CEO Interview: Andreas Ternstrom, Bonnier Gaming
Andreas Ternstrom has major plans for Bonnier Gaming. But rather than just trying to take market share, Ternstrom says he will grow egaming markets...
THERE HAS BEEN MUCH debate within egaming circles about the viability or otherwise of media groups entering the online gaming and betting sector as operators. Regardless of the arguments for or against, the Bonnier Group is one of those media firms that has stepped into the space through its subsidiary Bonnier Lottery, which is probably better known in the industry as Bonnier Gaming.
Bonnier Publishing is a major media company in Scandinavia and the largest in its home territory of Sweden; it also has international reach through publishing activities in the UK, US and other European markets.
But while much of the debate about whether publishers would make good gaming operators is interesting, Bonnier Gaming chief executive Andreas Ternström reminded eGaming Review that publishing is in fact part of the mainstream entertainment industry.
This is absolutely true and Olivier Ou Ramdane, chief executive of Eurosport’s betting and gaming division SPS Betting, made a similar point when he spoke to eGaming Review for last month’s CEO interview. “We see our offer as very much being in continuation of what Eurosport provides its spectators,” Ou Ramdane said. “The aim of SPS is to replicate the product Eurosport provides for sports fans but on a betting platform, giving them the possibility of placing a £15-£20 bet to enrich their viewing experience.”
Returning to Bonnier Gaming, Ternström explains how the company came into being. “Marcus Forssell, the head of the board for entertainment at Bonnier Group, had been looking at new technologies such as mobile telephony. After some research, he decided to set up Bonnier Lottery because gaming was the most exciting model, this was in early 2005.”
Integral part of the group
But in common with other major media organisations that take social responsibility and their role as objective information providers seriously, how did the group blend those duties with providing gaming products to its customers? Also, the group’s huge array of magazines and newspapers must provide Bonnier Lottery with an easy source of sign ups and white labels?
“We are a gaming company within a media house, but all the group’s product divisions are part of the entertainment industry and we aim to offer a leisure product to customers. We are very focused on all issues of social responsibility, and that’s because we compete for their business on the same level as other service providers,” Ternström explains.
“This competition is very good because it would be very easy to become a fat cat and take all those licensing deals for granted. But to come back to social responsibility, the company doesn’t look at it in terms of “should we do this or not?” It is already done: TV channels, newspapers, online portals: everyone in the group is involved and gaming is an integral part of the business now.”
Bonnier Lottery started out by partnering with a TV show called Bingolotto broadcast on the group’s TV4 channel to leverage the reach at its disposal. It launched the Bingolotto site in March 2006, carrying out all brand marketing, operations, customer services and so on.
“Since then, we reckon we have acquired around 20% market share in online bingo in Sweden if you take away [the national monopoly] Svenska Spel. We are now bigger than [Unibet’s] Maria Bingo and Bertil,” Ternström says.
“There are different reasons for this; the competition has lost market share and we have gained around 5%. But mainly we have got to the stage where we really understand what to do with the TV and online brands, how they are connected and how to make them work together to maximise revenues, integrate the brands and make them work well. So it is much more than just a white- label relation.”
The company also moved all internet advertising funds to finance TV commercials, using that platform to maximum effect, but “Bingolotto has been the basis and foundation of Bonnier Gaming and is what we have used as a starting point,” Ternström says.
While Bonnier has used bingo as its gaming springboard, Ternström says the company is a “gaming incubator” that will launch casino, poker and what he sees as the most natural product for the group’s target audience, sportsbook.
“The natural gaming product for Bonnier should be sports betting: we run a lot of sports content, buy a lot of sports rights, run TV channels with massive sports audiences and have all the famous commentators in print and TV. It will be natural for us to set up a sports-betting platform and when we have done this, we will cross-sell and convert those players to other gaming products such as poker,” he says.
Room at the top
The company’s TV channels include the largest commercial broadcaster in Sweden, TV4, and MTV3 in other countries such as Finland. All these plans sound grand and are clear proof of Bonnier Gaming’s lofty ambitions, but how is the company going to compete with already very strong competition, not just in Scandinavia, but across Europe generally?
“As a media house, we are very audience-focused, so for example we know about 55-year-old women and how to target them. Our major competitors have never worked with that demographic and are never going to. We will develop player groups that the current major egaming operators have never targeted and will do this by building local brands for specific audiences and not try to just direct them to a big portal brand where they can join the rest of the pack.”
Ternström adds that his company can become as big as Expekt or Unibet because it has the backing, the brands and the know-how. One of the other reasons for this optimism is that Sweden still has a lot of room for growth. “Our Swedish bingo operation currently has a turnover of around SEK45m (4.3m, £3.9m). That is just 20% of the market, Sweden has come far but is still a very small market,” he says.
For the time being however, Bonnier Gaming plans to scale up its business by launching its own casino and bingo brands in Sweden and in new markets. The idea will be to build up liquidity and sign up white-label partners to add to it.
Ternström says the timeline is for Cashball, the Isle of Man-based company that is Bonnier Gaming’s operating arm and white-label service provider, to have launched at least two new Bonnier brands and between three and five new licensed customers by the first half of 2010.
And even though the egaming sector is already highly competitive, he puts it in perspective. “The UK launched the first bingo site around 2002, for Sweden it was probably in 2006. As a country, Sweden is very keen on new technology and the like, but ultimately we have not done half what a company like Cashcade has done. Many people look at a country like Sweden and think it is really saturated but that is not the case.”
The entertainment aspect of the product offering will be key, especially in bingo where players come as much to be entertained as for the chance of winning money. Ternström says: “Our bingo research has shown that 70% of respondents play for entertainment and 30% for the chance to win money. But the 70% also includes the thrill of maybe winning big money. The bingo payout ratio in Sweden is now around 60%: this shows us that our players visit us to entertain themselves and that is the reason for our success. You have to deliver some kind of entertainment to keep people with you.”
The next year promises to be busy for Bonnier Gaming. An aggressive ramp up of its activities in Sweden and European markets such as Spain and Italy will put Ternström’s theories to the test. As he says himself, his company now has experience and know-how from its work in Sweden and understands the products and the target group. This of course is key, but if Bonnier Gaming is successful, it should also put to rest the running argument about whether a media company can become a fully-fledged successful egaming operator.
This article first appeared in the November issue of eGaming Review.