The difficult business on the net
Internet: Many Swiss publishers are now generating revenue online. But are they actually making money from it?
Internet Many Swiss publishers are now generating revenues on the Internet. But are they really making money with it? Is the Internet already a profitable business? The question is easy to ask, but the answers from publishers are vague. Business on the Internet is at a low level and oscillates between small profits and loss-making business. In two to three years, however, it is hoped that the profit zone will be reached. However, the shock of the burst Internet bubble after the turn of the millennium seems to have been overcome and confidence in online business is intact again. Publishers are certainly investing heavily in the expansion of their web activities. The Internet is an important part of the growth strategy and is at the top of the priority list. Most publications now have at least one website with a range of offers and additional services. Web presence has become mandatory, and growing sales on advertising-financed sites of 40 percent annually show where the trend is heading.
"We are investing heavily in the Internet and this area is growing strongly in terms of turnover," explains Christoph Tonini, CFO and Deputy Chairman of UL at Tamedia. He estimates that the Internet business currently accounts for around four percent of the Group's total turnover. "We want to continue to grow there," he says. The Group is currently investing in the expansion of the website of the commuter newspaper 20 Minuten, is redesigning the Piazza portal and has plans in the jobs sector. However, Tamedia has not yet earned any money on the Internet. At the bottom line, the Group is still in the black in this business. "We are in the investment phase," says Tonini.
The NZZ is also investing heavily in the web. The contribution margins for the online commitment are constantly improving, says Regula Meili, Head of Online Marketing. "However, we are not yet in the black." She estimates that the break-even point will be reached in three years. Meili estimates that online activities currently account for less than five percent of the NZZ's total turnover.
"On the question of whether we are losing or making money on the Internet, we can clearly say that we are making money," says Ringier Group spokesperson Marco Castellaneta. However, most of the income is generated via platforms that are linked to an existing publishing product. It is therefore not possible to quantify the earnings in detail. Ringier has over 150 brands on the Internet worldwide. "Until now, these presences have often only been marketing presences and communication platforms for newspapers, magazines and television programs." Most brands have developed their own web strategy. Not all of them have focused as much on the Internet as Cash with its ongoing Cash daily experiment in Switzerland.
At Ringier, as in many other media companies, the Internet is currently developing very quickly: "In five years' time, we will probably be talking about the Internet differently," says Castellaneta. Growth on the web is a declared goal of the Group and is on the list of priorities. "Ringier is currently developing a strategy for the digital business, because it is clearly our intention to earn money on the Internet," says Castellaneta.
The Espace Media Groupe, publisher of the Berner Zeitung and Bund, is apparently also earning money in Bern. Espace CEO Albert P. Stäheli reports that Internet revenue accounts for around 1.5 percent of the company's total revenue.
In Basel, Switzerland's second-largest economic area, publisher Matthias Hagemann invests an average of one million francs a year in the web activities of his company, which publishes the Basler Zeitung. However, with a conservatively calculated turnover on the Internet of around 700,000 francs, the publisher has so far added to this. "It's a difficult business and not easy, especially for a regional newspaper," says Hagemann. If you come up with new ideas and business models, there is bound to be someone else who is already doing it successfully.
The German Axel Springer publishing house recently announced that the group generates five percent of its turnover on the Internet and is already earning good money online. But such success stories hardly impress the Basel-based publisher. He has doubts as to whether the German business model is really sustainable: "Nobody has found the ideal model yet," says Hagemann.
At Edipresse, the company that largely dominates French-speaking Switzerland and publishes over 150 newspapers and magazines internationally, the Internet has so far only been profitable in the classified section. Edipresse is involved in numerous corresponding portals. Philippe Gendret, Deputy Director of the "Matin et Magazines" group at Edipresse, speaks of high profitability and double-digit growth. However, the phenomenon affects all publishers who want to remain in the classifieds business, which has migrated significantly to the Internet. On the other hand, the publisher is making a profit on the portals of Edipresse titles. "We are making losses," says Gendret. Preparing the content is expensive, and every few months the sites have to be upgraded with new tools such as blogs, video and mobile in order to remain competitive. "In small Switzerland, it's difficult to offer a generalist site; it works much better in France or Germany," he says.
As with all publishers, Edipresse does not yet know exactly which channels work best with the public. It's a constant process of trial and error. On the Le Matin site, for example, news dominates in the morning, while interactivity is more in demand in the evening. Gendret estimates that the Group generates three percent of its total turnover (of CHF 450 million) on the web.
For the AZ Media Group, publisher of the Aargauer Zeitung, Ueli Eckstein, COO and Head of Print Media, puts the share of online business in Group sales at two percent. Classified ads dominate here. Eckstein does not want to say how high the profit is, but the bottom line is that they are already making money on the web.
In Graubünden, publisher Hanspeter Lebrument generates around four percent of his Südostschweiz's turnover online. "It's now a pretty good business," he says. Unlike Tamedia, for example, the investment phase is over at Südostschweiz. "We invested a lot of money at the beginning," says the publisher. What Ringier has moved away from is clearly working well in Chur under regional conditions: Lebrument has founded his own Internet company, Südostschweiz New Media, whose biggest customer is himself with his holding company and other subsidiaries. He makes a profit - "a few 100,000 francs a year". Here too, Lebrument skillfully keeps his empire together. The titles belonging to Südostschweiz receive services from Südostschweiz New Media more cheaply than elsewhere. The company is also regarded as the largest service provider for web and IT solutions in the region. "The Internet is once again seen as an opportunity. There is no absolute guarantee, but it is probably a solid business," says the publisher.
René Worni
"We are investing heavily in the Internet and this area is growing strongly in terms of turnover," explains Christoph Tonini, CFO and Deputy Chairman of UL at Tamedia. He estimates that the Internet business currently accounts for around four percent of the Group's total turnover. "We want to continue to grow there," he says. The Group is currently investing in the expansion of the website of the commuter newspaper 20 Minuten, is redesigning the Piazza portal and has plans in the jobs sector. However, Tamedia has not yet earned any money on the Internet. At the bottom line, the Group is still in the black in this business. "We are in the investment phase," says Tonini.
The NZZ is also investing heavily in the web. The contribution margins for the online commitment are constantly improving, says Regula Meili, Head of Online Marketing. "However, we are not yet in the black." She estimates that the break-even point will be reached in three years. Meili estimates that online activities currently account for less than five percent of the NZZ's total turnover.
"On the question of whether we are losing or making money on the Internet, we can clearly say that we are making money," says Ringier Group spokesperson Marco Castellaneta. However, most of the income is generated via platforms that are linked to an existing publishing product. It is therefore not possible to quantify the earnings in detail. Ringier has over 150 brands on the Internet worldwide. "Until now, these presences have often only been marketing presences and communication platforms for newspapers, magazines and television programs." Most brands have developed their own web strategy. Not all of them have focused as much on the Internet as Cash with its ongoing Cash daily experiment in Switzerland.
At Ringier, as in many other media companies, the Internet is currently developing very quickly: "In five years' time, we will probably be talking about the Internet differently," says Castellaneta. Growth on the web is a declared goal of the Group and is on the list of priorities. "Ringier is currently developing a strategy for the digital business, because it is clearly our intention to earn money on the Internet," says Castellaneta.
The Espace Media Groupe, publisher of the Berner Zeitung and Bund, is apparently also earning money in Bern. Espace CEO Albert P. Stäheli reports that Internet revenue accounts for around 1.5 percent of the company's total revenue.
In Basel, Switzerland's second-largest economic area, publisher Matthias Hagemann invests an average of one million francs a year in the web activities of his company, which publishes the Basler Zeitung. However, with a conservatively calculated turnover on the Internet of around 700,000 francs, the publisher has so far added to this. "It's a difficult business and not easy, especially for a regional newspaper," says Hagemann. If you come up with new ideas and business models, there is bound to be someone else who is already doing it successfully.
The German Axel Springer publishing house recently announced that the group generates five percent of its turnover on the Internet and is already earning good money online. But such success stories hardly impress the Basel-based publisher. He has doubts as to whether the German business model is really sustainable: "Nobody has found the ideal model yet," says Hagemann.
At Edipresse, the company that largely dominates French-speaking Switzerland and publishes over 150 newspapers and magazines internationally, the Internet has so far only been profitable in the classified section. Edipresse is involved in numerous corresponding portals. Philippe Gendret, Deputy Director of the "Matin et Magazines" group at Edipresse, speaks of high profitability and double-digit growth. However, the phenomenon affects all publishers who want to remain in the classifieds business, which has migrated significantly to the Internet. On the other hand, the publisher is making a profit on the portals of Edipresse titles. "We are making losses," says Gendret. Preparing the content is expensive, and every few months the sites have to be upgraded with new tools such as blogs, video and mobile in order to remain competitive. "In small Switzerland, it's difficult to offer a generalist site; it works much better in France or Germany," he says.
As with all publishers, Edipresse does not yet know exactly which channels work best with the public. It's a constant process of trial and error. On the Le Matin site, for example, news dominates in the morning, while interactivity is more in demand in the evening. Gendret estimates that the Group generates three percent of its total turnover (of CHF 450 million) on the web.
For the AZ Media Group, publisher of the Aargauer Zeitung, Ueli Eckstein, COO and Head of Print Media, puts the share of online business in Group sales at two percent. Classified ads dominate here. Eckstein does not want to say how high the profit is, but the bottom line is that they are already making money on the web.
In Graubünden, publisher Hanspeter Lebrument generates around four percent of his Südostschweiz's turnover online. "It's now a pretty good business," he says. Unlike Tamedia, for example, the investment phase is over at Südostschweiz. "We invested a lot of money at the beginning," says the publisher. What Ringier has moved away from is clearly working well in Chur under regional conditions: Lebrument has founded his own Internet company, Südostschweiz New Media, whose biggest customer is himself with his holding company and other subsidiaries. He makes a profit - "a few 100,000 francs a year". Here too, Lebrument skillfully keeps his empire together. The titles belonging to Südostschweiz receive services from Südostschweiz New Media more cheaply than elsewhere. The company is also regarded as the largest service provider for web and IT solutions in the region. "The Internet is once again seen as an opportunity. There is no absolute guarantee, but it is probably a solid business," says the publisher.
René Worni
