2009�s key moments in media industry

10. Romania's country brand

Romania’s country brand has become in 2009 a hotspot on the Government’s agenda, after several attempts such as “Romania, simply surprising” (2001) and “Fabulouspirit”(2007) failed to turn the country into an international tourism destination. The ministry ran by Elena Udrea launched on May 1, the country’s promotion campaign “Romania, the land of choice”. The campaign included two ad spots, produced by ADDV and aired on Eurosport and CNN.

Last year, the Ministry of Tourism organized the pitch for the country brand. It will be a new attempt to bring Romania on foreign tourists’ “countries to visit” list. 13 ad companies, research or travel agencies joined the competition. The pitch was brought to a halt over disputes on the selection process of the three finalists. The ministry has chosen the bid with the lowest price - €895,000 - made by THR – Asesores en Turismo, Hoteleria y Recreation SA – Taylor Nelson Sofres SA, a price “suspiciously low”.

9. Lucian Sarb at Euronews

One of the 2009’s key moments in the media industry has been the nomination of Lucian Sarb, project manager and editorial director at The Money Channel, at the helm of the prestigious news TV channel Euronews. As editorial director, Lucian Sarb has become the Romanian with the most influential management position in a multinational media company, and the first east-European to take up such a job.

Euronews is the news channel with the highest viewership in Europe. It covers world news in eight languages and its main competitors are CNN and BBC World. Euronews was founded as a group of European public broadcasters. Majority shareholders are from France, Switzerland, Italy and Russia.

8. Development of the cinema industry

One of the few sectors that remained an attraction for investors in 2009 more than in previous years has been the cinema industry. After the first year of crisis, Bucharest got its first megaplex theater: Cinema City Cotroceni, a 21-screeens 4234-seats theater. The complex shelters the first IMAX theater in Romania. The investment amounted to around €10 million that the company plans to recoup in 3-8 years. Moreover, it plans to develop another 25 similar projects until 2012.

7. Transactions in the online media

Even if the M&A market has been on ice in 2009, the Romanian online industry has seen players striking major deals. In November, investment fund 3TS Cisco Growth Fund announced the acquisition of 25% interest in online publisher InternetCorp. The transaction is expected to fuel the growth rate of the company.

“With 5 years of history, an excellent team, a portfolio consisting of top sites and a strong financial backer, InternetCorp is no longer a start-up,” said Mihai Seceleanu, InternetCorp’s CEO (photo).

The companies involved in the deal refused to disclose the value of the company, but according to Ziarul Financiar daily, the acquisition of a minority stake in InternetCorp evaluates the company at an estimated €8 million.

6. TV stations cut back on ad brokers� services

The year 2009 has brought an important change in TV advertising business. Two of the biggest media companies, Antena 1 and Realitatea Media have cut back on the services provided by their ad brokers. Intact’s advertising space was sold by Clir Media, agency headed by Laurentiu Ionete, that managed the channels’ multiple ad space for the past 12 years. After Antena’s exit from Clir’s portfolio, the agency remained with two clients: Radio Zu and Radio Romania Actualitati.

DBV Media House’s portfolio narrowed to two clients as well (OTV and One Music Channel), after Realitatea Media that generated around 90% of the agency’s working capital, has cut back on ad space selling services in a broader cost-containment program.

5. Newspapers ditch print editions

2009 has been a difficult year for print media industry. Media companies have decided to ditch their local titles, in order to focus exclusively on stronger brands – national newspapers.

Publimedia International has shifted the operation of local newspapers Hunedoreanul, Clujeanul, Bihoreanul, Banateanul and Ieseanul wholly to the internet, after it considered shutting them permanently. The Clujeanul crew left the publication and set up from own funds a weekly newspaper called Viata Clujeanului.

EMI European Media Investment AG, majority shareholder of Monitorul de Cluj, Monitorul de Sibiu, Monitorul de Medias and Monitorul de Alba sold the newspapers to minority shareholders. The decision was influenced by Goldbach Media Group’s strategy of focusing exclusively on online media.

4. Bigger and Boom go out of business

The first year of crisis didn’t go by without inflicting heavy casualties. In March, Bigger Group agency closed down, leaving 40 staffers jobless, and a debt load of a whopping €4 million. The head of the agency, Marcel Straut (photo), unexpectedly sold the business to a 21-year old woman from Moldova and left the country. The no1 victim of Straut was BBDO’s Media Direction agency which had to receive around €2 million from Bigger.

In July, one of the largest online ad brokers, Boom Advertising, part of Netbridge Investment, entered insolvency proceedings after the legal action filed by imobiliare.ro publisher, which is part of the same company.

3. Sarbu sells Buftea film studios

In 2009, Adrian Sarbu has been appointed as CEO of Central European Media Enterprises, thus becoming the Romanian with the most important executive position in a multinational company.

Sarbu has also been the “leading actor” in one of the largest deal in the media market by value in 2009: the sale of MediaPro Entertainment (which includes Media Pro Pictures, Media Pro Studios, Media Pro Distribution, Pro Video, Media Pro Music & Entertainment, Cinema Pro and Hollywood Multiplex) to CME, at an estimated $97.6 million.

But managing a multinational company was no easy task in a year that had seen many companies sinking into loss and shedding jobs or customers. Late April, when CME was posting net loss of $44.4 million in the first quarter, Sarbu said the first quarter of 2009 had been the toughest in CME history.

2. Vantu sheds print operations

One of the crisis’ heaviest casualties in the media industry in 2009 has been the print media business of Realitatea group, after Sorin Ovidiu Vantu said in December: “I will permanently close print media business, and focus solely on online.” Thus, the final editions of Cotidianul newspaper, founded in 1991 by Ion Ratiu and Business Standard daily went to the presses on December 23rd.

Realitatea Media, company held by Sorin Ovidiu Vantu bought in 2006 Catavencu SA, a deal completed in 2009 when Realitatea acquired the remaining 10% interest in Catavencu. However, from October, the company has relinquished gradually to a number of titles – from lifestyle magazines (Tabu, Superbebe, Bucataria pentru toti, Aventuri la pescuit) to Cotidianul and Business Standard.

Money Express magazines has been acquired by special projects company M&C Strategy, owned by Dragos Nedelcu and Sorin Frenciu, according to paginademedia.ro, while NewsIn agency has been taken over by incumbent chief executive Cosmin Popa.

1. Ad market slumps 40%

2009’s most noted moment was the sharp decline of the advertising market. After two-digit growth rates in previous years, ad industry showed 38% slump in the trailing year, to €347 million, Media Fact Book study conducted by Initiative Media found.

The biggest drops were recorded in the print media that reached €40 million in 2009, half the 2008 size of €82 million. Outdoor ad market sank to around €44 million, 37.1% below year-ago level.

TV industry dropped to €225 million, 33.2% less than €337 million in 2008.

Although early 2009 projections had indicated stagnation in the online market, representatives of the media agency predicted a decline to €13 million from €16 million in 2008.