Schibsted Asa Business Information, Profile, and History

Company Perspectives:

Schibsted will achieve future growth and value creation as a focused Norwegian and international media company. Schibsted's ambition is to become Scandinavia's leading media company through being the preferred supplier of content to readers, viewers, and advertisers, irrespective of their choice of media.

History of Schibsted Asa

After operating for more than 100 years as a family-owned newspaper business, Schibsted ASA was incorporated in 1992 as the parent company of The Schibsted Group. The firm is organized into three segments: newspapers, television and film, and multimedia. While it is involved in a broad range of media, Schibsted continues to be strongest in the newspaper field, where its subsidiary Schibsted Print Media AS owns Norway's two largest newspapers, VG and Aftenposten, as well as Sweden's Aftonbladet, the largest newspaper in Scandinavia, and two national newspapers in Estonia, among other holdings. The company also owns newspaper printing plants in Norway, Sweden, and Estonia.

Schibsted's television and film subsidiary, Schibsted TV and Film AS, owns one-third of TV 2, the largest commercial television company in Norway, which it helped found in 1991. Schibsted is also involved in television and film production in Norway, Denmark, and Sweden, through its subsidiary Metronome Film & Television AB. In 1998 Schibsted's production group, which is headquartered in Stockholm, became the largest independent producer of television films and commercials in Scandinavia.

Through Sandrew Metronome AB, a 50--50 joint venture with Swedish film company Anders Sandrews Stiftelse formed in 1998, Schibsted buys and distributes films, distributes videos, manages cinemas, and sells films to television companies. Sandrew Metronome is one of three companies that dominate the market for film rights and distribution in Scandinavia.

Schibsted Multimedia AS is the holding company for Schibsted's interests in the Internet, media surveillance, book publishing, and photo and news agencies. In 1997 Schibsted became a partner in Scandinavia Online AS, which is jointly owned by Schibsted and the state-owned telecommunications company Telenor. Scandinavia Online has become the leading point of entry for the Internet in Norway and Scandinavia.

Background to 1860

The name Schibsted came to Norway from Denmark in the 1750s. Schibsted ASA can trace its roots to founder Christian Michael Schibsted (1812--78), who grew up in humble circumstances and entered an orphanage in Norway's capital, then called Christiania, when he was nine. The orphanage, called Christiania Opfostingsanstalt, operated a book printing business and published the newspaper Christiania Intelligentssedler. Christian M. Schibsted received training there as a typesetter and printer and learned about running a newspaper.

As a young adult he worked for several of the capital's printing companies. In 1839 he joined a book printing company run by Johan J. Krohn. In 1843 Schibsted took over the company and ran it as its sole proprietor. At first he printed mainly brochures and small books. Then in 1849 he was contracted to print a recently launched satirical magazine called Krydseren, which translates as The Cruiser. The magazine became successful, and after first appearing as a monthly, became a weekly. From 1855 it was published as a liberal daily newspaper under the name Aftenbladet.

New Venture Becomes a Success, 1860--85

In 1859 Bjornstjerne Bjornson (1832-1910) became the editor of Aftenbladet and published a song in the newspaper that became Norway's national anthem. Bjornson's strong political views alienated many of the newspaper's readers, and it was sold by its editors to another printer in 1860. To replace the lost income, Schibsted launched his own newspaper, Christiania Adresseblad. By the end of 1860 the paper was renamed Aftenposten. It would eventually become Norway's leading newspaper.

Aftenposten began as a small newssheet of four to six pages. During its first ten years it became financially self-sufficient through modest growth in circulation and advertising. Its growth paralleled that of the capital and Norway's population, as well as the modernization of Norwegian society. It was also helped by the rise of towns and cities, which were gradually becoming larger, and by more efficient means of communication such as railways and the telegraph. By 1876 Schibsted was able to purchase property in the center of Christiania and buy a new printing press.

Upon Schibsted's death in 1878, the newspaper was inherited by his son, Amandus Schibsted (1849-1913), who was a gifted journalist as well as strong business manager. He pioneered modern ways of news reporting and developed Aftenposten into a broadly based newspaper for a wide readership. When its rival Aftenbladet ceased publication in 1881, Aftenposten picked up many of its subscribers and some of its staff.

The mid-1880s witnessed an increase in the capital's population as well as its economic activities, both of which led to an expanded market for newspapers. Faster presses were making it possible to print more copies of larger editions, while quicker access to the news made the papers more topical. With improved distribution, they reached a larger audience. It was also a time of political struggle, especially concerning the union of Norway and Sweden. Modern political parties began to appear, and newspapers generally took sides. Neutral at first, Aftenposten took a conservative stance. The political struggles culminated in 1884 when Norway established a parliamentary system of government.

Aftenposten's chief competitor at the time was Morgenbladet, a morning newspaper. When Morgenbladet launched an evening edition in 1885, Aftenposten, which was traditionally an evening paper, launched its own morning edition the next day. The burden of appearing twice daily nearly broke both newspapers, but they carried on the struggle.

Modernization, 1885-1905

By 1885 Aftenposten was well established in Kristiania, as the capital was named from 1877 until becoming Oslo in 1924, as a newspaper for the middle class. In 1886 a new press, the first rotary press in Norway, was installed. Amandus Schibsted was a dynamic leader, and the paper attracted well-known and highly respected writers. By 1901 Aftenposten had overtaken Morgenbladet with a circulation of 13,730.

Becoming a National Newspaper, 1905--13

The union between Norway and Sweden was dissolved in 1905. It was around this time that Aftenposten became allied with the conservative party Hoire, as an independent supporter, not a party organ. The newspaper would remain allied with the conservatives until the 1960s, when it declared itself independent of any political party.

With the help of improved technology, new presses, and faster communications, Aftenposten became a national newspaper. Its network of correspondents supplied news from all parts of Norway. The paper was one of the first in Norway to use photography, air transport, and radio in reporting the news. Norway's newspapers operated under intense and at times rough competition. New papers were launched, trade unions fought their employers, advertising price wars were common, and editors regularly traded insults and carried on feuds. Still, the press gradually embarked on a process of cooperation, and in 1910 the Norwegian Press Association was formed. That year a very popular newspaper, Tidens Tegn, was launched in the capital and soon became Aftenposten's most serious challenger. Coverage of Arctic and Antarctic exploration was popular, and both papers sought rights to Norwegian explorer Roald Amundsen's conquest of the South Pole in 1911.

The Newspaper Business through Two World Wars, 1913--1970s

When Amandus Schibsted died in 1913, Aftenposten was a highly respected, hard-hitting modern newspaper. His wife, Thrine (1849-1933), inherited the paper and remained its proprietor until her death. They had two daughters, Hildur (1879-1944) and Gudrun (1861-1966), both of whom married. Hildur's daughter, Margrete Lindboe, married Leif Nagell-Erichsen (1901--66), and Gudrun's daughter, Cathrine Huitfeldt, married Hans J. Riddervold (1901--80). Both Nagell-Erichsen and Riddervold became members of Aftenposten's board of directors, and in 1939 they were appointed business managers of the newspaper.

In 1935 Chr. Schibsteds Forlag, the original printing business established by Christian Schibsted, became an active book publisher when Aftenposten acquired the rights to publish a new annual reference book, Hvem, Hva, Hvor, which translates as Who, What, Where. Through the development of different handbooks, Chr. Schibsteds Forlag became a highly reputable publisher of handbooks on Norway. It later expanded its line to include best-sellers and high-quality illustrated books on various subjects.

Norway was occupied by German forces during World War II, and Aftenposten's printing capacity was requisitioned to produce the German occupation newspaper, Deutsche Zeitung in Norwegen, and other publications. Aftenposten was published during the war under control of Nasjonal Samling, or National Unity, the collaborationist political party run by Vidkun Quisling, who formed a puppet administration during the war.

After World War II conditions in Norway gradually returned to normal, and the development of Aftenposten was resumed. At the time of its centenary in 1960, the paper was Norway's largest and leading newspaper. In 1966 it took over the operations of another newspaper, Verdens Gang, which translates as The Way of the World. Verdens Gang, or VG as it became known, was started in 1945 by a group from a wartime resistance movement headed by Chr. A.R. Christensen. It soon developed financial and technical problems, and Aftenposten took over technical production of the paper and then the company itself. As part of the takeover agreement, the two newspapers would continue to compete for readers and advertising and only cooperate in other areas, in an arrangement similar to a joint operating agreement (JOA) in the United States. In addition, the editors of Aftenposten committed to keeping VG independent from all political parties.

Tinius Nagell-Erichsen, born 1934 as son of Margrete and Leif Nagell-Erichsen, became business manager of VG. He then served as managing director of Aftenposten from 1970 until 1985. In the mid-1970s the owners of Aftenposten and VG established The Schibsted Group, a precursor to the present Schibsted corporation, as a holding company for the two newspapers. It was headed by Hans H. Riddervold (1928--80), the son of Cathrine and Hans J. Riddervold.

During the 1970s VG grew into a leading national newspaper. Its editorial staff was improved and enlarged, it changed from a broadsheet to a tabloid format, and it was consciously developed as a newstand, rather than a subscription, paper. In 1972 VG passed its main competitor, the liberal daily Dagbladet, to become Norway's second-largest daily newspaper behind Aftenposten. After building up a nationwide distribution network and taking on the role of a national newspaper, VG surpassed Aftenposten and in June 1981 became Norway's largest circulation newspaper. As publishers of Norway's two leading newspapers, Schibsted's proprietors assumed a new role within the newspaper industry and in Norwegian society. As part of a modernization program, they built a new printing plant in Oslo in 1977.

Competitive and Organizational Changes, 1980s and 1990s

Several factors affected the stable ownership of newspapers in Norway in the 1980s and 1990s. Toward the end of the 1970s and early 1980s certain interest groups began a systematic acquisition of newspaper shares. At the same time television was becoming the dominant news and entertainment medium. In 1986 The Schibsted Group, through VG, took over the newspaper Tromso, published in northern Norway. It was later sold to another northern newspaper, Harstad Tidende. Schibsted also launched a local newspaper for Oslo, called Osloavisen, on March 1, 1988, but it was closed down on November 5.

In 1990 VG and Aftenposten both began publishing Sunday editions after an absence of several decades. VG also began investing in related media properties. The takeover of the film laboratory Laboratorie-Service AS in 1986 in cooperation with Filmteknik AB of Stockholm marked Schibsted's first entry into the film business.

In 1988 Schibsted began reorganizing from a family-owned business to a joint-stock company. Subsidiaries were formed and the corporation Schibsted ASA was established. Tinius Nagell-Erichsen was named chairman of the corporate board of directors, and Kjell Aamot, the former managing director of VG, became CEO. The corporation went public on the Oslo Stock Exchange in 1992.

Recent Developments: Newspapers, 1990s

In May 1996 Schibsted acquired 49.99 percent of the total stock and 100 percent of the common stock of Aftonbladet, Sweden's and Scandinavia's largest daily newspaper. The Swedish Federation of Trade Unions owned the remainder of Aftonbladet's stock. The evening newspaper surpassed Sweden's Expressen in circulation in October 1996. It can trace its history to 1830, when it was founded by the liberal Lars Johan Hierta. In August 1994 it became the first Swedish daily newspaper to appear on the Internet. In 1998 Schibsted acquired a 74 percent interest in Sweden's morning newspaper, Svenska Dagbladet.

Schibsted established the Eesti Meedia group in 1998 after acquiring Estonia's largest newspaper, Postimees. It also acquired the country's fourth-largest newspaper, Sonumilhet. With a staff of about 1,000, Eesti Meedia publishes nine magazines, has interests in the printing business, and has holdings in five local newspapers, in addition to publishing Postimees and Sonumilhet.

In November 1998 a new printing plant began operating at Nydalen in Oslo. It was built with an investment of NKr 1.4 billion ($179 million) and printed 4.5 million newspapers per week.

In April 1999 Schibsted launched a free newspaper, Avis 1, which is delivered twice a week by Aftenposten's carriers to households in the Oslo area that do not subscribe to Aftenposten. Aftenposten subscribers can also request delivery of Avis 1, which has a circulation of some 200,000.

Schibsted has a one-third minority interest in Adresseavisen, Norway's fifth-largest newspaper and the dominant regional newspaper in Central Norway. It is published in Trondheim, the hub of central Norway. In addition, the Adresseavisen group has interests in six wholly or partly owned local newspapers as well as local television stations and an advertising agency. Adresseavisen can trace its history to 1767, when it was established by royal charter. Schibsted also has a one-third minority interest in Stavenger Aftenblad, the major newspaper published in southwestern Norway. It is Norway's sixth-largest newspaper by circulation and third largest by advertising volume. It was founded in 1893 and also owns a local television station.

Schibsted has a one-fourth ownership interest in Faedrelandsvennen, a regional newspaper for the south of Norway. It is by far southern Norway's largest media company, with a staff of 200 and seven branch offices. The newspaper first appeared in 1875. Other regional and local newspapers in which Schibsted has an interest include Harstad Tidende, the fourth-largest newspaper in northern Norway; Bergens Tidende, western Norway's major newspaper; and Asker og Bærums Budstikke, the local newspaper for Asker and Bærum, western suburbs of Oslo.

Also falling within the holding company Schibsted Print Media AS are Norway's national news agency, Norsk Telegrambryå, in which Schibsted has a 21 percent interest, and Scanpix Scandinavia AB, a holding company for Schibsted's Scandinavian picture agencies Scanpix Norway AS and Scanpix Sweden AB.

Recent Developments: Television and Film, 1990s

Schibsted became Norway's leading corporation in television and film in the 1990s. In addition to co-founding and holding a one-third ownership interest in TV 2, Norway's first nationwide commercial television channel, it also owns 86 percent of the Estonian television channel Kanal 2. Schibsted's television and film interests are organized under the holding company Schibsted TV & Film AS. They are grouped into three main divisions: television channels, operated by Schibsted Broadcast AS; television and film production, operated by Metronome Film and Television AB; and rights and distribution, operated by Sandrew Metronome AB.

Recent Developments: Multimedia, 1990s

On September 1, 1995, Schibsted acquired Oslonett AS, which had been formed in 1991 to provide services in connection with the Internet, e-mail, Unix, and Wide Area Networks for business users. In 1995 Oslonett changed its name to Schibsted Nett, which subsequently developed into a leading Internet supplier in Norway. By December 1996 it had 50,000 private access customers. Then, on January 1, 1997, Schibsted became a partner with the state-owned telecommunications company Telenor in Scandinavia Online AS. Telenor acquired all of Schibsted Nett's access customers and agreed to provide the technical link-up with the Internet. Scandinavia Online AS is jointly owned by Schibsted, which holds a 65 percent interest, and Telenor, which owns the remaining 35 percent. Scandinavia Online built content services with other partners and has become the leading point of entry for the Internet in Norway and Scandinavia.

In spring 1995 Schibsted established Hugin AS to provide financial products and services to large Norwegian companies. That summer Hugin launched its first product, an annual reports CD-ROM. By the end of the year Hugin Online was launched. It was one of the first commercial Internet services in Norway. Hugin Online gathers financial information for listed companies and offers a text service over the Internet. It also has a separate service in which unlisted companies can publish their financial information. Hugin AS also offers other services aimed primarily at the finance departments of large Norwegian companies.

Other multimedia ventures include the book publisher Chr. Schibsteds Forlag AS, which traces its roots to the original printing business of Christian Schibsteds. Imedia Norge AS surveys a wide range of media for clients who are interested in what is written and said about them in the media. SMS Publishing AS, based in Stockholm, is a holding company for Headhunter AB, which publishes the weekly magazine Headhunter for free distribution to passengers on domestic flights in Sweden, and for Svenska Forlaget live & ledarskap AB, a medium-sized publishing company that specializes in leadership seminars and runs a book club for business executives.

Schibsted established Dine Penger AS in the late 1990s to take over the activities of the publishing company Dine Pengers Forlag AS and its operating subsidiary, which publishes the personal finance magazine Dine Penger (Your Money). Its circulation nearly equals the combined circulation of its two chief rivals. Finally, Schibsted's multimedia photo agency, Scan-Foto AS, is a major supplier of feature and news photos from Norway and around the world.

Outlook

Schibsted has operated profitably since it became publicly traded in 1992. Revenues and profits increased at a steady pace from 1993 through 1997, but 1998 was a difficult year for the company financially. It was involved in several acquisitions and took a one-time restructuring charge in the fourth quarter. While revenues rose from 5.4 billion NKr in 1997 to 6.7 billion NKr in 1998, net profit decreased significantly from 488 million NKr in 1997 to 166 million NKr in 1998. The company's stock fell from a high around 150 NKr in 1998 to around 82 NKr at the end of the year, and its stock continued to trade between 82 and 110 NKr for most of 1999. Some 85 percent of Schibsted's revenues come from its newspaper group, and approximately 11 percent from television and film. While its multimedia division shows the fastest rate of revenue growth, it has operated at a loss for the past two years.

Principal Subsidiaries:Schibsted Print Media AS (Norway); Aftenposten AS (Norway); Verdens Gang AS (Norway); Aftonbladet Hierta AB (Sweden); Handelsbolaget Svenska Dagbladets AB & Co. (Sweden); AS Eesti Media (Estonia); Gratisavisen AS (Norway); Scanpix Scandinavia AB (Sweden); Schibsted TV & Film AS (Norway); Metronome Film & Television AB (Sweden); Schibsted Broadcast AS (Norway); Sandrew Metronome AB (Sweden); Schibsted Multimedia AS (Norway); Scandinavia Online AS (Norway); Hugin AS (Norway); Chr. Schibsteds Forlag AS (Norway); Scan-Foto AS (Norway).

Principal Competitors:Axel Springer Verlag AG; News Corporation Limited; Bertelsmann AG.

Chronology

• Key Dates:

• 1843: Christian Michael Schibsted first takes over a book printing company.
• 1860: Aftenposten founded.
• 1935: Chr. Schibsteds Forlag begins publishing reference books.
• 1966: Aftenposten takes over operations of VG.
• 1992: Schibsted goes public.
• 1995: Company establishes Hugin AS and acquires Oslonett AS, later called Schibsted Nett.
• 1996: Schibsted acquires 49.99 percent of the stock of Aftonbladet
• 1997: Schibsted becomes a partner with in Scandinavia Online AS.