Tuesday, March 06, 2007

VNU Media: new start, same problems

It is all over the Dutch publications and blogs: VNU Business Media Europe makes a new start as VNU Media. (Whatever you think the company is still Dutch pride). But there is more: the company goes after business internet movies. It is a new start for VNU, but it has the same problems as it used to have.

When VNU was broken up by private equity last year, the European business publications section was sold to 3i. Immediately the UK subsidiary was sold on. And recently the company (or what is left of it) changed its name from VNU Business Media Europe into VNU Media. The company profiles itself as an IT information and media company with subsidiaries in Germany, France, Italy, Belguim and Spain. The major activity of VNU Media will be in The Netherlands.

In no uncertain terms, the new management made clear that it wants to change from a print publisher to a blended media publisher, moving from a turn over of 70 percent from print to a 50 percent. One of the digital activities will be a service like YouTube, but then for business. Asked for the business model, the management indicated that it still was looking how to make money.

I am not sure whether the management was honest by saying that it did not know where the revenues had to come from or whether it just was playing dummy. Personally I hope that they were just playing dummy, otherwise they did not learn anything over the years.

VNU’s business publication section stem from the late seventies and the early eighties. It was set up as a new money spinner next to the consumer magazines. Once the Business Press Group was established there were two basic aims: internationalisation and solid revenue sources. The first international acquisition was VNU Business Publications in London, which was formed out of the computer and accountancy magazines of Haymarket publishing company. As for the revenue sources VNU in general, but VNU business publications especially had to look for other than advertisement sources. Advertisements are great in economic high times, but a pest in low economic tides.

In some way it looks like VNU Media is back to when it all began. No UK subsidiary; granted some small subsidiaries on the continent. VNU Media has been reduced to a company with main revenues coming from The Netherlands. And for some 70 per cent these revenues come from print and mainly from advertisements. Over the years VNU has learned to counterbalance income from advertisements. It bought database vendors with need-to-have data.

So now VNU Media wants to go into internet video without any idea of a business model. But whatever the model, digital media will have to replace 20 percent of the print advertisement revenue stream. YouTube for business can be one of the opportunities, but more solid sources of revenue will have to be found.

I congratulate the management and employees of VNU Media with their change of name and the YouTube idea. But now they should put down the champagne and get into their cubicles in order to come up with a solid business plan for the coming years.

BTW Get the new URL going and that vnubme.com site cleaned up!

Blog Posting Number: 684


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