Ivar Rusdal MBL / Jærbladet AS Fruska Gora, Serbia, 23-24 May 2005

1. Cooperation between competitors -a contradiction in terms?Building a Media Businesses’ Association Ivar Rusdal MBL / Jærbladet AS Fruska Gora, Serbia, 23-24 May 2005

2. Summary - «The 3 T’s» • Where do I come from? • The Norwegian newspaper market • Competition and cooperation • MBL - our Association - status and development • A comparison between AM and MBL

3. Summary - «The 3 T’s» • Where do I come from? • The Norwegian newspaper market • Competition and cooperation • MBL - our Association - status and development • A comparison between AM and MBL

4. The largest three-day-paper in Norway • Established 1949 • Circulation 12600 (+250) • Mon-Wed-Fri • 35 employees • Total revenue (2004): • 44 MNOK (5,3 M€) • Pre-tax profits (2004): • 7 MNOK (0,8 M€) • Successful size change 2004 (now tabloid / A3)

5. Our Group - Jæren Avis AS • Founded 1994 • Jærbladet • 5 smaller papers in our region: • 1- and 2-day-papers • Circulation 3-5000 per title • Total group circulation 30000 • Group turnover (2004) 72 MNOK (9 M€)

6. Summary - «The 3 T’s» • Where do I come from? • The Norwegian newspaper market • Competition and cooperation • MBL - our Association - status and development • A comparison between AM and MBL

7. The World Newspaper Reading ChampionshipCopies sold per 1000 inhabitants

8. Media Consumption in Norway - Penetration

9. Newspapers in Norway (MBL members)

10. How did we get to where we are? (1)(Or: Why does every Norwegian read newspapers?) History: • 1814: Constitution and Freedom of Speech established. • 1800’s: Intense political development and national awakening. • 1905: Dissolution of union with Sweden.

11. How did we get to where we are? (2)(Or: Why does every Norwegian read newspapers?) Geography: Many local markets Strong local/regional identities Product: Covering what the readers need to know! («On the people’s side»)

12. How did we get to where we are? (3)(Or: Why does every Norwegian read newspapers?) - and: Favourable treatment from government • Annual grant - 2004: 247 MNOK (30 M€) • No strings attached • To promote plurality • Mostly small amounts to 135 newspapers • 74% (183M) goes to 10 «special cases» The business is profitable without the grants - but the diversity (no. of titles) would be less without them. • No VAT on sale of subscriptions and single copies. Est. total value of this indirect support: 1200 MNOK (145 M€)

13. Summary - «The 3 T’s» • Where do I come from? • The Norwegian newspaper market • Competition and cooperation • MBL - our Association - status and development • A comparison between AM and MBL

14. Media in a market economy (1) • The purpose of any business: To maximise the value of the business (for the benefit of the owners). • The additional purpose of a media business: To promote and protect the right to free speech and editorial integrity. («Glue, magnifying glass, forum») • Those two principles are interlocked - our profits are based on reader confidence.

15. Media in a market economy (2) • The free market is not a jungle (in a civilised society, the ends do not justify any means) • The free market works best (for the customer) when all players follow the same rules • The self interest of the players needs checks and balances

16. Media in a market economy (3) Government intervention in the market: • Legislation: Government regulates and controls • that competition is «fair» (on equal terms) • that monopolies are not created • that illegal or unethical business practices do not survive • Financial policies: Government stimulates • to develop activities and institutions that are desired by society

17. Media in a market economy (4) • Media businesses compete: • for readers (subscribers and single-copy buyers) • for advertising revenue We compete against other media, against other advertising channels - and we compete for people’s time.

18. Media in a market economy (5) • Media businesses cooperate: • to protect and promote the basic freedoms (remember that this is the foundation of our business) • to influence Government policies • financial policies • competition policies • ownership and licensing policies • to increase negotiating strength whenever relevant

19. Summary - «The 3 T’s» • Where do I come from? • The Norwegian newspaper market • Competition and cooperation • MBL - our Association - status and development • A comparison between AM and MBL

20. History of MBL(Another «3 T’s»: Things Take Time ---) 1910: First newspaper publishers’ association («cartel») 1992: Merger of Publishers (NAL) and Employers (AA) 1998: New member groups accepted in NAL 1999-2000: The fight over the free newspapers 2001: From NAL to MBL 2003: Internal studies - changing the association to accommodate other media (e. g. trade publications, TV, radio, webpublishers)

21. Mission Statement (§ 1.1) • To promote the members’ common interests, thereby contributing to uphold a diverse, independent and economically healthy industry. To protect and promote the members’ interests versus the government, other organisations and society at large. • To defend editorial independence, and work towards securing an overall framework beneficial to the industry’s competitiveness and profitability, thereby securing jobs within the industry. • To promote contact and cooperation between members, and between member companies and their employees. • To initiate common initiatives in cases where the members deem it necessary and useful.

22. Main strategies (§ 1.2) • To influence the industry’s ecomomic and legal framework. • To influence and develop the industry’s market. • To ensure that the members have access to the necessary knowledge, skills and services. • To promote the members’ common interests as employers.

23. So what does MBL actually do? • Freedom of speech and the integrity of the press • Lobbying: Public policies, legislation and financial grants • Employee relations, collective negotiations with unions • Market surveys and information • Promoting the newspaper as an advertising channel • Newspapers in Education • Business activities on members’ behalf (in subsidiaries)

24. Direct benefits to members (Examples) • Market information («Consumers & Media») (Who are our readers/listerners/viewers? Where are they?) • Nationwide publication of prices and conditions • Undisputed circulation and readership figures • A system of general agreements with trade unions • Legal advice and assistance (Employee relations) • Financial compensation after strikes (through NHO) • Conferences and seminars (marketing issues) • Management training programmes • Scholarships (to employees) • Advice on Health, Environment and Safety • Membership in WAN and IFRA through MBL (= reduced rates at WAN/IFRA events)

25. Subsidiaries of MBL • Papirkjøp AS Buying newsprint (standard 45g) for all member newspapers of MBL. Total quantity 175000 tons/year. • NADA AS Develops and markets standards and systems for digital transfer of ads to all newspapers and magazines. • Mediebedriftenes Klareringstjeneste AS Licenses digital copying on behalf of rights owners • Norsk Opplagskontroll AS Jointly owned by MBL, LLA (local newspapers ass’n) and the Government, this company audits all circulation figures.

26. Getting the money MBL 2004: Total expenditure: 41,2 MNOK (5 M€) Members’ fees: 21,2 MNOK (2,6 M€) Other revenues: Projects, seminar fees etc 9,9 MNOK Kopinor 4,4 MNOK (copying fees) F&M 2,9 MNOK (sale of market info) Norsk Tipping 1,5 MNOK Members’ fee: 3,9 o/oo of previous year’s total wages (to be reduced to 3,8 o/oo in 2006)

27. Governing the MBL • Annual General Meeting • Board of Directors (12) • Executive Committee (5) • Various committees ad hoc • Negotiating teams • Administration: 21 • The MBL is also a part of NHO (the Norwegian Confederation of Industries)

28. Who are our members? • Members: 288 • Newspapers 166 • Printing co.s 20 • TV stations 20 • Distribution 19 • Joint marketing companies 17 • Corporate HQ etc 12 • Others 34 (Press agencies, radio stations, multimedia co. weeklies, advertising agencies etc)

29. Membership Criterion No. 1 (§ 2.2) Any publishing business of a member company shall be managed by a responsible Editor, in accordance with the provisions of the «Editors’ Declaration»

30. Developing MBL (1) • When difficult questions arise: • Free newspapers • Circulation calculation • MBL should not interfere where there is competition between members • Many subjects previously covered by NAL/MBL are now regarded as areas of competition that the members/groups handle themselves (e.g. technical and market issues)

31. Developing MBL (2) • Why would we want new member groups? • The newspapers are into new businesses/channels • Newspapers and other media have common counterparts • A larger association means: • Fewer areas of common interest • Much stronger influence in the important areas

32. New products and channels are needed Market share 80% New products and new channels 60% Time

33. Annual General Meeting Employee relations committee Board Legal affairs committee Managing Director Political framework committee • Newspapers • Printers/ mailroom • Distribution Radio and TV Digital medias Weekly press/ Magazines Developing MBL (3)The proposed new structure:

34. Summary - «The 3 T’s» • Where do I come from? • The Norwegian newspaper market • Competition and cooperation • MBL - our Association - status and development • A comparison between AM and MBL

35. Comparing AM to MBL:

36. Newspapers in EducationValue for society - value for the newspaper • Reading programmes • Educational material (booklets) • On media and journalism • During election campaigns • Teacher training • 7700 teachers participated in 2004 • Competitions (school newspapers) • «Newspaper weeks» - 3rd, 6th, 10th grade • 92000 pupils participated in 2004

37. Summary - «The 3 T’s» • Where do I come from? • The Norwegian newspaper market • Competition and cooperation • MBL - our Association - status and development • A comparison between AM and MBL Thank you very much for your attention!