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
 Industry Economics:
 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
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 Schibsted’s shares in SOL for a gain on 550 million NOK
 Takes on Classified Advertisements
 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
CASE BACKGROUND