63rd WORLD NEWSPAPER CONGRESS   Session: Finance   Titel: How do we get through the next crisis   Speaker: Gregor Waller  ...
How	  do	  we	  get	  through	  	         the	  next	  crisis	                                	                      Some	...
The	  double	  dip	  “monster”	  (recession)	  that	  will	  hit	  the	  world	  economy	  2012	  will	      bring	  Europ...
2012 the „2. Exitus“ will begin:Discerning the “prepared” potential winners of the Digital Trans-formation from the “passi...
Take Over Targets 1: How to identify newspapers with bad management1.	  LiUle	  RESTRUC-­‐                       •  Li_le	...
Take Over Targets 2: Newspapers with pure advertising based digital business models are „easy prey“ for investors leveragi...
If today we had the market penetration of tablets we will have in 5 to 10                                       years, no ...
Next Steps?                                                 •    Work	  out	  Digital	  Strategy	                         ...
Thank you for your kind attention! Gregor	  Waller	   Digital	  Age	  Consul7ng	  /	  Entrepreneur	   	   Associated	  Pri...
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World Newspaper Congress 11: Session Finance, Gregor Waller

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Transcript of "World Newspaper Congress 11: Session Finance, Gregor Waller"

  1. 1. 63rd WORLD NEWSPAPER CONGRESS Session: Finance Titel: How do we get through the next crisis Speaker: Gregor Waller Mark your calendar64th WORLD NEWSPAPER CONGRESS19th WORLD EDITORS FORUM Vienna, Reed Messe Wien www.wan-ifra.org/kiev2012
  2. 2. How  do  we  get  through     the  next  crisis     Some  Landmarks         Gregor  Waller    Consultant  and    Entrepreneur    Principal  Consultant  at  Frenemies  Consul7ng,  a  WAN-­‐IFRA  ac7vity     www.wan-­‐ifra.org  
  3. 3. The  double  dip  “monster”  (recession)  that  will  hit  the  world  economy  2012  will   bring  Europe’s  newspaper  publishers  in  the  red  figures*  –  it  even  can  get  worse   Large  Newspapers  >200k   Midsize  Newspap.  >  100k   Local  Newspapers  <50k   -­‐20%   -­‐40%   -­‐20%   -­‐30%   -­‐40%   -­‐5%  REVENUES   -­‐30%   -­‐10%   -­‐5%   -­‐30%   -­‐5%   -­‐10%   -­‐10%   -­‐30%   -­‐10%   -­‐10%   -­‐10%   -­‐10%   -­‐10%   -­‐10%   -­‐1%   -­‐2%   -­‐3%   -­‐4%   -­‐1%   -­‐2%   -­‐3%   -­‐1%   -­‐2%   -­‐3%   -­‐4%   -­‐4%   2011   2012   2013   2014   2015   2011   2012   2013   2014   2015   2011   2012   2013   2014   2015  EBITDA   CirculaIon   Display  Ads   Classified  Ads   *  Average  of  4  newspapers  in  each  class   WAN-­‐IFRA  Finance  Session  -­‐  Thesis*     2011-­‐10-­‐14   2    
  4. 4. 2012 the „2. Exitus“ will begin:Discerning the “prepared” potential winners of the Digital Trans-formation from the “passive” stakeholders “at print speed” Unable  for  challenges  of     PotenIal  Winner  of  the   Digital  TransformaIon   Digital  TransformaIon   §  Focus  on  dividends/noninvest   §  Commi_ed  to  a  Ime  of  invest   Shareholders   §  No  cooperaIon  with  dislikes   §  Digital  in  all  top  posiIons   suitable  for  financing  the   §  AUachment  to  CE,  CEO,  long-­‐ §  OK  to  deep  cut  layoffs   transi7on  into  the  Digital  Age   term  companions  (legacy)     §  OK  to  „digital  overhead“   §  Avoidance  of  cannibalizaIon   §  All  “Head-­‐of”  must  be  digital   Top  Management   §  No  digital  experiment  budget   §  Best  PracIce  Restructuring   capable  of  managing  the   §  „Passive“  digitza7on  approach   §  Coop-­‐Network  with  publishers   transi7on  into  the  Digital  Age   §  No  digital  restructuring  plans   §  Digital  Think  Tank   Editors  in  Chief   §  No  evaluaIon  of  digital  editor   §  Digital  all-­‐channel  workflow   willing  and  capable  of   §  No  best  pracIce  learning  trip   §  Customer  &  compeIIon  focus   transforming  a  „print-­‐culture“   §  I  hire  a  digital  deputy  chief  ed.   §  „get  digital  or  get  out“   editorial  in  a  digital  editorial   §  Conference  @  10  –  no  metrics   §  Commercial  whilst  integrity   2011-­‐10-­‐14   WAN-­‐IFRA  Finance  Session  -­‐  Thesis   3  
  5. 5. Take Over Targets 1: How to identify newspapers with bad management1.  LiUle  RESTRUC-­‐ •  Li_le  or  no  significant  RSTRUCTURING  PROJECTS  in  the  past  5-­‐7  years  TURING  in  the  past   •  No  /  li_le  BENCHMARK  PROJECTS  in  the  past  5-­‐7  years  2.  No  clear  DIGITAL   •  No  DIGITAL  STRATEGY  FOCUSSING  company  ac7vi7es  into  the  Digital  Age  STRATEGY  executed   •  Li_le  /  No  EXPERIMENTING  with  KEY  ELEMENTS  of  media  Digital  Strategy  3.  No  vision  for   •  Editor-­‐in-­‐chief  is  NOT  the  DRIVER  of  the  digital  transforma7on    DIGITAL  EDITORIAL   •  No  CRITICAL  MASS  of  20%  DIGITAL  EDITORS  4.  No  DIGITAL  edi-­‐ •  NEWSROOM  &  WORKFLOW  do  not  allow  to  serve  ALL  digital  channels  torial  WORKFLOW   •  Editorial  has  no  strategic  CONTENT  PLANNING  strategy  –  linked  to  online  5.  No  DIGITAL  PRO-­‐ •  Digital  Product  Diversity  is  neither  strategized  nor  implemented  DUCT  STRATEGY   •  Paid/Free  Content  debate  is  not  decided  6.  No  DIGITAL   •  No  ACTIVE  SALES  FORCE–  integra7ng  digital  products  &  know  how  SALES  know-­‐how   •  “Space”  selling  rather  than  SOLUTION,  TARGET  GROUP  selling   2011-­‐10-­‐14   WAN-­‐IFRA  Finance  Session  -­‐  Thesis   4  
  6. 6. Take Over Targets 2: Newspapers with pure advertising based digital business models are „easy prey“ for investors leveraging targets via Paid Content BUY  ANY  „FREE-­‐PHILOSOPHY“  newspaper  &  LEVERAGE  it     Paid  Content  works   by  over  100%  by  introducing  a  smart  PAID  CONTENT  model   2012   2022   Free   Paid  Cont.   Free   Paid  Cont.   #  of  free  apps   30,000   -­‐-­‐-­‐   300,000   -­‐-­‐-­‐   #  paid  apps  (15%  of  free)   -­‐-­‐-­‐   4,500   -­‐-­‐-­‐   45,000   Abendbla_.de  7,95  €/mo     &  Morgenpost.de  5,95  €/mo   CPM/month  (30  views)   100  €   100  €   50  €   50  €  week   week   week   week   week   week   week  51/09   10/10   20/10   30/10   40/10   01/11   13/11   Digital  ad  revenues   1,08  m€   0,16  m€   5,4  m€   0,81  m€   Price/month   -­‐-­‐-­‐   15,99  €   -­‐-­‐-­‐   24,99  €     120.000  subs  3,99  €/mo   Paid  Content  revenues   -­‐-­‐-­‐   0,73  m  €   -­‐-­‐-­‐   11,34  m  €   OVERALL  REVENUES  p.a.   1,08  m€   0,89  m€   5,4  m€   12,15  m€     244.000  subs  15  $/month   >  100%   2011-­‐10-­‐14   WAN-­‐IFRA  Finance  Session  -­‐  Thesis   5  
  7. 7. If today we had the market penetration of tablets we will have in 5 to 10 years, no western newspaper CFO would give an OK to a new print plant with circulation dropping at least 50% in the next 10 years. Output (mio sheets) 4.000 3.000 2.000 1.500 1.000 Salaries (m€) 200 m€ 200 m€ 200 m€ 200 m€ 200 m€ Invest (m€) 30 m€ 30 m€ 30 m€ 30 m€ 30 m€ 100%   Variable cost/sheet (10 ct) 800 m€ 600 m€ 400 m€ 300 m€ 200 m€ Total cost of ownership 1.030 m€ 830 m€ 630 m€ 530 m€ 430 m€ Cost per sheet 0,26 € 0,28 € 0,32 € 0,35 € 0,43 € Progressive Preissteigerung 22% 28% 37% AmorIzaIon  period  20-­‐28  years   50%  Total  Cost  of  ownership   40%   50  cent   80  cent   130  cent   200  cent   Printed   sheets   2011-­‐10-­‐14   WAN-­‐IFRA  Finance  Session  -­‐  Thesis   6  
  8. 8. Next Steps? •  Work  out  Digital  Strategy   •  Work  out  a  Restructuring  plan  and  project   •  Work  out  Transforma7on  Cost  1.  Shareholders   •  Get  an  o.k.  to  cooperate  with  other  newspapers   •  Do  a  manager  appraisal   •  Discuss  the  key  necessity  of  an  editor-­‐in-­‐chief  truly  understanding  digital   •  Found  a  joint  M&A  unit  2.  CooperaIon-­‐ •  Found  a  joint  IT-­‐unit  (backend  IT  &  produc7ve  IT)  Network   •  Found  a  joint  service  unit   •  Work  out  your  Digital  Strategy   •  Scope  and  Cost  of  Transforma7on   •  Shareholder  ok  to  Digital  Strategy  &  Digital  Transforma7on  3.  Steps   •  If  “no”  –  convince  them  to  sell  NOW     •  Pimp  the  bride  (execute  restructuring)  –  you  have  to  do  it  anyway   •  Look  for  investors  that  understand  both  the  opportuni7es  of  the  Digital   Transforma7on  and  the  “7me  to  invest”   2011-­‐10-­‐14   WAN-­‐IFRA  Finance  Session  -­‐  Thesis   7  
  9. 9. Thank you for your kind attention! Gregor  Waller   Digital  Age  Consul7ng  /  Entrepreneur     Associated  Principal  Consultant     Frenemies  Consul7ng,  a  WAN-­‐IFRA  ac7vity     Digital  Age  ConsulIng   Hoeltystrasse  17   22085  Hamburg   Germany   Phone:  +  49  160  90.410.654   eMail:  waller.gregor@googlemail.com   Twi_er:  wallergreg  2011-­‐10-­‐14   WAN-­‐IFRA  Finance  Session  -­‐  Thesis   8  
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