UBM is busy experimenting with a number of ‘virtual exhibition’
formats that allow once annual events to take on a digital presence
throughout the year – but for the moment at least, this is a much
more complementary activity than a substitutional one.
One of the great ironies of the digital world is that everyone relishes
any opportunity for a physical gathering as a result of it – whether
that be a big conference such as Web 2.0, SXSW or TED, or simply a
gathering of people who happen to use Twitter and live or work in the
same area – ‘A tweet up’. Even the most wired people in the world love
being in the same room as each other. The businesses that enable that
are sitting on something very powerful indeed.
In summary, often the most straightforward way to reduce your
exposure to the disruption of the digital world is to invest away from it.
Take ﬁve: newspaper groups in search of adjacencies
Newspaper companies provide us with a rich set of examples in this
area. This is partly because they demonstrate the need for disrupted
businesses to move into adjacencies to deliver growth, but also
because we can see a set of different strategies for seeking adjacencies
– and a different set of consequent results.
Newspaper groups have plenty of options when seeking an adjacent
market: they can either choose to consolidate in the press market; or
move into any one of a number of adjacencies expanding within their
geographic market, within the news media, into a vertical where they
have strength, or the broader media market. And, over the past few
decades, pretty much every possible avenue has been taken by one
group or another.
We are going to look at ve different businesses to see how they
compare and contrast. First the UK’s Johnston Press – a domestic
consolidator. Next we’ll look at the difference between the New York
Times Company and the Washington Post – thanks to the latter’s
decision to move into the education market in the late 1980s. Finally
Find big adjacencies
we’ll look at the Norwegian Schibsted and South African Naspers:
the two businesses most analysts believe had done the best job of
surviving the onslaught of the internet, and which have been most
aggressive in pursuit of digital adjacencies.
Why do it in the ﬁrst place?
Perhaps the single most important point to make right up front is
that the organic initiatives that have taken place within all of these
newspapers – especially their ventures online – are important, and in
some cases truly impressive, but in terms of overall corporate health
they are marginal. In 2009, the US newspaper industry had a terrible
year in print – but also saw its digital revenues fall by 11%. When you
consider that those revenues are, in most cases, less than 15% of total
company revenues, it is clear that even the most successful players
have yet to nd the path through to organic growth by developing
their own websites and managing the cost base in their print business.
The gures from Norwegian publisher Schibsted (see Table 6.1) shows
us the limits of what can be achieved even when you get things
Table 6.1 Schibsted data, 2005–09 (millions of Norwegian kroner)
2005 2006 2007 2008 2009 CAGR*
Verdens Gang 248 209 241 214 255 0.56%
Verdens Gang Multimedia 51 82 119 109 69 6.23%
VG total 299 291 360 323 324 1.62%
Aftonbladet 207 222 211 192 106
Aftonbladet Nya Medier 30 76 60 87 57 13.70%
Aftonbladet total 237 298 271 279 163
*Compound Annual Growth Rate
Table 6.1 shows the EBIT of Schibsted’s two most successful
newspapers, Norway’s Verdens Gang (normally known as VG) and
Sweden’s Aftonbladet. They have both done a brilliant job of build-
ing protable web businesses, and they both have the advantage