The mediapartners ... in brands
The mediapartners ... in brands
The mediapartners ... in brands
The mediapartners ... in brands
The mediapartners ... in brands
The mediapartners ... in brands
The mediapartners ... in brands
The mediapartners ... in brands
The mediapartners ... in brands
The mediapartners ... in brands
Reach newspapers North
Reach newspapers South
Reach (weekly) magazines North
Reach (weekly) magazines South
Reach (monthly) magazines North
Reach (monthly) magazines South
Share radio channels North
Share radio channels South
Media companies are in a dual product market
Business to Consumer revenues from
Sold copies
Pay TV
Line extensions, extended products
…
Business to Business revenues from
Advertiser sales
Rights on sold formats
Printing from third parties
…
Media companies are in the
business of selling content
to consumers* and selling
consumers to advertisers
The traditional business model is under pressure
Traditional
business model
under pressure
Advertisers look
for alternatives
(internet,direct,
…
)
Broadening
(media)
opportunities
leads to
fragmentation
audiences
Model of paying
for content is
questioned by
internet and free
newspapers
Costs of media
companies largely
fixed
The broadening of media opportunities
leads to fragmentation
Introduction and proliferation commercial tv
Dvd
Introduction pay tv
Personal video recorder
Rapid penetration digital tv
Internet
New devices (smartphone, i-pod, e-readers eg
Kindle, iPad,
…
)
New platforms (Facebook, Twitter,
…
)
Developments in last twenty years
lChoices continue to expand but
available time remains limited
lImportant impact for advertisers:
in 1988 P&G reckoned it could
reach 90% of consumers in the UK
with just 3 television
advertisements. Today, it would
take more than 1000 to have the
same impact
Percent
The evolution of newspapers sold in Europe, 2002-2005
UK
EXAMPLEDenmark
Germany
Greece
France
The Netherlands
Norway
Italy
Sweden
Belgium
Austria
Spain
-2.1
Weighted average
-3,4
-3,1
-2,7
-2,5
-2,4
-2,0
-1,8
-1,6
-1,0
-0,3
-0,2
1,8
USD Billions
Evolution recruitment ads in US newspapers, 1996-2005
Revenues
HR ads
1996
EXAMPLEVolume
decrease*
Price
increase
“Normal” HR ads
revenues in 2005
if no internet
Revenues
internet
only
companies
decrease
Revenue
due to
lower
online
tariffs
Real HR ad
revenues for
newspapers in 2005
5.8
0.9
1.8
6.7
0.4
1.5
4.8
0.3
4.5
1.9 billion USD
revenue decrease
newspaper
Online
Percent
Repartition costs newspaper company, 2006
EXAMPLE
15
10
More than 80% of
the costs of a
newspaper
company are fixed
Variable as function of # copies
Partially variable as function of # copies Fixed
companies is under pressure
EBITDA* Gross margin Revenue Consumer revenues Number of copies/viewersPrice per copy
Advertising revenues Number of ads Price per advertisement Direct costs Number of copies Operational costs Reproduction cost per copy HR
External services Other
Under pressure due to expansion choices
l Pressure of free content
l Under pressure due to
fragmentation / internet
l Decrease due to
technological evolution
l Largely fixed and
increases due to inflation
business model
• Increase scale
• Enhance value proposition towards consumer
• Create new revenue streams
• Enhance value proposition towards advertisers
• Use potential of convergence
• Cut costs
Increase scale
Increase scale
Potential action
l Spread fixed costs over large
volume
l Create complementary revenues Rationale
l Geographic expansion de
Persgroep: acquisition PCM (and sells NRC and book division)
l Geographic expansion Studio 100:
acquisition EM Entertainment (database Maya De Bij, Vicky De Viking, Pipi Langkous, …),
exploitation of Pipo de Clown, theme parks abroad
l In depth expansion home market:
1st digital channel Studio 100 tv (reclycling content), now 2nd channel NJAM!
l ProSiebenSat.1 acquires SBS
Broadcasting
l Back to back production
ProSiebenSat.1
l Roularta Media Group acquires
Groupe Express-Expansion
l VMMA acquires Joe fm
VMMA acquires Vitaya
Enhance value proposition towards consumers
Enhance value
proposition towards
consumers
Potential action
l Defend market share
l Stop/reduce decrease audience Rationale
l Launch of digital channel Acht by
Concentra
l Studio 100’s database of programs
broadens a lot by purchase of EM Entertainment
l Launch of 18 special editions of
Knack on cultural and historical topics
l Launch of Dutch edition of Côté Sud
International by Roularta
l Contact enlarges brand with digital
television channel Radio Contact Vision
l Pink sheet De Tijd to reinforce
business newspaper proposition
l Introduction tv-studios at De
Standaard
Create new revenue streams
Create new revenue
streams
Potential action
l Enlarge revenues Rationale
l Pay per view: Net Gemist, Ooit
gemist, i-Watch
l New digital strategies
newspapersites (eg Boutique du Soir, De Tijd launches payment for website)
l iPad apps to be payed De
Standaard, De Morgen, …
l Strategy of extended products, such
as product development (Libelle fashion with E5-Mode, Nina-dress with Veritas), licensing (eg Lotus & Studio 100), events (eg Flair Shopping Day), workshops (eg Weekend Knack Cooking Club)
l e-commerce, eg Libelle-shop:
BeCommerce Award 2010
Enhance value proposition towards advertisers
Enhance value
proposition towards
advertisers
Potential action l Increase revenues Rationalel Goedele release special edition
‘Tom’ (january 2011)
l VMMa launches analog channel
vtmKzoom, launch Disney Channel Vlaanderen
l TMF and MTV Loaded, mobile
marketing platforms
l Several attempts, product placement,
inscript sponsoring, program
participation, embedded content, …
l Difficult Examples
Use potential of convergence
Use potential of
convergence
Potential action
l Strenghten loyalty and income
l Reduce costs Rationale
l app De Standaard on iPad
l Humo joint venture Sanoma &
Woestijnvis l SBS l Flair Mobile l VRT 360° Newsroom l 4040 VTM Examples
Cut costs
Cut costs
Potential action
l Adapt cost to reduced income Rationale
l Reduce number of pages (several
media)
l Exit Het Volk
l Lay-offs at de Persgroep & Corelio
and almost everywhere in the international media
l Broadcasters and production houses
l Reduce size (paper costs): Knack, as
previously almost all newspapers
l Kanaal Z uses facilities VMMA
l Videojournalists at regional tv
Concentra
Potential strategic actions to strengthen
business model
Increase scale
Enhance value proposition towards consumer
Create new revenue streams
Enhance value proposition towards advertisers
Use potential of convergence
Cut costs
Potential action
l Spread fixed costs over large
volume
l Create complementary revenues
l Defend market share
l Stop / reduce decrease audience
l Enlarge revenues
l Increase revenues
l Strengthen loyalty and income
Adapt cost to reduced income
Rationale
l De Persgroep acquires PCM and
sells NRC and book division
l Pink sheet De Tijd to reinforce
business newspaper proposition
l Libelle fashion with E5-Mode, Flair
Shopping Day, Weekend Knack Cooking Club
l TMF and MTV Loaded, mobile
marketing platforms
l E-paper De Standaard on e-reader
Kanaal Z uses facilities VMMa
