The Future of the Newspaper: multi-media, multi-channel, multi-platform - DDr. Horst Pirker

The Future of the Newspaper: multi-media, multi-channel, multi-platform DDr. Horst Pirker, CEO Styria Medien AG INMA Europe Conference Vienna, 03.10.2008 Horst Pirker A-8010 Graz Schönaugasse 64 Tel. +43 316 8063-1000 E-Mail: horst.pirker@styria.com

Overview 1. Review daily Newspapers 2. New Developments 3. Consequences © Styria Medien AG Page 2

Newspaper Derived from „zidunge“ (west middle German): „News“ Attributes Periodicity Up-to-dateness Universality (variety in terms of content) Publicity (accessibility for everyone) ► Term „Newspaper“ does not include payment coercively. ► „Newspaper“ (News) is not bound to paper or printing. 1. Review Daily Newspapers © Styria Medien AG Page 4

Sold Copies and Reach Germany 1. Review Daily Newspapers © Styria Medien AG Page 5

Circulation and Reach USA 1. Review Daily Newspapers © Styria Medien AG Page 6

U.S. Media market 1. Review Daily Newspapers © Styria Medien AG Page 7

Reach, Media Usage Time & Circulation of Dailies in Germany and USA 1. Review Daily Newspapers © Styria Medien AG Page 8

Media Spending Germany 1995-2007 (Net income in relative terms) Loss of market share of daily newspapers in developed markets However, in absolute figures increase in advertising earnings of daily newspaper Risk of substitution by internet especially in the area of car and real estate- classifieds Source: ZAW 1. Review Daily Newspapers © Styria Medien AG Page 9

Media Spending Germany 1995 – 2007 (Net income in absolute terms, in Mio. €) Source: ZAW 1. Review Daily Newspapers © Styria Medien AG Page 10

Media Spending USA 1995-2007 (In relative und absolute terms) Source: Universal McCann. These U.S. advertising reports represent all expenditures by U.S. advertisers - national, local, private individuals, etc. The expenditures, by medium, include all commissions as well as the art, mechanical and production expenses that are part of the advertising budget for each medium. 1. Review Daily Newspapers © Styria Medien AG Page 11

Laws of Communication Sciences ( Riepl‘s Law) Law of Non-replacement Media never fall into desuetude, but they at the most change in their meaning and function in the society. Law of Need Media occur and only occur as a lasting institution only if a societal need has grown for them. Law of Acceleration New media step on the stage of societal communication in progressively shorter intervals. 1. Review Daily Newspapers © Styria Medien AG Page 12

New Developments: Technique Des- Content Re- Content Integration* Integration** Content and Digitalisation and intermediate medium and original medium (nz≥ 1) final medium Disintegration * by media producer, e.g. User E-Paper ** by media producer or consumer Broadband Hypermedium Internet Weblogs Games Artificial Intelligence Next Generation Media 2. New Developments © Styria Medien AG Page 14

New Developments: Economy Concentration Markets Market Participants Advertiser Advertising agencies Concentration of media Development of Free Newspapers worldwide New Business Models Hybrid Models Reverse Publishing Free Newspapers 2. New Developments © Styria Medien AG Page 15

Stock Price of selected Media Companies New York Times Company Gannett McClatchy Johnston Press Trinity Mirror 2. New Developments © Styria Medien AG Page 16

New Developments: Society Disintermediation Shift of Power Multitasking Always on 2. New Developments © Styria Medien AG Page 17

New Developments: Convergence Convergence of Technique Transmission routes Tools Branches Media (Companies) Content Culture Public and Private Human and Computer Producer and Consumer 2. New Developments © Styria Medien AG Page 18

Consequences for Media Companies 1. Cooperations 2. Mergers 3. Harvest 4. The 3 Lives of Newspapers 5. MMM-Strategy Multimedia Multichannel Multiplattform 6. Newsroom: Integration-Model vs. Separation-Model 3. Consequences © Styria Medien AG Page 20

1/6 Cooperations Source: Vgl. Schildhauer, T. et al. (2005), S. 29 3. Consequences © Styria Medien AG Page 21

2/6 Mergers (Fusions, Joint Ventures und Take Overs) Horizontal vs. Vertical Mergers  Economies of scale vs. homogenous value-added chains and strengthening of independence Substitutive vs. complementary Targets Companies after Mega-Merger very often to slow on dynamic media market (Vivendi, AOL Time Warner, etc.) 3. Consequences © Styria Medien AG Page 22

3/6 Harvest „A stagnant industry‘s market position is harvested by raising prices and lowering quality, trusting that consumers will continue to be attracted by the brand name rather than the substance for which the brand name once stood.“ (M. Porter) 3. Consequences © Styria Medien AG Page 23

4/6 Die 3 Lives of Newspapers: Paid 1. Paid-Newspapers 3. Consequences © Styria Medien AG Page 24

4/6 Die 3 Lives of Newspapers: Hybrid 1. Paid-Newspapers 2. Hybrid Model Manchester Evening News • Established in 1868 • Price: 40 p • For free in city centre, on airports and hospitals since 2006 Le Matin Le Matin bleu • established 1984 • Established 2005 • Paid-Newspaper • Free-Newspaper for younger target group Die Welt Die Welt kompakt • Established 1946 • Established 2004 • Format: Broadsheet • Format: Tabloid • Price: € 1,50-1,80 • Price: € 0,70 • Lower-priced compact newspaper for younger TG 3. Consequences © Styria Medien AG Page 25

4/6 Die 3 Lives of Newspapers: For Free 1. Paid-Newspapers 2. Hybrid Model 3. For free La Razon (Buenos Aires)  Established 1905  For free since 1999 San Francisco Examiner  Established 1865  For free since 2003 The Standard (Hongkong)  Established 1949  For free since 2007 3. Consequences © Styria Medien AG Page 26

5/6 MMM – Multimedia Multichannel Multiplatform Text Pictures Tones Graphs (moved/ unmoved) 3. Consequences © Styria Medien AG Page 27

5/6 MMM – Multimedia Multichannel Multiplatform Physical Distribution Household Delivery Kiosk/ Retail Colportage/ Distributors Distribution Bags Non-Physical Distribution Cabel Satellite UMTS DVB-H GPRS WiFi WiMAX, etc. 3. Consequences © Styria Medien AG Page 28

5/6 MMM – Multimedia Multichannel Multiplatform Various platforms Paper PC Mobile Devices Public Screens, … 3. Consequences © Styria Medien AG Page 29

6/6 Newsroom: Separation-Model vs. Integration-Model Separation-Model : Integration-Model : „Schibsted initially separated its print and online operations because it had no confidence in its newspapers’ ability to try simultaneously to steal competitor’s audiences while preserving market share. Since then, the managers have been impressed with the way the spirit of competition from online has bled into the print side.“ Source: Schibsted Media: Innovation In Action, p. 9 3. Consequences © Styria Medien AG Page 33

6/6 2 different Model - 2 possible Chances of Success Separation-Model : Integration-Model : 3. Consequences © Styria Medien AG Page 34

6/6 The Danger of Integration Digital only Digital only AUDIENCE Double AUDIENCE Double User User Print only Print only *At Schibsted the subset amounts to 5%! Probably it is usefull to build a common newsroom where digital and print sit next to each other in order to exchange ideas, etc. However the print and digital organisations and processes should not be integrated, they should act in an egoistic manner with clear seperation of responsibilities. In this sense the subset of contents is just a by-product or even a „waste-product“. 3. Consequences © Styria Medien AG Page 35

6/6 Content Engine 2 major components (among others): 1. UGC (User generated content) 2. Automatically generated and related content (e.g. silobreaker.com): Automated integration of own, external and individual contents and services for all media and formats. 3. Consequences © Styria Medien AG Page 36

Thank you! Horst Pirker A-8010 Graz Schönaugasse 64 Tel. +43 316 8063-1000 E-Mail: horst.pirker@styria.com

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The Future of the Newspaper: multi-media, multi-channel, multi-platform - DDr. Horst Pirker

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