Trinity Mirror announces major investment in internet strategy

Central to this strategy is Trinity Mirror's existing revenue-driving central portal, ic. The Group intends that the ic network will become a significant on-line destination providing users with independent consumer-oriented advice that is not driven by vested interest in any particular retailer or manufacturer's products. It will also provide completely secure on-line purchasing facilities for the Group's customers with continuous market-leading offers.

The ic network will take all of the traffic and customers generated through its regional and national sites and unite them into one of the UK's largest communities of on-line users.

Commenting on the announcement, Philip Graf, Group Chief Executive of Trinity Mirror said:

'We are confident that the combination of this sustained investment, together with the Group's unique offering and seamlessly integrated superior content, at both a national and local level, will enable Trinity Mirror to build on the initial success of ic24 to become the UK's leading "local portal" and a critical component of local and common interest communities.'

The Group has established a separate new media division, headed by David Clarke, previously Managing Director of Virgin.Net. Graham Mead (previously Director of Marketing, Trinity Mirror Regional Newspapers) has recently been appointed as Managing Director, Regional New Media to manage the implementation of the regional aspects of the Group's new media strategy.

The new media division is responsible for leveraging the Group's existing national and regional brand strengths and core new media assets to further develop and implement the Group's internet and new media strategy. It currently employs approximately 100 staff, all of whom have extensive experience in the fast-growing on-line or media industries. The Group's internet development plans require this number of staff to increase to over 250 during the next 12 months.

Market overview

Independent sources forecast the internet reaching 15 million homes by the end of the current year. During 1999, on-line retail sales were in excess of £3 billion and are forecast to increase to £10 billion for year 2000. Using the volume of traffic that will be generated by its own monetising portal, and the Group's ability to profile the large number of customers it will attract to its sites, Trinity Mirror will develop advertising revenues and sales commissions from a wide variety of on-line activities.

Existing new media assets

In addition to the ic24 central portal, the Group's existing new media assets include national websites, such as The Mirror site, and a series of regional sites, based on the Group's local newspapers' content and expertise. These sites currently generate over 40 million page impressions in total a month. The most visited sites are the ic24 portal, Sporting Life and the Racing Post.

To date, there has been limited investment in the Group's national and regional new media operations (only £6 million in 1999). The Group's internet strategy is to link these activities and develop them into a coherent network, offering a consistent, branded and high quality product to consumers.

ic24

Launched in April 1999, ic24 is already in the top five UK portals in terms of advertising revenues. During 2000, the Group expects to generate over £7 million of advertising revenue. In the first two months of 2000, the Group has already sold over £2 million of advertising for delivery in the current year.

This portal will now aggregate traffic from all the Group's sites into revenue-generating channels, as well as generating significant traffic in its own right. ic24 will offer a popular mix of lifestyle and entertainment channels, selected for their potential to generate advertising and e-commerce revenues. It will take a 'consumer champion' position in all the subject areas it covers - entertainment, consumer, lifestyle, news - offering excellent value services to customers and advice on a wide variety of topics. The Group has recruited the management team who were responsible for producing Virgin.Net's award-winning content to develop its own central portal content.

ic24 is also an internet service provider (ISP) and handles substantial levels of web traffic: over 215,000 access customers and more than 12 million page impressions a month. As a result of its ISP services, Trinity Mirror is able to profile its users more effectively and market to them on a one-to-one basis, which is key to attracting advertising customers.

Already at the forefront of providing free telephony time, the Group's free weekend telephony programmes have been effective since last October. Evening and weekend use currently account for around 80% of home internet usage and, to meet this demand, the Group will shortly introduce an additional free weekday evening programme, as well as continuing with its free access service. The Group's programmes are already operational and do not require the Group's customers to move from their existing telephone supplier for their normal telephone calls. Trinity Mirror believes that, today, it has the best overall telephone/internet access offering, as supported by the recent article in MMXI Europe and Internet magazine (March 2000).

Roll-out plans

Within the next 12 months, Trinity Mirror plans to roll out 16 ic portals in all major regions. The Group's routes to market, access to local content and existing status in local communities give it an excellent competitive advantage in these areas.

Its local sites will become the core of the local internet community they serve. In addition to local news and sport, they will provide users with a comprehensive 'what's on' guide for all ages, the ability to book tickets, make a reservation at a restaurant or arrange a tee time at the golf club. They will also provide facilities to buy a wide variety of products from local, national or global merchants, and have the definitive local business directories. Trinity Mirror is confident that this will encourage and enable local communities to use the internet to its maximum potential.

Trinity Mirror will develop all its local sites into industry-leading regional portals based on a common, leading-edge technology platform. This will enable these sites to be major contributors to the ic24 network - in terms of the quality content they offer, the traffic they attract and the revenue they generate. The first beta site, icScotland, launches on 22 March 2000 with substantial microsite and local advertising revenue opportunities.

Customers accessing the ic network, whether through the central portal or though any of the Group's other sites, will be able to move seamlessly from one site to another.

National websites

Already popular due to their established brands, the Group's national newspaper websites, The Mirror, Sunday Mirror and Scottish Daily Record, will also be enhanced. Plans include greater involvement from columnists to provide web-specific editorial.

Sporting.coms

Another key element in Trinity Mirror's new media strategy is the further development of its sporting.coms.

The Group is working with its shareholder partner to develop the PA/Sporting Life site into the UK's leading general sports portal.

The Racing Post website was re-launched in October 1999 as a free-to-market site, having previously been a subscription-only service. This move has resulted in a significant increase in registered users from 1,200 to over 41,000, attracted by the credibility and independence of the Racing Post brand. The site's e-commerce potential is illustrated by the rise in page impressions already achieved from 1 million in October 1999 to the current level of over 8 million per month.

Other income streams include advertising and sponsorship deals. Future developments for the Racing Post website will focus on strengthening its status as a leading supplier of racing and sports betting information in any form. This includes offering visitors the facility to interact directly with a number of major UK bookmakers. Visitors will be able to compare the live odds offered on a wide range of sporting events and to place a bet in a matter of seconds with their preferred bookmaker. Income to the Racing Post will be derived from a percentage of the betting turnover generated and negotiations are at an advanced stage with a number of leading bookmakers.

Technology and content partnerships

PC-based internet, interactive digital television and mobile phone-based technologies are set to be extremely important ways of delivering content and services to customers. The Group is currently in discussions with a number of parties with the intention of developing relevant partnerships with leading edge technology and content providers to ensure the quality, depth and compatibility of its services.

Investment

The planned investment in 2000 is in respect of £44 million of revenue expenditure (primarily promotion and marketing, technology and staff costs), £5 million of capital expenditure and up to £3 million of further investment in existing joint ventures such as Fish4 and PA Sporting Life. This investment programme does not however reflect the benefit of £7 million anticipated revenue income in 2000 or revenue income in future years. The Group's objective is to significantly increase this revenue year-on-year.

In addition to this anticipated £150 million three-year investment, significant opportunities exist for marketing and cross promotion within the Group's own national and local newspapers.

David Clarke, Managing Director of Trinity Mirror New Media, comments: 'Trinity Mirror is committed to the development of its new media business and has a clear and focused strategy in place. We intend to continue implementing and developing our internet and new media strategy quickly, but with quality, to capture substantial UK online advertising and e-commerce revenues.'