A Dutch press discussion

A new discussion on the press rages in the Netherlands. The newspapers are concentrating in large corporations. Roughly five companies dominate the market nationally and regionally. Some small players are active in the niche markets. Three companies De Telegraaf, PCM and Wegener hold 86,7 per cent of the market. As these companies see their daily run go down for more than four years, they look at other expansion opportunities. So far De Telegraaf has expanded into magazines, Internet and mobile content. PCM has moved into book publishing, not exactly with great success. Wegener has expanded in direct marketing.

One reason for these expansions is the rule in the Netherlands that a newspaper company can only have a market share of 33 per cent with all its titles. Now there is some talk about upgrading the rule from 33 to 35 per cent and opportunities to expand into broadcasting. In this way cross-ownership will be possible for newspaper companies. In a fourth report on Media concentration in sight, it says that newspaper companies should be able to develop themselves into multimedia companies; this is a typical misunderstanding of publishers: multimedia means here many media instead of a combination of digital media (text, images and sound).

While the discussion on upgrading to 35 per cent of market share and involvement in broadcasting rages on, Theo Bouwman, the CEO of PCM, made a statement in an interview this weekend: internet will not yield relevant revenues (for PCM, JB). In fifteen years the majority of revenues will still come from subscriptions and advertisement of the newspapers”. He expects more expression opportunities for the newspapers, but his message is: print is there to stay.

Theo Bouwman has never been a fan of the digital media. In 2001 he closed the Internet department of PCM. It was a good decision, but for the wrong reasons. He compared Internet information to teletext like information (a broadcasting text information service). He does not believe that newspapers will move integrally to Internet.

I completely disagree with him. First of all the printed circulation of the newspapers is going down already for the fourth year. In the Netherlands the newspapers live from subscription rather than street sales. So far the subscriptions go down radically, except the street sales on Saturday newspapers are going up. Subscriptions of digital newspapers during the week combined with a printed newspaper on Saturday are on the rise, but do not compensate for the loss.

The income of Internet is not even breaking even with the costs. But PCM has hardly developed a strategy of producing newspaper related sites like the Telegraaf. This newspaper is working on a strategy and has now Habbo Hotel as a source of income. The site has been on the market since 1999 and was only picked up by De Telegraaf two years ago. De Telegraaf and a regional newspaper group NDC have bought a license for Fitclub from a Swedish company. Wegener has an Internet joint venture with a real estate company Funda. But PCM does not really have a hit. It makes some shy steps in video and audio, but blames legal restrictions for not starting Internet news television and radio nor theme cannels.

Now everyone is concentrating on newspaper companies buying themselves into broadcasting companies. However, PCM needs a hostile offer from a commercial broadcaster as pepper to spirit the company into the 21st century.