This document discusses the ongoing media revolution brought about by digitalization and the internet. It notes that the changes happening are more rapid than media companies can adapt to. Users now control media consumption through internet-connected devices. Within 10 years, all media will be delivered over IP networks, eliminating print newspapers and magazines. This represents major structural changes and financial challenges for traditional media businesses. Two key challenges are developing new business models and understanding how to survive and prosper in the digital age. The future remains uncertain but some trends are clear, such as increased user engagement and more targeted advertising through user data. Media companies must explore new opportunities through digital innovation and platforms that extract value while growing network size.

1. Media revolution
Some thoughts for reflection
Elvebakken VGS
Mikal Rohde; October 29, 2009

2. We are in the beginning of a digitalized media
revolution. The changes we see will effect all
marketing processes. Change in media
consumption happens more rapid than we are
able to recover
The users takes control, and we have to live
with it

3. ”There will be no media consumption left in 10 years that is not
delivered over an IP network. There will be no newspapers, no
magazines that are delivered in print form.”
Steve Ballmer, CEO Microsoft in Washington Post summer 2008
”Printed news will become occasional luxury items”
Craig Newmark, founder of Craigslist
”The truth is that the newspaper business is still a huge
industry and will be around in one form or another for the rest
of my life”
Chris Anderson, editor in Wired and author of “The Long Tail”
“News is eating itself: needs new media business models for journalism”.
“Search will see its overall share of online ad dollars swell from 45% this
year to 48% in 2009 as other segments slow down.”
Paul Brandshaw, Birmingham City University
3

4. But Google delivers……
4

5. So what will the future bring?
We don’t know!!

6. What do we know…
• Few companies truly understands how to survive and prosper
in the internet age
• The understanding will be key to be able to navigate in a
world that is under constant radically change
• Effective and international free distribution encouraging new
services from new players
• Tagging and tracking users and their interest and behavior will
create customer segment down to one
• The user engagement will create new exiting services
• In the “old days” media decided what the ad cost was. Now
the advertiser decide
• Our ownership models doesn’t work as well

7. Two major challenges in the media business
today
Finance Structural
Media business
collapse changes
7

8. What will be the position after the wave?
8

9. Schibsted
The Economist, August 2006
Schibsted - a worldwide
exception within newspaper
business

10. Not afraid to cannibalize ourselves
Aftenposten vs. Finn - Cars Aftenposten
NOK million FINN
150
120 117
107
90
85 87 90
80
12 29
43 83 95
60 64
96 98 99 93
86
72 68
30 56
44
26 24 22
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 E2006
Aftenposten and FINN charge approximately the same for an ad,
about NOK 200-300
10

11. Online activities’ share of Schibsted’s
operating profit (EBITA1))
Quarterly
Percent
Rolling 12 months average
140
130 131
120
110
100
93
90
80
70 64 66
60 5346 62
50 45
30 43 28 43
40
29 29 2315
30
24
20 20
6 8 13 15
10 1 0
0 2 15
-4
-10 -2
-20
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2002 2003 2004 2005 2006 2007 2008
11
1) Reported EBITA excl. associated companies

12. Split online vs offline revenues and EBITA
NOK million
Revenues
3,448 3,574
3182
3,487 3,359 3,450 3,179 3,622 23% 25% 3536
2,907 25%
2,432 2,497 2,260 2,643 2,557 2,697 16% 18% 20%
20%
20% 24%
10% 12% 13% 15%
7% 9% 9%
77% 75% 75%
93% 91% 91% 90% 88% 87% 85% 84% 82% 80% 80% 80% 76%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2005 2006 2007 2008
Adjusted EBITA 515
443
407 388
345 361
319 47% 322
299
251 245 251 38% 60%
197 41% 51% 224
193 59% 45% 62%
37% 33% 37% 49%
34% 139
57% 62% 53% 88%
59% 51% 49% 41% 55% 38% 40%
66% 63% 67% 63% 43% 109%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2005 2006 2007 2008
Print Online
12
Note: EBITA excluding operating loss from new initiatives and income from associated companies.

13. Not less audience, but different
Daily readers (000) 2047
2000 Total 1985
1912
Paper 1847
Online
1696
1655
1571
1522
1500 1481
1384 1403 1391
1393 1368 1380
1358 1343 1349 1376 1334 1356
1321 1294
1228
1222
1168
Totally we 1062
reach more
1000
people 866
664
537
500
435
364
266
149
81
22
0
97/2 98/2 99/2 00/2 '01/2' '02/2' 03/2' 04/2' 05/2' 06/2' 07/2' 08/2'
Source: Forbruker & Media.

14. Speed of change increasing
Introduction of new technology in USA
120
100
Telephone
80
60
Cable TV
Million Radio
40
users
20
0
Internet
(World Wide
TV Web)
1995
2000
2005
1930
1970
1980
1945
1975
1985
1940
1950
1960
1990
1935
1955
1965
1920
1925
Source: Morgan Stanley, The Internet Advertising Report

15. 7 trends in media consumption
1. From periodic to “just now”
2. Fragmentation
3. Mobility
4. Ego orienting (web 1.0 to 3.0)
5. Demand for speed in development, but not
everything works
6. Modern consumers have “some of each attitudes”
7. Digital overflow creates mental limitation

16. We hope they live forever…
62%
Buyer of
60% newspaper
50%
40% 41%
30%
23% 20%
20%
18% 18%
10%
8%
10%
Under 30 years 30 – 39 years 40 – 49 years Older than 50 years
Part of population

17. Less time reading printed newspaper
…. not only newspaper……

18. US population vs Newspaper readers
350 000 000
300 000 000
250 000 000 Population up 118%
Gap
200 000 000  Working women
 Youth
150 000 000  Single households
 Immigrates
100 000 000  New technology
 Shift in behavior
50 000 000
Daily circulation up 33%
0
1940 1950 1960 1970 1980 1990 2000 2005
Wilkinson INMA 08
18

19. News consumption
Evening News, 1945-1970
6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00
Wilkinson INMA 08
19

20. News consumption change
Morning news, 1970-2000
6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00
Wilkinson INMA 08
20

21. News consumption change
Diversified , 2000->
6:00 7:00 8:00 9:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00
Wilkinson INMA 08
21

22. Increased complexity
Wilkinson INMA 08
22
Source: Mediaedge:CIA

23. Media companies challenge
Disruptive media
Lower revenue
Lower cost
Push New Pull
Editorial Search
Today
Do we have the right
business models to support
High revenue
the new age?
High cost Traditional media

24. Storm, climate change or hurricane?
Print product
New user
New players
habits
Technological Radical
innovation innovation
Economical
down scaling

25. The new Media World!
Top sites US (Alexa):
• Google
• Yahoo
• YouTube
• Facebook
• Live
• msn
• Wikipedia
• Blogger
• MySpace
25

26. Analog vs. digital
Digital reflex camera
Digital camera
Analog camera

27. Readers use the newspaper different today
• Traditional • Today
– General news • Conclusion
– Information • Info in depth
– Last news • Telling a story
• Inspiration
– Kept updated • Relaxing
– Get known • Education
– Common information • Self esteem
– Participate in day to day discussions • Knowledge for analysis
– Daily routine • Individual knowledge
Kilde: NGN prosjektet 2008

28. News as product
• Dictated by production and distribution
• Owned and controlled
• Centralized
• Once a day
• One way
• One message fits all
• Perfection as a standard

29. Network model
• Collaborative
• Not all owned, joint platforms when feasible
• Enabling other to build content to your services
• Extracts minimal value to grow to maximum size
• Critical mass faster, cheaper
• Sharing ad system
• Tailor-make content and distribution systems to be
able to sell content
• Build traffic from other sites

30. Not anymore:
Content was king Consumer/conversation is king
The battle of:
Source: Earl Wilkoinson, INMA

31. Digitalization makes everything possible
• Digitalization is changing the media arena
• General content is “free”
• Aggregation services will grow and new services will be built
on your content
• Advertisers will demand effectiveness for ad spending via
content relevancy – context, geo, behavior and demographics
• New business models will change roles of players
• User habits change
• Business rules change
• New players enter the market
• Not only a technical issue
– Prices, terminals, access and regulation
31

32. What will disruptive technology do?
• Substantial shift in business thinking –threat towards
current business models
• New opportunities – also for the media sector if we
understand what to do for the customers and
advertisers
– New products
– New business models
– New advertising platforms - network
32

33. Basic elements in future media platforms
News
This is where everything happens Classified
Connecting content and behavior TV
Know all about users Phone
Targeted ads and content
Everything will be digitalized
Everything will be accessible
Freedom to choose is huge Different demands
Different needs
Different settings
Type of Access
Access quality
Access price
Black box Access
User
Content

34. Media business model today
Navigation
34

35. A challenge?
35

36. Ad market ahead
• Traditional media channels will be threaten
– Offline to online
– Advertisers demand ROI
– Ads and listings will be sold on action basis
– User knowledge in depth will tailor-made ads
• Revenues will follow traffic, service and users
– Transaction based payment
– The largest traffic and best service win

37. Fase 2
Media & Kommunikasjon

38. This is not a Google presentation, but…..
They have a natural position in the discussion.
Google didn’t build their business based on broken rules,
they established new rules of the new age, that’s what
we have to understand….

39. Factors of Media Use
Technical
revoulution
Ad User
solutions Behavior
Factors
of
Media
Demo and Use Available
Socio Trends Time
Accessibility
Convergence Of
information
IFRA Scenarios of Media Use 39

40. Find customer differentiators

41. Context Driven Business
Content
User
Ads and Context
More content
41

42. Are you willing to pay for content?
You have to offer something different
• Tailor made content
• Exclusive content
• Exclusive distribution
• Your content
42

43. Long tail
Large advertisers One to many
One to one
Small advertisers
Online offer today
New opportunities

44. # 2’s challenge in Europe!
RPM
Google network
!
Alternative network
Time
RPM = revenue per 1000 search

45. What do we need to do?
• Take the Google medicine!
• Create an advertising network based on “the Google
philosophy”
– Build the network strong by;
• Seek local strong partners on traffic
• Build and control the ad system our selves
• Build more intelligent contextual systems for advertisers

46. What do we need?
Distribution - network
Content
Context
Geo
Ad handling system Sales
Demographics
Behavior
Search
Ad format Ad format

47. Examples
And proved a
Tailor maid ad
We analyze the text

48. Helt ny iPhone 3G 16 Gb selges kr 4.000,-
Ulåst i ny forpakning
Litt brukt iPhone 3G 8 Gb selges for kr. 2.000,-
Åpen for alle nett
Content match between product Helt ny iPhone 3G 16 Gb selges kr 4.000,-
Ulåst i ny forpakning
for sale and the cover text in the Litt brukt iPhone 3G 8 Gb selges for kr. 2.000,-
Åpen for alle nett
newspaper

49. Mobile – why will that be the new arena for
ads?
• New technology will provide much more traffic
• All handset providers will follow the Apple way to make
handsets
• Cost of communication will be predictable
• We know where you are
• We know what you do and are interested in
• Everything will be available on the mobile
• We have all kinds of advertisers and messengers to connect to
you

50. The time is now!
Mobile 1.0 Mobile 2.0
Proprietary Standards
Walled Gardens Web Services
First to market Web as a Platform
Brand-centered User-centered
Today
Birth of the mobile 2009
Price High Lower Flat rate
Speed Low Acceptable - High and getting
higher
Content Poor (www) Better (time, place & Good
personalization)
Handset Poor Difficult to use still Good (iphone,
Ericsson X1, etc.)

51. Mobile content usage
In bed
Lunch
Commuting
Commuting Breaks
Breakfast On the sofa
06.00 24.00
Need for a differentiated ad system

52. ”The most obvious large space of
advertising is the mobile internet”
”The next big wave in advertising is
the mobile internet ”
”By these products, the advertising
gets more targeted because phones
are personal ”
”Yes, mobile will be a larger
business than the PC-Web. But it
will take a few years”

53. US Mobile Advertising Revenue
Silicon Alley Insider
Transaction
based ads also
on news sites

54. Different navigations
News aggregator
Content for all news stories,
clustered
Other stories
Persons in the news today

55. New business currency
• User engagement
• New distribution via social medias
• Free distribution

56. 56

57. Largest sites in Norway

58. Desired position
“Returns on scale”
EBITDA margin works for all online
100% verticals?
50-70%
Desired position
30-50%
5-30%
0%
1x 3-5x 8-10x
Size vs second player

59. Learn how to earn money in the structure
59

60. Front pages can do a lot of things but not all
We have to index
the specific content
for monetization
and paid content
e
C e
P C
M P
M
Distance from front page Relative importance of search

61. Web TV viewers – new record
• Aftonbladet’s web TV had more than 1,13 million unique visitors per week
• “Fanthomas” to date had 8.000.000 viewers.
• VG live TV has an average of 250,000 UV per week, an increase with 18% since 2008
61

62. Mobile
What is mobile?
• We have to define our position
in mobile
• Value creation
– Content
– Apps/browser
– Ad network
• How to build successful
services
• Timing
– Handset
– Data traffic

63. Owned vs. outsource
Editorial Ads
Editorial Ads
Production Distribution
Production Distribution

64. Revenue models
• Where is the value?
• Where are the opportunities?
• New open ad network
• New industry networks
• Hyper local networks
• New ad models (behavior, context)
• New measurement

65. Today’s traditional revenue model
Subscriptio
n Ads
50 % 50 %

66. Many new revenue models are needed
For å redigere footer > View >
66
Header and Footer

67. Process for monetization via ad network
Methods Context
Behavior
Geo
Own distribution Demo
Network
Distribution Format
Banner
Text links
Web, mobile, TV
Sale System
Self sale Ad handling
Self service Auction model
Agencies Billing
Flexible usage

68. Alternative models for ad network
Alternative Conclusion Rationale
 Separate activity  Not attractive  To small alone to challenge Google
 Limited profitability individually
 Cost synergies – system and sale
 Cooperation  Recommended solution  Higher revenue per click due to more effective
action and wider distribution
 Large network that will attract more local
distribution
 Give most revenue on short term
 Co-operation with Google  Not attractive
 Not attractive to let the largest competitor to run
our prime business

69. Why should we build our own network?
Online media represent a
substantial inventory
Market - # of searchs
Marked - # søk*) 10-15%
Owners
Control fees and revenue share
Distribution partners
Increased revenue up to Google
level. Be an alternative to Google
Marked - -## sidevisninger**)
Market of page impressions
65-70%
Advertisers
An alternative network for
performance and action based ads

70. The big picture
Distribution
System
Sales
News
Self
Service Directory
Methods
KAM
Direct Bing
System
KAM
Agencies Yahoo
Agencies
Other Classified
Own *)
Sale Other
*) Own sale = sales from independent brands

71. Value creation for an ad network
Main contribution
Relevant web
Gross revenue
traffic
happy advertisers and
distribution partners
Price per click Match rate
Click rate
71

72. Alternative traffic attractiveness
High effectiveness
Search
Directory
Classified
Search oriented
Vertical
Content oriented
Pull portals Push
Vertical
news
News
Communities
Low effectiveness

73. “No content will be sold, if we neglect to offer the buyer a easy
and effective way to pay”

74. E -reader
Who will control this business?
Would you like to own the value chain, or only be a content provider?

75. Content the users are willing to pay for?
• Exclusive and unique articles (if presented well to the user)
– Historical archive, print, pictures and video
– Guides (travel, business)
– Time limited subscriptions (PDF newspaper for a day, football match)
– VOD and POD
– Pictures and other relevant content
• Subscription services
– Fix and recurring subscriptions (PDF newspaper, football video, film channels)
– Payment for e-reader news services (tailor-made content)
– B2B services (new agent)
• On time payment for listing fee
– Listing of items for classified services
• Goods sold
– Books, magazines – on e-reader or as PDF to web
– Music, videos
• All kind of mobile content (alternative to CPA)
75

76. Summary
• Readers worth less (online less than print)
• More competition (All types of channels are challenge your
business with more advanced services and user offers based on
your content)
• Lower cost (New productions are more effective to produce and
distribute. Ads are available with without any sales effort form
several sales network)
• Share some of your platforms (You don’t need to own your own
platform to create traffic and visitors. The marketplace is not
exclusive any more)
• Content will be free (We dream about that users are willing to pay
for content provided. The wide range of producers and contributors
(professional and private) will still do the content free in general.
Unique content or distribution presented as the user will have it will
enable some willingness for payment )

77. Recipe
• Face the challenge
• Get out of the box
• Use the tools for the new age
• Think network economy
• Just do it
…….if you don’t do it, somebody else will do it for you

78. “The best way to predict the future is to create it”

79. Verdikjeden i medieproduksjon
Tekst Papir
Foto Desking Nett
Video Prod system E-bok
Regi Mobil
Research TV
Kreativt Publisering Format
Brukergenerert innhold

80. Utviklingsløp
Basis Kunnskap
(VGS 1)
Forventninger
VGS 3 Fagkunnskap
(VGS 2)
VGS 2 Drift og
fordypning
VGS 1 (VGS 3)
Mål og mening

81. Modell for opplegg
Tekst
Foto/video
Basis Produksjon
Desk
VGS 1 VGS 3
Grunnmur
VGS 2