Eivind Thomsen, (Retired) Senior Vice President, Schibsted ASA, Norway

ISOJAustin; April 1st 2011

Paywalls: Charging for news content. Does it work?

4,9 million people

94% Internet penetration

Daily Newspaper Readership 1,3

111% mobile penetration64% on Facebook

Schibsted 1839 – 1992

Schibsted ForlagenePublishing house

AftenpostenMorning newspaper

Verdens GangEvening newspaper

1839

1860

1966

From newspapers and books in Norway to an European media group

“We shall become the leading media company in Scandinavia”

*1994

# employees # countries revenues result

2 1001

3 billNOK

0.3 billNOK

111 newspapers1983 – 2009111 newspapers1983 – 2017

6

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Only paper version Both Only online version

2,069

Daily readership (‘000) Daily readership (‘000)

980(47%)

506(24%)

583(28%)

Source: TNS Gallup, Orvesto¹ From 2007 from Internet survey

Innovative approach to online news publishing

Increasing reach of our strong media houses

1999

2000

2001

2002

2003

2004

2005

2006

2007

¹

2008

¹

2009

Only paper version Both Only online version

2,442

1,250(51%)

299(12%)

893(37%)

7

Schibsted sites generate close to 28% of top 20 traffic in Norway

Schibsted sites generate close to 25% of top 20 traffic in Sweden

Unique weekly visitors (m) Change Y/Y

1. 3.7 19%

2. MSN 2.9 26%

3. Startsiden 2.2 16%

4. Dagbladet.no 2.2 7%

5. NRK 1.9 27%

6. 1.8 20%

9. 1.1 10%

17. 0.6 20%

Unique weekly visitors (m) Change Y/Y

1. MSN network 9.4 32%

2. 4.9 20%

3. 3.3 14%

4. Eniro.se 3.0 7%

5. 2.6 4%

18. E24.se 0.8 -

19. SvD.se 0.8 33%

20. Prisjakt.nu 0.7 17%

Source: TNS Gallup, KiaindexNote: Week 50 of 2009

Schibsted’s superior online traffic positions enable rapid and efficient launch of new concepts (e.g. Nettby, E24)

Schibsted’s properties

The most used online sites in Norway and Sweden

Note: percentages based on online and offline businesses’ contribution to revenues in FY2002 and last twelve months as of Q3 2010; online revenues in FY2002 include online newspapers and FINN ¹ Excluding corporate costs and eliminations

Schibsted’s online activities represents 30% of Group revenues and 53%¹ of Group EBITA

today

Online 30%

Offline 70%

in 2002

Online 3%

Offline 97%

Unique position – strong online footprint

8

Revenue split

Media Houses on-line7%

Media Houses off-line adver-

tising25%

Media Houses

circulation35%

Media Houses

other11%

Online classifieds

23%

Total revenue Q3 2010 MNOK 3,288

Unique position – strong online footprint

The Washington Post Co.

E.W. Scripps

Gannett

NY Times

INM

DMGT

Johnston Press

Trinity Mirror

MecomAxel Springer

Schibsted

-5 % 0 % 5 % 10 % 15 % 20 % 25 % 30 %

Europe

USA

Digital/online share of revenues 2009

”Schibsted is now the global No. 3 in online classifieds, behind eBay and Craigslist”

Bloomberg Business Week, October 2010

One of the global leaders in Online classifieds

2,008 2,009 2,010 -

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Unike brukere VG Nett, snitt pr uke sommer

+420 000+120 000

2,008 2,009 2,010 0

50000100000150000200000250000300000350000400000

Unike bruker VG Mobil, snitt uke pr sommer

+215 000

Snitt 09 Snitt 10 -

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

MobilNett

+ 340 000

We observe an altered traffic pattern moving from net to mobile – facilitated of iPhone and other smartphones

Source: Uke 25 -31, TNS Gallup Metrix/Scores

From desktop to mobileAverage weekly UV VG Nett Average weekly UV VG Mobil

Average 2009 Average 2010

What consumers will expect

Always-On Access with Super-Fast ‘Boot Time’

Near Zero Latency Access to Nearly All Information

Day-Long-Plus Battery Life in Elegant Portable Devices

Source: Morgan Stanley Internet Trends Report

Consumption throughout the day: PC, iPhone and iPadVG Nett Monday - Thursday

Evening consumption is so far dominating the iPad usage12

am 1am

2am

3am

4am

5am

6am

7am

8am

9am

10am

11am

12pm 1p

m2p

m3p

m4p

m5p

m6p

m7p

m8p

m9p

m10

pm11

pm

0.0 %

2.0 %

4.0 %

6.0 %

8.0 %

10.0 %

12.0 %

iPadNettiPhone

Succeeding in creating multiple revenue streams is key for the future of our journalistic ambition

Online News product needs increased journalistic resources to sustain brand equity

The Online Advertising Boom scenario might not be enough to create profit with increased cost

New revenue streams needed to: - Close the gap and create profitability - Hedge the volatile advertising market

VG.no and Aftonbladet.se’s multiple revenue streams management key success factors

Segment leadership

Broad reachStrong brand

Cost control

Loyal traffic

Combined, we are facing dramatic increase in operations and revenue streams complexity

Music industry's learning Online News industry’s lesson

• 115 different products

• 19 million units

• CD sales constitutes 20% of total revenues

• Push a hit in all channels and formats

• As fast as possible!

Tomorrow; Several smaller revenue streams

User payment

Online Advertising

Mobile Advertising

Web-TV advertising

Print Subscriptions & single copy sales

Print Advertising

Related Services

Etc…

Yesterday; Few huge value buckets

Print Subscriptions & single copy sales

Print Advertising

Online Advertising

Parts of the user payment adoption probably lies in the packaging of content on mobile devices

Full accessibility, strong brand and offering premium experiences are all important areas driving willingness to pay

Hamburger Abendblatt

• www.Abendblatt.de

- iPad 8x3

Access to National and International news is free, access to unique regional and local content is behind paywall.

TV Guide for iPad launched in app store September 1st.

ONLINE SUBSCRIPTION – AFTONBLADET PLUS

BEST SELLERS:•ARTICLE ABOUT HEALTH AND WELL BEING•TRAVEL GUIDES•LISTINGS - TAXATION ETC.•TESTS: EVERYTHING FROM CARS .. TO SHAVERS ...

115,000SUBSCRIBERS

5$/MONTH

MICRO PAYMENT

PIECE BY PIECEANOTHER WAY OF BUYING OUR PREMIUM CONTENT

QuickTime och enH.264-dekomprimerare

krävs för att kunna se bilden.

PAY PER VIEW

We also sell TV programs and documentaries

Example: Selling National Geographics and Factual TV documentaries. Aftonbladet gets 50% provision.

QuickTime och enH.264-dekomprimerare

krävs för att kunna se bilden.

(Pay) Clubs

WEIGHT CLUB€ 30 –3 MONTHS€ 40–6 MONTHS€ 50–12 MONTHS

380,000

SUBSCRIBERS

SINCE 2003

E-commerce

CUSTOMER FIGURES PREMIUM CONTENT

PREMIUM JOURNALISTIC 55%

11%E-COMMERCE

34% CLUBS

20% AFTONBLADETS ONLINE REVENUES ARE USER REVENUES

PAYMENT MODELSCLUBSSEK XX

BASE PLUS SEK XX

FREE MATERIAL

PREMIUMPLUS SEK XX

NewsLifestyle

Charles Darwin

”It is not the strongest of the species that survive, nor the most intelligent,

but the one most responsive to change.”

‘Survival of the fittest’

Thanks for your attention….