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Monday, April 18, 2016

You are a physicist. And you are working at a newspaper. But you don't write articles. What do you do? And why?

As I am getting this question a lot, I am trying to give an answer here.

To be quick: As a data scientist at Neue Zürcher Zeitung I am dealing with predictive analytics, statistical modeling, advanced data analysis tasks as well as everything "algorithms" (e.g. recommendation & personalization). I am mainly using R for tasks involving small data and Apache Spark for tasks dealing with not-so-small data. Python and bash are my favorite scripting languages. I just happen to have a background in theoretical physics -- could be engineering, math or computer science as well.

But why media? I have always been looking for challenges and opportunities, intellectual and societal. And, well, being in media these days one finds both. The publishing business is super exciting, because everything is changing: how news are done, the way stories are told, distribution channels, the audience, the technology, the business models, ... Indeed, many of these issues are still open, are just being explored and the future of many publishing houses is still uncertain. So why is this?

Not-so-long ago news were mainly distributed using one medium: paper. For the individual there were exactly two possibilities: either you want to be informed daily, then you'd have to pay for a newspaper subscription, or you don't. If you (or your parents) happen to belong to the first group, chances are you only had one daily newspaper subscription. At the end, they are not cheap (NZZ subscription for example is roughly 600CHF/year) and you chose the one that suited you best. However, fast-forward less than 10 years and you find that reality today looks quite different. If you want to be informed, you can do this mainly for "free" on the www. Also, as you have immediate access to all these manifold resources and they do not cost you a dime, you have a much wider variety at hand. No need to stick to one newspaper. 
So newspapers are not only suffering from the problem that technology has been changing fast (from print to web 1.0 to web 2.0 to mobile,...), but that this change undermines the very basis of the (news) publishing industry: loyal customers who are paying for the service you provide and, given this loyal, well-known customer base, to be able to monetize on the advertisement market. 
Actually, from a balance-sheet perspective, the publishing industry has mainly been an advertisement industry -- only 20%-40% of revenue have been revenues due to subscriptions -- the rest was advertisement.

So what do you do, when the very basis of your business model is eroding? You innovate -- and this is where, among others, people like me come in.
Innovation comes in two parts. First you innovate in the sense that you optimize your current operations: you cut costs were possible and increase efficiency. And data, clearly, should be the basis for this: understand the numbers, then you can optimize. For example in marketing: use predictive analytics to help you decide where to put your marketing budget best. Or use customer analytics to better understand the need of your readership and to improve the customer experience accordingly.
The second part is what I like to call "true innovation". True innovation for me is not mere optimization, but novelty -- doing things that have not been done before. For this, on the one hand, data can be used as a decision criterium ("where to innovate"). On the other hand, data can also be the very basis for innovation. Here I am mainly thinking about data-driven / algorithmic products & services: things like smarter search, automated recommendations or personalization, in all its facets, that have the potential to greatly improve the customer experience, explore new ways of news consumption and reach a more tech-savvy audience.

I am contributing my part to this transformation at NZZ. Founded in 1780, NZZ is one of the oldest still published newspapers in the world. A heritage like this comes with a lot of responsibility -- balancing the tradition with the modern is a worthwhile challenge. At the end, a diverse and well-functioning media landscape is the basis for democracy. And I am glad to be part of it.

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