Digital publishing is continuing to grow
The book industry is still going strongly digital. At Otava Publishing Company Ltd, that is evident particularly in the growing popularity of e-books and audiobooks. In general literature, digital publishing has grown to account for almost one-quarter of net sales.
The pandemic contributed to the accelerating pace of digitalisation by changing how people spend their time and their consumption habits. The pandemic increased the use of electronic products and services in Finland as well. In children’s books, sales of audiobooks rose by over 100 per cent in 2020.
The digital business area – the Virta team – was bolstered with added resources both through recruitment and the development of its operating model.
The coronavirus has also affected the values of consumers – and some of those changes will most likely be here to stay. One of the impacts of the pandemic is that sales of printed books rose for the first time in many years. People rediscovered the value of spending time with their family and reading.
In addition, the short run production model adopted at the Otava printing facility in 2019 bolstered both Otava’s competitiveness in the market for printed books and its earnings potential. Book printing operations fared well during the pandemic year.
Otava published over 1 000 audio books in 2020.
Thirty-five per cent of the fiction books published by Otava in 2020 were audiobooks.
In general literature, digital publishing has grown to account for almost one-quarter of net sales.
Due to the pandemic, Finns now have a greater appreciation for Finnishness and locally produced goods and services. Otava has taken this into account in book marketing as well.
The acquisitions of Karisto in February and Atena Kustannus in October were carried out in line with Otava’s strategy of pursuing growth by acquiring publishing expertise that rounds out its publication programme.
Both Atena and Karisto will continue their publishing operations under their own name and publication programme, and with their existing staff. Otava seeks to nurture the vitality of the Finnish book industry to ensure the availability of a wide selection of options in the market.
Otava’s books were successful in 2020 in terms of both sales and quality: Barack Obama’s A Promised Land was the year’s number one bestseller in the printed books category.
The year’s top bestseller was Carl-Johan Forssén’s The Rabbit Who Wants to Fall Asleep, above all thanks to its success as an audiobook.
Atena Kustannus’s Kielletyt Leikit (Forbidden Games) by Marko Tikka and Seija-Leena Nevala won the Finlandia Prize for non-fiction.
Anne Vuori-Kemilä’s Mustaa jäätä (Black Ice), published by Karisto, was shortlisted for the Finlandia Prize for fiction.
The nominees for the Finlandia Junior Literature Prize were Tatu ja Patu – kovaa menoa kiskoilla (Tatu and Patu: Tremendous Train Trip) by Aino Havukainen and Sami Toivonen as well as Otus Opus (Zoology Poetry) by Laura Ruohonen, Erika Kallasmaa and Petri Kumela.
In late autumn 2020, Otava Learning started its transformation process to ensure customer-focused operations in a market that is going strongly digital.
In 2021-2022, Otava Learning will bolster its operational capabilities by means such as shifting over to a team organisation model and developing management and coaching-focused supervisory work. This calls for boldness and the ability for renewal.
Otava Learning defined a new learning vision in 2020: Enabler of lifelong learning. One of the key tasks has been to prepare for free secondary schooling and the changes this ushers in.
The company has been able to serve its customers seamlessly in an environment that is going strongly digital and as user numbers grow.
The learning vision will guide Otava’s operations in the years ahead during its transformation process in an operating environment that is undergoing dramatic changes.
Otava Learning supported Finnish schools when they made a digital leap forward.
The number of digital upper secondary school textbooks ordered exceeded the number of printed copies for the first time.
The number of users of digital learning services grew approximately 21 % .
Multichannel and data-driven customer service
The coronavirus pandemic accelerated several development trends that had already been evident in the retail sector. One of the greatest of these is digitalisation. In 2020, digital purchasing gained ground rapidly.
The acceleration of changes in purchasing behaviour and the digitalisation of learning in particular were also visible in the bookstore business. In 2020, sales were down in Suomalainen Kirjakauppa’s brick-and-mortar stores, which had shorter opening hours due to the pandemic.
Suomalainen Kirjakauppa reacted immediately to the impacts of the pandemic by means such as renegotiating store lease agreements and scaling staff resources in line with shopper numbers. These adjustment efforts were successful.
Customer volumes at the brick-and-mortar stores were down by a fifth. However, the average purchase and conversion rate were higher than in previous years, and the stores focused on service quality.
Customers were looking for fun things to do during their greater leisure time.
The decline in sales by the stores was compensated for by surging growth in online sales on our modernised and scalable webstore platform.
Thanks to different delivery options – such as reserve and pick up, home delivery, and click and collect – and the new Plus streaming service, Suomalainen Kirjakauppa now offers an even more multichannel shopping experience.
Suomalainen Kirjakauppa collects user-specific data on the basis of in-store purchases, use of the online store and Suomalainen Plus usage data. With this user-specific data, we can make recommendations tailored to the interests of each customer from our range.
Data can be utilised in all of Suomalainen’s channels – customers can be provided with genuinely relevant, customised book recommendations, instead of the same old things.
Going forward, Suomalainen is well-poised to provide more personalised service to customers on the basis of data.
The company took a new step towards more personalised service in February 2020 with the launch of the Suomalainen Plus e-book and audiobook service.
The service combines new book formats, a new sales channel and a loyal customer app.
Suomalainen Plus provides accurate, individualised and book-specific usage data. We use the data to improve customer retention, optimise the selection, and develop service and the customer experience. The Suomalainen Plus service can also provide data that the rest of the Group can use to develop more engaging content.
Unlike other streaming services, Suomalainen Plus is a key loyal customer app that enables the company to provide many targeted offers to Plus users. In addition, the service will feature diverse content such as digital magazines and podcasts.
We intend to grow Suomalainen Plus profitably in a competitive market, focusing especially on serving Suomalainen customers.
We also harnessed digitalisation in new ways in book marketing.
Due to the pandemic, writer visits and events had to be cancelled. These have traditionally served as important meetings between writers and readers. Due to these exceptional times, Suomalainen Kirjakauppa proactively thought about new ways of generating visibility for books and authors. We rolled out two concepts: Suomalainen Kirjakauppa’s Kirjakahvila (Book Cafe) virtual hangout and the Äänessä kirjailija (The Author Speaks) video series.
Suomalainen Kirjakauppa’s top three bestsellers in 2020 were Barack Obama’s A Promised Land, Enni Mustonen’s Pukija (Dresser) and Anni Kytömäki’s Margarita. The top three audiobooks on Suomalainen Plus were Antti Holma’s Kaikki elämästä(ni) (All About My Life), Elina Backman’s Kun kuningas kuolee (When a King Dies) and Michelle Obama’s Becoming.
Visitor records broken on Otavamedia’s online media
The Media business area anticipated moving into new premises at Tripla in Pasila at the beginning of 2020. The move took place in February, one media family and unit at a time.
These modern premises facilitate collaborative work. However, employees only had a few weeks to enjoy them before the pandemic turned Otavamedia’s day-to-day operations upside down. Employees shifted over to remote work in mid-March. In summer, a hybrid model was introduced, combining remote and office work.
In the media sector, the impacts of the coronavirus pandemic were particularly evident in advertising: the Finnish advertising market was hit by an all-time slump in the second quarter, down 27 per cent.
Otavamedia took rapid action in response to the pandemic. Its adjustment measures were successful. Performance in both consumer and media sales outperformed the forecasts made in spring 2020.
The greatest successes were achieved online. The visitor numbers and page views of all eight major sites broke previous records.
In 2020, Otavamedia also performed better than its competitors in online advertising.
During the pandemic, there has been an even greater need for high-quality content and reliable journalism. Readers wanted both entertainment and factual information.
The media families kept track of not only the pandemic, but also the movements and moods of readers and online visitors, and adapted their content accordingly.
We also tested out a new kind of collaboration: TM-live, a daily news show about the coronavirus pandemic, was unveiled in April. TM-live was a joint project of Tekniikan Maailma and Otavamedia OMA that ran until June.
Otavamedia’s high-quality content won many prizes, including wins in three categories in the Finnish Periodical Publishers’ Association’s Edit competition.
Changes are shaking up the market. The world has changed permanently – and this calls for new ways of doing things.
Otavamedia’s strategy is to bolster its position as Finland’s leading player in the magazine market.
We will achieve this by producing and offering the best content in Finland to well-defined target groups. For this reason, Otavamedia is focusing on three tasks:
First, to be more agile. The mindset, willingness and ability to learn new things and change our operations in cooperation with our partners are important in the midst of the accelerating changes ongoing in the competitive environment.
It is also important to improve the customer experience by utilising data. This will keep the quality of our content commercially competitive, relevant and interesting to readers and online visitors.
Third, Otavamedia will accelerate its digital business alongside print content. Otavamedia must take a proactive approach to expanding its target groups in both sales and marketing of print and digital content, and to provide B2C and B2B customers with a media environment in which media solutions based on customer needs work in line with their objectives.
During the pandemic, there has been an even greater need for high-quality content and reliable journalism. Readers wanted both entertainment and factual information.
Marketplaces’ best-known products are Nettiauto and Nettimoto.
Marketplaces will be able to provide advertisers with even more diverse marketing communications and sales solutions.
A focus on core products in Marketplaces
Otava Marketplaces started 2020 with a merger. SL-Mediat and Ampparit Oy were merged into Nettix and three profit centres were set up: Marketplaces (Nettix), Professional Media (SL-mediat) and News Services (Ampparit). Otava Marketplaces operates under the name of Nettix Oy.
It moved into modern new premises in Tripla in February. Employees could enjoy the new premises for a few weeks before shifting over to remote work.
The coronavirus pandemic impacted on Nettix’s business as well – the changes were rapid.
A substantial share of Nettix’s net sales are generated through media sales in the advertising market. As the advertising sector is heavily tied to business cycles and among the first to be impacted by changes, Nettix also had to initiate adjustment measures in the spring due to the pandemic. For instance, we revised our service offering.
Our operations focused on products closely linked to our core business. In addition, we carried out a reorganisation and fine-tuned job descriptions.
The net sales of Marketplaces were down 3 per cent in 2020, but profitability improved thanks to the adjustment measures and the operating result amounted to EUR 9.8 million, representing 42.5 per cent of net sales.
Marketplaces overhauled its operating methods in autumn 2020. Part of these changes concerned the physical working environment, while some affected ways of working.
Changes in consumption habits due to the pandemic were evident in services such as Nettimökki, which saw growth in 2020 and became Finland’s most popular website for renting a holiday cabin.
Due to travel restrictions, interest in domestic tourism rose substantially in summer 2020, and it is likely that this change will remain partly permanent.
About 300,000 users visit Nettix’s Nettiauto service every day. Visitors who come directly to the site account for about half of all traffic. This indicates its top-of-mind status among consumers: Finns know Nettiauto and are in the habit of visiting the site when they think about replacing their car.
In addition to growth in visitor numbers, trading in cars through Nettiauto was strong in spite of the exceptional year. Two record-breaking months were seen in the summer, when more than 140,000 cars changed owners in July-August, growth of 7.2 per cent year-on-year.
The Nettiauto service commemorated its 20th anniversary in the autumn. Nettiauto also reached another important milestone: it was recognised as the world’s second most popular vehicle marketplace in relation to population (see the 2020 Automotive Annual report published by AIM Group on 18 September).
In Finland, Nettiauto is the clear market leader.
The Nettiauto service will be developed further so that Nettix can help people make these kinds of purchases that are important in their daily lives as smoothly as possible and at the right price. Its mission is to keep providing a platform that enables easy and reliable transactions.