BPN 1156 A crazy project (continued)

When the project of the De Pers, a free newspaper was announced in the Netherlands during the summertime of 2006, I dubbed it crazy project. Now the project is live for more than a year. The title has gained respect as the top quality free newspaper among the two incumbent ones, Spits and Metro as well as the latest newcomer Dag.

But the newspaper is loosing its crazy traits and is returning to the economic laws of publishing. The editor in chief has confessed that he had exceeded the budget with no less than 60 to 70 percent. So now measures will be taken to reduce the editorial staff from 51 to 43 employees by discontinuing year contracts. On the other hand the turn-over will double this year and the daily loss is much less than 60.000 euro forecasted earlier in the year. In the business proposition two items will change. The Saturday edition, the only Saturday edition among the free newspapers, will be suspended due to distribution problems.

The editorial formula will change and financial and economic news will be increases in favour of art and culture. The newspaper will remain a general newspaper with an optimistic undertone. It will not become a head-to-head competitor of the financial daily Het Financieele Dagblad. At the end of April a pilot issue was produced with financial news.

The circulation ranking of the four free newspapers is: (1) Metro with roughly 550.000 copies, (2 and 3, ex equo) Spits with 550.000 copies and De Pers with 440.000 copies with Dag (360.000 copies) in last place. But this might change as the newspaper is changing to the target group of well educated hih professionals between 25 and 49 years. This will have a decrease of copies. In the summer months the circulation will go down to 300.000 copies, but by the end of August it will be up again to 350.000 copies. The management expects the newspaper still to grow. At the start the publisher said that he was aiming at 1 million copies, but this is now seen as ambitious. De Pers distributes 50 to 60 percent in public transport, a quarter in offices and the rest in shops. The pilot with home-to-home distribution is not likely to be continued as the number of readers per copy is too low.

Links:
New Dutch financial daily launched
Dutch free tabloids
PCM's DAG launched
Never a dull moment at PCM
Never a dull moment at PCM
Yes/No/Yes: a free newspaper for PCM, at last maybe
Never a dull moment at PCM (1)
A crazy project

Blog Posting Number: 1156

Tags: newspaper, free newspaper

BPN 1089 Volkskrant wants to partner Het Gesprek

Talk television station Het Gesprek (The Conversation) is in exclusive talks with the PCM morning newspaper De Volkskrant. De Volkskrant wants to partner Het Gesprek, but Het Gesprek wants only to welcome De Volkskrant, when it brings along a lot of money. The talks should deliver by summer 2008.

Het Gesprek started in October 2007 as a talk television station, of which the broadcasts are distributed by internet and cable. The station has made a toilsome start in attracting an audience. In the viewing figures of the Dutch television stations, Het Gesprek did not show at all. The talk station can presently be received in almost the whole of The Netherlands in analogue and digital modes. A public broadcast station, KRO, started some co-operation, but the station needs more to be regularly viewed. This is where De Volkskrant comes in; the newspaper should push Het Gesprek with its progressive and intellectual audience, consisting of a large group of singles. Het Gesprek will be able to strengthen its position in the field of content of the programs and marketing.

In the stern wave of De Volkskrant follows the television producer Harry de Winter, who has been an advisor to De Volkskrant in setting up its own television channel, codenamed Oase. De Winter wants also to partake with his company WinterMedia.

The exploitation of Het Gesprek costs 4,5 million euro, according to one of the founding fathers, Ruud Hendriks. De Volkskrant will have to pay 3 million euro for a minority share. And this is a hefty amount within the conglomerate of PCM. Recently De Volkskrant adopted the daily free newspaper DAG and pays 7 million euro for that adventure. Now De Volkskrant wants to pay 3 million euro for a minority on top of that.

Within the holding PCM there is doubt about these financial investments, but De Volkskrant considers the investment in Het Gesprek as an impulse to its multimedia strategy. De Volkskrant has already invested a lot of money in its website and in a video staff, and it produces television programs together with the public broadcast stations VPRO and MAX. Besides the financial problems of De Volkskrant, PCM has to deal with other multimedia projects. Last week PCM stopped the citizens’ journalism site Skoeps and it has a dubious citizens’ journalism experiment going in EN.nl.

Blog Posting Number: 1089

Tags: talk television, citizens' journalism

BPN 1078 New Dutch financial daily launched

The newspaper came out of the blue. No rumour had been around about the launch of De Financiele Pers (the Financial Press). It is a sister publication of De Pers (the press), the free morning broadsheet. And the FP served this morning 32 pages of mainly financial news; yet the lead story, an interview with a representative of the animal front, was also available in De Pers. The physical paper will be distributed in financial centres like the World Trade Centre in Amsterdam, while the pdf edition is also available on the site of De Pers.

How does it look? The newspaper has a professional lay-out, as distinguished as that of De Pers. The stories are well written and illustrated with photographs and info graphics. As said, the editorial staff cooperates with the editorial staff of De Pers by borrowing stories; most likely De Pers will borrow stories from FP. This type of editorial co-operation has been recently demonstrated by De Volkskrant and its sister publication De Dag.

FP has been set up by De Pers and by the financial investment platform IEX. FP is the first real competitor of the paid daily Het Financieele Dagblad (Financial Daily, FD). FD circulates 60.000+ copies a day. FP has three challenges to distinguish itself from FD: focus, quality and distribution. Today the opening article bore the headline: It will be okay with the credit crisis (of course, this article is clearly intended for the Dutch market, which has not been hard hit by the crisis). Remarkable is the lack of pages and pages of stock quotes; while every professional investor is using internet for stock quotes FD is still printing list after list instead of filling up those pages with sensible stories. FP has just one page with quotes for funds.

Last year in August and September a dummy versuion of FP had been produced and shown around to advertisement bureaus and potential advertisers. For the reader market the launch was kept secret with no rumour in the market. The advertisers did not come in hords for the first edition. However three banks and a real estate investment company took out a full page ad.

FP is also the first free morning paper with a specific scope. So far, Metro, Sp!ts, De Pers and Dag are general consumer newspapers. De Pers and Dag are just over one year in the newspaper market as free morning broadsheet. Dag, a joint venture of the newspaper conglomerate PCM and ICT company KPN, has experienced its first reorganisation and its first restyling after a year. And the restyling was badly needed; it was unbelievable that a newspaper allowed such a rag to be published. At present it looks better and the quality of articles has gone up, as the publications borrows articles from its sister publication, the paid daily De Volkskrant.

De Pers and now FP have been started up by the multi billionaire Marcel Boekhoorn. His publishers recently told the Belgian newspaper De Morgen (The Morning), that De Pers costs Mr Boekhoorn 60.000 euro a day. In the first year De Pers suffered a loss of 20 million euro; this year the loss will be 10 million euro and the year after that 5 million euro. By 2011 or 2012 the first profit will show. Of course with FP now, the dawning of a profit might be even more extended.

Update 25 April 2008: The launch of the new Dutch finanicial daily was a live trial dir two days in order to test the reaction from the readers and adverterisers. The first reactions have been positive. Aboiut the future of the financial newspapers, no details were communicated by the publisher.

Blog Posting Number: 1078

Tags: newspapers,financial newspapers

BPN 1065 The first post-Apax annual report of PCM

Last year was an annum horribilis for the Dutch newspaper and book conglomerate PCM. The private equity company Apax had left PCM in 2007, taking 140 million euro in profits along in its exit after four years and leaving the conglomerate with a negative own capital. This year the figures of PCM look rosier, but the future of the conglomerate is still uncertain.

The situation has changed this year by using a set of tricks. By converting the deferred loans into shares the own capital of the conglomerate is now 271 million euro and positive again. And the debt has been halved to 316 million euro; a sum which has to decrease in the coming year. The turn-over slightly rose last year to 644 million euro and the company result grew almost twenty percent to 45 million euro.

The main share of the revenues still comes from newspaper sales and subscriptions as well as advertisements. Deducting the turn-over of the book division (96 million euro) and of the educational division (64,5 million euro), the turn-over from newspapers and newspaper related activities is 483,5 million euro. Volkskrant and NRC Handelsblad are the money makers, while AD, a joint venture with Wegener, is positive. For the newspapers PCM is afraid of the paper prices and the price for newspaper distribution; it does not expect any re-organisation in the newspaper sector. PCM expects the free newspaper Dag, a joint venture of KPN and PCM, to cost another 10 million euro in the coming year, before it shows black figures. Dag recently underwent a restyling and gets now editorial input from De Volkskrant; it is no longer a red rag.

PCM is taking some accountancy measures. After the Apax exit, the company was forced to an investigation by the Enterprise Chamber of the Amsterdam Court. Now PCM has announced that it will report its annual figures according to the international accountancy method IFRS. It will be done for transparency and for comparison with competitors.

PCM has no plans for mergers or acquisitions. Last year the merger with NDC/VBK was called off. The coming year will be used to consolidate business. PCM does not aim at a broadening of its base any longer to decrease the dependence on newspaper. For the time being it will remain a newspaper and book conglomerate. As mentioned in yesterday’s posting the educational division ThiemeMeulenhoff will sold off and the money received will be used to relieve the debt.

Blog Posting Number: 1065

Tags: newspaper

Dutch newspaper conglomerate PCM investigated

At the request of the trade unions, amongst other the Journalists’ Trade Union (NVJ), an investigation about mismanagement will be started against the Dutch newspaper conglomerate PCM, owner of NRC Handelsblad, Volkskrant, Trouw, NRC Next and DAG as well as house-to-house broadsheets, . In 2004 The Dutch newspaper conglomerate invited the British private equity company Apax to move ahead faster, but the investment company left with 140 million euro in profits in 2007. The judge ordering the investigation did not mince his words criticising Apax.

The newspaper group PCM was owned by separate foundations, of which SDM was the moist influential one. These shareholders invited Apax to reorganise the company and move it to the front. First thing Apax did was reorganising the total financial structure of PCM Publishers. First action was to found a holding company, PCM Holding, capitalised at 1 million euro. Apax transferred 475.000 euro, while the other stakeholders (foundations) paid also 475.000 euro. Management contributed 50.000 euro. As the voting rights were lodged with Apax, the company dominated the board with 52,5 per cent of the votes.

PCM Holding bought PCM Publishers with 300 million euro foreign capital from banks. Also Apax puts in 139 million euro and the foundations offer 200 million euro. All the loans have an interest rate of 12 per cent. In 2006 Apax refinances PCM and asks PCM to return 130 million euro. Apax is then major stakeholder, dominating the votes for 40 million euro, while PCM has debt of 170 euro due to the high interest on the 139 million euro. In 2007 Apax is bought out by the foundations for a profit of 140 million euro. During the Apax management PCM lost more than 240 million euro.

Now the corporate chamber of the court has appointed to investigators. The investigation will cost 150.000 euro and has to be paid by PCM. Depending on the conclusions of the investigators the judge can concluded that PCM has been mismanaged under the Apax regime.

Such a conclusion would be disgrace for Apax, especially as private equity companies have already a bad name as locusts in The Netherlands. Theoretically the conclusion could lead to dismissal of the governors and return of premiums of the governors and managers. Yet these measures would have hardly any effect on PCM. Most of the governors and managers involved have been dismissed and some of the managers have not accepted their premium. Mr Groenewegen, who started as cfo in 2005, is the only manager left from this period, while Strengers is the only governor left from that period.

Yet the judicial conclusion of bad management would mean justice to the PCM employees, who could not prevent that their company was financially drained during an economic upturn.

Blog Posting Number: 977

Tags: newspapers, private equity

Dutch free tabloids

2007 was an interesting year for the Dutch daily newspapers. Almost all of the newspaper kept in line with the world trend of loosing subscriptions. The newspaper conglomerate PCM bought out Apax, not having made any progress and loosing a hell of a lot of money. Royal Wegener was acquired by the media empire Mecom. And the companies did not move an inch on diversification of media to for example and radio and television; in fact PCM sold its radio operation. But against this back-drop of common newspaper happenings, the real new things happened in the sector of free dailies with two new titles on the market. On January 23, 2007 De Pers (The Press) published its first edition, while on May 8, 2007 the PCM fledgling DAG came onto the market.




Both of them have not been on the market for a full year. Yet they had to fight immediately against the two existing free tabloids, Metro and Sp!ts. Metro is well known throughout the world and has developed in the Netherlands to a daily with short bullets and a few spreads; not exactly a daily which presents news, but a perfect advertisement vehicle with a finely distribution network of public transport points. Sp!ts, the Telegraaf competitor of Metro, is also free daily tabloid with much of the same editorial formula; it also functions as an advertisement vehicle. In this setting, which exists since 1999, two new free dailies entered the market; one, which has no ties with a a newspaper publisher and one which come from the PCM nest. To make some impression on the market, both newspapers had to have their unique selling points, if only for the advertisers: an new editorial format, a new distribution network, a new proposition for advertisers and for the users a real attraction.

Both free tabloids have succeeded in that. De Pers is seen as the better intellectual free tabloid; its editor in chief Ben Rogmans received the press award recognising its quality. It was in fact the first time that a free tabloid won a journalistic award. DAG has made some impression with its visually oriented editorial format. It is full of photographs.

De Pers, a venture of multimillionaire Mr Boekhoorn, has fought for its place by quality. A distribution network and advertisements are basically instruments for competition and it does not make the daily stand out. The advertisement is not impressive, but this has to do with the time of launching. When the daily was launched, it still had to show and prove itself, while the advertisement budgets were already earmarked. So as for advertisements De Pers should be able to get a better market share. Also its distribution network is developing differently from the other free dailies as it is also delivered to the door in some zip code areas. The newspaper has built in less than one year a quality image.

Having talked with PCM about launching a free daily together, PCM broke off the talks with Mr Boekhoorn to start their own free daily in cooperation with the telecom incumbent KPN. And again it was the editorial format which should make the difference. The tabloid sports now daily pages full of photographs and highlights some headings in yellow. Compared to De Pers the printed edition of DAG is a rag, paper to wrap the fish in. And as for the distribution network started to use retail food stores for its distribution. Also DAG needs to attract advertisement for the coming year.

But the novice free dailies needed more USPs. Both free dailies have a website and have or are preparing a mobile service. Especially the owners of DAG the newspaper conglomerate PCM and the telecom operator KPN touted the term crossmedia wherever they could. Having an internet site with movies and mobile internet site is not yet enough to brand a product crossmedia. The newspaper has been unable to develop for example to introduce day parting, using various media at various times during the day, when the media fit the environment. A printed newspaper at the breakfast table or in public transport works. But when people arrive at the office they start using internet and should not get just a digital copy of the printed tabloid, but should get other feeds and stories. By midday they should be fed news on their mobile. This type of thinking has not been a principle from the beginning. So crossmedia has been an after thought rather than an integrating philosophy so far. As such PCM has not yet learned anything else but making a printed free daily and KPN has not yet come further than technology in this project and has systematically reduced the combination of its editorial and technical knowledge.

Overlooking the battle field De Pers has won the fight so far on editorial quality. Having set a standard for their content they can quietly build out their digital presence. DAG will have quite a difficult year ahead. The newspaper has costed 12 million so far and so far the management has been able to bring the costs down to 9 million in less than a full year. In order to control the costs, It has been announced that DAG will editorially work together with the PCM morning paper De Volkskrant. This will mean that it will copy or re-edit Volkskrant articles. KPN on the other hand is closing down the editorial operation of its content site Planet Internet and will be concentrating on the internet and mobile technologies.

Blog Posting Number: 962

Tags: newspapers, day parting, crossmedia newspapers, day parting, crossmedia

DAG continues to go crossmedia

The Dutch free broadsheet DAG, a joint venture of the newspaper conglomerate PCM and the incumbent telecom operator KPN, are taking steps in crossmedia. Last week the free newspaper, published from Monday till Friday, started narrowcasting on hundreds of television sets in bars and cafes. The publication will also start a mobile television network via KPN’s DVB-H network.

So far DAG has been as a printed publication and internet editions on internet and on mobile telephone. The free printed edition has now a run of 415.000 copies and is distributed at railway and bus stations and in shops; people can now also have it delivered at home for 25 eurocents. The online edition has daily 770.000 visits and a penetration of 2,1 percent, which compares to the online site of the free broadsheet Spits and the TV broadcasts of Nieuwsniews.nl an RTL Z. The mobile internet site processes monthly 140.000 pageviews.

Presently there are hardly mobile telephones which can support this technology. In fact the technology is presently slowing down the introduction, but the Olympic Games should make the technology interesting enough for introducing a service.

Anticipating upon this network DVB-H service, Dag has started a narrowcasting network with On, a network which reached 750.000 young people. The narrow casting service will also be extended to the network of Media Landscape. Newspages are shown with video and text and the format is being tested for the DVB-H service.

DAG is a project of PCM and KPN, which have signed a co-operation for four years. PCM brings in its expertise in the field of editing, printing and distribution as well as advertisement acquisition. KPN brings in the internet, mobile and mobile tv technology. However it is now also bringing in its content service Planet Internet. Recently the editor-in-chief left as KPN made its intention know to integrate/scale down the editorial staff of Planet Internet with the Dag editorial staff. Articles in DAG will be published in print and on the Planet Internet site. So far Planet Internet has scaled down its original article output in the past two years.

Blog Posting Number: 908

Tags: newspaper, DVB-H, mobile services, narrowcasting

Free newspapers less appreciated

I knew it from my gut feeling: for-free newspapers loose from the paid-for newspapers. Market research from Newcom Research & Consultancy BV confirmed that paid-for newspapers get on average 7.9 points out of 10; for-free newspapers get an average of 6.6 out of 10. The survey is interesting as two more free newspapers started this year in the Netherlands. And my second gut feeling was also right: the most recently launched for-free newspaper DAG by the newspaper holding PCM and the incumbent telco KPN scores the lowest in appreciation.

In the Netherlands we have four national free newspapers: Metro, Spits, De Pers and DAG. Metro was the first one, set up by the international Metro chain in cooperation with the Dutch railway company NS since 1999. This publication was immediately followed by Spits, a publication from De Telegraaf, which was out to protect its advertisement share. On January 23 of this year a new free broadsheet was published, De Pers, to be followed by DAG on May 8. The survey publishes the first competitive figures in appreciation.

Metro and Spits score highly in the survey, respectively 6.9 and 6.8. But De Pers is the winner with 7.0. DAG is the absolute looser with 5.9. A discussion can be started about the fact that Metro and Spits are established for-free newspapers. But De Pers proves that it is appreciated even better than the long existing for-free newspapers. De Pers is seen as a newspaper with depth, while Metro and Spits are bullet news newspapers, aiming at young people as a target group. DAG is still trying to find its target group and format. So far it has proven to be publication with an aggressive lay-out, a lot of pictures and not much depth.

The appreciation is also partly related to recognition of the title and the penetration. Metro and Spits are well-known and well established. Their distribution is an oiled machine and the audience is mainly reached around the train and bus stations. De Pers and DAG still have difficulties with the distribution. De Pers is difficult to come by, while DAG made a smart distribution deal with a grocery retail chain. But both newspapers still have to do more before people recognise the title.

The conclusion is that Metro and Spits are well established in the market, but have gotten competition from De Pers as to its format and content. With a better distribution plan, De Pers could succeed Metro and Spits, but also challenge paid-for newspapers. DAG will have to make up a lot if it ever wants to be an established for-free newspaper; it will have to change its format radically to attract a target group (and advertisements) and survive. It is unbelievable that a newspaper holding as PCM with so much knowledge about newspapers, an experienced advertisement acquisition machine and a distribution network is putting out such a rag and all this with bragging adjectives as cross-media. PCM would have done better to make a joint venture with De Pers, which had no editorial experience, no ad acquisition machine and no experience in distribution.

But the survey shows another fact. For-free newspapers are less appreciated than paid-for newspapers. This looks like a contradiction. While the paid-for newspapers are going down in circulation figures, there is a great distance between the appreciation for the paid-for newspapers and the for-free newspapers. Paid-for newspapers get on average 7.9 points out of 10; for-free newspapers get an average of 6.6 out of 10.

And the opinion about paid-for newspapers is strong. Almost 70 percent of the respondents are of the opinion that for-free newspapers do not change anything for the appreciation of paid-for newspapers. Confronted with the statement: For-free newspapers are a full replacement for the paid-for newspapers, no less than 48 percent of the respondents disagree; 28 percent disagree, while 20 percent are neutral. Almost 45 percent of the Dutch indicate that they would not miss for-free newspapers as they would cease publication. I personally think that this statement is a nonsense statement as hordes accept for-free newspapers every day.

Blog Posting Number: 811

Tags: newspapers, cross-media

PCM's DAG launched

Wow. You cannot miss it between the other free newspapers, the new Dutch free daily DAG. It is colourful, it has an exciting lay-out, which changes on every page.



DAG was launched today and it is the fourth free daily in The Netherlands. In fact you can distinguish the free dailies in The Netherlands in two generations. Metro and Spits belong to the first generation. Metro, part of the worldwide franchise was the first to introduce free newspapers in 1999. It was financed by the NS, the Dutch railway company. Metro was a direct attack on the paid daily De Telegraaf, the largest newspaper in The Netherlands. De Telegraaf immediately reacted by publishing the free daily Spits. Metro and Spits form the first generation of the free dailies. Since this year the second generation has started. De Pers was the first one to appear on the market. This free daily is financed by the billionaire Marcel Boekhoorn. For a moment the Dutch national newspaper publisher PCM thought about stepping into this venture, but due to internal differences of opinion PCM left the negotiation table. Now PCM has come up with its own free paper DAG. De Pers and DAG form the second generation of free papers. And there is a difference between the generations. While Metro and Spits have become advertisement brochures for mainly mobile telephones with bullet articles and a few spreads, De Pers and DAG are more serious about the news. De Pers is almost academic, while DAG is more popular, mainly due to its lay out.

How does DAG distinguish itself? The lay-out of the newspaper is bold with colours. The articles are short with a few longer background articles. Photographs and infographics are abundant. But so far there is nothing new. But from the beginning the idea makers of DAG have stressed that it is not a paper, but a cross-media news service, of which the newspaper is one of its manifestations. The cross-media news service also serves the audience by internet and by mobile. Eventually DAG will also feed news into the narrow casting service used in the Dutch railways. A newspaper with an internet extension is no news any longer. All the free newspapers have their internet extensions as well as their digital counterparts to print. The distinguishing factor for the news eater will be the 24 hours news service.

The internet site of DAG has signs indicating that the editorial staff goes after a 24 hours continuous service. The headline sector has time indicators, while a ticker tape runs across the screen. The headline sector leads to short news items from the Dutch press agency ANP (as Dutch is the language the newspaper can not use feeds from Reuters or AP). The earliest time stamp I saw on the site was 12:00h. But I missed a page with the headlines of the last 24h.

How did realise the cross-media factor? As said DAG is a continuous news service with sub-services through print, internet, mobile and narrow-casting. The news is being spread through all these media, making use of the specific characteristics of the media. A printed newspaper has news in text, photographs and infographics. An internet news service has text, photographs, infographics, animations and movies. The same goes for mobile and narrow-casting. From what can be seen on the internet site, DAG uses all these characteristics. The movies are prominent on the home page. Two movies related to Dutch news items of the past 24 hours (celebration of Ajax winning a Cup, the long traffic jams due to the long awaited rain). As far as I can see, the principle of day-sharing (print in the morning, internet in the office, mobile during lunch has not been applied yet). So the cross-media concept still needs some fine-tuning.

Interesting is the co-operation of the newspaper with a high-tech news service Bright. This service first showed up on internet with a site and later on started a printed glossy magazine. Now the editors deliver a page on technology in DAG, which means quality for DAG and promotion for Bright as magazine and site. It looks like Quest a popular science magazine fits into the same formula.

Will DAG make it commercially? Before the launch, the management of DAG announced a deal with AH, a food retail store. Part of the deal is that the store chain will distribute the newspaper to some 700 stores. This is a smart move, as the other free dailies are fighting for their spot near the railway stations and bus platforms. Of course AH will also use the newspaper for advertising. But the deal will not stop here, as AH is experimenting with narrow-casting in its stores. DAG will eventually deliver content for narrow-casting broadcasts of AH. Leafing through the newspaper, there are a lot of advertisements; let us say that there are much more advertisements in DAG than there were in De Pers when that was launched. Of course DAG has a news paper company behind it. It would have been a shame if the advertisement had been scarce; still there was duplicate of Partners in perspective. But what was remarkable was the number of advertisements for mobile telephones and mobile telephone services. It looks like Metro and Spits will loose market share in this sector; even more as KPN is partner in the DAG venture.

Altogether, I guess that the competition in the free dailies world are studying now DAG. There is new competition, a new concept, a continuous news service with all media types ranging from text to movies and a newspaper with a bold lay-out which functions as a sign for the entire service.

DAG means in Dutch DAY and HELLO, but also GOODBYE. One of the free papers will have to say goodbye in this crowded market; I guess that it will not be DAG.

Blog Posting Number: 747

Tags: newspapers, cross-media, day-parting

Dutch newspapers on the move

There is a mixed bag of news in the Dutch newspaper World coming from various newspaper companies: Telegraaf Media Group, PCM (remember the postings Never a dull….), FD Media Group and Royal Wegener.

PCM
At last PCM has announced its intention to merge with NDC/VBK. Both companie will undertake a study of four months. The question is whether the two companies can merge. If so, it would be come a company with national and regional newspapers, with educational book companies as well as general book companies. Together the two companies would turn over 1 billion euro. The study will be directed by Mr Groenewegen CFO of PCM and Jan Roos chairman of NDC/VBK.

Comment: The two companies have the same structure. Both companies are overseen by foundations, looking after their ideal objectives. Together the companies would be the largest Dutch publishing company. However the question is whether the Dutch monopoly watchdog would allow the combination or ask the company to abandon parts of it.

Royal Wegener
This regional newspaper company, ready to be acquired by the UK company Mecom, has shown optimism about the display ad and classified ad market. The chairman of the board Jan Houwert reported the joint venture newspaper AD with PCM to be profitable now; Wegener has a 37 percent share in this venture. He also mentioned the new major shareholder Mecom, which holds 24 percent in Wegener. Mecom and Wegener hold talks, but these have not been conclusive yet. Mecom has shown interest in the acquiring Royal Wegener.

Comment: When Wegener is optimistic, be assured that things are looking up for the newspaper industry in The Netherlands, as the company is at the end of the national ad feeder line.

FD
The Dutch financial daily FD plans to launch a new online business publication next week together with the TV station RTL Nederland and the Norwegian publisher Schibsted. The name of the newspaper will be Z24. The online business newspaper will have an editorial staff of 12 people. The new publication, of which there will be no printed counterpart, aims at the target group of well educated men and women between 25 and 40 years old. The target group differs from its parent publication Het Financieele Dagblad that aims at business men and women. The co-operation of RTL Nederland, which has the business TV station RTLZ has not been formally confirmed yet. The co-operation with the Norwegian Schibsted is not a surprise as the FD group works already together with this newspaper in a business news consortium; besides one of the owners of FD, Mr Sijthoff, has a financial interest in the Norwegian publishing group.

Comment: This is an interesting project. FD Media Group has followed a cross-media strategy over the past years and has merged with Business News Radio into a successful media conglomerate. Now the media group is addressing a complete new target group with a daily online publication. Although the business newspaper has been in several consortia, usually in order to pick up ads, the media group now also goes into an editorial collaboration with a progressive Norwegian newspaper. FD Media Group has worked before with FD on an incidental basis, but now it looks like RTL Nederland is seeking co-operation with a newspaper and business radio group.

DAG PCM
PCM’s free daily DAG has appointed Bob Witman as the-editor-in-chief. He will be heading a 45 strong editorial staff and is responsible for all editorial information regardless of its platform (print, internet, mobile and narrowcasting. He was one of the strategists of the internet policy of the daily newspaper De Volkskrant. He is an experienced journalist and has experience with cross-media. Joris van Heukelom has been appointed as the director cross-media. He will be charged with the creative development and cross-media of DAG, the brand DAG and the creation of strategic partnerships with advertisers. DAG Media is a joint venture of PCM and KPN. (For those who understand have a look at the Adfolive movie).

Telegraaf
The newspaper company Telegraaf Media Group (TMG) and the broadcasting company SBS, in which TMG holds 20 percent of shares, will launch a multimedia platform for consumer news under the name of Wuz (an acronym for What u say, but than in Dutch) in the middle of June. Internet will be the core of the joint venture. Content mailed to the editorial staff can come online, in print, on mobile websites and in the SBS TV news programme. The target group is said to cover 2,2 million people online and 1,2 million TV viewers.

Comment: The national consumer newspapers are getting nervous again as PCM is preparing the launch of its free newspaper DAG. In order to distinguish themselves the newspaper are adding the epitheton ornans cross-media. It all started with the paid daily NRC.next, which started to use the adjective. PCM used the word when collaboration with the incumbent telco KPN was announced. Now also TMG is rushing to the new land of cross-media with Wuz.
It will be interesting to see how the concept of cross-media is going to realised with distinction. From the sound of the different press releases cross-media is no more than multi-channel. So far it sounds like there is no day-parting, no scaling of screens and no usage of the strong points of the various media. It will be interesting to return to this issue with half a year and research the cross-media concept as given shape by the various editorial staffs as well as the effects on the target audiences.

Blog Posting Number: 736

Tags: newspapers, cross-media

Never a dull moment at PCM

It took a while, but now PCM knows the height of the claim by Mr Marcel Boekhoorn, the proprietor of free daily De Pers. Instead of 96 million euro, the claim has been lowered to 10 million euro. PCM disputes the claim and refuses to pay.

The claim is part of talks to collaborate in the free daily project. PCM’s CEO Ton aan de Stegge together with an Apex partner started these talks with Mr Boekhoorn. PCM would provide the printing and the distribution; Boekhoorn would provide the editorial staff. The PCM national newspapers were against the plan as they wanted to have their own free daily or protect their own baby like NRC.next. The Board of Directors/Shareholders stepped in and called off the talks.

Boekhoorn immediately let the company know that he was going to put down a claim and estimated the disaster on 96 million euro. In the meantime Apex and the Board of Directors/Shareholders were in talks for Apax stepping out. Besides the height of the transfer sum, the claim was hanging above the talks. Despite the fact that the Apax representative is said to have made promises to Boekhoorn, the Board of Directors/Shareholders took the claim, if it would come to a court case or a settlement. As the claim has been lowered from 96 million to 10 million, a settlement around 5 million euro will be most likely (and PCM has already 1 million for this claim as the CFO return his bonus of 1 million euro).

In the meantime the PCM project of a free daily DAG has started up. And the former CEO Ton aan de Stegge has been named a commissioner of the PCM love baby. No date for publication has been set yet.

De Pers has not failed one day of publication so far. As with every new paper advertisers still are hesitant. Distribution of De Pers is done at the railway stations. But now the management has also plans to have the free daily be delivered from door-to-door and eventually to convert to paid subscriptions. Eventually the distribution will consist of 30 percent through stations and buses, 30 percent in office blocks and through bookshops and 30 percent from door-to-door; the rest will handed out at gas stations. In the coming weeks De Pers will be distributed from door-to-door. The publisher Cornelius Van den Berg has 50 areas selected where De Pers will be delivered daily. The areas are mainly new developments and new towns. That is where the young families are; they are interesting for advertisers.

The publisher is very optimistic. Besides the mix of distribution channels, he wants to convert from a free daily to a paid subscription in a mid-term view. Having established one arm of the publishing empire, the publisher also announced that the company will be publishing books. Next month the first book will appear. You would think that a publisher would be able to tell the title, but he has not decided which book it will be.

By not getting involved in De Pers, PCM allows a competitor, not hindered by money, to grow.

Blog Posting Number: 723

Tags: newspapers

Never a dull moment at PCM

PCM is many illusions poorer as well as a lot money. Yet it improves its revenue flow due to a financial reconstruction and despite the hefty bonuses for the top management (of course the results could have been better if the bonuses had been added to the final results).

It is unbelievable that after so much mismanagement and turmoil there is still a reasonable financial result. The newspaper and book publishing company had a turn-over in 2006 of plus 3,4 percent from 653 to 675 million euro. The netto loss went down from 51 million euro in 2005 to 31 million euro in 2006.

The positive results were mainly made in the newspaper sector and the educational division. In the newspaper sector the job advertisements brought in more money as the Dutch economy is in full swing. And extra revenues at 50 million euro came from the sale of the book publisher Bohn Stafleu Van Loghum to Springer.

But what is the real status. The newspaper companies keep on working and still have to realise heavy cuts in their budgets. This while the managers of Apax leave with a fat profit and the top management cashes, while it is still possible. Two top managers have left in the meantime, each taking 2 million euro for less than two years of work. The CFO, who stays on, has returned his bonus of 1 million euro. Also two members of the shareholders’ board have left (of course without a bonus). So there is a CFO and a chairman of the shareholders’ board left.

In order to pimp up the picture of the company, PCM expects for the future:
• It has a fine starting position to profit from the economic upswing and new developments in newspaper and book publishing;
• The advertisement sector is picking up again, but the newspaper will have to look to get into the competitive game of television and internet (in The Netherlands newspaper publishers are not allowed yet to possess television stations);
• The company will invest in new products such as the free paper DAG; it aims to develop a cross-media news platform to reach younger target groups and invest in a multimedia strategy for the present quality titles (read established audience; mind you: cross-media for youngsters and multimedia for the elderly!)
• The newspaper and book divisions need to work on improving the results (of course after handing out bonuses so generously);
• The book publishing division will remain part of PCM and no longer be put up for sale.

So what is happening today?
- PCM is still negotiating in silence with the newspaper an book publishing company NDC/VBK. Mr Jan de Roos of NDC/VBK is rumoured to be the new CEO of the merger.
- Mr Marcel Boekhoorn, proprietor of the free paper De Pers has put a claim on the desk of PCM for 10 million euro. This claim represents the damage caused by PCM when the company was talking to Mr Boekhoorn about collaborating in De Pers project, but broke off talks and left promises unfulfilled..

Tomorrow there will be more on the 10 million euro claim and the project De Pers.

Blog Posting Number: 723

Tags: newspapers, cross-media, multimedia