*
Bonnier
at a Glance
Starting in 1804 as a small book store and publishing firm, Bonnier is now a multi-channel media company with experience and knowledge from a full range of media in 175 companies across 17 countries. 0 2000 4000 6000 8000 10000 Book s Magazine s Broadcasting & Evening Paper Entertainmen
t Business Pres s Morning Paper 0 200 400 600 800 1000 1200 1400 Book s Magazine s Broadcasting & Evening Paper Entertainmen
t Business Pres
s
Morning Paper
Net Sales by Business Area
MSEK EBITA by Business AreaMSEK Net Sales by Country Net Sales by Revenue Stream
Sweden Finland Norway Denmark U.S. Germany Other 12% 9% 7% 7% 6% 4% Advertising Subscription Retail Direct Sales Box Office Other Books Business Press Magazines Cinema & Film Newspapers TV & Radio
Bonnier represents more than 200 years of sustainable media entrepreneurship through eight generations of the Bonnier family—always combining a true fascination for media products with a keen business mindset. From the beginning, the family has promoted high-quality media products while collaborating closely with authors, journalists and publishers.
The Bonnier Group is fully owned by the Bonnier family, which has grown and nur-tured the company for the continuing suc-cess of coming generations.
Operations are divided into the following business areas: Books, Broadcasting & Eve-ning Paper, Business Press, Digital, Enter-tainment, Magazines and Morning Paper. Corporate headquarters are in Stockholm, Sweden. 33% 55% 24% 23% 10% 4% 6%
For me, 2010 was the year Bonnier decided to invest in new printers for the print shops in Stockholm and Malmö, and simultaneously invested in the groundbreaking tablet formats Mag+ and News+.
The first decision was crucial to making our newspapers in Sweden profitable for the coming decade; the second investment was crucial to making them profitable for the years to come after that. Mag+ and News+ also helped to push Bonnier ahead of most of our competitors in the digital media space, but primarily it should be seen as a first step to finding a new business model for digital content. The Swedish and Polish newspapers made a remarkable and sustainable turnaround in 2010, after years of struggling, and I have a feeling that a new era of creative product development supported by strong financial results has begun.
The book business within the group finally showed us what a “normal” year meant, without megasellers: 2010 became their best year ever. Among other outstanding performances, I would like to mention SF Bio, for five consecutive years of all-time-high results; TV4, which came back after 2009 in an extremely strong way; Bonnier Corporation for being among
our top five recoveries after the recession; and Äripäev in Estonia, which worked miracles in a market that has been in constant depression mode.
As we move forward, our success is still determined by our willingness to understand and listen to our audiences and our partners. We have to constantly adapt our businesses to the changing – or unchanging – needs of readers, viewers and visitors. We have to stay ahead, but not too far ahead. In a world that is becoming more global and transparent, with lower barriers of entry and
competitors everywhere, at the end of the day it is quality that counts (and is what people are willing to pay for).
Since quality is a mark of both our heritage and our present day, we are looking forward to the future. Jonas Bonnier
President & CEO, Bonnier AB Stockholm, March 2011
A Year of
While the majority of people still read print-ed books, the book publishing industry is facing changes brought on by digitalization in its various forms. But whether on paper or on a screen, an author’s ability to capture the reader’s interest remains the key to success. Despite the criticism of the strong focus on bestsellers that account for an increasingly large share of sales, when there is a lack of bestsellers there is a decline in visits to book-stores, as we saw in 2010. And bookstore visits account for an extraordinary share of new-title sales.
Technology developments continued to affect publishers in 2010. E-commerce ac-counted for an increasingly large share of book sales, which in turn resulted in pres-sure on traditional bookstores to change. Barnes and Noble, the world’s largest book-store company, launched its own e-reader to meet reader’s expectations. At the same time the leading online bookstore, Amazon, de-veloped new versions of its Kindle e-reader. During the year, Apple introduced the iPad, which quickly became the second most-used platform for e-books. Google also recently launched an e-bookstore offering three mil-lion titles available for all platforms. Despite the push from bookstores and de-vice developers, readers and not publishers determine whether a text will be read on pa-per or on screen. And the majority still read printed books. But early adopters of plat-forms for e-books are not traditional book readers, which will hopefully lead to new target groups discovering books that they otherwise would not have purchased. One of the other truly exciting advance-ments of digitalization is the opportunity to develop new types of books. Interactive
reference books or children’s books with moving images allow for an entirely new ex-perience – not to mention educational aids. On the downside, new book formats create copyright challenges for legal systems, and the issue of value-added tax is causing prob-lems in several markets. Publishers are fac-ing issues of pricfac-ing and the traditional life cycle of books, from hardcover to paperback, which does not necessarily apply to e-books.
Best Year Ever
Bonnier Books’ operating profits of SEK 720 million were above 2009, making it the best year ever. Although revenues were down 7 percent compared with 2009, im-proved margins contributed to the positive results. Sweden and Germany remained the most important markets in terms of sales and profits.
The year’s strong earnings were achieved despite the book sector lacking any major global bestsellers. Instead, earnings were achieved through robust performances and better margins, and through mea-sures such as cross-border production partnerships.
In Sweden, net income increased despite a stagnating book market. Online bookstore Adlibris expanded – in Sweden as well as in the neighboring Nordic countries – and increased earnings. Newly acquired Pocketgrossisten expanded book sales through non-traditional channels. Bonnierförlagen significantly improved its earnings and increased its market share despite fewer individual bestsellers than in 2009. The audio-book downloading service Laudio also successfully launched during the fall.
The major German publishing houses Piper and Ullstein had a strong year, as did Carlsen, despite lower sales of the Twilight series. German authors were at the top of the publishers’ sales lists during the year, and paperback sales increased. Cappelen Damm remains Norway’s largest book publisher and its earnings were in line with 2009, despite a decline in the educational-aid market compared with last year. Cappelen Damm’s chain of Tanum bookstores performed well and investments were made in improving lo-gistics efficiency. In addition to Sweden, Norway is the Nordic market in which e-commerce is increasing the most. Bonnier Publishing, whose largest mar-kets are Australia and the United King-dom, improved its earnings as a result of efficiency enhancements implemented in 2009 despite continued challenging mar-ket conditions and unfavorable currency exchange rate effects.
In Finland, Tammi bettered its results by improving efficiency in a difficult market. The company also launched a proprietary paperback brand.
Overall, partnerships between different publishers at Bonnier Books strengthened, primarily in the publication of children’s books. Carlsen, ArsEdition and Bonnier Publishing featured concepts and book titles that were compatible with other markets. All publishing groups also launched e-books, although performances differed among the markets.
Books
Fewer Bestsellers,
More E-Books
For the book publishing industry, 2010 was a year with no global bestsellers to take the spotlight. Instead, the hot topic was e-books, with the launch of new tablet computers including Apple’s iPad. Bonnier’s book publishers had strong profits due in part to cross-company partnerships and non-traditional sales channels.
Text by Erik Haegerstrand
Companies within Bonnier Books
• Cappelen Damm – Norway • Bonnierförlagen – Sweden • Bonnier Publishing – U.K.,
Australia and France • Tammi – Finland
• Bonnier Media Deutschland – Germany
• Weldon Owen – U.S. and Australia
Net Sales Bonnier Books
MSEK 0 2000 4000 6000 8000 10000 2007 2008 2009 2010
* For Bonnier Books, 2010 was a record year despite slightly lower sales.
*
At 4 p.m. on a snowy November in Oslo, Cappelen Damm Editor Herdis Eggen makes her way down the stairs to the lobby café and bookstore of the Norwegian book publisher Cappelen Damm. There, a girl in a bright pink stocking cap stares at her iPhone next to a young woman with a ponytail sharing a table with a middle-aged woman in a down jacket. Then there’s the older Asian woman with a portfolio, the man with the cane and the guy with trendy glasses who looks to be in his late 20s.
All are waiting for a chance to talk to an editor, no appointment required, as part of Cappelen Damm’s Editor’s Corner, where the public is invited in to present manuscripts, book ideas or just get some advice from one of Norway’s top publish-ing houses.
The brainchild of Eggen, the first Editor’s Corner was held in March 2010. “We came up with the idea originally when Cappelen and Damm merged,” says Eggen. “We especially wanted to reassure all young authors that even if we are a big publish-ing house, we are still personal, open and accessible.”
Since March, aside from a break during the summer, the Editor’s Corner has been held every Thursday. At least two editors
from Cappelen Damm participate: one editor for Norwegian literature is always there, along with one editor from either recent history and current events, non-fiction, entertainment, children’s or the young adult divisions.
Between six and 12 people show up each Thursday, and Eggen and her colleagues end up with three to ten manuscripts. “For Norwegian literature, we’ve gotten 47 manuscripts so far,” says Eggen. “We haven’t published any yet, but we’re taking a closer look at a couple of them.” Cappelen Damm has gotten about 120 manuscripts in all so far from the Thurs-day meetings.
The Editor’s Corner is not just a goodwill effort, it’s also another way for Cappelen Damm to get manuscripts over the tran-som. In a country of big book readers and significant support from the department of culture (which purchases a thousand copies of each book to place in Norwegian libraries), being competitive means getting new writers.
“We like to have five new young writ-ers on our new fall lists every year, so we’re always on the lookout for first-time authors,” says Eggen. “More and more young people are interested in and trying to write – this is a generation
that wants to be seen – and publishing houses are in hot competition to find the next hot author.”
Eggen, who started at Cappelen in 1986, knows her hot authors: One of the writers for whom she is editor is the Norwegian queen of crime, Karin Fossum.
This day, Eggen has received five manuscripts, including a children’s book, poetry and some short stories. She gets a kick out of meeting everyone who comes to the Editor’s Corner, she says. “When I’m through, sometimes I can’t wait to get back to my office so I can read a manu-script that’s really piqued my interest,” she says. “Who knows, it could turn into something huge!”
As for the potential authors who have waited their turn to meet an editor, each has their reasons for attending. The young woman with the ponytail is lawyer K.G. Stave, who says she walks by the Cappelen Damm offices every day. “It’s on my way to work and I thought I should take advan-tage of the opportunity,” she says. “I just wanted to get some advice on a children’s book I’ve been working on.”
Who knows, Stave could be the next Dr. Seuss. Which would be a win-win situa-tion for her and for Cappelen Damm.
Open to Criticism
At Cappelen Damm, Editor Herdis Eggen’s initiative to invite anyone who wants to get advice from editors has generated plenty of goodwill for the Norwegian book publisher.
Books
1,000 Titles, 800 Manuscripts
Cappelen Damm was formed by the 2007 merger of publishing houses Cappelen (founded 1829) and Damm (founded 1843). Jointly owned equally by Bonnier and Egmont, Cappelen Damm publishes some 1,000 titles of both Nor-wegian and translated authors each year. According to Editor Herdis Eggen, the publisher receives around 800 unsolic-ited manuscripts a year – including those that come in via the Editor’s Corner.
Editor Par-Excellence
After working in bookstores and as a book critic in Oslo, Herdis Eggen started as an editor at what was then book pub-lisher Cappelen in 1986. Her writers include Norwegian luminaries such as Karin Fossum, Erlend Loe and Beate Grimsrud – the writer she has worked longest with is Stig Saeterbakken, who
started with her in 1988. * Cappelen Damm’s Herdis Eggen is always on the lookout for the next top young author.
*
A slow but steady climb in 2010 advertising sales bodes well for the future of television, as the industry seeks new ways of deliver-ing programs to viewers and usdeliver-ing social media to enrich the viewing experience. Overall, global ad spending has increased. In every region, television, with a 15.8 percent global increase over last year, remained the ad medium of choice. Viewership in the United States stayed flat with viewers watching an average of 143 hours a month, although digital video recorder usage was up slightly. In the U.K., viewers increased their monthly viewing by 7 hours, 30 minutes to 110 hours and 30 minutes. Sweden inched up from an av-erage 87 hours and 50 minutes per month in 2009 to 88 hours and 50 minutes in the first half of 2010, with viewer reach expanding from 72.8 percent the previous year to 74.1 percent.
Globally, the Winter Olympics in Vancou-ver helped pump up first quarter viewing numbers, and the World Cup in South Africa garnered impressive worldwide ratings, including a 41 percent increase in U.S. viewers from 2006.
Watching television live still dominates viewing, but more households are using digital video recorders and streaming video options as a way of catching up on programs. Although still in the infant stage, the era of Internet TV has begun. New services such as Google TV launched this year, offering seamless integration between the Internet and TV viewing. Subscribers to the service can set up watch lists, access background material and share their viewing experience with others online.
In an effort to capture tech savvy and younger audiences, content providers including HBO have started a strong push for television programs on broadband for computers and mobile platforms including iPad, iPhone and Android. HBO Go offers more than 600 on-demand programs. With high definition television making headway into most markets, the new in-novation is 3D. Although still problematic with the issue of watching with special glasses, British television viewers have become the first in Europe to experience a full 3D TV station in their homes, with the launch of Sky 3D on Oct. 1, 2010.
Fast Recovery
The return of advertisers to Swedish TV in 2010 was as quick and dramatic as the 2008 downturn in the advertising market during the financial crisis and recession. The post-recovery period has turned out to be even better than the period before the crisis, and overall TV advertising revenues have never been as high as in 2010. The local TV advertisement market performed particularly well. The chan-nels actually sold out advertising time and were unable to meet the demands of advertisement purchasers during fall 2010. In response, an industry-wide agreement was reached with media agen-cies to address the shortages. The demand for higher ratings resulted in increased programming investments in a bid to raise audience shares – and revenues.
Channel TV4’s new fall shows Så mycket bättre (So much better) and Morden i Sandhamn (Murder in Sandhamn) and the updated classic Fångarna på fortet
(Prisoners of the fortress) became major hits, which, combined with TV4’s other-wise strong lineup resulted in increased audience shares during the fall. News shows also had a good season, and TV4Nyheterna 22.00 (News at 10:00 p.m.) became the highest rated news broadcast among viewers under 60 on TV in Sweden. Adversely, the costs for sports broadcast-ing rights rose substantially durbroadcast-ing the year, which resulted in weaker profits for sports channels and sports shows. It was also a breakthrough year for on-demand viewing, through boxes with recording functions, operators’ on-demand platforms or TV4’s catch-up service TV4 Play. Some shows increased their viewership by more than 10 percent via on demand. The Finnish recession lasted longer with the recovery not arriving until the second half of the year. When it did, it was not as powerful as the Swedish recovery. Growth in the premium pay segment was stag-nant, largely due to the Finnish absence from Formula 1 and the consequent reduced interest in pay-channel subscrip-tions. However, strong increases in adver-tising revenues late in the year signaled a promising 2011.
Under its new editorial management, Swedish daily Expressen performed very well, in terms of journalism and market share. Expressen continued to capture readership and circulation shares, and in December, according to media research firm Orvesto, Expressen surpassed competitor Aftonbladet as the most-read newspaper in Sweden, which – combined with a considerable increase in advertis-ing – resulted in earnadvertis-ings that exceeded expectations.
Broadcasting & Evening Paper
Up with Ads
and Viewers
The year 2010 saw increases in TV advertising spending worldwide and viewership was up as well, with on-demand service use also becoming more popular. For Bonnier, TV advertising revenues saw an all-time high.
Companies within Bonnier Broadcasting and Evening Paper
• TV4 Group – Sweden • MTV Media – Finland
• C More – Denmark, Finland, Norway and Sweden
• Radio Nova – Finland • Expressen – Sweden
Net Sales Bonnier
Broadcasting & Evening Paper
MSEK 0 2000 4000 6000 8000 10000 2007 2008 2009 2010
* At TV4, demands for ads were greater than the ad space available in late fall.
*
For more than a decade, magazine publishers watched newspapers with envy as they successfully amassed more visitors online than customers for the print versions. Most magazines had dif-ficulty in identifying a successful model through which to publish their material online, and only a limited number were able to successfully develop a profitable concept.
However, in 2010, this frustration turned into enthusiasm. When Apple launched its iPad tablet in April 2010, magazine publishers were for the first time provided with a platform capable of handling texts, images and video with a quality that makes the reading experience equal to or better than on glossy paper. Combined with market assessments now purporting that 80 million tablets will be sold world-wide in 2012, it looks like the magazine industry’s enthusiasm is warranted. This will not lead to the death of print magazines in the coming years, and maybe not even in the long term. However, the years ahead will be filled with rapid developments for the magazine industry. If publishers manage to produce digital magazines for which readers are willing to pay to the same extent as they pay for printed publications, then magazine pub-lishers are facing their most revolutionary decade.
It is currently difficult to gauge what impli-cations this will have on the sector as a whole, although three key conclusions can be drawn from the developments to date. First, the design of a magazine is more decisive for the success of a magazine than even the most enthusiastic art directors
have understood. Readers who have spent upwards of an hour on a print magazine have often only spent a few minutes on the magazine’s website. Now that magazines are available on tablets, time spent reading could once again be closer to an hour. For the first time, readers’ feedback can also be monitored in detail.
Second, the magazine sector, which has been characterized by major national dif-ferences so far, will now become consider-ably more global. An English-speaking reader in Malaysia, for example, will now be able to purchase a U.S. publication for the same price and have it delivered at the same time as a reader in New York. Knowledge about reader behavior and mar-keting of applications will largely become universal.
Third, the challenge for magazine publish-ers is to keep pace in the race to innovate.
Later Comeback
The magazine publishing industry is generally late to enter recessions, and con-sequently later to recover from economic downturns than, for example, daily media. Which is exactly what we witnessed in 2010. Following the crisis in 2009, it was not until after summer 2010 that advertis-ing sales gained momentum again in the U.S., Scandinavia, the Netherlands and Russia.
In addition to being the year of recovery, 2010 will go down as the year in which Bonnier launched Mag+, a production system for digital magazines on reading tablets. Nine magazines were unveiled during the year, and the top seller was the first to come out, Popular Science+.
None other than Apple’s own Steve Jobs designated it as the “King of the Hill,” and through its websites and App Store, Apple still encourages the world to check out Mag+. No doubt new potential business areas lay ahead, with additional revenue streams from consumers and advertisers. In the U.S., the market was characterized by overall economic instability, and Bon-nier Corporation had a year of challenges. Key advances were made in editorial and commercial areas, however, and market shares were captured and the increase in year-on-year earnings was significant. The improvement in online positions was particularly evident, with the Parenting Group among the more successful. Bonnier Publications strengthened its positions slightly, launching Science Illustrated in more markets (Germany and Russia) and in new, innovative formats (Sweden). The challenges were particu-larly intense in Denmark, while there were tailwinds in Norway and Russia.
In Sweden, Bonnier Tidskrifter launched the magazine S and the Yourlife con-cept, and expanded Mama to Belgium. A number of new initiatives were taken at the same time as market shares were captured in advertising. Continued cost controls resulted in a significant recovery in earnings.
Magazines
Magazines Open Up
on Tablets
New tablet computers could be a turning point for digital magazines trying to make money online, but challenges remain. For Bonnier, the launch of the iPad platform Mag+ was a high point, getting the company attention on a global scale for its innovation.
Companies within Bonnier Magazines
• Bonnier Tidskrifter – Sweden, Belgium and the Netherlands • Bonnier Publications – Denmark,
Norway, Sweden, Finland and Russia • Bonnier Corporation – U.S.
Net Sales Bonnier Magazines
MSEK 0 2000 4000 6000 8000 10000 2007 2008 2009 2010 * After a slow start in 2010, magazine ad
sales picked up after the summer.
*
After ten years working with print magazines, when Griffin Plonchak was offered the chance to work on a new kind of magazine in a new media, he jumped at the chance.
The new magazine, Popular Photography+, was the second magazine to come out on Bonnier’s Mag+ platform for the iPad. Plonchak, who had been working as art production manager at Parenting, joined the Bonnier Corporation Technology Group a month after the April 2010 launch of Popular Science+. There he helped put out the second and third issues while preparing for his new position as digital producer for Popular Photography+. “One of the reasons Popular Photography was picked as the second title for the Mag+ platform was because of the beautiful images,” says Plonchak. “The iPad is really designed to show off photos to their best advantage, they look amazing on the screen, so it made a lot of sense to put up Popular Photography with its focus on pictures.”
To get the first issue ready for its August premiere, Plonchak worked directly with the material – texts and photos – to get it ready for layout by designer David Quaranta. Not so different from his work on print magazines, Plonchak says, but it
required some rethinking of work flows and changes in organization of files and servers. There were a few late nights where the team ordered in dinner. “It’s like any magazine, there are peaks where you have to work more,” he says. But his advice for other digital producers starting a first issue with Mag+ is to put extra effort into being organized, and be prepared to serve as a liaison for the rest of the team so that everything works as smoothly as possible. “What’s great about Popular Photo-graphy+ is that we don’t have the same physical limitations that the print magazine has,” Plonchak says. “So we have more room for texts and photos, it’s easier for us to maneuver. Plus we always try to throw in extras, like adding in photos that were shot but not used for the print magazine.” He also likes that Mag+ uses Adobe InDesign software for the layout, so it’s very user-friendly for designers who are almost universally familiar with the program.
The finished product is a thing of beauty. “The iPad really enhances the experience, it’s more alive and has a really different feel from the printed magazine,” says Plonchak. “It’s like the magazine has been reborn in a new world. It’s a second chance for us to tell the same story in a very dif-ferent way, in a difdif-ferent medium.”
While Plonchak has trouble choosing any favorite part of the magazine – “every part is good in its own way” – he does have some features of the application that he thinks are exceptional.
“The way the design moves seamlessly when you change orientation of the tablet from vertical to horizontal is a really great part of the original design of the platform,” he says. “If you look at a lot of other applications, when you switch orientations there’s a gap in time where the app has to reload, which could be a little bit disconnect-ing. Another great feature is how you can just tap the screen to remove the text so you can look at the picture and then just tap again to bring it back. It’s so simple but it makes the experience so much better.”
As for the next magazine he’d like to see on the Mag+ platform, he’s looking forward to seeing Sound & Vision on the iPad. “I love music, I love gadgets like head phones and amps so I can’t wait to see what it’s like,” he says. “I can just imagine – more interactive, the audio clips, the how-tos, it’s going to be great to just sit down and start going through a whole new version of one of my favorite magazines.”
Star of the Screen
The second magazine from Bonnier to come out on the iPad Mag+ platform, Popular Photography+ was a natural choice with its emphasis on gorgeous photos, says the magazine’s Digital Producer Griffin Plonchak.
App Happiness
Popular Photography+ debuted on Sep-tember 2 at Apple’s App Store. Applica-tions for the iPad are just now available for subscription; prior to that they were sold only by single issue. Popular Photog-raphy+ sells for USD 2.99 and so far has had approximately 2,000 single-issue downloads per month.
Man on the Front Lines
Griffin Plonchak got his start in publish-ing as an art production assistant for Food & Wine magazine. He eventually moved to The Parenting Group which included both Babytalk and Parenting magazines, and was acquired by Bon-nier in 2007. In May 2010, he became digital producer for Mag+, which already included Popular Science+ and was soon followed by Popular Photography+. “It’s very interesting to be on the front lines of the media revolution,” he says about his work.
Magazines
* Popular Photography Digital Producer Griffin Plonchak likes the simplicity of the iPad.
*
Advertising revenues rose, circulation increased and the competition for readers broke new ground with the advent of the iPad tablet. And the major business media players quickly recovered from the recession. In 2010, the Financial Times Group’s revenues rose steadily and by late June, owner Pearson reported a profit of nearly GBP 178 million, which was primarily at-tributable to stronger advertising sales. In the competition over the crucial U.S. market, the Financial Times opted to focus its newspaper on heavier business reporting, while the Wall Street Journal expanded its newspaper to include more general journalism.
The Wall Street Journal primarily went on the offensive in New York, where its owner News Corp decided to compete with the New York Times with a local edition that resulted in the Wall Street Journal now selling 2 million newspapers in the U.S. News Corp can afford the competition over New York since its TV network Fox in particular has performed exceptionally well and took the Group from figures in the red to billions in the black.
The Wall Street Journal reported a 30-percent increase in advertising revenue. Following Rupert Murdoch’s purchase of the beleaguered newspaper three years ago, readership of the paper has risen 20 percent.
Before summer, the Financial Times be-gan reporting an overall circulation figure – digital and print – and in September, it was up 3 percent to 580,000 subscrip-tions. Pearson also proudly noted during the autumn that the ft.com website had
180,000 paying digital subscriptions – up 50 percent in one year – despite raising the price during the summer by 20 per-cent to GBP 200 per year.
In late November, the Financial Times announced that the iPad edition of the newspaper had been downloaded 430,000 times since its launch in April. However, the number of iPad readers who have chosen to sign up for a digital subscription has not been disclosed.
The Economist has not settled for a con-tinued strong performance for its print edition, but instead joined the applications trend. Within three years, the Economist is expecting 1 million digital subscriptions, which will be marketed under the same business model as the Financial Times. In the global market, the Financial Times launched a Chinese iPad edition in partnership with Rolex. The Wall Street Journal has also increased its commit-ment to the Asian market and reported successes in India.
Positive Signs
For the Swedish Dagens Industri Group, 2010 has been a strong year with 130 per-cent growth in operating profits. The posi-tive numbers are mainly the result of 20 percent growth in print advertising sales and 24 percent growth in web advertis-ing sales. Also contributadvertis-ing was a gen-eral price increase in subscriptions. This more than compensated for a decrease in circulation and leading to the highest circulation revenue in many years for the business daily. In late 2010, di+ – Dagens Industri for the iPad – was launched with a single copy price model.
During 2010, the Danish Børsen reported growth in operating profits. Advertising revenues increased 13 percent over the previous year, where growth came pri-marily from web advertising sales. Even though newspaper sales ended below both budget and forecast, Børsen has through-out 2010 managed to maintain a constant circulation. At the end of the year, Anders Krab-Johansen was appointed as new editor-in-chief and CEO, succeeding Leif Beck Fallesen as of January 1, 2011. In the second half of the year, most of the Central and Eastern European businesses showed some positive signals. Subscrip-tion and circulaSubscrip-tion figures seemed to have reached bottom and remained flat or slightly positive. For advertising sales, the trend is now positive in several markets, especially Russia and Poland. In Poland, Iwona Kossmann was appointed CEO for Bonnier Business (Polska) in December and will start her new position during the first quarter of 2011.
The companies within Medicine Today International (MTI) felt the impact of continued declining product advertis-ing. At the end of June, Medicine Today Poland was integrated into the Bonnier Business (Polska) operations. In October, Bonnier Business Press became the 100 percent owner of Dagens Medisin AS in Norway. The event businesses as well as web advertising sales in all countries within both Central and Eastern Europe and MTI experienced increased revenues. In Norway, Lise Hjertaas was appointed CEO for Dagens Medisin AS, and Markus Moe was appointed editor-in-chief.
Business Press
Tough Tactics
and Higher Revenues
Increases in advertising and aggressive moves by the Financial Times and the Wall Street Journal helped pave the way for a stellar 2010 for the business press. For Bonnier, the situation was likewise an improvement over 2009, although Central and Eastern Europe generally still lags behind the Nordic countries.Companies within Bonnier Business Press
• Børsen – Denmark • Dagens Industri – Sweden • Delovoy Peterburg – Russia • Finance – Slovenia
• Bonnier Business Polska – Poland • Äripäev – Estonia
• Verslo Žinios – Lithuania • Pari – Bulgaria
• Rynok Media – Ukraine • Dagens Medicin – Sweden • Mediuutiset – Finland • Dagens Medicin – Denmark • Dagens Medisin – Norway
Net Sales Bonnier Business Press
MSEK 0 1000 2000 3000 4000 5000 2007 2008 2009 2010
* For Bonnier Business Press, ad sales generally increased or stabilized.
*
Gunta Lauck
Carlsen Verlag, Germany, GROW Participant
Becoming part of the GROW program meant being given a great opportunity to get to know a foreign company, the way of working there and, of course, the way of life. I was able to gain valuable experience about the work flow, exchange knowledge and best practices with my new col-leagues, support the spirit of international cooperation and get a fascinating insight into life abroad.
My advice to other GROW participants is to make sure to visit museums and parks, attend concerts playing the local music, and spend time in cafés, restaurants and shops. Finally, if you are working in a publishing house, you really should check out the local bookstores!
Gunnar Bolin
Sveriges Radio,
Great Journalist Award Winner How does it feel to win Lukas Bonnier’s Great Journalist Award? After being tricked by Stefan Mehr and accomplices, I felt in the following order:
1) Shocked.
2) Taken by surprise. 3) Astonished. 4) Uncomprehending. 5) Gratified.
Over time, the feeling of No. 5 took over and naturally it’s incredibly flattering that a group of smart colleagues chose to honor me, not for a specific program that I did but for my work. Fantastic and as I said, a bit difficult to fully comprehend.
Kayse Gundrum
Bonnier Corporation
Bonnier Sales Awards Sales Winner, Sales Representative of the Year
Being recognized as the Bonnier Sales Representative of the Year award was an extra sweet accomplishment considering the challenging economic landscape of 2009 and proved to be a strong motivator throughout the entirety of 2010.
Bonnier is an amazing company to be a part of and I am proud to have been hon-ored with such a prestigious achievement.
Prizes & Grants
Each year, Bonnier and Bonnier-owned companies give out a range of prizes, awards and stipends worth various amounts to Bonnier employees as well as to the general public. Among the most well-known is the Stora Journalistpriset (Great Journalist Award), Sweden’s most prestigious journalism award, first given out in 1966; the Finnish Great Journalist Award was started in 2000. More recently instituted, the Bonnier Sales Awards have been recognizing top creative sales staff throughout Bonnier since 2007. And Bonnier’s GROW global exchange program allows employees to spend three months at another job in another country – so far 63 people have participated since the program’s founding in 2008, with a new class of 36 set for 2011.
Internal Prizes & Grants:
Bonnier Sales Awards (2009)Jenny Boberg, TV4 Sverige – Sales Rookie of the Year;
Heikki Lampinen, Dagens Nyheter – Sales Manager of the Year; Kayse Gundrum, TransWorld Media, Bonnier Corp – Sales Representative of the Year .
Gerard Bonnier Employee Stipend
Marie Jungsand, Bonnierförlagen and John Häggblom, Bokförlaget Forum
GROW 2010
Ellen Adolfsson, Bonnier Carlsen; David Andersson, Adlibris; Christiane Bartelsen, Carlsen Verlag; Kristyn Brady, Bonnier Corp; Rikke David, Bonnier Publications; Amy Geppert, Bonnier Corp; Brian Glaser, Bonnier Corp; Beatrice Hellman, Bonnier Tidskrifter; Pirita Hiltunen, MTV3; Linus Holm, Bonnier Tidskrifter; Reagan Johnson, Bonnier Corp; Frida Jonasson, Bonnier Tidskrifter; Hanna Kallankari, MTV3; Rebecca Kinnear, Bonnier Corp; Craig Kotilinek, Bonnier Corp; Gunta Lauck, Carlsen Verlag; Merete Lind, Bonnierförlagen; William Mack, Weldon Owen; Katherine Maggio, Bonnier Corp; Amy Mangino, Bonnier Corp; Anna Nilsson, Resume; Jutta Pasanen, MTV3; Jaclyn Rymuza, Bonnier Corp; Brandon Stakenborg, Bonnier Corp; Lena Söderqvist, SF Media; Stephanie Tang, Weldon Owen;
Lena Thunell, Bonnier Carlsen; Libby VanderPloeg, Bonnier Corp; Karolina Westerdahl, Expressen; Lisa Widell, Bonnier Tidskrifter; Shawn Woznicki, Bonnier Corp; and Anna Ågren, Bonnier Tidskrifter.
Åke Bonnier Private Foundation 75th Anniversary Stipends and Albert Bonnier Stipend Fund
Lotta Lundberg, Bonnier Tidskrifter; Henrik Westman, Dagens Industri; Niclas Blixt Madison, Allt om Resor; Victor Birgersson, Bonnier AB; and Christina Heinä Liman, Bonnier Korsord.
Tor Bonnier and Albert Bonnier, Jr. Stipends
Michael Berglund, Borås Tidnings Tryckeri; Gunilla Charléz, DNEX; Dan Edström, Expressen; Tove Ekman, Expressen; Elin Fjellman Jaderup, Sydsvenskan; Malin Forsberg, Expressen; Johannes Fosseus, Sydsvenskan; Daniel X. Fridh, SDS Tryck AB; Magnus Huss, Dagens Nyheter; Anders Kull, DNEX; Annelie Landin, Dagens Nyheter; Niklas Lundmark, Dagens Nyheter; Tara Moshizi, City Malmö/Lund – SDS; Ulf Mårtensson, Ystads Allehanda; Annika Nilsson, Dagens Nyheter; Caroline Nilsson, Sydsvenskan; Michael Norlund, Expressen; Erik Ohlsson, Dagens Nyheter; Peter J. Olsson, Kvällsposten; Benjamin Peetre, Sydsvenskan; Caroline Persson, Sydsvenskan; Ida Thellenberg, Expressen; and Sara Westberg, DNEX.
External Prizes & Grants:
Albert Bonnier Prize for Business Owner of the Year(Dagens Industri)
Rune Andersson, Mellby Gård AB
Albert Bonnier Stipend Fund for Swedish Authors
Magnus Florin, Birgitta Lillpers, Gabriela Melinescu, Niclas Nilsson and Arne Sundelin
Albert Bonnier Stipend Fund for Young and New Authors
Håkan Anderson, Anna Jörgensdotter and Jerker Virdborg
Expressen’s Per Wendel-pris
Janne Josefsson, SVT
Gerard Bonnier Essay Prize
Horace Engdahl
Gerard Bonnier Poetry Prize
Kennet Klemets
Maria Bonnier Dahlin Foundation Stipends for Current Young Swedish Artists
Paul Fägerskiöld and Jenny Yurshansky
Albert Bonnier Foundation 100th Anniversary
Stipend Fund
Lasse Berg, Henrik Berggren, Aimée Delblanc, Anna Hallberg, Gunnar D. Hansson, Nina Hemmingsson, Björn Kohlström, Anders Olsson and Magnus William-Olsson
Great Journalist Award
Michael Winiarski, Dagens Nyheter; Helena Bengtsson, SVT, Victoria Gaunitz, SR and Kristofer Sjöholm, SVT; Hasse Johansson and Nicke Nordmark, SVT; and Gunnar Bolin, SR
Great Journalist Award, Finland
Kristiina Tolvanen, Aamulehti; Pasi Heikura, Pertti Ylikojola, Anu Heikkinen and Kaisa Pulakka, YLE Radio 1; Leena Sharma, Kaisa Rautaheimo and Riikka Haahti, Suomen Kuvalehti
The Bonnier Award, Estonia
Piret Reiljan, Äripäev
Osterwold Prize of Hörbuch Hamburg
Stefanie Stappenbeck, Matthias Brandt and Hans Scheibner
Prizes & Grants
Prizes & Grants
Was it the economic crisis? Did pirated movies further drain cinema profits? Or did movie companies produce fewer mov-ies audiences wanted to watch? Whatever the reason, ticket sales in the U.S. were down 18 percent compared with 2009, and ticket revenues declined 14 percent from the previous year’s all-time-high of USD 10.7 billion.
Swedish cinema visits also declined compared with 2009, although not as precipitously as in the U.S. However, gross ticket revenues were at the same level as in 2009, which was the result of a growing proportion of movies being shown in 3D – which usually are sold with more expen-sive tickets.
But there are still issues with 3D. There has been a critical and public backlash against filmmakers trying to cash in by adding 3D effects to a 2D movie. Such was the case with Clash of the Titans, even if the movie attracted a large audience. Not all studios are opting for add-on 3D, how-ever. Warner Bros decided not to release the 3D version of Harry Potter and the Deathly Hallows, Part 1, despite earlier re-ports that it would. Instead, 3D likely will be used for the final movie Harry Potter and the Deathly Hallows, Part 2. However, animated films nearly always use 3D nowadays, and some of the most popular movies worldwide in 2010 were animated. Disney/Pixar produced Toy Story 3, which became one of the year’s most acclaimed and highest grossing films. Its competitor Paramount came out with the highly popular How to Train Your Dragon and Shrek Forever After. Universal achieved major commercial success with its animated 3D movie Despicable Me.
While animated family movies and 3D were a universal success, identifying a trend in terms of standard feature films was more challenging. In the U.S., Iron Man 2 became a major public success, grossing more than USD 300 million, while Ridley Scott’s Robin Hood was con-sidered a serious flop at slightly more than USD 100 million. However, in Europe, Robin Hood performed much better than Iron Man 2, proving that universal taste is difficult to pinpoint.
Top Revenues
Box office sales declined somewhat com-pared with 20o9, although 2009 was an unusually strong audience year, bolstered by the success of the Millenium trilogy. However, despite fewer moviegoers, revenues increased and SF Bio reported its best earnings ever for the 2010 fiscal year. The rise in revenues was attribut-able in part to all cities in which SF oper-ates now featuring at least two theaters for showing 3D movies, and in part to a considerable increase in advertising and snack sales.
The interest in 3D movies remains significant and the most viewed movie of the year was Avatar, which debuted during the Christmas season in 2009. Quality, availability and the movie experience have all improved and will have to continue to do so for cinemas to remain the best place to watch mov-ies. To date, SF Bio in Sweden and SF Kino in Norway have succeeded in this objective, but sustaining high moviegoer figures means that movie producers must maintain profitability and continue to deliver movies that attract large and diverse audiences.
AB Svensk Filmindustri (SF) is the Nordic market leader in movie distribution in all the Nordic countries and also produces films in all four markets. Its distribution operations are based on SF annually pro-ducing and co-financing 20-30 local mov-ies, on purchasing films in the interna-tional independent market and on signing distribution agreements with major U.S. movie companies. The single largest movie of 2010 was Avatar, which SF distributed in the Nordic region under a distribution agreement with Fox. During the year, a new distribution agreement was signed with Sony concerning rentals throughout the Nordic region. An agreement was also signed with Warner Bros. regarding box-office distribution in Denmark, Norway and Finland.
Homeenter operates mail-order clubs, pri-marily for film and music, in all the Nordic countries. Declining DVD sales and lower DVD prices have resulted in decreased sales and weaker profit. The Homeenter Group also includes the e-commerce company Discshop, whose growth in 2010 performed below expectations. In 2011, Homeenter and Discshop will be trans-ferred to the SF Bio Group where, together with SF Bio’s video-on-demand opera-tions, they will form the new SF Consumer Entertainment business unit.
During the fiscal year, Bonnier Gaming acquired Soft Capital Investment and its online bingo operations Bertil Bingo.
Entertainment
3D Helps Boost
Movie Industry
With fewer people going to cinemas last year, moviemakers tried to cash in with ever more movies released in 3D. For Bonnier, despite fewer ticket sales, it was still a record-breaking year at the box office.
Companies within Bonnier Entertainment
• SF Bio – Norway and Sweden • SF Anytime – Denmark, Finland,
Norway and Sweden
• Svensk Filmindustri – Denmark, Finland, Norway and Sweden • Homeenter – Denmark, Finland,
Norway and Sweden
• Discshop.se – Finland and Sweden
Net Sales Bonnier Entertainment
MSEK 0 1000 2000 3000 4000 5000 2007 2008 2009 2010
* In 2010, SF Bio’s best-ever year was marked by 3D advances in theaters.
*
Peter Possne believes in following his heart. Not that he ignores his head. “I think it’s important to combine creativity with smart business,” says the longtime producer and founder of Swedish film company Sonet Films. “I always make my final picks for films with my heart,” he says. “Then if I feel strongly about it in my heart, I take the next step and look at it with my brain, from a business perspec-tive as well.”
And Possne says that audiences likewise want something that combines head and heart. His prediction for 2011: “I feel strongly that people today more and more are looking for projects that deal with the question ‘what is life really about?’ – a book, a film, a TV series that discusses this theme in an intelligent, humorous, clever and entertaining way will get an enormous audience.”
When he isn’t traveling – as a producer, he spends a great deal of time on location – Possne is at his offices at Svensk Film-industri in the historic Filmstaden outside Stockholm, where movie luminaries from Greta Garbo to Ingmar Bergman got their start before the sound stages were closed in 1969.
Possne got his own start in movies 25 years ago when then-big Swedish record company Sonet Grammofon asked him to start a new film division from scratch. At that time, most foreign films – not from Hollywood – that Swedes saw were smaller art films, mostly from France, Italy and occasionally the U.K. “It seemed strange to me that Swedes didn’t see more broadly commercial European foreign films,” he says. So he made a decision to import and distribute films
that had been commercially successful abroad, a bet that paid off handsomely. Enough so that within seven years, he had Swedes clamoring for him to distrib-ute their local films as well.
“This quickly branched out into not just distribution but co-producing and eventu-ally, producing,” Possne says. The first film fully produced by Sonet Film was the 1996 Jägarna (The Hunters). A thriller set in the far north of Sweden, Jägarna was a huge hit in Sweden, winning Sweden’s biggest film prize for best supporting actor and best director for the year.
Since then, Possne has had a string of regular commercial and critical successes, including a Best Foreign Film Oscar nomi-nation for the 2004 As It Is In Heaven. “I still have the ticket to the ceremony,” he says, pulling it from his wallet with a bit of amazement six years later. “I feel like I should do something with it but I’m not sure what.”
As a producer, Possne deals with every-thing from the first line in the script to approving the final print. He is responsible for deciding who will write the script and direct it. He also has to find those actors who will work best with the director he’s chosen and to decide who will give the film its visual look and who will write the soundtrack.
Along with the financing of the produc-tions, a big part of the job is giving creative people the support they need to do their jobs. “It’s important to be there for them so that they feel like they are getting 100 percent of your attention even if it’s not actually possible when you are working on so many projects,” he says.
Being a producer is a juggling act, Possne says. “It’s a mentality, either you like it or you don’t, and I’ve always loved having a lot going on at once,” he says. “You get syn-ergies if you have several different projects going on at the same time.”
As for what makes a good movie, Possne says that Sonet Film has always followed the rule that a film must have broad ap-peal but with a high artistic standard, something he keeps in mind as he looks at each script he reads – around 350 a year, which is nearly one a day.
“What the audience wants is to have something unique and new that they don’t understand that they wanted until after they’ve seen it,” Possne says. “Show Me Love and As It Is In Heaven were surprises, unique. And this isn’t just true of movies, it’s true of all popular art, like books and music.”
And Possne is an expert at giving people something they didn’t even know they want: Simple Simon, one of his latest releases, was not only a box-office hit but was nominated by Sweden for the Best Foreign Film Oscar. “It’s always fantastic to get an Oscar nomination,” he says.
Art That Sells
at the Box Office
Sonet Film started out as a distributor of foreign films and has branched out into production. CEO and Producer Peter Possne has been at the helm from the beginning.
Passionate Producer
• Film favorites: Amadeus, Cinema Paradiso, Titanic and The Bridges of Madison County
• Favorite movie theater: Rigoletto on Kungsgatan in the center of Stock-holm. “But only the original theater, not the smaller screens.”
• Advice to a new director, producer or actor: “Always make your choices on what you really love yourself, if you work with projects you don’t like your-self, you’ll fail.”
Over the Hundred Mark
Sonet Film was founded in 1984 and has been owned by Bonnier since 2008. The company has distributed more than 100 films since its founding, many of which it has also produced or co-produced. Its films have received many awards both within as well as outside Sweden, in-cluding the Oscar-nominated As It Is In Heaven from 2004.
Entertainment
* Film producer Peter Possne has produced his share of hits during his 25 years at Sonet Film.
*
The status of daily media is both promis-ing and under pressure. On an interna-tional basis, print publications continue to decline, as is often the case with their profits – although in terms of readership, daily media is reaching more people than ever.
The year 2010 was not as depressing for the daily media as 2009 was. Some figures stabilized along with the economy, and at the end of the day, print editions are the major source of earnings for newspaper companies in this niche.
The pivotal question is: What conclu-sions can we draw from this? Should the business be developed in the hopes of generating considerable gains in, say, ten years? Or should any surpluses be invested in research and development? This will be the major cause of internal conflict at daily media companies in the years ahead.
This sector always follows a few subjects with particular interest and breathless anticipation. For example, how does the New York Times endure? This could per-haps be more of a symbolic question than a relevant point of comparison. Yet some admirers still breathed a sigh of relief when profit for the year rose rather dra-matically, primarily as a result of a strong first quarter. However, the truth is based more on cost controls than on exceptional revenues, although it is noteworthy that advertising in the New York Times Group’s digital channels currently accounts for 25 percent of overall sales.
Apple’s product development is moni-tored with the same degree of fascination. What does the iPad phenomenon mean
for the future of daily media? It may have an impact, but it is certainly not a definitive answer. Yet with the advent of the iPad, it seemed many dailies found a natural channel through which to be digital for the first time in 15 years. The iPad combined a seamless network in which each story could be told regardless of the type of media. This newspaper of the future combined text, images, video, graphics, hyperlinks and interactivity. The iPad won’t be the only tablet plat-form, however.
The news year was overwhelmingly shaped by the massive coverage of WikiLeaks. While the rules of engagement for public disclosure were being rewritten, anyone who was interested in traditional media could confirm an uncomfortable insight hidden in this flow of news: The largest and best newsrooms should al-ready have uncovered this.
To survive in an incredibly exciting and shifting media landscape, publishers must now work hard to preserve and increase the credibility that is ultimately daily media’s greatest asset. New ideas are also needed concerning everything from packaging to pricing, text and photography, and sales and distribution. If it’s true that necessity is the mother of invention, the years ahead will be fantastic.
Rebound Year
For Bonnier’s morning papers, 2010 was a rebound year. A severe advertising crisis was transformed into a promis-ing, profitable finish to the year through reorganization, cost-savings programs and editorial innovations. The year also
concluded with the late launch of the News+ project in the form of digital newspapers for tablets – an interesting future initiative.
If the daily media market was subject to a generally turbulent year, then Dagens Nyheter experienced a mild hurricane, but a positive one. In addition to cost-cutting measures, a number of editorial and advertising initiatives were implemented. This was particularly noticeable through the new supplement DN Världen, and by Michael Winiarski winning the 2010 Great Journalist Award for his reporting from Haiti. The year concluded with the launch of DN+, and an exceptional and historic rise in earnings.
The Sydsvenskan Group also improved its position, primarily during the fall, and managed to recapture part of its lost advertising market. Through continued cost controls and with a new management team at its morning papers in Kristians-tad, Ystad and Trelleborg, important strides were made, including new revenue initiatives. An exciting sign of the future is the digital version for tablets, Sydsven-skan+.
At Bonnier’s printer Bold Printing Group, efforts focused on continued quality and cost-control and efficiency-enhancement actions. The year concluded with a deci-sion to make new investments in printing equipment at DNEX in Akalla, Sweden.
Morning Paper
Big Turnaround for
Daily Newspapers
While newspapers are still facing some subscriber issues and how to get paid for online content, things have taken a turn for the better. For Bonnier’s morning newspapers, 2010 was a rebound year, with flagship Dagens Nyheter making a strong comeback.
Companies within Bonnier Morning Paper
• Dagens Nyheter – Sweden • SDS Group – Sweden
• Bold Printing Group – Sweden
Net Sales Bonnier Morning Paper
MSEK 0 1000 2000 3000 4000 5000 2007 2008 2009 2010
* For Bonnier, 2010 was a rebound year for morning newspapers, with Dagens Nyheter leading the way.
*
In 2010, media companies were chal-lenged by new players who are rewriting the map. Instead of leading online devel-opments, traditional media companies have been forced to follow suit, implement makeshift solutions and incorporate the best ideas into their offerings.
Facebook has continued to emerge as one of the most decisive websites in terms of media consumer’s behavior. Users are no longer only locating digital content through Google: In the U.S., 10 percent of all online time is spent on Facebook, which is more than Google and Yahoo, and the website has 500 million active users worldwide. In the wake of Facebook’s major success, new business models are emerging. In 2010, the company Zynga distinguished itself with such games as Farmville and Mafia Wars, which contributed to Zynga’s estimated sales of over USD 500 million.
In March 2010, Apple launched its iPad reading tablet along with several publica-tions and newspapers.
Although media companies continued to make strong products, reader applications such as Flipboard and Pulse Reader are the most popular. These can be described best as graphic and well-made RSS readers that aggregate content from the reader’s own favorite sources.
However, 2010 should be regarded as more of a birth year than a breakthrough year for the iPad: many projects remain in their infancy (such as Rupert Murdoch’s forthcoming iPad-distributed newspaper the Daily), and while iPad users reached the million mark twice as fast as the iPhone mobile phone, the behavior of iPad users remains undeveloped.
A new term emerged on the digital media landscape: paywall. An increasing number of newspapers locked their material to non-paying customers. Rupert Murdoch’s U.K. newspaper the Times received the most attention this summer when it imple-mented a paywall. According to analysts, traffic to articles fell by 88 percent and it is as yet unclear how much the remaining visitors contributed financially.
During the year, several digital projects made a major impression: WikiLeaks altered the fundamental view of the exclu-sivity of journalistic sources when all of the source material was published on the WikiLeaks website. Groupon emerged as one of the fastest growing online services, where companies pledge discounted goods provided that Groupon gathers a certain number of users. The microblog website Twitter has become an established chan-nel for companies and artists to reach their customers, and the U.S. film-rental company Netflix reached a record-breaking number of Internet-distributed rentals through the use of fixed-rate subscriptions. So, what do WikiLeaks, Groupon, Twitter and Netflix have in common? They were not formed by media companies, but by techni-cians and engineers who accurately identi-fied user’s needs and behaviors. In 2010, it became clear that media companies were faced with an entirely new type of intense competition over the creation of content and attracting target groups. The media landscape simply no longer exclusively com-prises traditional media companies.
New Platforms
At Bink, Bonnier’s common web sales and technology company for the Swedish
operations, work has continued with implementing Bonnier websites onto the EpiServer technical platform. In 2010, both DN.se and di.se were successfully transferred. In addition, some ten sites from Bonnier Tidskrifter were moved. Along with moving the websites onto a common platform, the web sales teams from DN.se, di.se and Bonnier Tidskrifter were moved to Bink in late January 2010 and the complete web sales force is ex-pected to be in place by the end of 2011. In 2010 Bonnier launched its own e-reader, Letto. Following the release, all new Swedish fiction and textbook titles from Bonnierförlagen were published in e-book format and hundreds of titles from the existing catalog were digi-talized. In light of similar international success stories with e-books, the develop-ment and release of Letto was a natural step for Bonnier to take and the launch was a great success.
Bonnier Digital also started up the digital-commerce project Brickmark in 2010. Brickmark will develop digital toys and games for kids on touch-screen devices. The primary target groups will be children aged 0-6, since a touch screen allows them to interact with digital products for the first time. The first products are being developed on the iOS platform for the iPhone and iPad. Even though production and development is in Sweden, the prod-ucts will be launched in early 2011 with a worldwide release.
Digital
Changing Digital
Media Landscape
The digital year 2010 was marked by the launch of the iPad, by the continued rise of social media and by the success of non-media companies in the digital media sphere. For Bonnier Digital, 2010 was about working behind the scenes to improve websites and the launch of a new digital commerce startup.Companies within Bonnier Digital
• Brickmark – Sweden • Bink – Sweden * Characters from Helicopter Taxi,
Brickmark’s first digital toy for kids, available at Apple’s App Store.
*
Definition
Making a product more game-like, such as giving consumers the possibility to “win” something, can have very positive effects regarding engagement and retention. In saturated markets this can become a way to add value to the consumer experi-ence and distinguish one’s product from competitors.
The most famous example of the “gameifi-cation” of products is Nike+. Nike turned exercising into a whole new experience by using simple game mechanics that would measure progress and allow users to challenge friends. These added a new play functionality that became a key driver behind creating what is now the largest running community in the world. The addition of play capabilities can also be a method to give users incentive to change their behavior. Honda encour-ages its Honda Insight drivers to be more economical (and more environmentally friendly) by adjusting the speedometer’s background color to green when the car is being driven in a more fuel-efficient man-ner and a purple-blue color when not.
Implications
It is important to remember that inter-action with the product can have both social and individual dimensions. The sense of achievement when reaching a new level, or the shared experience with other consumers when comparing results, are both strong motivators. Games create their own internal value when played, compelling consumers to finish for the sake of finishing.
Game design elements may also par-tially explain why some seemingly absurd consumer behavior occurs, such as using real money to purchase virtual crops on the Facebook application Farmville. The value for the consumers may not always lie in the content, but in the experience: When there’s a chance to win, to collect, to compete or to just have a bit of fun, users engage more fully with the product, thus valuing that product more.
For the media industry, gameification can mean several new opportunities:
1. Reaching new target groups: A recent Forrester report says European teens now spend more time in total playing games than watching TV. The media industry could create new products that appeal to these users, who may not consume a high level of “traditional” media content today, but are used to playing games, not to mention using other online and social media. 2. Repackaging content: Revamping
content by adding game functionality can create new, engaging products. 3. Creating engagement in between
content delivery periods: Use games to build anticipation and keep up interest between programs and campaigns. 4. Differentiating products: Create a
unique product experience in an other-wise saturated market.
5. Incentivizing media consumption: Allow consumers to compete with friends and build a social reputation within the product based on their con-sumption of media.
Media Trend 2010:
Playfulness
In 2010, Bonnier R&D released its second annual Bonnier Global Media Map, an internal report on trends within the media industry. The report was coordinated by Björn Jeffery, now the director of digital commerce at Brickmark, a part of Bonnier Digital.
One of the 11 trends from the Media Map that continues to be relevant is “playfulness.” So maybe it’s no surprise that Jeffery’s work at Brickmark is focusing on games for kids. Below is an excerpt from the playfulness chapter of the Media Map.
Digital
Playfulness: Case Study
Dunnit! (Done it) is a to-do list applica-tion for the iPhone, priced at USD 4.99. Dunnit! takes productivity a step further by using game mechanics.
By adding social and gaming features, the experience changes from a simple productivity and to-do-list application (of which there are already many) to a game that pits users against their friends to get things done. Dunnit! integrates the gaming high-score system OpenFeint, and players are rewarded points by fin-ishing tasks they create. Players level up by completing tasks and are rewarded with virtual badges and other awards for their accomplishments, such as complet-ing ten tasks within a day. Through Face-book and Twitter integration, players can compare their work-week progress and share their particular accomplishments.
* Björn Jeffery, who coordinated
Bonnier R&D’s Media Map, is turning his research on playfulness into reality at Brickmark
Financial Report Bonnier AB 2010
Financial Report Bonnier AB 2010
* EBITA is the operating profit before capital gains/losses, share of profit/loss in associated compa-nies and goodwill as well as other acquisition-related write-offs and depreciations.
0 2000 4000 6000 8000 10000 Book s Magazine s Broadcasting & Evening Paper Entertainmen
t Business Pres s Morning Paper 0 200 400 600 800 1000 1200 1400 Book s Magazine s Broadcasting & Evening Paper Entertainmen
t Business Pres
s
Morning Paper
Net Sales by Business Area
MSEK
EBITA by Business Area
MSEK
Net sales by business area
SEK M 2010 2009 2008 2007
Bonnier Books 6,265 6,710 5,917 6,314
Bonnier Magazine Group 5,658 5,671 6,202 6,031
Bonnier Broadcasting & Evening Paper 9,978 9,524 7,703 6,979
Bonnier Entertainment 3,828 4,203 3,969 4,019
Bonnier Business Press 1,758 1,866 2,495 2,525
Bonnier Morning Paper 3,405 3,196 3,678 3,787
Other -314 -303 -367 -448
Bonnier AB total 30,578 30,867 29,597 29,207
Operating profits (EBITA*) by business area
SEK M 2010 2009 2008 2007
Bonnier Books 720 710 568 678
Bonnier Magazine Group 155 -13 466 699
Bonnier Broadcasting & Evening Paper 1,260 991 1,374 1,159
Bonnier Entertainment 280 255 251 252
Bonnier Business Press 210 62 194 337
Bonnier Morning Paper 39 -375 -161 38
Other -553 -445 -278 -318
Bonnier AB total 2,111 1,185 2,414 2,845
EBITA* margin
% 2010 2009 2008 2007
Bonnier Books 11.5% 10.6% 9.6% 10.7%
Bonnier Magazine Group 2.7% -0.2% 7.5% 11.6%
Bonnier Broadcasting & Evening Paper 12.6% 10.4% 17.8% 16.6%
Bonnier Entertainment 7.3% 6.1% 6.3% 6.3%
Bonnier Business Press 11.9% 3.3% 7.8% 13.3%
Bonnier Morning Paper 1.1% neg neg 1.0%
Other n/a n/a n/a n/a
Bonnier AB total 6.9% 3.8% 8.2% 9.7% Earnings SEK M 2010 2009 2008 2007 Net sales 30,578 30,867 29,597 29,207 EBITA* 2,111 1,185 2,414 2,845 Operating profit 1,522 212 1,816 2,710
Net financial items -522 -440 -283 -285
Profits after financial items 1,000 -228 1,533 2,425
Profit for the year 711 -381 1,052 1,542
Operating capital
SEK M 2010 2009 2008 2007
Tangible and intangible assets
excluding goodwill 5,420 4,957 5,420 4,944
Working capital 65 -500 -538 -50
Other financial assets 233 193 182 173
Goodwill 9,066 10,982 11,788 8,468
Operating capital 14,784 15,632 16,852 13,535
Net debt 7,207 8,497 8,690 6,691
Shareholders’ equity and minority interests 7,577 7,135 8,162 6,844
Financing of operating capital 14,784 15,632 16,852 13,535
Gearing ratio (Net debt/shareholders’ equity) 0.95 1.19 1.06 0.98 All business areas increased their profits.
Morning Paper improved its EBITA by SEK 414 million, Broadcasting and Eve-ning Paper by SEK 269 million, Magazines by SEK 168 million and Business Press by SEK 148 million. The profits for Entertain-ment increased by SEK 25 million and the cinema division had its best year ever. This was true for Books as well, which hit an all-time high despite a lack of “megas-ellers.”
As of the end of December 2010, share-holders’ equity and minority interests amounted to SEK 7.58 billion, an increase of SEK 442 million. Net debt amounted to SEK 7.21 billion, an improvement of SEK 1.29 billion. Relation of net debt to shareholders’ equity and minority inter-ests (gearing ratio) was 0.95 (1.19).
Books had an EBITA of SEK 720
mil-lion (SEK 710 milmil-lion), the business area’s best result so far. Sales fell slightly due to unfavorable exchange rates. In contrast to 2009, sales in 2010 were not driven by individual bestsellers but by a broad and attractive assortment. Publishing houses within Books increased sales even in shrinking markets. The strong profits were the result of long-term work at improving gross profit margins, primarily within Bonnierförlagen and Bonnier Media Deutschland. Bonnierförlagen had its best year ever, as did its online bookstore Adlibris.
Magazines had nearly the same sales
as the year before. The EBITA was SEK 155 million (SEK -13 million). Bonnier Publications, with operations in the Nor-dic countries and Russia, improved profits primarily due to lower costs – while the Swedish Bonnier Tidskrifter’s improved
results were primarily from higher ad revenues. The U.S. operations, Bonnier Corporation, showed strong improvement as a result of increased ad sales revenues during the second half of the year. Bon-nier’s own Mag+ platform for the iPad was launched and was very well received.
Broadcasting & Evening Paper had a
5 percent increase in net sales. The EBITA was SEK 1.26 billion (SEK 991 million). The main reason for the improvement was better ad sales for TV4 and Expres-sen, with TV4’s ad space completely sold out during the latter part of the year. The Finnish MTV didn’t see the same growth in ad sales as Sweden but showed better results than the previous year.
Entertainment revenues decreased
by 9 percent as a result of lower sales for Svensk Filmindustri and Homeenter. SF Bio continued with strong growth, however. The EBITA for the business area was SEK 280 million (SEK 255 million). The main reason for the improvement was SF Bio, with record results, primarily due to a strong start to the year. The most popular films were Avatar, Harry Potter and the Deadly Hallows, Part 1 and Incep-tion. On the downside, Homeenter had a tough year and reported lowered profits from the previous year because of weak growth in the mail-order clubs. Svensk Filmindustri reported profits at the same level as the previous year.
Business Press revenues shrunk by
6 percent, but when excluding divested operations showed an increase of 2 per-cent. The EBITA was SEK 210 million (SEK 62 million). Ad sales revenues in-creased throughout the year, primarily for Dagens Industri but even for Dagbladet
Børsen, while the ad sales in the Baltic countries continued to be problematic in 2010. Circulation remained stable during the year and the companies continued to have good control over costs. In Decem-ber, Dagens Industri launched Di+, an iPad application on Bonnier’s News+ platform.
Morning Paper increased revenues by
7 percent. The EBITA was SEK 39 million (SEK -375 million). Both circulation and ad sales revenues increased during the year, and the ad sales market’s rebound grew stronger during the second half of 2010. Cost-reduction measures improved the results for the newspapers, and invest-ments were made in converting the print operations within Bold. Along with the business newspapers, morn
