Case Study

SCHIBSTED
Group 1: Abhishek Menon Anisha Jain Abhishek Rungta Ann Mary Sebastian Akshay Singh Anoop Dev Singh Amit Mishra Slathia

CASE BACKGROUND

Family owned newspaper company in Oslo, Norway for over 150 years By 2006, it was a media group with 8,500 employees in 20 countries Operations in newspapers, books and magazines publishing, television and video production Known for innovations in the segment, the group by 2007 owned leading online newspapers in Norway and Sweden and controlled Scandinavian web classifieds, search and other online services Free print newspaper, 20 minutes, one of the top 10 newspapers in Europe In 2006, acquired Trader Classified Media, solidifying classified advertising business in Europe and Latin America Pressing Issues:

Google launching online Norwegian news aggregator Long term organizational challenge; changing Consumer Preferences, Threat of Startups

CASE BACKGROUND

Background of Newspaper Industry:

Origin Acta Diurna, first published in 59 B.C. In 1440, Johann Gutenberg invented the printing press - Mass production of News Latter part of 17th Century witnessed stronger motives of Censorship 19th Century Tremendous growth in Newspaper business with the advent of Telegraph 20th Century Penny Papers, Consolidation of Industry, Introduction of Radio & TV News In 2004 Global Newspaper Market revenue $150 billion (20:80 :: Circulation:Advertising) Advertising 3 classifications; Classified, Retail and National Advertising (40:50:10) Costs Raw material/Printing Costs (40% of revenues); Ad sales staff, editorial staff, distribution (10-15% of revenue) High operating margins Goodwill Significant factor in Valuation Ad rates increase by 253% and newspaper prices by 161% between 1970-90 Rising newsprint costs

Industry Economics:

CASE BACKGROUND

Internet and Newspaper Industry:

By 2005 Washington Post and New York Times Double digit growth in online revenues Still overall only 6-8% of the total revenue of major public newspapers was realised online However Circulations declined, classified advertising migrated to Online Sites

SCHIBSTED:

1860 After Posten, daily newspaper 1966 After Posten acquired Verdens Gang (VG) The Schibsted Group (1970) 1986 Schibsted acquired Trosmo (Local Newspaper) & a Film Labratory 1989 Joint Stock Company Public Listed Company in 1992 1991 Govt. Licence to operate Norway's first terrestrial commercial TV channel TV2 and forayed as a comprehensive media company 1996 Nagell Erichsen established Tinius Trust

CASE BACKGROUND

Transformation of SCHIBSTED:

1995 Decision for transforming from Print to Electronic Media and from Norwegian company to Scandinavian company Reorganisation to Print Media, TV/Film and Multimedia 1997 Partner with internet portal Scandinavian Online (SOL) with Telenor 1999 Introduced first free daily newspaper, 20 Minutes 2001 Burst of dot.com bubble. Annual loss more than 350 million NOK. Share prices eroded by 50% Great pressure to cut back on new media investments Sale of Schibsteds shares in SOL for a gain on 550 million NOK Take 1: PDF copies of newspaper ads which were not searchable. To but online ad space, one needed to buy print paper ad space Take 2: Rebrand classified section as FINN to be perceived as sub-brands of trusted print newspaper

Takes on Classified Advertisements

CASE BACKGROUND