News / 20.03.2011

Finnish newspapers leave recession behind

Results released in the mid February indicate media houses performed moderately well last year. They made their operations more effective by consolidating their editorial offices and business units, by adopting new newspaper formats and doing mostly in-house work rather than outsourcing.

“We are at a good level but far from the peak years”, Kai Telanne, managing director of Alma Media puts it in a crystallized form.

Several print houses say turnover is growing steadily this year but there is plenty of work to be done. The pressure is coming from paper and distribution costs.

“Circulation figures are falling slightly. We have to be cost effective and devise clever operation models and new services”, says Telanne.

For instance, Alma Media’s regional newspapers in northern Finland set up a common editorial unit and adopted tabloid-size formats.

The Sanoma Concern sees it results in a more positive light than the others.

“Our results almost tripled due to the sale of Welho cable television operations, and profits improved by seven per cent. I expect this year will be more successful and sales in advertisements to grow”, estimates Sanoma’s managing director Harri-Pekka Kaukonen,

There has not been significant growth in the magazines sector this year either, says managing director of Otavamedia, Alexander Lindholm.

“Our results were good but however, media sales did not grow at the beginning of 2011 according to expectations. Also, circulation figures have been a challenge. In the future, we intend to improve productivity by doing work ourselves. This includes everyone: journalists, sales and marketing personnel”, says Lindholm.

Tallentum, a finance, media, health and technology company in the Nordic countries made away with its middle level and management personnel last year in Sweden. The company’s cost efficiency drive is towards increasing its turnover.

“If the sky does not crush onto us, this year’s expectations are more positive. We hope to produce good results. The increase in GDP and the success of businesses also reflected on Tallentum. We are still integrating productive elements into our business operations, so that this year is certainly not going to be easy either”, says Tallentum’s Juha Blomster.

The bigger newspaper companies such as Sanoma and Alma Media are placing greater expectation into online services than other media houses. The goal of Sanoma is to double its online services targeting consumers by 2012.

“Also iPad and other tablet computers will play an important role”, says Harri-Pekka Kaukonen.

Alma Media’s Kai Telanne says the online services of the firm’s local newspapers are still at an initial stage but the national papers have gone far already. The online services of evening tabloid Iltalehti and financial newspaper Kauppalehti are especially good.

The online operations of Talentum covers 20 per cent of its turnover but the breakthrough years are over. Otamedia doesn’t experience significant growth anymore in its online newspapers.

“The web, at least from journalistic content, is not going to take us higher, there are opportunities in advertisement. But still the web will not replace print media, says Alexander Lindholm of Otavamedia.

According to media executives, the continuation of efficiency drive of the past years is normal business practice. Staff layoffs are avoided until the last moment.

“But I still think that Sanoma has no need for mass cost-cutting measures. At the moment the most important is to speed up our organic growth and increase our revenue creation capacity by increasing turnover”, says Sanoma’s Pekka Kaukonen.

Almas Media has also no need for general job cuts. Kai Telanne emphasizes that job cuts are always a result of solutions taken by the business units.

“There are units that perform well and there are those whose performance are weaker, for instance our newspapers in northern Finland. This stems from market situation and net population loss. The purpose is to have all our units maintain and secure their own finances”, says Telanne.

Translated and edited by Linus Atarah

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