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Capgemini Consulting is the strategyand transformation consulting brand
of Capgemini Group
16 May 2012
Johnston Press
Discussion Document
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Our understanding of Johnston Press challenges and context
Lessons from other industries
Applicability to Johnston Press
Contents
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During 2008 alone, Johnston Press total revenue decreased by 75.6m
(12.4%), while digital revenues went up 4.7m (31.1%)
519.3 520.2
602.2 607.5
531.9
2004 2005 2006 2007 2008
Total Revenue, m, 2004-2008
6.3
8.3
11.3
15.1
19.8
2004 2005 2006 2007 2008
Digital Revenues, m, 2004-2008
1.6%% of totalrevenues
2.5% 3.7%1.2% 1.9%
Source: Company website and press releases.
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Operating profit on ordinary activites was also down in 2008
Operating Profit on Ordinary Activites*,m, 2004-2008
EBIT**, m, 2004-2008
178.2 180.2186.8
178.1
128.4
2004 2005 2006 2007 2008
177.6 177.7 171.7 165.5
-399.6
2004 2005 2006 2007 2008
Source: Company website and press releases.*Before share of associates' operating profit and non-recurring itemse.g. fundamental reorganisation of existing business, write down of Northampton press, impairment of goodwill andpublishing titles, etc.
**After non-recurring items
34.6%
Op.margin 29.3% 24.1%34.4% 31.0%
After interest and taxation, Johnston Press registered a loss of 365.5m for 2008.
http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D17/31/2019 Johnston Press 20090807 v.12
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Johnston Press attributes the decrease in operating profit to the collapsein ad revenues resulting from recession
0.3
80.0
5.5
11.4
4.7
9.0128.4
178.1
2007
Operating
Profit
Advertising Other
Revenue
Digital
Publishing
Newsprint Production
Costs
Other Costs 2008
Operating
Profit
m
Source: Company website and press releases.
-
-
Operating Profit, m, 2007-2008
http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D17/31/2019 Johnston Press 20090807 v.12
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as print ad sales remain its largest source of revenue, accounting for
66% in 2008
Digital
Advertising/
Services,
4%
Contract
Printing, 7%
Advertising,
66%
Sale ofNewspapers
, 19%
Other sales,
5%
Source: Company website and press releases.
2008 Revenue Breakdown by Revenue Stream
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Although both Johnston Press and the wider TME industry cannot relyon advertising spend when the economic situation deteriorates
Source: Capgemini TME Strategy Lab analysis; US Bureau of Economic Analysis
Advertising Expenditure per Capita, GDP Per Capita, YoY Growth, US, 1984-2007,%, Real Terms
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
YoY growth GDP per capita YOY Change in Ad Spend Per Capita (%)
US FinancialRecession(1990-1991)
Bursting of theDotcom Bubble
(2000-2001)
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ad revenues in traditional media are also suffering due to a structural
shift online and declining circulation
0.0%
0.3%
0.6%
0.9%
1.2%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Print ad spend as % of GDP
0.0%
0.2%
0.4%
0.6%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
TV ad spend as % of GDP
0.00%
0.02%
0.04%
0.06%
0.08%
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Radio ad spend as % of GDP
TV advertising revenues as% of GDP, UK, 1991-2007
Radio advertising revenuesas % of GDP, UK, 1991-2007
Print advertising revenuesas% of GDP, UK, 1991-2007
Advertising Revenues for Various Media as % of GDP, UK, 1991-2007
Source: Capgemini TME Strategy Lab analysis; Annual reports of ITV and Trinity Mirror,2006; Economic History Services, UK GDP,2006; IPA ,Resource centre-Total UK AdvertisingExpenditure,2006 , UK TV and display advertising outlook, Enders Analysis, November 2008, Preliminary estimate of Gross Domestic Product briefing note: 2008 Q3, National StatisticsUK, November 2008
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InteractiveWebContent
Gaming
This is a reflection of consumption: while the consumption of news inthe UK is declining, that of interactive web content is on the rise
4%
-3%
-6%
26%
97%
News
Audio/Music
TV
Estimated Time Spent on Media, Hours per Week per User, UK,1975-2008
Breakdown of Growth in MediaUsage, 2006- 20091, UK (%)
x2.7
0
10
20
30
40
50
60
70
1975 1980 1985 1990 1995 2000 2006 2008
Notes : 1. Data till May 2009.Source: Capgemini TME Strategy Lab Analysis; Forrester: The Impact Of The Internet On UK Consumers' Media Behavior; Brand Republic; Ofcom 2008; Nielsen Netview; OEC; EuropeanInteractive Advertising Association Media Scope Surveys; BBC, Gamers in the UK, December 2005
Music is a similar industry in which consumption of traditional audio content is in decline.
http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D1http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D17/31/2019 Johnston Press 20090807 v.12
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Convergence lowers barriers to entry enabling news companies to moveinto new services (e.g. blogs, podcasts) and markets (e.g. broadcast)
Video
Music
News
Pictures
Blogs
Podcasts
DeviceDeliveryContent
Horizontal Convergence
Vertical
Convergence
Advertising
TraditionalMedia
WebContent
Mobile
Broadcast
Fixed
Pay TV
PortableMediaPlayer
HomeGateways
Handsets
PC/Laptop
TV
Source: Capgemini TME Strategy Lab analysis
http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D17/31/2019 Johnston Press 20090807 v.12
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Contents
Our understanding of Johnston Press challenges and context
Lessons from other industries
Applicability to Johnston Press
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Traditional media players are taking steps to address market challenges andgrow audiences and revenues
Audience segmentation
Identifying key segments to target
Shaping the service offering by segment
Developing and monetising online properties
Integrating traditional and online propositions for consumers andadvertisers
Diversifying revenues by leveraging assets to move into adjacentbusinesses e.g. events , radio
Key Strategies By Media Players
Audienceunderstanding
Monetisingassets across
platforms
Diversifyinginto adjacentbusinesses
Source: Capgemini TME Strategy Lab analysis.
http://images.google.co.uk/imgres?imgurl=http://www.redletterdays.co.uk/Client/Images/promo/Affiliates/johnstonpress.gif&imgrefurl=http://www.redletterdays.co.uk/promotion/jp&usg=__oEV0dS41JRKqd9cI6kM9VQCaMdw=&h=64&w=120&sz=1&hl=en&start=4&um=1&tbnid=qKnkVWGENTEZSM:&tbnh=47&tbnw=88&prev=/images%3Fq%3Djohnston%2Bpress%2Bplc%2Blogo%26hl%3Den%26safe%3Dactive%26rlz%3D1R2ADBF_en-GB%26um%3D17/31/2019 Johnston Press 20090807 v.12
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and players can strive to create compelling customer experiences,
with multiple revenue streams to maximise these opportunities
Source: Capgemini analysis.
Example of a Potential Future Music Experience
Synchronised DRM-freedownloads to multiple devices
Capture userprofile and
Insights
Ad-Funded Fixed Online andMobile Discovery
Targeted Up-Selling and Cross-Selling
Proactively Contact FanCommunities with targeted
communications
U2 Greatest Hits
TrackSampling
Artist bios andmetadata
Videos, interviewsand mobisodes
Recommendations and reviews
1
2
3
4
SMS/MMS ads Direct e-mails
Dear James,
Just to let you know,the new NIN album isout next week.
Clickherefor more
Digital albums,
bundles andbonusmaterials
Merchandise and
music-relatedentertainmentcontent
Live events
leveragingplayerbrands
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We have also worked with the BBC to create an integrated customerexperience around a specific theme, enhancing the proposition to advertisers
Event attendance
Example of a Multiplatform Food Proposition
Magazine Readership
Online
Recipes
Cooking advice
E-commerce
Quick & Easy HealthyEat ing Dinner Part ies In Season OnTV
Entersearch SEARCH M yR ecipe B o x Sig n In
Quick Meals
In Season Now
Chef Recipes
1. I wantto make:
2. With:
3. Readyin
Dinner
Pork
4hours
CookShop
Cookware
Bakeware
Utensils
RecipeBooks
ThisweeksSpecial
Hand madeoakchopping board,
only35
JamieSaves our Bacon 9pm
ReadySteadyCook 6pmGreat FoodExhibition 25-28February,Nearyou,Only14
Food
Emporium
Snacksforthe FACupFinal
Year of the Ox
Makechicken sesamenoodles, spring rollsand more for happinessand prosperity.Good-Luck Dishes
INSPIRED IDEASOurTopClicks
EasyMeals,Good DealsMadeHealthy
Ultimate Recipe ShowdownWinners
Simple Snacks and Small Bites
YourRecipe inFN Magazine
IN SEASON NOW
Guacof theDayDip into Rachael's
quick and easyversionof 7 layerdipwithripe avocados.100+MoreOur#1 Recipe
Quick & Easy HealthyEat ing Dinner Part ies In Season OnTV
Entersearch SEARCH M yR ecipe B o x Sig n In
Quick Meals
In Season Now
Chef Recipes
1. I wantto make:
2. With:
3. Readyin
Dinner
Pork
4hours
CookShop
Cookware
Bakeware
Utensils
RecipeBooks
ThisweeksSpecial
Hand madeoakchopping board,
only35
JamieSaves our Bacon 9pm
ReadySteadyCook 6pmGreat FoodExhibition 25-28February,Nearyou,Only14
Food
EmporiumFood
Emporium
Snacksforthe FACupFinal
Year of the Ox
Makechicken sesamenoodles, spring rollsand more for happinessand prosperity.Good-Luck Dishes
INSPIRED IDEASOurTopClicks
EasyMeals,Good DealsMadeHealthy
Ultimate Recipe ShowdownWinners
Simple Snacks and Small Bites
YourRecipe inFN Magazine
IN SEASON NOW
Guacof theDayDip into Rachael's
quick and easyversionof 7 layerdipwithripe avocados.100+MoreOur#1 Recipe
Catch up TV
Linear TV
Surrounding the consumerwith a full passion areaaround a theme/ genre/talent
Cross promotion betweenplatforms and services
Operating multiple revenuestreams
Attractive propositions toadvertisers
Extension beyond corebusiness
Full leverage of content/ IP
Principles
Providing a compelling consumer experience to a passionate audience drives stickiness andincreases the revenue potential
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The music industry is in the process of re-inventing monetisation models in achallenging industry through diversification into adjacent businesses
10-year deal worth $120m
Three studio albums, concerttours, merchandising andbranding
21 concert dates in London 3m copies of the latest album given
away for free with the Mail on Sunday
Recorded Music: Broader Monetisationthrough Diversification into Adjacent
Businesses
Expanding into the growth areas of Liveand Merchandising
Tapping into related areas of consumerexpenditure (subscriptions, devices,games)
Enterprise funded music (brands,advertising, ISPs, mobile players)
Services to artists and other 3rd parties
More exciting propositions (integrationwith other media, engagement withartists, enhanced discoveryexperience)
One-off, device related charge forall-you-can eat music service
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Capgemini Consulting is the strategyand transformation consulting brandof Capgemini Group
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Appendix Contents
Background
- Johnston Press profile
- Competitive analysis
- Market trends
Online monetisation best practice
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Scotland
North
North West
Midlands
South
Northern Ireland
Republic of Ireland
Johnston Press print and digital operations comprise 50 publishing
companies within 7 geographical divisions
Johnston Press employsapproximately 7,000 people
Of these, 2,500 are localjournalists
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Dinnigton Sunderland Caledonian Mortons (Carn) Limerick Kilkenny Isle of Man
It operates a range of local newspapers and Internet sites in the UK andIreland
Johnston Press publishes 300 local and regionalnewspapers across the UK and RoI:- These include 18 daily, 164 paid- for weekly titles, 118 free-
weekly and 2 Sunday titles- It also has a range of other publications, such as lifestyle- magazines and classified directories
The groups Digital Publishing Division operates 319
local websites:- These offer news coverage as well as classified advertising
sites (e.g. Jobstoday.co.uk, Motorstoday.co.uk. etc).
Publishing Division Websites
Prints JPs 300+
titles Undertakes contract
work 10 printing centres:
Leeds Peterborough Portsmouth
Johnston Press stated mission is to serve local communities in terms of news, information and
advertising; its main sectors include Employment, Property and Motoring.
Source: Company website and press releases.
Johnston Printing
Johnston Press
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Online, Johnston Press also operates at a national level offering arange of classifieds websites
Website Type
Letterbox direct Door Drop marketing
Equestrian today Horse racing information & classifieds
Going out today
Jobs today Employment classifieds
Motors today Motoring classifieds
Photos todayOnline store for photos from JPpublications
Property today Property classifieds
World of property Overseas property classifieds
cvmatch
Free-ads todayWebsite of weekly fee ad supplementfeaturing bargain classifieds
Local pagestoday
Business directory
Students today Student information & classifieds
emigrate2Overseas emigration information &classifieds
National Websites
Johnston Press operates 319 localwebsites to extend the content andreach of our print products:
- These websites reach an estimated monthlyaudience of about 8 million
It also operates classifieds websites ata national level across the UK andIreland
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Johnston Press most recent Interim Management Statement reflects itskey concerns surrounding costs and debt
Source: Press releases.
Key Issues
Advertising Revenues
Costs
Profit
Debt
Over the 19 weeks to 9 May 2009, total advertising revenues were down34.4% compared to the same period last year:
- Johnston Press had reported on 11 March 2009 that total advertising revenues for the first 9weeks of the year were down 35.9% on the same period in the prior year
The Group continues to reduce costs to offset the impact of lower
revenues:- Year- on - year costs are expected to reduce by over GBP30m, despite the increased cost
of newsprint, and these cost savings will mean that non-recurring and redundancy costs forthe year will be in the region of GBP8.0m
- These cost savings will be not be sufficient to offset the fall in advertising revenues
Operating profit for 2009 is likely to be towards the lower end of currentmarket expectations
There is a strong likelihood of a breach of a financial covenant in theGroup's debt facilities during 2009:
- It has begun discussions with its debt providers to obtain a relaxation in the debt covenants
- Net debt at the end of April 2009 was GBP448m, down GBP29m from the start of the year
- GBP13m of this reduction was due to the strengthening of Sterling against the Euro, andGBP16m was cash generated from operations
Highlights of Interim Management Statement covering 19 weeks of 2009 to 9 May
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Johnston Press Board - Executive Directors
John Fry
Chief Executive OfficerJohn Fry was the former Chief Executive of the Norwichbased regional media group, Archant. Prior to moving intothe regional media sector in 2002, he was for nine yearsPresident of the information company Dun & Bradstreet forUK, Europe, Middle East and Africa, after four years as aconsultant with Bain & Company. He started his career withProcter & Gamble. John is a graduate of Jesus College,Cambridge (MA Physics and Mathematics). He also holdsan MBA from INSEAD where he won the Ford Prize for thetop student in his year.
D Cammiade
Chief Operating OfficerJoined the Board in 2005. Joined the Group in 1992 throughits acquisition of TR Beckett Ltd. Appointed ManagingDirector of West Sussex County Times Ltd in 1994 and held
various Divisional Managing Director roles until appointedDirector of Operations in 2001. Chairman of the NewspaperSociety Marketing Committee.
S R Paterson, MA, CA
Chief Financial OfficerJoined the Board in 2001. Chartered Accountant. FormerFinance Director of Aggreko plc. Non-Executive Director ofDevro plc and Mirago plc.
P R Cooper, ACA
Company SecretaryAppointed Company Secretary in 1996. CharteredAccountant. Former Finance Director of Yorkshire WeeklyNewspaper Group Limited.
Source: Company website and press releases.
Appointed as new CEO on 5 January 2009
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Johnston Press Board - Non-Executive Directors
I S M Russell, CBE, ChairmanJoined the Board in 2007. Chairman of the Audit Committee until 11
March 2009. Chairman elect and Chairman of the NominationCommittee from 12 March 2009. Chairman of Advanced Power AGand of Remploy Ltd, Non-Executive Director of the Mercantile Trustplc and British Assets plc, adviser to Bergemann Power Group andChairman of the campaign board for the University of Edinburgh.
Mark Pain, FCA, Chairman of the Audit CommitteeJoined the board in 2009. Since 2007 Mark has been a NonExecutive Director and Audit Committee member of Punch Tavernsplc, one of the UK's leading pub groups, and from 2006 Mark hasbeen Group Finance Director of Barratt Developments Plc ('Barratt'),
the UK's largest housebuilder.
M A King, Non-ExecutiveJoined the Board in 2003. Member of the Remuneration, Audit andNomination Committees. Former Managing Director, CountryOperations Europe, at Yahoo! UK Ltd. Non-Executive Director ofCapita Group plc and IMD plc.
P E B Cawdron, Non-ExecutiveJoined the Board in 1998. Senior Independent Director. Chairman of
Remuneration Committee from 30 January 2009. Member of theAudit and Nomination Committee. Former Group StrategyDevelopment Director of Grand Metropolitan PLC. Chairman ofPunch Taverns plc and Spice plc. Non-Executive Director of GCapMedia plc, Capita Group plc, BUPA and Prostrakan Group plc.
.
F P M Johnston, CBE, Non-ExecutiveJoined the Board in 1959. Former Managing Director and Chairmanof the Group. Former Non-Executive Director of the ScottishMortgage Investment Trust plc and Lloyds TSB Scotland plc. FormerPresident of the Newspaper Society.
Ralph Marshall, Non-ExecutiveJoined the Board in 2008. Executive Director of Usaha Tegas Sdn.Bhd. Serves on the Boards of several companies listed on the BursaMalaysia Securities Berhad including Astro All Asia Networks plc asExecutive Deputy Chairman.
Camilla Rhodes, Non-ExecutiveJoined the Board in July 2009. Camilla is a very experienced mediaexecutive who has held a number of senior positions during a 28 yearcareer at News International ('News'). Among her senior roles atNews, she was Managing Director of Times Newspapers and wenton to become Managing Director of News Group Newspapers,publisher of the Sun and the News of the World.
Appointed as new Chairman on 12 March 2009
Source: Company website and press releases.
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Permanently Reducing the Cost Base
Source: Company website and press releases.
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Debt Re-Financing
Source: Company website and press releases.
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Contents
Background
- Johnston Press profile- Competitive analysis
- Market trends
Online monetisation best practice
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These players have been ramping up their digital initiatives in 2009
Trinity Mirror
5 national newspapers 120 regional newspapers 400 digital products
Newsquest
17 local daily paid-fortitles
200 weekly newspapers,magazines & tradepublications
180 local websites
Company 2009 Digital Activities
Northcliffe
113 local daily, weeklyand free newspapers
155 local websites
Trinity Mirror is embarking on the second phase of its mobile network
rollout- Thirteen m-sites (websites accessible from mobile phones) were unveiled last year with the
final two, Birmingham Mail and Coventry Telegraph, going live in December
It also revamped its network of local recruitment websites- These include new features such as mini-sites, enhanced recruiter branding, keyword
sponsorship and a CV database
Newsquest Media Group has launched a network of 148 mobile websites
to accompany its newspapers and online sites- The mobile websites will feature news, sport, traffic, travel, entertainment and weather
information from the publishers newspapers
The companys digital network for Scotland has launched a "no sale, no
fee" advertising service for motors dealerships- Ad space on www.s1cars.com is free but dealers pay a commission when a sale is made to a
buyer who has seen advertising on The Herald and Times Group website
Northcliffe Media, a division of Daily Mail & General Trust (DMGT),
launched a pilot of its Local People network in January 2009- This began with the launch of an initial twenty-three local community websites in the South-
West of England; a further twenty plus sites are due to launch in the South-West of Englandthroughout 2009
- These cover areas with 10,000 to 50,000 inhabitants that typically do not have a dedicated localonline proposition, and are designed to encourage the local community to interact
Source: Company website and press releases.
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Online, Johnston Press contends with digital classified market leadersAuto Trader, Jobsite and Right move
The growing reach of national brands like Rightmove and AutoTrader means that local papers havelost their grip on property and car advertising.
UK automotive website featuring cars as wellas bikes, caravans, and trucks for sale
Its lists over 360,000 vehicles at any one time The website had a 38% share of the
automotive classified market in 2008 Associated to Guardian Media Groups print
magazine, published weekly in 12 regions
UK property website Advertisers include over 20,000 estate agents,
letting (rental) agents, new homes developersand overseas agents who offer propertiesabroad for UK-based home hunters
Owned by Right move plc
UK online recruitment site featuring vacanciesfrom a range of sectors including IT, Sales,
Engineering and Construction It has a total of 3,500,000 registeredcandidates
Jobsite is part of Northcliffe and the Daily Mail& General Trust (DMGT) group of companies
Website Description
Source: Company website and press releases; ABC
10.32
1.392.59
AutoTrader Jobsite Rightmove
Monthly Unique Users, millions, 2008
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In 2008, regional recruitment advertising for both print and online grew to594m and accounted for 48% of all recruitment advertising
Sources: The Newspaper Society Intelligence Unit, Advertising Association Yearbook 2009
Regional press recruitment advertising wasworth 505m in 2008, while regional online
recruitment was 89m
Online recruitment advertising in the regionalpress grew by 17.1% in 2008
Regional Online Recruitment AdvertisingSpend 2002-2008, m, 2008
Online
Specialists,
16%
Business
magazines,
25%
Regional
New spapers, 48%
National
New spapers
, 11%
Online
Specialists,
62%
Regional
New spapers
, 29%
National
New spapers
, 9%
Shares of Total Recruitment Market, 2008
Shares of Online Recruitment Market, 2008
89.2
76.1
52.2
41.532.7
23.616.0
2002 2003 2004 2005 2006 2007 2008
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46Copyright 2009 Capgemini. All rights reserved.Johnston Press 2009 .PPT
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Ofcoms recent consultation has implication for Johnston Press as it would
allow it to diversify into radio and/or TV
At the end of 2008 there were 305 local commercialstations in the UK broadcasting on analogue:- 59 on AM and 246 on FM- Of these 305 stations 41% served a population of over
500,000, 17% served a population of between 250,000 and500,000 and 42% served a population of less than 250,000
- Many of these stations, particularly those serving largerpopulations, are also broadcast on DAB.
- Most are streamed on the internet and a few are available via
digital television 30 years ago each commercial radio station was
independently owned, but today, consolidation hasmeant that the sector is dominated by threecompanies which command a 77% share of allcommercial radio listening
Total listening to the radio has remained broadlyflat over the last decade both in terms of thenumber of listeners reached and the total number
of hours spent listening still in excess of 1 billionhours per week
Ofcoms proposes to allow regional stations to
merge to become quasi-national stations in returnfor a commitment to broadcast on DAB.
It is also encouraging the launch of new radiostations
Lord Carter's Digital Britain report proposed usingabout 130m a year from the licence fee from 2013to fund a series of independent consortia toprovide local TV news
On July 16th, the Conservatives proposed insteadthat local newspaper companies could step in toproduce local and regional TV news on ITV, as an
alternative to 'top-slicing' funding from BBC licencefee
- They propose creating a range of about 80 local mediacompanies - delivering TV, print and online services toregional and local communities
- These entities, known as LMCs, would obtain income fromclassified ads, mainly from print and online media, anddisplay ads across all media including TV
- The local media companies could also look to sell video newsmaterial to regional broadcasters.
The Conservatives proposals, produced byoutgoing Johnston Press chairman Roger Parry asof a review of creative industries, draws on the USand Canada where local TV companies succeedwithout the need for public subsidy
- The report also highlights Channel M, part of the GuardianMedia Group, publisher of MediaGuardian.co.uk as the mostsuccessful example of local television in the UK
Radio TV
C
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Contents
Background
Online monetisation best practice
L i li i i f i l
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Levers to improve online monetisation range from operationalimprovements to monetisation of new services
Expand distribution of video content tomaximise audience reach
Strategic Levers Examples
Enhancing the proposition to advertisers
Develop innovative advertising models
Introduce sticky and monetisable newservices and content
Tap into passion areas by offering a fullexperience across platforms and services
Fully exploit existing content online
Offer payment options alongsideadvertising
Enhance user experience andpersonalisation
1
2
Open up platforms to developers andpartners
Enhance value of
existing users
Increase volumeof users
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