Group - 6 " Newspapers cannot be defined by the second word — paper.

They’ve got to be defined by the first word – news."

Case Analysis
Presented By

Abbaraju Soujanya | 2020PGP003

Bibhu Prakash Panda | 2020PGP097
Kush Kumar | 2020PGP219
Mitul Bhattacharya | 2020PGP242
Saurabh Yadav | 2020PGP381

| SDW Report 1 - 2021

 PART 1 Intro - Situation Analysis

Contents PART 2 Industry Overview

of the Report PART 3 Schibsted's Journey

PART 4 Transformation of Schibsted

PART 5 Challenging Conventions

PART 6 Analyzing Alternatives

Presented By Group-6 | SDW Report 2021

 Founded as a newspaper
1839 company in Oslo, Norway.
Introduction Media group of 8500
employees, across 20 countries
2006
20 minutes - free
print newspaper

Leading online
t i ons
newspapers
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Newspaper Book & Magazines Television Video Production
Publishing
ned

yaw
ew

roN
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" The only

newspaper in the
2006 world to have
ecna
rF

turned online into

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S

Acquisition - Classified
Scandinavian Countries Advertising Business a profitable
business "
Situation Analysis “You don't lead in an online
business by prohibitions, and
by closing stuff. The nature of
the net is free access, and
Agenda 1: Agenda 2:
Norwegian news Long-term
CEO whoever is best wins.”

aggregator challenges Kjell

Aamot
News aggregator service that Consumer behaviour changing
could undercut Schibsted's dramatically.
online ad revenue stream. EVP (Norway)
Birger Magnus
Customers might soon bypass
Startups creating threatening
the front pages of those sites, EVP (Int.)
business models Sverre Munck
resulting in revenue loss.

In this environment, could Schibsted ensure that its recent success was somehow
repeatable? Or, would it be viewed as an organization that had experienced a very good
run but that had its best days behind it?
History
The earliest recorded newspapers are thought to be circulated in ancient Roman and Chinese
cultures. With the development of the printing press in the 1440s, it was now possible for print
media to reach the masses.
There was a shift in the 17th century from local reporting to international reporting. Several
countries in the developed world passed laws protecting freedom of the press. The stage was
set for the industry to grow rapidly due to advancements in printing tech.
The advent of the telegraph made news reporting faster, however it was costly which resulted
in industry changes

20th century trends

In the early part of the century, the industry started to consolidate and the number of
independent papers declined.
Publishers in the 20th century started to charge lower rates to increase their circulation,
dubbed as "penny papers".
As the circulation of the paper increased, journalism as a profession also began to grow. The
introduction of radio and television in the latter half of the 20th century disrupted the industry
and decreased readership significantly. Readership fell from 80.8% in 1964 to 49.9% in 2006.
Industry Overview
POLITICAL
Newspapers began to play a role in commerce and
geopolitics. Played a significant role in revolutions
and served as a front for both news and
propagating ideas for various factions.
SOCIAL
The industry had started to lose readership
among the newer generation due to advent of
newer technologies, however, it has been
resilient.
ECONOMIC
Two sources of revenue: Readers (20%), Advertisers (80%)
The industry generated a revenue of $150B in 2004 globally.
Major cost drivers: Raw materials, printing & staffing.
Economies of scale. Goodwill a major factor in valuation.
TECHNOLOGICAL
The industry was regularly threatened by advances in
communication technology such as radio or the
television.
The newest threat to the industry was the
introduction of the world wide web
Schibsted's
Journey
1843
Took over the modest printing operation of Johan
Korhan Schibsted
Began publishing a monthly satirical magazine, which HISTORY (1843-1992)
eventually became a liberal daily newspaper

Launched a new daily newspaper called Aftenposten, or “afternoon

1860
post.”

1886 Amandus Schibsted installed the first rotary printing press in Norway

1901 Aftenposten’s circulation reached 13,730

WW II
(1939- German occupying powers took over Aftenposten’s printing operations
1945)

A group of resistance veterans founded a newspaper, Verdens Gang (VG),

1945 or “the way of the world.”
1966 Aftenposten acquired VG for one Norwegian krone Schibsted
HISTORY (1843-1992)

1972 VG becomes second-largest newspaper in Norway just behind Aftenpost

Schibsted acquired a local newspaper, Tromso

1986 Schibsted ventured into motion picture industry by acquiring film
laboratory Laboratorie-Service AS

1989 Schibsted became a joint stock company

Schibsted A/S was formed
- Tinius Nagell-Erichsen as Chairman of the Board of Directors
- Kjell Aamot as President and CEO.

Schibsted-led consortium operated Norway’s first

1991 terrestrially distributed commercial television channel, TV2 Kjell Aamot
1992
Schibsted became a publicly listed company on
the Oslo Stock Exchange in July 1992.
Aftenposten and VG, also listed shortly thereafter

1996
Nagell-Erichsen established the
“Tinius Trust”

2002
Nagell-Erichsen stepped down as Chairman of
the Board

2006
Changes in
Nagell-Erichsen transferred the sole voting share
in Blommenholm to the trust in May 2006 Ownership
 Transformation
• Decided to venture into the online market.
• Skepticism as online portals posed a long-term threat
• Schibsted continued unfazed with its investments.

1995 Oslonett: IT Infratructure company

1997 Partner in Scandinavia Online (SOL): Internet Portal

1995 Launced 20 Minutes: Free Daily newspapert

 Redesigning Classified Ads Strategy

Genesis Launch Work Organization Growth

Collaborated with 4 The 5 newspaper re- Resembled that of a start- Two million unique users per
other newspapers and branded their online up with average employee month.
divided ownership in classified ads section as age of 32 and absence of FINN became Norway’s largest
proportion to each’s FINN, launching service in any employee unions online marketplace for
market share in the print March 2000. recruitment, real estate and
classified arena. other classified ads by 2005.
Aftenposten Valuation exceeded that of
commanded 62% share. Aftenposten
Response to Crisis

Bursting of the “dot.com bubble” triggered a mild yet lengthy recession. Schibsted lost 350
million NOK and its share price dropped by 50%.

Pressure grew to cutback on new media investments but Aamot and team continued to
focus on developing online newspapers, classified ads and free dailies due to conviction in
digital media's growth.

Schibsted sold shares in SOL to Nordic directory company Eniro in Dec. 2001 for a gain of
NOK 550 Million.

While competitors cut down investments and rolled back projects following the dot com
crash, Schibsted continued to invest into online expansion.
Online News

• Schibsted leveraged the brand reputation & content of the print paper to grow its
online business which would otherwise have been significantly challenging to
.
operate as a pure-play entity.

•Front page was constantly formatted to include real-time trending stories. It took a
reader less than 15 seconds to get updated on the portal as opposed to 15 minutes
via 24-Hour TV news channels.

•Special emphasis placed on big stories from around the globe. Tools were created
to boost user-generated content and make the platform more conversational rather
than purely informational.

•The online newspaper VG.no brought in nearly 50% of the profits generated by the
print newspaper. Advertisers had to pay top buck for the front page banner ad,
considerably more expensive than buying a full-page ad in print newspaper.
 Free Dailies
•In 1999, Schibsted launched its first free newspaper Avis1 in Oslo and its free daily 20 minutes
in Zurich and Cologne, followed by the launch in France and Spain in 2000.

•Being entirely advertising-driven, free newspapers could. cut down costs of operating
subscriptions, circulation, printing and inking.

•Aimed towards new readers, Free Dailies captured considerable portion as substantiated by the
finding that 77% of 20 Minutes readers didn’t read any paid newspaper.

Resistance and Change

•There were 60 million Free Daily readers in over 40 countries by 2006. However,
Schibsted’s 20 Minutes experienced varying degrees of success, gaining a strong
foothold in Spain and France while underperforming in Germany.

•Despite losing on print circulation, VG maintained a strong brand name due to its
online presence.

•Following the entrepreneur model, Schibsted decided to launch free dailies in

markets where it didn’t have print circulations. The idea was to capitalize not
cannibalize.
 Main Schibsted Brands & Market Presence by 2006

Local Norwegian newspaper company International Media company

 1. Should its online news site move aggressively to

Challenging Conventions develop moving-picture capability?

2. Should it launch a free daily for the first time inside
one of its core markets, Sweden?

Google News Launch of Norwegian & Swedish news aggregators

Permitting access to Google crawler bot would allow articles from

independent news sites to show up on Google News
Schibsted's managers seem
But there's a catch unlikely to give in

Accessing articles from Google News would land the users directly
Schibsted had developed its own
to the news article page. Therefore, the users won't go through the
search engine, Sesam, to
HOMEPAGE
compete with Google in
"Should Schibsted allow Google to crawl & index its news sites? Scandivania
Or let their articles not be a part of Google News"
 Challenging Conventions

Was Schibsted's success within Scandinavia repeatable outside it?

Organizational Stock Market Approroach

Competitors
Challenges vs
Cathedral Approach
Major Small garage
companies companies Consumers behavior in most media Profit motivation for the business?
products has been dramatic
OR
Many new initiatives but not enough
Correctly distributing information in
experts within the system
the society
Analyzing Collaborating with Gooogle
PROS
Consumer behavior moving
towards aggregators
May increase customer base
of the company as non-
readers of schibsted will also
visit their site if they found
the news interesting
CONS
Advertising revenue will be
impacted as there will be less page
visibility.
There is no ordering in the online
news feed.
Will get very less amount from
news aggregator for tehir offering
which would not justify the efforts
made by the company in
developing content.
Analyzing Free Dailies in Core Markets
PROS
Would help in expanding the
current market of their print news
business.
Less administration cost.
Revenues only from
advertisement. So the company
can increase charges for ads
Suitable for people who use pubic
transport.
CONS
Cannibalization of existing market
offerings by the company.
Complete dependence on advertisement.
It may not work out well in long term as
the company will face challenges in
terms of reduced margins.
It can also get in some legal arguments
with its competitors for trying to gain an
unfair advantage in the market and
exploiting the current competitive
ecosystem
THANK YOU