Mergers, acquisitions, research and development at newspaper companies
October 16, 2008 by marek.miller
Smart media companies are investing millions of Euros on acquiring new digital companies that are expected to grow and provide rich rewards. Companies like News Corporation in the US, Fairfax Media in Australia, Axel Springer in Germany, Telegraaf Media Group in the Netherlands and others, have invested in digital company acquisitions in order to win profits over time. Learn what some other European companies do and how they invest their money.
Frédéric Sitterlé (left), Mirek Kowalski and Philippe Vignon
In the last session of WAN’s World Digital Publishing Conference: Digital Revenue Gold Mine in Amsterdam in October 15-16, 2008 Frédéric Sitterlé, Special Adviser of Figaro Group, France, Mirek Kowalski, Managing Director, MyCity Project, Poland, and Philippe Vignon, CEO Edipresse Digital, Edipresse Publications SA, Switzerland talked about their experience in investing and innovation.
Frédéric Sitterlé
Case study of Le Figaro (France)
Few years ago the Figaro Group had a less than one million audience. While strategic thinking, a specific target was set. Target 2010 meant 20% total turnover of the company coming from online, and a 10 million audience. The target was set in 2005 but was reached 2 years too early. How did they do that?
They looked at online business as a specific and complex ecosystem, where not only the fittest, but the quickest and most adaptive can win. While the changing landscape brings new models, the growing of the companies can only be achieved through innovation. The company took Rupert Murdoch’s words from 2005 (upon purchasing of MySpace) very seriously:
“We need to realize that the next generation of people accessing news and information, whether from newspapers or any other source, have a different set of expectations about the kind of news they will get, including when and how they will get it, where they will get it from, and who they will get it from.”
The publishing competition field is very crowded. As the businesses change, so must the business models. Companies that used to work on different grounds (telcoms, radio, TV, and newspapers) are now direct competitors. Companies compete not only with one another but also with other players from outside the country. The speaker’s guess is that there is not enough room for everyone.
Figaro Group planned its change in 3 steps shift:
- 2006. Exist (created a portal lefigaro.fr with news and services was created)
- 2007. Collaborate (building bridges between digital and print)
- 2008. Disseminate (it is a mixture – nobody knows whether it is print dissiminated in digital or the other way round).
Not all of the acquisitions are branded with Le Figaro. The challenge for the company is to build and maintain the trust that readers have for them.
Content, in Mr. Sitterle’s opinion means nothing without technology. If newspapers will not deliver content, anyone else will, so technology is the key here. It is also not the number of people hired that make a size of the company but the number of users.
MyCity Project (Poland)
Mirek Kowalski
Media Regionalne which manages MyCity Project, is a publisher of regional dailies in Poland. It managed to stay regional while it’s main competitor in Poland, Polskapresse, went national. The company has 3,3 million readers of the printed products, and 2,4 million unique users monthly.
MyCity Project has 10 locations. In 2 locations free weeklies are printed. In other parts of Poland, the project exists only online. The project started in October 2006 in one city – Szczecin. In march 2008 there were 8 online operations and 2 print products already.
MyCity’s main concept is to focus on local communities. Content and ads are geotargetted according to the city districts. There is no national information at all, only local information from cities the projects were started in. It is a platform where citizen and professional journalists not only cooperate but are also treated equally. All of the journalists work online. Most of the staff is very young, between 20 and 25 years old.
The entire project works in three main areas: news, people and places.
MyCity Project allows anybody to download the special MoDo application for free (an application allowing users to publish their content – picture or text – anytime, from their mobile phones). In 2 months the application was downloaded 580 times. Now the application is in its test phase, as only 10% of mobile users in Poland have smart phones, and to that kind of phone is the application dedicated. It proves, that the company is working before the market might emerge.
Last figures from the MyCity project:
- 13368 registered users (10 sites)
- 36773 posted articles
- 23438 places on map
- 1544 blogs
- 12527 posts on blogs
- 187 041 photos
The company spends no money for traditional promotion. According to its philosophy, the newsroom is everywhere, journalists go out to their audience. They engage in educational projects in schools, and prepare workshops on modern journalism.
By the end of the year the company hopes to reach the level of 750.000 unique users and 1,5 million uu by the end of 2009. It predicts it will reach break even point in 2010.
The key findings from MyCity Project are:
- big nation wide advertisers show bigger interest in combination of news and community on the site than for pure community sites.
- district structure of the site is well receied and appreciated on a local level
- topic pages are very welcome by both kind of advertisers.
Edipresse’s troubles with the right strategy
Philippe Vignon
Edipresse works in newspapers magazine and electronic publishing sectors. Edipresse has 3400 employees all over the world. It exists in 15 countries, and its portfolio includes 200 titles and various websites. The flagship newspapers in Switzerland are: Le Matin, LM Dimanche, LM Bleu, Tribune de Geneve, 24 heures. It digital portfolio contains: lematin.ch, tdg.ch, 24heures.ch, plus magazine sites and thematic portals focusing on classifieds. Edipresse also started the first website to collect all classifieds in Switzerland, and addressed another priject to the russian language speaking community – Nasha Gazeta.
The first steps in the digital environment were not easy for Edipresse. It needed 18 months of development time, 3 million euro investment, huge team (70 people: it, editor, supliers) to create 4 newspaper sites full of bugs and errors. That strategy leaded to a dramatic drop in number of unique users, technical team was demoralized, and lacking credibility. The journalists were frustrated as putting content on the web lasted 40 minutes. The sales people were disorientated.
The development was too quick, the wrong CMS was chosen. There was a lack of objectivity in partner selection process.
Luckily, Edipresse’s strategy evolved. The company created a specific in house “digital-web department”. Everyone works together, web became independent from both print editors and IT department. The basic principle became a full in house control of technological platform.
Thanks to the change in its strategy, Edipresse became the leader in digital advertsising in the news segment in Switzerland. The new strategy allowed the company to achieve:
- 16 websites within 9 months
- Company’s budget decreased by 3
- Average traffic increased by 50%
- Improve of ROI (60 pages for 1 euro in 2007, now 360 pages for 1 euro)
- Return of the confidence
Tagged: conference, economics, local journalism, online, strategy, WAN
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