The flattening of Norway

Michael Hedges October 5, 2008

Norway isn’t particularly flat, in that geographical sense. But a clear flattening of media shares is taking place. Market shares for major newspapers, terrestrial TV and radio have been flattening as new offerings take from market leaders. Now, even the Web is flattening.

TNS Gallup Norge released figures (September 23) on visits to major websites. With the exception of public broadcaster NRK’s websites, the trend over the last 18 months shows slowing growth if not absolute declines. Growth for websites VG Nett and Manager appears stalled while unique visits to Aftenposten, Nettavisen and Dagbladet sites are in decline.

The September television viewing shares showed a similar trend as market leader TV2 stalled. Norway’s dominant commercial television broadcaster TV2 Group, TV 2 being the largest component, slipped to a mere 58.6% from 66.2% year on year. Public channel NRK1, leading the national persons 12 years and older ratings, has fallen nearly 4 points on the 52 week average to 28.3% markets share.

Gaining are (almost) all other channels. The biggest gain was ‘other,’ indicating the drawing power of new channels on satellite and cable platforms. The ‘long tail’ is wagging the media dogs.

And the ‘long tail’ is just getting longer as television distributors TVNorge and Canal Digital begin offering HD TV channels. 

TVNorge with Canal Digital launched Norway’s first HD TV channel this week (October 3), a simulcast of foreign programs available in HD carried on its main channel. The HD channel was inaugurated with the HBO/BBC series ”Rome.” Not all programs on the channel will be in HD. “In the coming months we will develop HD programming through international purchases, said program director Eivind Landsverk in the press statement.

A TV Norge spokesperson, quoted by DinSide, said HD programs in Norwegian wouldn’t be available “on this side of the New Year.” None of the nine HD channels available on Canal Digital carry Norwegian language programs.

The company announcement reported 100,000 HD receiver enabled households among Norway’s 1.3 million HD TV subscribers. TVNorge, owned by ProSiebenSat.1, was Norway’s original commercial television channel, then owned by SBS Broadcasting.

Canal Digital is the television cash cow of Norway’s State owned telecom Telenor. It has aggressively entered cable in Norway and Sweden, DTT in Finland and IPTV in Sweden. Canal Digital and BBC Worldwide announced last week (October 1) agreement to air the BBC HD channel in Norway on cable and satellite fixed up with Norwegian subtitles later this year.

Public broadcaster NRK has “no immediate plans” for an HD channel. “It is only when most people throw themselves on the HD wavethat this is really interesting,” said NRK’s Arne Helsinge to VG (October 2).“That's when it becomes a must.”

Neither does TV2, the joint venture multi-media cash-cow of Norwegian media company A-pressen and Danish media company Egmont.

“HD will cost a lot of money,” said TV2 spokesperson Rune Indroy to VG. “We are also uncertain how quickly consumers will attach themselves to HD.”

TV2 Group is quite a conglomerate: TV channels, web TV, a pan-European weather platform, production house and investments in DTV and pay-TV. Turnover in 2007, according to the TV2 Group website, was NOK2.6 billion (€315 million). 2003 revenue was NOK1.6 billion. Schibsted had a piece but sold out in 2006. Alf Hildrum became TV2 Group CEO in 2007, transferring from A-pressen where he had worked up to CEO.

Earlier this year Norway’s commercial TV broadcasters effectively ended the less than effective platform exclusivity with all channels available on both the Canal Digital and Viasat (MTG) satellites.

TV2 Group, ProSeibenSat and MTG/Viasat (TV3) compete for about €360 million in TV ad spending. Audience share for ProSiebenSat1 channels – TVNorge and FEM – rose to 22.5% in September from 20% year on year. MTG/Viasat’s TV3 and Viasat 4 rose to 18.9% from 13.8%. TV2 Group is said to take about 65% of Norway’s TV ad spending.

Broadcasters well-known resistance to digital proliferation is based on fear, mostly justified. Ad spending doesn’t increase proportionately with each new channel. Even if a broadcasters costs can be lower per channel for each new offering competition from cable and satellite distributors siphon market share and, thereinafter, ad share.

Distributors, conversely, have every incentive to offer more channels, new channels, different channels. Cable and satellite subscribers – and sooner than you think, IPTV – may use TV more sparingly but who cares? The subscription is paid each month.

The rise in market share for ‘other’ in Norway’s media – whether television or radio or Web  - has become media’s growth sector. Some call this the digital dividend. Consumers love it. For free-to-air incumbent broadcasters the future could be as flat as a silicon wafer.

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