The two big Finnish “old media” companies, Sanoma and Alma Media, published their 2009 results yesterday and today, respectively. However, as seems to be the common policy, neither of them was too open about the state of their online business. But luckily Alma still offered some nuggets of information for constructing a picture of what’s going on.

The two online legs of an old media company are typically classifieds and editorially driven news sites. Alma’s classifieds segment, which includes such assets as the housing site Etuovi.com and jobs site Monster.fi, posted a loss of €0.7m with an €27m revenue. Sanoma doesn’t give out any information on its online classifieds.

On the online news side, Alma publishes Iltalehti.fi, the biggest website in Finland by unique visitors. Although the full year figures for the asset were not disclosed today, the Q1/09 report from April states a revenue of €1.2m, so the annual income is likely to be around the €5m mark. Given that Iltalehti.fi relies mainly on journalistic content, the site is – after full allocation of editorial costs – most likely loss-making or, if they’re lucky, posting a very small profit.

Neither report offers any further insight into the revenues or profitability of other editorial sites, such as Kauppalehti.fi or HS.fi. But the situation is unlikely to be strikingly different from the market leader.

So online clearly has not been a smashing success thus far for the Finnish media giants. And given that all the non-online businesses are already, or will be soon be, in structural decline, it doesn’t take a genius to guess that both firms are frantically looking for ways to turn the tide.

Learn from the Vikings

What about old media in the other Nordic countries? Fortunately Schibsted, the Norwegian publisher, has a more open communications policy on its online activities. VG Multimedia, the publisher of VG Nett, Norway’s largest website and the local equivalent of Iltalehti.fi, posted a Q3/09 revenue of €8,2m with an 18% operating margin. So the annual revenues are likely to be at least €30m with €5m in profits. Not bad at all when compared to the Finns, especially considering the slightly smaller market size (Norway has 4,8m inhabitants and Finland 5,3m).

But it’s the classified advertising that really shines across the Scandic Mountains. Finn.no, the marketplace for everything from used goods to boats and travel tickets, posted a Q3 revenue of €25m with a whopping €11m profit. So at an annual level, the asset is raking in €100m in revenues with a more-than-healthy 45% profit margin.

In Sweden, Schibsted runs the news site Aftonbladet.se with a 12% margin and the classified site Blocket/Bytbil with a staggering 62% margin.

Although Schibsted is clearly on the right track, this all begs the question: What does the online future look like for the Scandinavian old media companies?

Finger-pointing never helps

We all know how the story has developed in the US. The consumers are migrating online at an ever-increasing pace and the media companies are – to put it politely – struggling to follow. Nowhere is this as evident as in the news industry. The beacon of US quality newspapers, the New York Times, almost went bankrupt last year, only to be rescued by a Mexican businessman. Other papers have not been as fortunate, and many have gone under.

Finally realising that the old tricks – selling advertising space as a scarcity and making readers pay for bulk content – don’t work in the new environment, these firms are all but panicking. The most comical example of this has been Rupert Murdoch trying to argue that Google, which generates traffic for news sites by making their content easily discoverable, should pay the news companies for the privilege of providing this free marketing service.

Google has been unfairly blamed for the news industry’s misfortunes also in Europe. The Germans have argued that news companies deserve a share of Google’s revenue and called for legislation to condemn the company as a monopoly. News firms from other European countries have since joined this bandwagon of nonsense by signing the so-called Hamburg Declaration.

Rather than pointing the finger at innovators such as Google and crying after their profits, media companies should themselves put all focus on innovation and renewal. The internet has broken most old media business models, and no amount of protectionism will bring them back.

It ain’t gonna be easy

Given that Scandinavian media companies are still in a much better shape than their US counterparts, there is still time to act. Schibsted – which, by the way, didn’t sign the Hamburg Declaration – has shown that it is not impossible succeed online.

Bonnier, the Swedish media behemoth, has taken a small step in the right direction by establishing an R&D lab. Only time will tell whether they can produce anything beyond snazzy concept videos.

Succeeding in the new world will not be easy, not least because newcomers are rapidly populating what is now a fully open playing field. Google has already taken a big chunk of the small business advertising. In paid digital content, the device and platform providers such as Apple and Amazon are likely to reap the biggest benefits. Thematic content verticals, traditionally the domain of magazine publishers, are steadily slipping into the hands of non-established players. In Finland, the most popular standalone cooking site (Kotikokki.net), health site (Tohtori.fi) and fashion site (Indiedays.com) are all run by innovative and fast-moving companies eager to capitalise on the new opportunities.

And while the old media companies might be many things, fast is not one of them.

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