MY BEP EXPERIENCE

Archive for the ‘Bertelsmann Entrepreneur Program’ Category

In my endeavour to analyse and understand the disruptive force of digitalisation on media, it is time to capitalise on my experiences along the way.
During my BEP time I made experiences in direct media selling (Direct Group), book publishing (Random House), TV broadcasting (Antena 3 / RTL Group) and music publishing (BMG Rights Management). Many times I complaint that large corporations where slow to act and adapt new trends and business model. Today, I understand that oftentimes very risky for large and established companies to be a first mover. If you want to play and capitalize on early trends, you have to be in venture capital. In July I joined BDMI, Bertelsmann’s venture capital arm.

BDMI is a strategic venture investor focused on innovative digital media technologies, products, and distribution channels across the globe. We look for opportunities where we can accelerate growth through BDMI’s financial and management resources and close connectivity with one or more Bertelsmann divisions.BDMI is a wholly owned subsidiary of  Bertelsmann AG.

The current portfolio comprises 16 investments in the US, Europe and Asia.

For the next couple of weeks, I will be focusing on several themes such as online video, gaming, e-commerce and online education, among others. Any input from you about interesting sectors and companies is very welcome.

Stay tuned,

Tobi

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After having spend more than three months in Berlin now at BMG, it is about time to share some details about my current project. BMG is a music publishing start-up founded in 2008. You can check out the website here.

In the music industry, a music publisher (or publishing company) is responsible for ensuring the songwriters and composers receive payment when their compositions are used commercially. Through an agreement called a publishing contract, a songwriter or composer “assigns” the copyright of their composition to a publishing company. In return, the company licenses compositions, helps monitor where compositions are used, collects royalties and distributes them to the composers. They also secure commissions for music and promote existing compositions to recording artists, film and television. Read the full Wikipedia article here.

What makes a publisher different to a record label is that revenue generation is not limited to the sale of physical or digital reproductions of a master recording. Publishers have a vast and growing range of revenue sources. Just think about all the motion picture advertising spots on  iPhones and iPads that will come along with all the media people will consume. They will certainly feature music that needs to be licensed from their respective owners. Or think about Guitar Hero or any other video game that comes with music. Or even live concerts that are increasingly popular. All these trends indicate that music will continue to play a major role in our digital lives. As a copyright owner, this world is becoming very complex and you would like to see your copyrights exploited in the most transparent, efficient and revenue generating way. This is what we are trying to do at BMG.

But before we can engage in all the fancy stuff, we have to make sure to purchase or sign copyrights around the globe. My current job is of a financial nature and implies the acquisition of music copyrights.

So far the introduction, in the following posts I will comment on some trends and ideas I pick up along the way.

Best, Tobias

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Since summer I have been working on TV strategy at Antena3 in Madrid. It was a fascinating time for me and a decisive moment for the industry as well. Again, technology has a major impact on this business and starts to disrupt an established business model.

Probably my key learning was that broadcast TV is increasingly faced with new competitors. Content conversion has the effect that all kind of media products find their way to our TV screens, as those become connected devices.  This enables all content producers to embed video based advertising. This is a threat to broadcast TV’s dominance over the “spot”.

We are now up against the big newspapers (you can scrap the papers if you want), magazines, video-portals or even music streaming services. These are all brands you like and trust but never put them in relation with your TV? If you had the choice, would you rather stick with the news from your TV station or switch to your favourite newspaper that now also is available as VOD on your TV? I personally watch TV because I don’t have that many alternatives for the big screen and when it comes to news, I might even prefer a different brand over the established prime-time news offer from broadcast TV.

Just check out these videos from the New York Times R&D lab and their efforts to create a more audio-visual offer to their readers, if you have your doubts on what I just said.

In a world where distribution is no longer a key success factor for broadcast TV stations, content brands become more and more important.

As traditional TV stations are looking to monetize their content in a multi-media setting, the importance of self-produced content increases. Consumers are increasingly focused on on-demand offers and are less likely to follow linear programming patterns. This requires a radical mindset shift from the stations, but also from the advertising buyers. If linear TV becomes less attractive to the audience, it will be harder and harder to aggregate mass audiences at prime time. I think attention from one individual should not be worth less than the joint attention of millions. But this is all still in the making and quite frankly a bit fuzzy.

Check out this article from Advertising Age who covers a great deal of relevant topics around TV and advertising.

At Antena3 these trends are clearly recognized and many initiatives already in place. All self-produced content is available at Antena3videos also for mobiles. My argument about brands and production was also subject to a presentation I gave. Please find an abstract below.

Don’t get me wrong, I think there is a bright future for TV ahead of us. The content is still loved by a great number of people and stations have a great advantage in terms of branding. You cannot easily take away the 70-year-old legacy of motion picture distribution. This has a deep brand value. But it will probably take some time for stations to adapt to the new reality and dispose of its capital intensive asset based that was built to take advantage of distribution monopoly.

That’s all folks, until next time
Tobi

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No spring nor summer beauty hath such grace as I have seen in one autumnal face. (Autumn quote by Jonne Donne, picture courtesy of Paplo Arias on Flickr)

Parque Retiro, Madrid

If you are about to graduate from b-school you probably feel less romantic about this time of the year. I know that right now you are juggling two very important aspects of your MBA; revising for your finals and at the same time procuring not to miss the boat on the recruiting and job application front. I know exactly what you are going through.

Not surprisingly, I get a lot of emails these days about Bertelsmann and the Entrepreneur Program. I am delighted to help you and will try as much as I can to answer your requests. Many of you share the same questions and doubts so  I  thought it might be a good idea to answer them on this blog. I also invite you to post additional questions through the comment feature so that I can answer them in a conversational fashion.

Here are some of the FAQ’s:

  • I have an on campus interview scheduled, which aspects of my application should I focus on?
    • The BEP specifically appeals to entrepreneurial minded applicants. Recruiters will put a lot of attention on your proven ability to create, innovate, change and lead. Have your pitch about your past or present projects and ventures ready. Obviously starting something is extremely hard and chances to land a big hit are dim, but this is not the point here. Important is your spirit and the way you brought your ideas forward.
    • Also remember that Bertelsmann is a Media conglomerate. It helps if part of your entrepreneurial energy addresses some of the pressing issues a traditional media company is facing. Think digital!
  • I have no prior experience in the media sector, do I still have a chance?
    • Yes you do! I had, and I am sure others will have too. Your interest in the sector however, should be genuine and well founded. To me it was more of an advantage to be from a different background. Sometimes it helps to have a clear mind about certain things. And especially in the media sector a perfect understanding of the past does not mean that you can architect business models of the future even though old media is trying to do just that.
  • How many people get accepted?
    • I cannot tell you the exact number for the 2010 intake but in 2009 four people got hired.
  • Who determines the projects during the program?
    • You do. Well, obviously this is not a cherry picking contest. You will always have to network your way through the organisation and sell your idea or input to the divisional management. You are expected to contribute and not just be a silent bystander. But in general terms, there are no limits to where you could end up during the program.
  • What is your general perception of the program?
    • At Bertelsmann this is the top-talent program and enjoys considerable support and status. You are visible to the board and get support from corporate management development. It’s a great way to enter the firm, no doubt.
    • I would describe it as a learning and preparatory journey. Your projects usually last 4-6 month and in the majority of cases, have the character of a research project with a recommendation pitch to management in the end. Bear in mind that you always enter existing business structures and teams and that your room for innovation and change is limited. There have been exceptions in the program but in general terms I would say this is a fair judgement.
    • So don’t expect p&l responsibility and reporting lines straight away. This might be a challenge, especially if you had these responsibilities in your previous job and expected to build your post MBA career on that.
  • What can you say about pay? Is the offer competitive?
    • Yes, the package is above industry standard, about par with renowned consulting firms and round about 50% better than finance jobs these days. (yes, the latter was a joke).
  • Would you enroll again?
    • Absolutely!
  • Is there a downside?
    • If you don’t see a downside you might not have done your research properly. In joining the BEP you are joining a traditional media empire that has not yet found and defined its digital future. Make no mistake about it, there are other companies growing at a different pace with a different set of activities. Bertelsmann is still very much a physical media play. Books, Magazines, Retail, broadcast TV as well as print and services dominate our portfolio. You might argue that the distribution part of this portfolio is disrupted, and I won’t argue that, but at the same time this portfolio stands for great content for which we have to find new business models. This is a slow process and it is yet to demonstrate that turning a physical media company into a digital media company is actually going to work. So far we have no real evidence of this in the industry. But if you share my believe that it is possible and that we can do it, you have to join us!

I hope I could answer some of your questions and I wish you all the best for your finals and good luck with the job-hunt. Please post a comment if you have more questions or drop me an email if you want to discuss an issue in private.

Cheers, Tobias

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Last weekend, Reinhard Mohn died at the age of 88.

His passion as an entrepreneur and ambition to serve our society, makes him a role-model for all of us trying to follow his lead. As a participant of the Bertelsmann Entrepreneur Program I am grateful for the distinct entrepreneurial and co-operative culture at Bertelsmann, a corporate characteristic Mr. Mohn shaped for decades. Or in the words of a fellow program member: “I am pretty confident it is thanks to his dedication as an entrepreneur that has made the Bertelsmann Entrepreneur Program, we are now part of, possible.” As future decision makers, it is now our duty to keep his legacy alive.

Here is the official press release.

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The popular saying “time flies when you are having fun” is probably the best to description how I feel these days. It has been
5 month since I joined Bertelsmann and so far I have enjoyed every single day. Since a couple of weeks this blog is linked to the official career portal of Bertelsmann and I get some traffic from applicants who are interested in the BEP program. So this post aims to give people a better understanding of what to expect if admitted to the program.

Being a Bertelsmann Entrepreneur is a privilege. It’s true and here is why: You get almost total independence on what experience during 18 month you would like to have. It is up to you to explore the different areas of Bertelsmann and learn as much as you can. You can join projects in publishing, kick-start new projects in services or be part of strategic and more corporate function. As long as you can convince the people involved in these project that you can add some value, you’ll be on board. I yet have to find another company offering matching opportunities. Let’s face it – I am getting paid to do what I want! Fortunately, Bertelsmann does a lot of stuff I like and it is fascinating to become a part of it. Imagine you like jelly beans but especially the red ones. Well, Bertelsmann is a whole bag of all color beans and being a BEP participant they let you eat only the red ones. For me the red ones are all activities that are related to the digital distribution and consumption of media content. Currently, I focus on books and if you followed this blog you kind of know my state of mind on this topic. As I said it is a privilege and I am well aware that the expectations on me are high. Very soon I will have to make up for the trust invested in me.

My program started in Gütersloh (Germany) at the company’s corporate center where I was involved in a couple of M&A transactions withing the Direct Group business of Bertelsmann. Quite honestly, Gütersloh is not the sexiest place around and might not have much appeal to you, but just consider it as a good launching pad for your program. At the moment I quite enjoy living in NY . Check out some pictures of my office views and Broadway where I am located. The work I am doing here is much more operational than my previous project. Currently, I am helping to launch a start up company in the digital marketing space and at the same time I am involved in the formulation of a digital strategy for our publishing business.

The point I want to make is that one of the advantages of the BEP program is that you can mix all kind of projects and define your personal learning experience. This is great, especially if you have to learn “media” the hard way like myself.

There are however some things you might want to consider before you make your decision on whether the program is right for you or not. During 18 month you will not have direct P&L responsibility. If you come straight out of b-school or your own venture this might frustrate you here and then. For me it is fine as I am aware that I needed to learn the media business and that I would not be in the position to take on this responsibility from a start. But if you know the industry and feel you know exactly what you want to do, the program might not be so valuable for you. Also consider that Bertelsmann is an international company with operations all over the world. You will have to be very flexible in order to take the full advantage of the program. Bear that in mind and talk it through with your partner or family.

Ok, I hope this helps and summarizes my thoughts on the program. Feel free to contact me if you have any questions.

Tobias