Alma Media’s business segments
Alma Regional Media and IL-Media, which was reported under the name Iltalehti until March 2013, are reported as part of the Newspapers segment. Alma Regional Media includes all regional and local newspapers published by Alma Media. In 2013, this comprised over 30 Finnish newspapers and their online services. IL-Media’s consumer products include Iltalehti, Iltalehti.fi, IL-TV, Ilona and theme supplements.
Kauppalehti Group specialises in producing business and financial information as well as in providing marketing solutions in Finland. In addition to the business paper Kauppalehti, the Group includes Kauppalehti Information Services, the custom media and communications house Alma 360 and the news agency and media monitoring unit BNS Group, which operates in the Baltic countries. Starting from the beginning of 2013, the digital business premises service Objektvision.se has been reported under the Kauppalehti Group.
Digital Consumer Services includes Marketplaces and Alma Diverso.
Marketplaces comprises Alma Media’s digital classified advertising services. Classified advertising is focused on three main sectors: housing (Etuovi.com, Vuokraovi.com and City24), recruitment (LMC, Monster.fi, CV Online, Jobs.cz, Prace.cz, Topjobs.sk, Profesia.sk and MojPosao.net) and cars (Autotalli.com). Marketplaces also includes the MyyjaOsta.com online service. In 2013, Alma Media sold the heavy machinery and vehicles marketplace Mascus, which was previously reported under Digital Consumer Services. Objektvision.se, an online service for advertising business premises that was part of the Marketplaces segment in 2012, was transferred to the Kauppalehti Group at the beginning of 2013.
The Alma Diverso business unit includes digital consumer and marketing services. The consumer services comprises Telkku.com, Kotikokki.net and E-kontakti.fi The marketing services aimed at businesses consist of Almascope as well as Meedio, which will be launched in early 2014. In addition to managing its consumer services, Alma Diverso supports the digital service development of all Alma Media units.
The Other operations segment reports on Alma Manu and the operations of the parent company. Alma Manu is responsible for Alma Media’s printing and distribution operations. The Group’s support functions, such as human resources management, financial administration and ICT administration are consolidated in the parent company. The role of the Other operations segment is primarily to support Alma Media’s other segments.
The weak economic situation in Finland and Europe, along with structural changes in advertising and media consumption, continued to have an effect on the Newspapers segment’s revenue in 2013. The segment’s revenue declined to MEUR 185.6 (206.6).
The segment responded to the accelerating movement of advertisers and consumers from traditional media to digital channels with a strong focus on the development of paid online content and digital services.
Content revenue and advertising sales for print media continued to decline in 2013. The Newspapers segment’s advertising sales totalled MEUR 83.9 (98.0), down 14.4%. Advertising sales for print media decreased by 17.3%, but online advertising sales grew by 7.6%, amounting to MEUR 12.1 (11.3). The segment’s content revenue was MEUR 98.5 (105.3), down 6.5 per cent.
Alma Regional Media responded to the decline in profitability caused by structural changes in media consumption in 2013 by focusing particularly on the development of paid content for electronic channels, as well as the improvement of digital services. The business unit also clarified the pricing of print and digital newspapers and increased efficiency by consolidating the content production of newspapers.
Alma Media’s regional newspapers clarified their subscription pricing by adopting monthly pricing for all subscriptions from the beginning of June. With the pricing change, they also became the first newspapers in Finland to discontinue charging additional fees for paying by instalment. The reasons for the change include the need to clarify prices as well as changes in consumer behaviour and subscribers’ desire to pay for their newspaper subscriptions in shorter periods. The growth in the popularity of digital subscriptions was taken into account by adopting consistent pricing for the digi+ service, which includes the digital edition and archive, for all subscription types.
Alma Regional Media continued to develop paid content solutions for online content published via its newspapers’ digital channels. The goal is to implement paywalls for all subscription-based online content by the end of 2015. Online content has already been put entirely behind a paywall at Raahen Seutu and Pyhäjokiseutu in summer 2013. Pohjolan Sanomat and Aamulehti implemented a partial paywall at the beginning of 2014 and Kainuun Sanomat will implement in March 2014 under the premium content principle.
The opportunities presented by digital development were also investigated in sparsely populated areas in Northern Finland. In April–May, Alma Regional Media carried out a tablet pilot in partnership with Lapin Kansa, offering people in sparsely populated areas in Lapland a tablet device and the digital edition of Lapin Kansa for a six-week trial period. The aim of the pilot was to assess the perceptions of customers in Lapland regarding the digital newspaper and to determine whether the digital newspaper could offer better and faster delivery of news to those living in sparsely populated areas. The results of the pilot were positive, with the participants finding that reading the newspaper on a digital device first thing in the morning was an improvement over receiving the print edition later in the day.
As part of its expansion of digital services, Alma Regional Media launched the Yourlapland.com website in January 2013. The service, which utilises social media tools, is aimed at tourists and provides information on and news from Lapland.
The structural reform Alma Regional Media carried out in 2012 resulted in savings in 2013. The structural reforms were aimed at increasing cooperation while eliminating duplications of effort. The most significant operational change was the partial consolidation of content production, which began immediately after the business unit was formed.
Another initiative aimed at improving the efficiency of operations was the content and development cooperation with Ilkka Group, Kaleva and Turun Sanomat, which started at the beginning of 2013. In the beginning of 2014, Alma Media and five other Finnish publishers signed a letter of intent, planning to significantly expand their journalistic cooperation and establish a company called Lännen Media. The aim of the company is to provide shared content for all the participating newspapers, Aamulehti, Satakunnan Kansa, Lapin Kansa, Kainuun Sanomat, Pohjolan Sanomat, Turun Sanomat, Kaleva, Ilkka, Pohjalainen, Hämeen Sanomat, Forssan Lehti and Keskipohjanmaa. Lännen Media’s objective is to improve the journalistic quality of the newspapers involved, increase operational efficiency, expedit development measures and increase editorial reciprocity.
The Aamulehti tabloid project launched in 2013 is also aimed at increasing operational advantages in content production, with the newspaper shifting to the same tabloid format used by other regional newspapers in April 2014. The shift to the tabloid format will also see the newspaper’s content structure and story types changing. The views and opinions of readers will be increasingly highlighted, which will result in more social or communal journalism. Read more about the tabloid reform.
In addition, Pohjolan Sanomat carried out a structural reform at the beginning of 2014 that saw the newspaper shift its print edition from a seven-day to a five-day publication. The structural reform also included an expansion of the newspaper’s paid online content.
Other changes related to newspapers included the acquisition of Lounais-Lappi, a town paper published in the Kemi-Tornio area, from the Kaleva Group subsidiary Forum24 Oy. The newspaper was acquired to complement Alma Regional Media’s offering in the Sea Lapland area.
IL-Media redesigned the Iltalehti print edition and continued the development of online services
The Iltalehti business unit changed its name to IL-Media at the turn of March–April 2013. The reasons for the name change included rapid growth in digital business operations, the content-based divergence of products and new media sales products. In addition to adopting a new name, IL-Media took several other development steps in 2013.
In 2013, the Newspapers segment’s online advertising sales increased by 7.6 per cent to MEUR 12.1 (11.3). Online business accounted for 6.9 per cent (5.6%) of the segment’s revenue.The growth in online business was reflected in IL-Media in the development of mobile applications and online services. The Iltalehti mobile website quadrupled its number of visitors during the year. Read more.
In media sales, IL-Media and Kauppalehti increased their cooperation and improved the efficiency of operations by implementing a new media sales system to harmonise sales workflow between the units.
Iltalehti also carried out a redesign and content renewal process aimed at providing even better service to readers. Going forward, the print edition will offer slower reads and in-depth articles, while the online edition will be focused on quicker, more modern and more diverse content. Iltalehti also launched the new Fiidi.fi service that publishes articles that are popular in social media, which readers can then share in their own networks. The successful launch has resulted in an average of 400,000 unique visitors a week. In June, Iltalehti launched a new digital edition, Iltalehti Plus, which offers more updated information compared to the previous digital edition.
For Kauppalehti Group, 2013 was a year characterised by strong development and growth in digital media, which is also reflected in the segment’s result. The revenue for the full year 2013 of the Kauppalehti Group was MEUR 56.8 (59.0), of which online business accounted for 33.4 (29.0) per cent. Revenue decreased by 3.7 per cent from the previous year. The segment reached an important milestone in the third quarter as the increase in Kauppalehti’s digital content sales exceeded the fall in print media content sales for the first time.
Growth through digital content
Kauppalehti’s income from digital content increased by 22.1 per cent, and online advertising sales increased by 10.9 per cent. Content revenue for print media decreased by 5.1 per cent.
During the year, Kauppalehti launched a digital media development project to redesign content, subscription products and media sales opportunities. Kauppalehti also launched mobile applications that make it easier to follow news streams and made changes to its advertising locations and pricing logic. Mobile products saw rapid growth. For example, the Kauppalehti Windows Phone application launched in January was downloaded over 7,500 times in the first week, and by the end of the year the application was used in more than 100 000 devices. In May, the user management service of the online services was renewed.
In addition to investing in the growth of digital business, Kauppalehti also focused on print media. The newspaper’s competitiveness was improved by, among other things, making adjustments to the pricing of print advertising.
Kauppalehti Information Services continued to grow in 2013. The unit launched new online services, such as a procurement search and a map service. The procurement search allows customers to search for public sector procurement announcements. The new map service for property searches offers property location functionality and other features that simplify the use of property information.
The Kauppalehti Group’s custom media and communications house Alma 360 developed its multimedia offering in 2013. Alma 360 signed several new partnership agreements during the year, and its products also received publication industry awards. The unit began multichannel partnerships with customers including the Finnish Association of Business School Graduates SEFE and the state alcohol company Alko.
The increasing importance of video was a particularly noteworthy trend in the demand for multichannel content. The rapid growth in online television is also reflected in the operations of Alma 360, with the unit establishing its own video desk in 2013 to ensure efficient video production and competence development. Read more on the future of video.
Digital Consumer Services
The Digital Consumer Services segment, which leads the way in Alma Media’s digital development, continued to grow in 2013. The segment’s revenue reached MEUR 55.9 (54.5), up 2.6 per cent. The acquisitions of online recruitment services outside Finland completed in 2012 supported the segment’s growth.
The Digital Consumer Services segment’s Marketplaces business unit continued to grow despite the weak economic situation in Finland and Europe.
The recruitment business accounted for 58.3 (49.8) per cent of the segment’s revenue in 2013.
Synergies between different operations in the recruitment business were increased by sharing expertise and taking advantage of various recruitment-related added-value services. Tools were also developed to better meet the needs of employers and jobseekers. One such example was the implementation of video interviews by Monster.fi. The Czech-based LMC launched the Teamio human resource management application for small businesses, and the use of the application is currently being tested in Finland as well.
In late 2013, Alma Media announced it would expand its recruitment business cooperation with Monster Worldwide Inc. The expansion of the cooperation added Monster’s services to Alma Media’s recruitment service offering, which is available in Finland, Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary and Croatia. The business is managed by Alma Career Oy, a joint venture between Alma Media and Monster that began operations in January 2014. Alma Media’s existing services will continue to operate under their familiar brands and technologies, but they may make use of Monster’s technologies, service concepts and sales network in selected markets.
In the second quarter of the year, the Marketplaces unit divested two marketplaces outside of its core business. The company sold the Slovakian used car marketplace Autovia.sk and the heavy machinery and vehicles marketplace Mascus. Going forward, Alma Media will focus on recruitment and housing portals in its international marketplaces business.
Housing-related services remained successful in 2013. In Finland, the Etuovi.com service succeeded in improving its profitability compared to the previous year despite the slow cycle in the home sales market in Finland. The unit continued its active development of new businesses and launched the Sisustusovi.com online service as part of a comprehensive housing service. Sisustusovi.com offers interior decoration ideas as well as interior decoration services for sale. The focus of service development for Etuovi.com in 2013 was on new business development, but also on the improvement of customer satisfaction among real estate agents and the renewal of the Etuovi.com application platform. Read more on what’s new at Etuovi.com.
The Alma Diverso business unit sought growth by renewing its existing online services and focusing on the development of tools that facilitate easier purchasing of digital advertising.
Telkku.com continued to develop its Nauhuri recording service and grew its offering of new advertising solutions to its partners. The structure and tools on the Kotikokki.net service were also renewed. In addition, Kotikokki.net began a partnership in 2013 with Neljän Ruoka Oy and launched a new service called Kotikokin Ruokakassi (Home Chef’s Grocery Bag). The service allows consumers to order a full week’s dinners delivered right to their doorstep. Read more.
In 2013, Alma Diverso also developed its services in the rapidly growing field of network advertising. In the latter part of the year, the unit worked on a new marketing service for self-service purchasing to allow advertisers to manage their digital marketing via a digital desktop. The business unit also developed a data management tool to support targeted advertising. October saw the launch of Almascope, a marketing service based on utilising “big data” collected from the visitors of Alma Media’s online services. Also in development was Meedio, a self-service platform for purchasing online advertising. The service was rolled out on January 2014. Read more about the AlmaScope service.
The revenue of the Other operations segment in 2013 was MEUR 85.4 (84.8), of which MEUR 7.1 (6.3) was generated by sales to customers outside Alma Media Group. One of the highlights of the year was the commissioning of the new printing facility in Tampere.
The new printing facility of Alma Media’s printing and distribution arm, Alma Manu, was commissioned in spring 2013. The printing facility will improve the competitiveness of printing operations well into the future. The new printing press is more efficient than its predecessor, which enables the printing of not only the Group’s own newspapers, but other papers as well during the critical night time period. The additional capacity also improves the printing facility’s profitability, as the new equipment allows the printing of products faster and with less waste than before. Customers can also be offered an even broader range of products and variations thanks to the comprehensive selection of printing and mailing solutions available.
The initial stages of the commissioning of the new printing press were challenging due to production and distribution issues. However, control over the printing facility’s production reliability improved in the third quarter, and late deliveries decreased compared to earlier in the year. The new printing facility is expected to produce a positive financial result in 2014.
Alma Manu also signed a contract with its first new customers. In September, it was confirmed that the printing of Hämeen Sanomat and Hämeenlinnan Kaupunkiuutiset will be moved to the printing facility in Tampere from 1 January 2014 onwards.
The efficiency of printing operations was also improved by other arrangements made in 2013. The company decided to close down printing operations in Rovaniemi by the end of March 2014. An agreement was signed to print the Group’s newspapers in Northern Finland at the Kaleva printing facility in Oulu thereafter. The new printing location ensures the newspapers’ printing quality and their continued early morning delivery. As a result of the shutdown decision, Alma Media recorded a non-recurring expense of MEUR 3.5 for the second quarter of the year consisting of impairment loss on fixed assets and other reorganisation costs.