- Moving multimedia group from market entry to being recognized market leader
- Transformed traditional newspaper into profitable multimedia leader
- Radical culture transformation in a newspaper company
- Created critical new revenue streams during severe Argentinean economic crisis
- Transformed group of local TV stations to leading national network
Moving multimedia group from market entry to being recognized market leader
Cutting-edge competition, internal cultural difficulties and a failing online strategy sent leading 1b€ Spanish multimedia group to a falling 23rd position in the market. Stockholders set the goal of positioning the group among top 10 players as part of a four year strategic plan.
Built credibility, cooperation and organization’s confidence through dialog with managers and quick wins. Analyzed competition and devised strategic plan based on organizational strengths and future-oriented vision. Built multidisciplinary team energized by shared common vision. Started organic growth, Greenfield and acquisitions initiatives. Evangelized and executed on proposed technical and organizational changes to adapt to online competitors and markets.
Outdid competition traffic growth. Over four years, company grew 749% - 4.9 times faster than the market and faster than two main competitors. Met goal of top ten market position by reaching top seven. Increased market share of Spanish Internet users to 74%. Increased revenues by 358% (from 16.8 M€ to 60.1M) and increased ebitda nine fold (from 0.9M€ to 8M) over 4 years.
Company’s newspapers gained stronger foothold in their regional markets as new audiences and new sources of income were obtained. Financial analysts and markets were reassured of strategic, future-oriented vision and strong leadership to maintain extraordinary growth and market success.
Transformed traditional newspaper into profitable multimedia leader
Century-old newspaper needed to define and implement a winning multimedia strategy to revive revenues and ebitda. The goal was to become the new multimedia leader in audience and advertising revenues. Competing radios, new TV stations, a newspaper, a free advertising paper, internet and free trade magazines were entering the market and eroding income by offering advertising solutions adapted to our target market.
Internal sales force was selected to better control local markets and up sell upcoming new media to smaller advertisers. Convinced advertising agencies that outreach to smaller advertisers would not hurt them. The majority of a local TV station was acquired and tailor made solutions were offered to advertisers. Intrapreneurial managers were selected and given a margin of freedom to act. Cross media training was offered to pioneering journalists. A regional radio frequency was obtained from the local government. An online edition of newspaper was launched, quickly followed by the first Internet city guide in the region and one of the first in Spain.
In five years income grew 80% and profit grew 324%. Struggling newspaper in Spain became an excellent example of modernity and very profitable multimedia diversification. The local TV stations and the Internet sites became regional leaders. All new media investments were self-funded thanks to new income and costs reduction.
This unique transformation and the possibilities offered to traditional media when future-oriented strategies are embraced was documented in the Ph.D. dissertation “La Transformación de Nueva Rioja S.A. en una Empresa Multimedia” by The Universidad de Navarra. The visionary plan developed to transform the newspaper into a multimedia leader was later adopted by the the holding group in its 12 regional papers and other competitors followed.
Radical culture transformation in a newspaper company
Struggling, century-old media company needed radical organizational and cultural transformation to adapt quickly to changing, highly competitive new media arena. Company lacked vision, focus and teamwork. Current systems and structures did not leave room for change. Without swift structural and cultural changes to improve profitability, the company’s survival was at stake.
Created and secured buy-in from executives, management teams, workers and unions for transformational plan. Empowered teams and workers through training, instilling a common vision and objective-driven bonuses. Leveraged technology for personnel management and transitions.
Empowered teams executed on ambitious plan and company acted as integrated unit under new common vision. Generated 22% savings in spite of new activities being launched. Headcount was reduced 27% over a two-year period without any strike. Previously undisclosed liabilities were identified and doubtful accounts were written off establishing a baseline for future projects.
Transformation of organizational culture improved relationships with readers and advertisers who appreciated new formulas, technology and approaches based on their needs. Internal organizational changes no longer met with resistance by workers and unions. These changes and new open-minded, creative atmosphere paved the way for further transformation and a later entry into new business areas.
Created critical new revenue streams during severe Argentinean economic crisis
Due to economic crisis (total Gross Domestic Product fell 20%) and the sudden devaluation of local currency, regional Argentinean newspaper needed to drastically reduce costs and create new sources of revenue to survive. New media solutions needed to be created while making use of existing organizational structure.
Vigorous negotiations with creditors and local shareholders eliminated high interest rates and debts. When monetary system collapsed, the newly created four local currencies and bartering were accepted. Reached agreements with regional radio players to exchange air time for content. Non-qualified personnel reduced and expert personnel reassigned to new online projects to immediately generate revenue. Developed new Sunday magazine with existing human resources which was sold, along with other content, to regional media. Secured distribution contracts for other regional and national newspapers and magazines.
Unlike its competitors, company did not show a negative ebitda at any time and its revenues did not reflect the full effect of the general devaluation. Company experienced a strong reduction of liabilities while comparable market players had to surrender significant assets. Company experienced 540% income growth in new media and new activities, including Internet, radio, printing, distribution. Fixed costs were lowered by 27% in spite of a higher costs environment and total debt for the holding company and business units was reduced from 145M USD to 8M. High interests were almost eliminated. Personnel reduced from 551 to 336 without strikes. Company was sold at price that gave parent company a profit equivalent to 31.5% of its 2007 ebitda.
Named “third most profitable company in Argentina” by the economics magazine, Mercado. It leveraged crisis to start new project and create new avenues of growth. Its excellent ebitda and balance sheet allowed it to continue operations while exploring acquisition of weakened players. Company became the strongest player in its sector. Company entered post-crisis years with more balanced portfolio of income.
Local TV stations of leading Spanish multimedia group were a group of unrelated business units, resulting in few synergies and nonexistent national revenues. Lack of national identity was affecting national advertising potential and the ability to obtain new digital licenses from the official authorities. Without a common vision and programming responsible for low audiences in non-prime time, it was difficult to reach significant prime time audiences.
A small, centralized team was hired to reinforce shared programming, technological developments and sales. Local news and programs were revitalized in Madrid market, stressing city presence through live studio programs and street presence. A Barcelona frequency was negotiated, acquired and reenergized. Shared programming was reinforced through own programming and aggressive rights acquisition.
All local brands evolved into a single national identity that created network notoriety and commercial awareness. Local market share for all of Spain grew 72.7%. National advertising increased 63%. Several digital frequencies were obtained from authorities. Independent TV stations grew into a network with 53 stations across the country.
The new management of the local network brought company closer to understanding the business of TV and TDT (Terrestrial Digital TV). The foothold of the local markets was strengthened with the new presence of the local TV stations.
Learn more about Fernando Samaniego and his experience and expertise in new media.