Friday, January 19, 2007

Never a dull moment at PCM (2)

While on the subject of PCM, there is more corporate news. It is clear that Ton aan de Stegge wants to change the company. But he has to deal with the British venture capitalist Apax, which holds the majority of the shares, and a foundation. This gives a lot of tension and this shows in the policy decisions.

PCM was split off as the newspaper conglomerate from the Elsevier publishing company as a run-up for Elsevier to the merger with Reed. The conglomerate consisted of a newspaper company with national newspapers, regional newspapers and door-to-door papers. In addition to the newspapers a book publishing division was formed. Internet has been an additional activity so far with every newspaper having its Internet site. In the fall of his term, CEO Mr Bouwman, a magazine man by origin, looked for diversification in other analogue media. The radio station Arrow was bought, while a TV project Oasis was under development.

Soon after his inauguration Mr Aan de Stegge made clear that company is going to follow a new strategy in which there are two divisions: newspapers and educational publishing. He minced no words and made clear to sell up the book publishing division and he is doing so; the healthcare publisher Bohn Stafleu Van Loghum (BSL) is rumoured to be sold to the Dutch subsidiary of Springer Verlag for 50 million euro. Also the radio station is for sale.

The combination of newspapers and books, including educational books, is not uncommon abroad and in The Netherlands. There is an economic rationale: the revenues of the books are there to even out the steep revenue valleys during economic low tide. Now PCM wants to narrow the scope to newspapers and educational publications. It is hard to see the economic and organisational synergetic effects, especially as the educational publishing division is not that large. (Of course this can solved by acquiring Malmberg, a former educational publishing division of VNU, from a venture capitalist or the educational division of Wolters Kluwer which is put up for sale).

At least the free newspaper and multimedia assets would fit in this strategy. And the company would have money from the sale of the healthcare publisher and radio station to start up a multimedia newspaper project with KPN. The multimedia aspect is not clear yet. KPN has the Internet service Planet Internet, the TV service Mine and the mobile services. The free newspaper and the multimedia services could lead to a well integrated crossmedia project, which would serve as an example for the paid subscription newspapers.

IMHO, PCM is not yet on a course to stability.

Blog Posting Number: 638

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