SCHIBSTEDCase Study

Group 1:Abhishek MenonAbhishek RungtaAkshay SinghAmit Mishra

Anisha JainAnn Mary SebastianAnoop Dev Singh 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