, there
months. Then in September 2016, Udacity were five; now there are over 50, and the
announced another exciting Nanodegree: figure is rising.
in self-driving cars – the only one of its “To me, the most interesting applica-
kind anywhere in the world. tion of artificial intelligence is in robotics,
Sebastian Thrun himself presented and self-driving cars are a timely and in-
this new course to an audience of more credibly useful application of that,” says
than 3,000 IT experts from all over the Sung, adding that he was all the more
world at one of the famous “TechCrunch delighted that his application for this
Disrupt” conferences in San Francisco completely new course at Udacity was
in September 2016. He also presented a accepted, and he was enrolled in the first
car that was equipped with the appropri- group of students. The degree program
ate autonomous vehicle software and, started in October 2016. “And it got straight
as he said, played a decisive step in the to the point,” he said, summing up the first
realization of his life’s dream, in which few months, during which he completed
people don’t necessarily have to own a a series of projects. For example, he pro-
car, but simply call one when they need grammed applications for topics including
it, and which then automatically drives basic lane detection, traffic sign classifica-
them to their destination. “The market tion and behavioral cloning – the basics,
for self-driving cars is huge,” said Thrun that is, of what cars need in order to be
at the conference. “Technology corpora- able to move around autonomously on
tions, carmakers, media companies and the road. In order to make the training as
start-ups around the globe are working practical as possible, Udacity has its own
to advance the development of the self-­ self-driving car that the students can use
driving car, whether through hardware or to test code in an actual vehicle.
software. All they need are talents.” During his studies, Sung engaged with
And through Udacity, anyone, any- the online education provider’s various
where in the world can become one of career-planning services. “The Udacity
these talents and earn the qualifications. staff gave me lots of advice, for example on
From career starters to career changers, all my resume and profiles on major online
they need is an Internet connection. careers networks,” he says. He was also
given the opportunity to mentor other
Job offers before wrap-up Nanodegree program students.
The media response to the launch of the In January 2017, Sung was finally ready
program was huge, as was the level of in- to apply for jobs – preferably those that
terest from the target group in question. involved self-driving cars, of course. He
“In no time at all, around 30,000 people used online careers networks Udacity’s
from all over the world applied,” says own career services, and he applied di-
David Silver, head of self-driving cars at rectly through company websites. “In all,
Udacity. “About 7,000 of them have been I actively applied for about 90 jobs,” says
selected and enrolled in the program al- Sung. His applications resulted in nine
ready.” This makes the Self-Driving Car interviews. “In my mind, this was a pretty
Engineer Nanodegree one of Udacity’s good conversion rate,” he says. “After a job Vishal Makhijani, CEO of Udacity (top), Udacity
most popular courses ever, he adds. search of only two months, I ended up graduate George Sung (middle) and David Silver,
Meanwhile, the graduates’ career pros- with four job offers from companies, all of head of the “Self-Driving Car Engineer” program of
pects are getting better and better. “It’s them interesting, from which I then chose Udacity, with a self-driving car (bottom picture).
not unusual for students to get their first a full-time job at my top favorite, BMW” –
job offers before the final phase of their where Sung now works on machine-­
course has ended,” explains Silver. One learning processes in self-driving cars.
of the reasons for this is that Udacity’s The fact that he ended up at BMW is
many partners are involved in developing no coincidence. The German car manu-
the curriculum, and Sebastian Thrun per- facturer, like Mercedes-Benz, Nvidia and
sonally keeps an eye on it as well. All this many other renowned corporations, is
helps to focus the degree as closely as pos- among the companies that work closely
sible on the requirements of business, as with Udacity on the Self-Driving Car En-
well as keeping it constantly up to date. It gineer Nanodegree program. “For them,
also brings the students into contact with Udacity is the ideal source for the urgently
industry experts – and they remain in con- needed experts in this field,” says Silver. So
tact out of mutual interest. In the case of the online learning company and its part-
the Self-Driving Car Engineer Nanodegree ners not only collaborate on the content,
program, the number of partners Udacity but Udacity also connects Nanodegree

50 INSIDE BERTELSMANN / NOVEMBER 2017


BERTELSMANN EDUCATION GROUP • UDACITY

The Udacity website


provides a detailed
introduction to the “Self-
Driving Car Engineer”
Nanodegree.

“It got straight also by its branches in Berlin, São Paulo


and Beijing. “Especially in South America,

to the point.” enrollment is on a steep rise,” says Shernaz


Daver, CMO of Udacity. In total, Udacity
has eight million course enrollments since
GEORGE SUNG
it was founded six years ago, and over
10,000 students have completed Nano-
The Udacity principle
degree programs to date. The completion
rates for Udacity’s Nanodegree programs →Together with leading tech companies
like Google, AT&T, Facebook, Salesforce,
graduates with employers hiring in the are much higher than free courses. GitHub and others, the training and
field. “This point is very important to us,” “Although some may have thought educational platform Udacity is offering
explains David Silver. “We want to help our this was a strange decision, to plunge into Nanodegree programs that train students
around the world as programmers, data
students get an interesting job as quickly the unknown and quit my safe full-time analysts, mobile developers, machine
as possible, not only with our industry-­ job to study machine learning at Udacity, learning engineers and other professionals.
focused content, but also with our exten- I have no regrets,” says George Sung. “I’m Through a series of online courses and
practical projects, the participants acquire
sive network. This is another reason why now surrounded by lots of incredible peo- relevant, modern skills that are needed
more and more people are interested in ple and fascinating technology. There’s by employers in the IT sector. With the
studying at Udacity.” Udacity’s growth is so much to learn and so much room for Nanodegree, the graduates obtain a training
credential accepted by companies around
fueled by future-oriented courses like the innovation – I’m looking forward to the the world in just six to 12 months. The costs
Self-Driving Car Engineer Nanodegree, but future!”  are generally around US$200 per month.

INSIDE BERTELSMANN / NOVEMBER 2017 51


INNOVATION@BERTELSMANN

The Fourth
Generation
Mobike, a start-up that has since risen to become the Chinese market
leader, plans to revolutionize bike sharing with innovative new approaches:
smart technology designed to make using the specially designed bicycles
even more appealing. And not only in big cities in China, but in many other
locations around the world. Bertelsmann Asia Investments (BAI) concurs
that this could be a promising business model.

U
rban commuting is rarely a distances of up to five kilometers. How-
pleasure, especially in big ever, we feel that at the moment there
cities: Driving your own car is aren’t many opportunities to meet this de-
not cheap; traffic jams are time-­ mand – which is why we founded Mobike.”
consuming; exhaust fumes pollute the air; Among other things, Mobike users benefit
and parking can test your patience. Taxis from highly sophisticated algorithms built
are much more expensive and do noth- on big data analysis that help place the
ing to eliminate exhaust fumes. Public bikes exactly where they are needed. There
transport is much more environmentally are hardly any fixed borrowing or return
friendly, albeit not always quicker, espe- stations – instead, Mobikes can be located
cially when you also need to travel to and at all the same accessible and permissible
from the station or bus stop. In principle, places as conventional bikes – often, →
cycling is the perfect way to go in all re-
spects – but not for longer distances.
What to do?
Hu Weiwei, Davis Wang and Xia Yiping
explored the problem extensively before
launching their start-up Mobike, in Beijing
in January 2015. The company offers a
new approach to bike sharing – the intel-
ligently organized borrowing of bikes in
urban areas – that is particularly innova- Top: Dario Nardella, Mayor of Florence,
tive because of the underlying technology. Giuseppe Sala, former Mayor of Milan, and
The young company’s founders want to Mobike founder Hu Weiwei (from left).
make bicycles easily and conveniently
available to all their users for shorter dis- Left: Using a Mobike is easy: locate it,
tances, wherever and whenever they are unlock it, and take off.
needed – and ultimately to improve the
quality of life in the city.
“Mobility is one of the basic human
needs in everyday life,” explains Hu
Weiwei. “We’ve found that in cities in par-
ticular, this need is acute for short

52 INSIDE BERTELSMANN / NOVEMBER 2017


BERTELSMANN INVESTMENTS • MOBIKE

“Mobility is
one of the
basic needs.”
HU WEIWEI

INSIDE BERTELSMANN / NOVEMBER 2017 53


INNOVATION@BERTELSMANN

With the Mobike app, nearby bicycles can be located and reserved for use.

of course, in particularly highly fre-


quented locations. This is made possible “We are the only Mobike’s founders have set out to make the
bikes not only easy to find and book, but
by Internet of Things (IoT) technology that
includes a GPS system installed in the bike
company that also a pleasure to ride. The GPS technology
built into the smart lock is combined with
and a smartphone app. “We are the only
company in the world that operates with
operates with this a solid, custom-made aluminum frame, an
advanced shaft drive, a single-fork front
this kind of technology,” says Hu Weiwei. It
allows Mobike to make ever-more-precise
kind of technology.” suspension and five-spoke wheels with
airless, wear-resistant tires and a durable
propositions and ultimately, predictions, HU WEIWEI disc brake. According to Hu Weiwei, more
about where the most important cycle than 30 engineering and design patents
routes through a city are and where bikes went into the production of the bike, with
are booked most often. This includes pa- a view to ensuring that it can be ridden for
rameters such as the time of day, location, four years without having to be serviced.
number of rentals and returns, the density
of traffic, and the weather, which also More than 30 technical and
results in different behavior patterns. the frame is scanned to disable the bicycle design patents
“In the end, we can even contribute lock – another of Mobike’s proprietary de- The concept works, as demonstrated by re-
our experience to helping optimize urban velopments – and the user is ready to roll. search carried out with Beijing’s renowned
traffic structures for bicycles,” says Hu Upon arrival at the destination – which Tsinghua University. As of August 2017,
Weiwei. “It will help the people in charge doesn’t have to be a dedicated Mobike Mobike users have collectively cycled over
to make informed decisions about where station – the user manually locks the bike. 5.6 billion kilometers. The company cal-
to make routes more accessible or pass- This automatically logs out the user from culates that this corresponds to roughly
able.” the bicycle and signals to other users that 350,000 fewer cars on the roads, or avoid-
The versatile app helps users find the it is now available again. Meanwhile, the ing 1.26 million tons of CO2 emissions,
nearest Mobike in the area – no problem, fee is deducted from the user’s Mobike based on an assessment of their first year
thanks to the GPS transmitter – and imme- account in 30-minute increments using of operations conducted with WWF China.
diately make a reservation as needed. Once online payment services. A refundable And users’ behavior has also changed dra-
a bike has been located, the rest of the deposit or credit card number must be reg- matically: Thanks to Mobike, they cycle
procedure is just as simple: A QR code on istered before the first ride. twice as often as previously, and the share

54 INSIDE BERTELSMANN / NOVEMBER 2017


BERTELSMANN INVESTMENTS • MOBIKE

How Mobike works


→ Users download the app and register
with Mobike by providing credit card
information, which is then used to
transfer a deposit.
→ They can reserve a Mobike on the map
inside the app or select an available
bicycle in person.
→ Cyclists use the app to scan the code
on the Mobike and unlock it.
→ After the ride, they simply park the bike
again at any publicly accessible spot
and lock it.
→ Mobike gives “credit points” for parking
the bike in preferred zones, among other
things, and there are deductions for
certain misdeeds.
→ After the bike is locked up, usage
fees are displayed in the app and then
deducted from the user’s account.
→ The costs depend on the duration of
the ride and the number of credit points.
Mobikes can now be found not just in Chinese cities but in many other parts of the world too,
such as here in Florence.

of biking in their daily movement profile tors; the fund has participated in several
has doubled to around 12 percent. At the of the rounds. The reasons were good:
same time, car use decreased by 3 percent “This money enabled us to establish a
to just under 27 percent per day. In partic- presence in all major cities,” says
ular, rides in taxis and illegal motor rick- Annabelle Long, CEO Bertelsmann China
shaws – a huge problem in China – were Corporate Center and Managing Partner
reduced by more than half. Bertelsmann Asia Investments. In
Mobike has attracted a lot of positive Shanghai, Guangzhou and Beijing, more
attention from the Chinese government than 100,000 Mobike cycles are now on
as well. At the November 2016 meeting the road. “And it also allowed us to expand
of G20 Economic Ministers in Hangzhou, internationally.” Mobike took its first step
eastern China, the company was presented abroad, to Singapore in March 2017, fol-
as a model of progressive, environmen- lowed by Manchester, Florence and Milan,
tally friendly transport. Earlier this year, Sapporo, and then London in September.
Mobike CEO Davis Wang spoke at the Many more cities are to follow.
Transformation Transportation Summit in
Washington at the invitation of the World In all big Chinese cities
Bank and World Resources Institute, a Hu Weiwei reckons that Mobike is the
nongovernmental US environmental think “fourth generation” of this business
tank. Shortly after this, Mobike announced model. “Bike-sharing started in the Neth-
a strategic cooperation with the Taiwanese erlands in 1960, followed by further in-
technology producer Foxconn. novations in Copenhagen in 1990 and in
The company can also count on the Rennes in 1998. However, our model, con-
confidence of the investment industry. sisting of flexible lending at theoretically
Mobike has already raised over a billion any location where bicycles can be parked,
dollars from investors in a series of fi- and the related IT infrastructure, is the
nancing rounds – $600 million in the last first that meets people’s mobility needs on
round alone (June 2017). Bertelsmann short inner-city routes, to the greatest ex-
Asia Investments is one of these inves- tent that this is possible today.” 

INSIDE BERTELSMANN / NOVEMBER 2017 55


MAGAZINE

Carbon footprint
In 2016, Bertelsmann
again presented its carbon
footprint report, the sixth
of its kind since 2008.

BERTELSMANN PUBLISHES
CARBON FOOTPRINT 2016

Sustainable
Paper
 In the report Carbon Footprint 2016, Bertelsmann carbon footprint, respectively. At 1.58 million metric tons of CO2 equivalents,
Bertelsmann provides a transparent account About half of the emissions are produced the other indirect greenhouse gas emissions
of the environmental impact of its business directly at Bertelsmann companies through recorded in the Carbon Footprint report, which
activities for the sixth time since 2008. A the generation of heat and electricity and arise from upstream stages of the value
total of 380 companies at almost 400 loca- through the fuel consumed by company cars. chain, significantly exceed the emissions from
tions participated in the annual collection of The other half of the emissions are electricity, heat and fuels.
environmental data at Bertelsmann. produced indirectly by utility companies or In 2016, the proportion of paper
According to the latest figures, landlords, for the generation of electricity Bertelsmann companies purchased from
Bertelsmann’s carbon footprint was approx- and district heating. While Group-wide power sustainable sources rose significantly from
imately 572,300 metric tons of CO2 equiva- consumption fell slightly by one percent year- 74 percent to 86 percent. Meanwhile, overall
lents (CO2eq) – CO2eq is a measure through on-year to 827,600 megawatt hours (MWh) in paper consumption was down slightly year-
which different greenhouse gas emissions 2016, heating consumption in the same period on-year by 10,000 tons (minus one percent),
are weighted according to their impact on the rose by one percent to 711,300 MWh. Energy to 1.85 million tons. Bertelsmann’s annual
climate. This corresponds to a slight decline consumption from fuels also increased slightly paper consumption therefore corresponds to
of 5,300 metric tons, or 1 percent, compared to 69,800 MWh. Compared with the previous a column of trucks loaded with rolls of paper
to the previous year. The Bertelsmann Printing year, total energy consumption remained that stretches more than 760 kilometers –
Group and Arvato are by far the largest virtually unchanged at 1.61 million MWh. This roughly the distance from Washington DC to
sources of emissions. They account for just is approximately equivalent to the annual Ottawa.
under 60 percent and 20 percent of the electricity consumption of 1.6 million people.

56 INSIDE BERTELSMANN / NOVEMBER 2017


Certified source
Bertelsmann consumes a lot of paper,
but more and more of it is being
sustainably produced.

NEW ENVIRONMENTAL TARGETS FOR BERTELSMANN

Reducing Emissions
 The Corporate Responsibility Council By 2020, at least 90 percent of the paper tricity, heat and fuel are to be reduced by
chaired by CHRO Immanuel Hermreck has purchased should be recycled or from a 10 percent compared to the base year of
agreed on Group-wide environmental targets. certified source. Their certification must meet 2014. By 2025, these emissions are to be
It is thereby providing a common framework the requirements of established standards reduced by 20 percent. With these measures,
for the numerous environmental protection such as the Forest Stewardship Council (FSC), Bertelsmann is supporting the goal agreed at
measures at Bertelsmann companies. In the Program for the Endorsement of Forest the 2015 Climate Change Conference in Paris
particular, medium-term targets were set Certification Schemes (PEFC), the Sustainable of limiting global warming to less than two
for increasing the proportion of sustainably Forestry Initiative (SFI), or equivalent. degrees Celsius. Bertelsmann is hereby also
produced paper, and for reducing greenhouse In addition, by 2020 greenhouse gas meeting the increasing requirements set by
gas emissions. emissions from the consumption of elec- key business customers.

INSIDE BERTELSMANN / NOVEMBER 2017 57


MAGAZINE
CORPORATE RESPONSIBILITY REPORT 2016 ON THE INTERNET

Responsibility Online
 How is digitalization changing staff on how Bertelsmann lives up to its corporate German and English. Like the supplementary
training and development? How important responsibility in its value creation. Bertelsmann Carbon Footprint 2016, it is
is the protection of customer data at The reporting focuses on topics in the available for download online at:
Bertelsmann? Is Bertelsmann committed to areas of employees, media, services and
freedom of the press? And does the company education, the environment and society. www.bertelsmann.com/responsibility
invest in renewable energies? Bertelsmann These topics include freedom of the press,
is increasingly asked these and many other diversity, eco-efficiency, health, fair working
questions by employees, business partners conditions and the protection of media users
and customers. The Corporate Responsibility and customers. The Bertelsmann Corporate
Report 2016, an online publication, elaborates Responsibility Report 2016 is available in

New Corporate Responsibility Report


German and English versions of the
report are available online.

58 INSIDE BERTELSMANN / NOVEMBER 2017


MAGAZINE
EXTENSIVE SOCIAL MEDIA REACH

11,500
Channels in the
Social Cloud
 After incorporating the Instagram channels
of Bertelsmann companies worldwide, the
social media reach of the various Bertelsmann
channels has now grown to more than
two billion followers. The Group’s approx-
imately 11,500 channels are pooled in the
Bertelsmann Social Cloud, where they can
be systematically sorted and searched using
various filters. The Bertelsmann Social Cloud
brings tweets and posts from Bertelsmann
companies, editorial teams and authors from
all over the world together in one place, in
real-time. Every second, news is spread, video
clips are posted online, recipes are published,
updates to current show formats are posted
and much more.
“Bertelsmann unites international brands,
successful formats, innovative services and
creative concepts into an Internet site with
a reach that’s probably among the highest
around,” says Karin Schlautmann, Head of
Corporate Communications. “All our busi-
nesses are deeply anchored in the digital
world, and the spectrum of our social media
channels is correspondingly large. The rapid
growth of our Social Cloud illustrates
Bertelsmann's creative diversity and digital
transformation.” The topics dealt with in the
channels range from breaking news and
background stories to fashion tips and make-
up tutorials; there is everything from cooking The social media channels of Bertelsmann have two billion followers.
videos and travel blogs to channels covering https://socialcloud.bertelsmann.com/
brand-new TV, music and gaming highlights.

BERTELSMANN DIGITAL MEDIA INVESTMENTS ACQUIRES STAKE IN VIDEO CREATION START-UP WIBBITZ

Video at the Press of a Button


 Thanks to artificial intelligence, news texts The other Series C funding investors include employs a total of 60 people at offices in
can be converted into videos in seconds – media companies The Weather Channel New York, Tel Aviv and Paris. Bertelsmann
using software by Wibbitz, an Israeli start-up. Television Network and The Associated Press. Digital Media Investments is the strategic
The Bertelsmann Digital Media Investments Wibbitz specializes in the production of short investment platform of Bertelsmann in
fund is investing in the young company with news clips, and its customers include the the United States and Europe. The fund is
offices in New York, Tel Aviv, and Paris, and media companies Bloomberg, Reuters, Forbes, currently invested in approximately 50 digital
is leading a $20 million round of financing. Hearst, Time Inc., and CBS Interactive. Wibbitz start-ups.

INSIDE BERTELSMANN / NOVEMBER 2017 59


MAGAZINE

Great new voices


The finalists of the singing competition
“Neue Stimmen” on stage (top).
FINALE IN GÜTERSLOH
Bottom: Liz Mohn (second from left) with the

Bulgarian and South Korean


winners Cho ChanHee (left) and Svetlina Stoyanova
(second from right) and the jury chairman,
Dominique Meyer (right).

Win “Neue Stimmen”


 The 26-year-old Bulgarian mezzo-soprano generation platforms for the opera industry.
Svetlina Stoyanova and the 24-year-old South “Neue Stimmen” has already paved the
Korean bass Cho ChanHee have won the an- path to an international career for many
niversary edition of the “Neue Stimmen” (New young artists, including such internationally
Voices) international singing competition or- renowned singers as Christiane Karg, Nathalie
ganized by the Bertelsmann Stiftung. The two Stutzmann, Marina Rebeka, Michael Volle,
singers receive prize money of €15,000 each. René Pape and Franco Fagioli.
Five male and five female singers competed
at the finale in Gütersloh. Cash prizes totaling
€60,000 were awarded to the top three men
and women. Liz Mohn, President of “Neue
Stimmen” and Vice Chair of the Bertelsmann
Stiftung Executive Board, emphasized that
she is proud of the “Neue Stimmen” contest’s
successful track record: “In the past 30 years,
the ‘Neue Stimmen’ international singing
competition has developed into one of world’s
foremost opera competitions. It has launched
the most careers. It is particularly important
to us to not only discover talents, but also to
support, advise and advance them long-term.
Our support for the young singers doesn’t
stop after the awards ceremony, the master-
classes, concerts, and seminars,” she says.
The Bertelsmann Stiftung’s “Neue
Stimmen” international singing competition
was initiated in 1987 by Liz Mohn, President
of “Neue Stimmen” and Vice Chair of the
Bertelsmann Stiftung. It is regarded as
one of the world’s most important next-­ Mezzo-soprano Svetlina Stoyanova during her performance in Gütersloh.

60 INSIDE BERTELSMANN / NOVEMBER 2017


MAGAZINE
FREMANTLE MEDIA TO FILM “MUNICH” BY ROBERT HARRIS

Betrayal and Conscience


 Robert Harris can be relied upon to produce
bestsellers for his publishers, Hutchinson in
the United Kingdom and Heyne in Germany,
both imprints in the Bertelsmann group. Now
two other Bertelsmann companies, Euston
Films in the United Kingdom and UFA Fiction
in Germany, have teamed up to turn Harris’
latest thriller, “Munich,” into an international
TV series. The international co-production
between Fremantle Media’s Euston Films
and UFA Fiction will be shot in the United
Kingdom and Germany. Harris’ historical
thriller tells a gripping story of treason and
conscience, loyalty and betrayal. As is so Master of his trade
often the case in Harris’ work, the story Robert Harris is one of the most successful
revolves around historical characters – Hitler, authors of Penguin Random House.
Chamberlain, Mussolini and Daladier – and
events that shaped world history.

TERRITORY WORKS ON PRO BONO PRODUCTION

Frequent Travelers of the Wild


 Usually, Sebastian Handke, Josephine Vogt idea of an inflight magazine to the migration
and Melanie Jonas work for the G+J subsidi- of animals. Looking back on the time,
ary Territory and on “Lufthansa Magazin,” the Josephine Vogt says: “We worked intensively
airline’s customer magazine. Recently, how- on this project for six weeks: three weeks
ever, they dedicated six weeks of their time of conception work and three weeks for the
pro bono to the production of the magazine layout. And, let’s not forget, there was the
“Tracks” to benefit the UN Convention on the fabulous visit to the German UN representa-
Conservation of Migratory Species of Wild tive office at the ‘Langer Eugen’ in Bonn, a
Animals. The project adroitly translates the very nice and productive meeting.”

Six weeks of work


Josephine Vogt and Sebastian Handke at the
“Langer Eugen” in Bonn.

INSIDE BERTELSMANN / NOVEMBER 2017 61


MAGAZINE
“AMERICA’S GOT TALENT” BREAKS ALL RECORDS

Age: 12, Talent: Ventriloquist


 The twelfth season of the hit show
“America's Got Talent” ended with record
ratings and the most clear-cut winner so
far. Twelve-year-old Darci Lynne Farmer
from Oklahoma City, a singing ventriloquist,
wowed the audience in the United States so
thoroughly that she received more votes than
any other winner in the history of “America's
Got Talent.” The show, produced by Fremantle
Media North America in collaboration with
Syco Entertainment and broadcast by NBC,
achieved its highest-ever ratings, averaging
15.7 million viewers this year. The show also
received a huge response on social networks,
garnering more than 2.6 billion views across
Facebook, YouTube and Twitter. In the end,
Darci Lynne Farmer outshone all the other
competitors. Her ventriloquist’s rendition of
the Beatles classic “With a Little Help from
My Friends” using two puppets not only gave
her clear victory, but also record views on
social media channels. Within just 30 hours of
the broadcast she became the most viewed
performer in the format’s history.
Fremantle Media’s “Got Talent” format
has reached a worldwide audience of over
900 million viewers since it was first broad-
cast in 2006. With over 70 local versions
produced across Europe, Asia, Africa, the
Middle East and the Americas, it is entered
in the Guinness World Records as the Most
Successful Reality Television Format of all
time.

Record-breaking vocals
America’s new talent,
Darci Lynne Farmer (12), has
enchanted millions of viewers.

62 INSIDE BERTELSMANN / NOVEMBER 2017


MAGAZINE

Well-wishers
MAJOR ENTERTAINMENT BRAND TURNS 100 The UFA anniversary celebration was
attended by the Governing Mayor of Berlin

Happy Birthday, UFA! Michael Müller, with his wife, Claudia Müller
(left), and by Germany’s President Frank-
Walter Steinmeier (second from right) with
his wife, Elke Büdenbender (third from right).
 It’s one of the oldest entertainment brands including the big “UFA Anniversary Night” in Their hosts were Wolf Bauer (third from left)
in the world, and this year, it’s celebrating its September. The hosts, UFA CEO Nico Hofmann and Nico Hofmann (right).
100th birthday: UFA is the largest German and the producer Wolf Bauer, longtime CEO
company involved in film and TV production of UFA (1990 to 2017), welcomed more than
and exerts a major influence on the television 400 prominent guests to the event in Berlin,
landscape with TV events, movies, long-­ including Germany’s President Frank-Walter
running series and daily soaps, as well as Steinmeier and Berlin’s Mayor Michael Müller.
stage shows and reality TV formats. The Liz Mohn, Vice Chair of the Bertelsmann
UFA group, which is owned by Fremantle Foundation Executive Board, also attended
Media and thus the RTL Group, organized a the ceremony.
number of events to celebrate its anniversary,

G+J PRESENTS THE NEW WORLD OF THE BEEF! BRAND

For Men
 An out-of-the-ordinary Advent calendar, a
hand mixer for the kitchen, steak and chef’s
knives, rump steaks, burgers, gin and pepper:
the G+J food magazine “Beef!” is continuing
to expand its brand identity with new licensed
products. The magazine “Beef!” was launched
in 2009, and it quickly gave rise to an entire
brand ecosystem. There are now a number of
products available under the Beef! brand, and
more are planned. “The important thing is
that all the products are like Beef!: masculine, Razor-sharp
full of relish, humorous and ambitious,” says Whether it’s sharp spices or sharp
“Beef!” Managing Editor Jan Spielhagen. “The knives, Beef! is the brand.
products have to be of high quality and have
something to do with cooking, grilling
or eating and drinking – and they have to
be fun.”

INSIDE BERTELSMANN / NOVEMBER 2017 63


MAGAZINE
POP PRESS TO PUBLISH A BOOK FOR EVERY OCCASION

Gifted
 The Penguin Random House family in
Britain is growing. Its subsidiary Ebury Press
is launching a new imprint: Pop Press is
dedicated exclusively to discovering and
publishing gift books for every occasion
from Christmas to weddings to International
Women’s Day. Headed up by Laura Higginson
and Elen Jones, Pop Press will publish around
20 titles a year.

MOHN MEDIA WINS TESCO

Two Million
Copies, 10 Times
a Year
 With revenues of around £45.3 billion
(€51.5 billion) in the United Kingdom and
Ireland, and a network of over 3,500 stores,
Tesco is by far Britain’s biggest retailer.
The order Tesco placed with Mohn Media is
therefore correspondingly large: As of this
year, Europe's largest printing group has been
producing the retailer’s customer magazine,
which is available for free at all of its super-
markets. “Tesco,” the title of the publication,
is published 10 times a year in print runs
of no fewer than two million copies, making
it the highest-circulation magazine in
the United Kingdom. It ranges from 96 to
Iconic singer and songwriter Morrissey is publishing his first album with BMG. 152 pages in size.

MORRISSEY PUBLISHES FIRST ALBUM WITH BMG

Premiere
 His voice is one of the most idiosyncratic successful, which has now led him to BMG.
in the international music business, and Just recently, his new album came out –
Steven Patrick Morrissey, Morrissey for short, his first in three years and his first to be
used it – along with his mordant, provocative released via BMG. The singer has also teamed
lyrics – to contribute in large measure to up with BMG to launch his own new label,
the success of the iconic 1980s cult band Etienne Records. The new studio album is
The Smiths. After the band broke up in called “Low in High School.”
1987, Morrissey pursued a solo career, also

64 INSIDE BERTELSMANN / NOVEMBER 2017


MAGAZINE
BDMI AND SPOTX INVEST IN
VIDEO DISTRIBUTION PLATFORM VEMBA

Everything
Under Control
 In 2013, the technology expert Norbert
Horvath founded the video distribution
platform Vemba, which helps content
providers disseminate videos across a
GOOGLE AND BERTELSMANN FUND UDACITY SCHOLARSHIPS wide range of channels and still retain
control over them. After buying an initial

75,000 Scholarships stake in the Canadian start-up last year,


the Bertelsmann fund BDMI has now
increased its investment as part of a new
round of financing. This time, the RTL
 Bertelsmann and Google will fund a total Group subsidiary SpotX is on board as well.
of 75,000 scholarships to provide free Besides BDMI and SpotX, Time Warner
courses through the technology education Investments and Upfront Ventures also
platform Udacity. The program builds on last participated in the new investment round.
year’s success: When the cooperation was
launched in 2016, more than 70,000 appli-
cations were received for 10,000 Udacity
scholarships. Bertelsmann is one of Udacity’s
biggest share­holders. In response to this
high demand, Google has increased the
number of Udacity scholarships available
to 60,000 and expanded the program to
include both Android and web development
training. Eligibility has also been extended to
Egypt, Israel, Russia and Turkey. Furthermore,
Bertelsmann has promised to fund an addi-
tional 15,000 Udacity scholarships in the
field of Data Analysis.

“OHMYMAG” LAUNCHES PORTAL IN THE UNITED KINGDOM

Very British
 In the first year following the takeover
by the French G+J subsidiary Prisma
Media, Groupe Cerise is continuing with the
international expansion of its two portals
“Ohmymag” and “Gentside.” While the
women’s portal “Ohmymag” was launched
in October in the United Kingdom, the men’s
magazine “Gentside” will follow suit and take
this step over the course of the next several
months. Currently, both portals are available
in German, Italian, Spanish, and Portuguese
in addition to the French original.

INSIDE BERTELSMANN / NOVEMBER 2017 65


MAGAZINE
ARVATO OPENS LOGISTICS CENTER
IN TURKEY

9,000
Square Meters
Eight exhibits of Storage Area
from the Milan-
based Archivio
Storico Ricordi are  Arvato SCM Solutions has opened a new
on display at an distribution center in Turkey. The new site
opera exhibition in the Istanbul region provides more than
in London. 9,000 square meters of storage space and is
currently being put into operation in stages.
From the new center, Arvato will render
BERTELSMANN LOANS VERDI ITEMS FOR EXHIBITION IN LONDON logistics services for the German electronics
chain MediaMarkt, the Japanese technolo-

Exhibition on History of Opera


gy company Fujitsu, and the Turkish online
mail-order company Çiçek Sepeti.

 “Opera: Passion, Power and Politics” is Bertelsmann, include the recently restored
the name of an exhibition on the history of original score to the world-famous “Va, pen-
opera at the distinguished Victoria and Albert siero” (“Chorus of the Hebrew Slaves”), pages
Museum in London. Bertelsmann is support- from the historical libretto of “Nabucco,”
ing the exhibition with valuable loans from its contract documents, and a letter written by
Archivio Storico Ricordi in Milan. Among them Verdi to his publisher Tito Ricordi. A total of
is Giuseppe Verdi’s opera “Nabucco” from eight 19th-century exhibits will travel from
1842, which is particularly well documented Italy to Great Britain for the first time, and will
in the Ricordi Archive. Items on loan from the be on display in the “Nabucco” section of the
Milan-based archive, which is operated by London exhibition for the next few months.

DIGITAL START-UPS TREEBO AND LENDINGKART

Investment in India
 Bertelsmann is stepping up its activities service Saavn and the e-commerce platform
in India with follow-on investments in two Pepperfry through the fund.
digital start-ups: The company is participat-
ing in a $34-million round of financing for
Treebo, an online marketplace for budget
hotels, and in a round of approx. $10.5 mil-
Start-up
lion for the fintech company Lendingkart.
Some 250 partner
Bertelsmann already owned a stake in both
hotels in 50 Indian
companies through its Bertelsmann India
cities are operating
Investments fund (BII). Treebo was founded
under the umbrella
in 2015; today, some 250 partner hotels in
brand Treebo.
50 Indian cities are part of the umbrella
brand. Lendingkart specializes in brokering
loans for small and medium-sized enterpris-
es (SMEs) in India. It was founded in 2014,
and over the past few years, the start-up
has arranged loans for companies in more
than 800 Indian cities through its platform.
Besides Treebo and Lendingkart, Bertelsmann
is also invested in the music streaming

66 INSIDE BERTELSMANN / NOVEMBER 2017


IMPRINT

INSIDE
The international magazine
for Bertelsmann employees

Published by:
The Executive Board of
Bertelsmann SE & Co. KGaA, Gütersloh

Overall Responsible:
Karin Schlautmann

Editors:
Markus Harbaum, Markus Laß, Jan Witt,
Hendrik Baumann, Sarah Maria El Safty

Art Direction and Design:


Dirk Bartos, BartosKersten Printmediendesign

Realization:
TERRITORY CTR GmbH, Gütersloh

Production:
Mohn Media Mohndruck GmbH

INSIDE was printed on Respecta 100,


an FSC-certified paper.

Contact:
INSIDE
Corporate Communications
Bertelsmann SE & Co. KGaA
Carl-Bertelsmann-Strasse 270
33311 Gütersloh

Tel.: +49 (0) 5241 80-2368


E-mail: inside@bertelsmann.com

Photos:
Arvato SCM Solutions, Bertelsmann, Bertelsmann /
Paul Schirnhofer, BMG, BMG / Matti Hillig / Klaus
Sahm / Sandra Vjandi, Alisa Connan, Peter von Felbert,
Fremantle Media, Harald Fuhr / Eventpress, Groupe
Cerise, Gruner + Jahr, Gruner + Jahr / Patrick Tiedtke /
2Vista, iStock, Matti Hillig, M6, Besim Mazhiqi Fotograf,
Mobike, Victoria and Albert Museum, London, Kai
Uwe Oesterhelweg, Penguin Random House US / Out
of Print, Penguin Random House Grupo Editorial /
Fiorella Battisti / Victoria Iglesia, F. Sadou / AdMedia /
Picture Alliance, Sonopress / Jan Voth, Udacity,
Verlagsgruppe Random House, Wildside, Wildside /
Gianni Fiorito / Action Press / Interfoto / Laif /
Visum / iStock
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