BPN 1604: Dutch cross media on the mend again

In the past week the iMMovator Cross Media Monitor 2012 was presented. It is already the fourth edition of the biannual snap shot of the creative industries and ICT. The monitor is a co-production of iMMovator, Paul Rutten Research and TNO. This is my translation of the press release published by the 

foundation iMMovator Cross Media Network at Hilversum.

The stats

The Dutch cross media sector provided nearly 553 000 jobs in 2010 which is nearly 7 per cent of the Dutch employment. Cross media is the combination of creative industries and ICT segments. Of this 3.5 per cent accounts for the creative industry (over 280 thousand jobs) and 3.4 per cent for the ICT sector (over 272 000 jobs). The turn-over of the cross media sector accounted for  € 90 billion in 2010, of this amount € 32.8 billion is generated by the creative industry (2.9 per cent) and € 57.2 billion by ICT (5 per cent). In ICT more sales were generated with less people than in the creative industries.

Hesitant recovery

The number of jobs in the Dutch cross media industry has again increased slightly (0,5 per cent) between 2009 and 2011. The job reduction of the crisis year of 2009 has been brought to a standstill. Creative industry is growing again by 1.9 per cent, while ICT shows a slight decrease: -0.9 per cent. The sector has some difficult years ahead. The economic downturn will certainly be felt in the cyclical ICT segment. The cuts of the national government will hit the creative industries, particularly arts and cultural heritage as well as  media and entertainment. Arts will be less subsidised in the coming years. Also the public broadcasting system and its suppliers will feel the impact of government measures.

Need for co-operation between small creative businesses  

An important part of the growth in creative industries is attributable to the rise of self-employed entrepreneurs. These entrepreneurs increase in number, while large firms are getting smaller. Downsizing is the key word in the creative industry more than in the rest of the industry. The creative industries have low entry barriers and is therefore open to new professionals. This creates the need for new forms of working together. In this way self-employed entrepreneurs and small businesses can compensate the lack of scale of large companies. This leads to inefficiencies within the creative industry. While the number of jobs in the creative industries is increasing, teh revenue declines. ICT sees the reverse effect, the number of jobs decreased while sales increases.

Amsterdam and Utrecht fastest growers in the media cluster

In The Netherlands there are two major cross media areas, called the Northern, ranging from Haarlem, Amsterdam, Almere, Hilversum, Amersfoort to Utrecht and the Southern wing, ranging Delft, The Hague, Rotterdam, Breda, Tilburg, Eindhoven to Den Bosch. The fastest growing concentration is in the Northern Wing. Amsterdam and Utrecht have generated the largest number of cross media jobs in the past years (2009 ttill2011).  Amsterdam had the largest  growth with over 7,500 new jobs in cross media (+5.6 percent)  in 2009 to 2011, while Utrecht had an increase of almost 3 thousand (+5.3 per cent) in the same period. Hilversum is a different story: the town lost nearly a thousand jobs (-3.6 per cent) over the past two years due to the decline in major media and entertainment industry. The media cluster in the Northern Wing of the Randstad is still an important engine of the Dutch economy. A strengthening of the cluster strategy is necessary, partly in view of the internationalization of the sector, which will intensify the competition. The clustering of cross media companies currently mainly provides efficiency, but must increasingly become a source of innovation.

BPN 1604

BPN 1244 A banker's view of the Dutch creative industry

In these days of financial troubles, it is hard to read a financial report without any suspicion. But recently the Dutch cooperative Rabobank published statistics on the Dutch creative industry in its series of industrial sector reports under the title Figure and Trends. The financial figures report (sorry: in Dutch) is an addition to the Dutch 2008 Cross Media Monitor, which was put together by iMMovator in collaboration with TNO and the Rabobank.

The creative industry is a container term for a sector consisting of arts and cultural heritage, media and entertainment and creative business services. Within the subsector art and cultural heritage economic motives are subordinate to artistic motives. The activities are often sponsored by governments or semi-government institutes, not leaving the activity to the market mechanism of demand and supply. The subsector media and entertainment industry with the music industry, broadcasting, print and movie industry is very market driven and generates turn over from products and services for the consumer market. Major exception is the public broadcast system. The subsector creative business services operates on the business market, delivering products and services adding symbolic value to the products and services of their clients. In the creative business services sector operate architecture companies, consultancies, design and communication bureaus.

The Rabobank produced a financial analysis of the creative industry between 2004 and 2006. The data come from the Rabo Figures & Trends database. The database contains balance sheets of bank customers up to 2006. The statistics reflect the average company in the subsector. The figures of the art sector are base don a smaller amount of data than the other subsectors and are only indicative.

On a national level the creative industry created in 234.000 jobs in 2007. The creative business services are the largest subsector, followed by media and entertainment with 30 percent and arts and cultural heritage with 19 percent. The creative industry and ICT were the main boosters of employment with 10 percent between 1996-2007. Both sectors grew faster than the national economy and realised both in this period 4 percent turn-over growth over against an average national growth of the total economy of 2,2 percent. The creative industry as well as ICT are heavily concentrated in the Northern Wing.

The financial highlights are:
- The average company in the creative industry as well as in the subsectors have developed positively developed in the years 2004-2006. The average company in the creative industry sector realised turn-over of 689.000 euro in 2006.
- The average turn-over of a company in the creative business services was 801.000 euro, in the media- and entertainment industry 593.000 euro and in arts and cultural heritage 557.000 euro.
- The absolute profit as well as the profit percentage was raised in the period of 2004-2006: the creative business services with 6,9 percent, media and entertainment with 4% and arts and cultural heritage with 2 percent.
- Almost half of the companies in the creative industries with a turn-over smaller than 250.000 euro makes a profit after deducting the management fee.
- An average company in this sector owes 33 percent of the capital, while it also has 36 percent of foreign capital on the balance sheet. The short term foreign money is on average 20 percent.

The figures offer some ideas about the financial side of the business in the creative industry. However it would also be interesting to know what the share is of the digital creative industry, as I suspect that this is the main boost behind the growth up to 2007. Of course we will have to wait for the new figures and see in 2009, what the present financial crisis has brought on.

Blog Posting Number: 1244

Tags: creative industry,cultural heritage, creative busines services, arts, media, entertainment

BPN 1058 Affordable glass fibre by Dutch BroadNet

BroadNet (BreedNet) has closed the first agreement to offer glass fibre to companies in the provinces North Holland, Flevoland and Utrecht. The companies of KPN, @Work, Multikabel, Casema and UNET will participate in this business project.

Companies and institution in 14 municipalities will get an affordable offer for glass fibre connections. BroadNet will become the largest broadband project in the Dutch business market.

Broadnet stimulates the innovative use of glass fibre by Small and Medium Enterprises and social institutes. More and more companies and institutes want faster internet access and datalines. The present connections are either cable or ADSL. The glass fibre connections can be 10 to 200 times as fast as cable and ADSL.

BroadNet makes an inventory of the SMEs and social institutes in the participating municipalities. The parties are put into contact with the suppliers of glass fibre connections. BroadNet uses an open network model, in which any service supplier can offer service such as telephony, internet, television, camera protection and ICT.

BroadNet is based on a so-called Open Partnership in order to guarantee an optimal working of the market. BroadNet concludes agreements with market parties for their participation in the Open Partnership. KPN is the first market party to conclude such an agreement. It is expected that the companies @Work, Multikabel, Casema and UNET will also conclude agreements in the coming weeks.

By uniting the demand it is possible to organize the supply and thus create an affordable offer. The fast internet offers the opportunity to SMEs and social institutes to expand their market or their services. With BroadNet the economic structure will sustainably be re-enforced.

From April onwards, a large scale marketing campaign will address SMEs and social institutes to inform them about glass fibre. The website http://www.breednet.nl/ will be at the centre of this campaign. A check on the zipcode will reveal whether and when an application can be made. The applicant can choose between 100Mbps for 275 euro a month or 1Gbps for 625 euro a month.

The project is performed by the foundation iMMovator Cross Media Network and is made possible by a financial contribution by the ministry of Economic Affairs in the framework of Peaks in the Delta. Besides the provinces, 14 municipalities will contribute.

Blog Posting Number: 1058

Tags: broadband, glass fibre

Broadcast and CRM

It was an interesting session yesterday at the iMMovator Crossmedia Café in broadcast city Hilversum (the Netherlands). The theme of the meeting was Broadcast and Web 2.0, which can be roughly translated to how broadcast companies can use CRM. Jochem de Gruyter (see photograph) of SBS Broadcast company introduced the subject looking from the Direct Marketing side to a broadcast company. His two lines of thought were: Why should a media company use CRM; if it will use CRM, what are the strategy and tactics.

He started out with the observation that consumer look less at TV. Yet for a commercial broadcast company it is important to get the advertisement slots filled. A commercial broadcast station will attempt to fill 20 percent or 12 minutes in hour with commercials. In practice the advertisement slots will be filled. The profit for a station will not come out of advertisement slots, but from crossmedia activities, certainly if the station wants to compete with YouTube and Joost. So the commercial broadcast companies will have to move from mass to individual client.

This move implies a lot for an organisation which has always been oriented on mass markets. At once they have to identify the individual client, keep them happy and expand the client value. This is something else than just broadcasting a programme and have a receptionist picking up the complaints.

The strategy is twofold:
- better exploitation of existing and new content, making the company less dependent on content from third parties as well;
- have a better knowledge of the viewer/user/client; get a database with profiles.

In practice this means setting up a database for the profiles of the individual viewer/user/client and opening up other communication channels than the existing programs, phone-in and sms actions. These days there are many more communications channels than before. Yet many of them have a high irritation degree. Funny enough an unsolicited e-mail has an equal irritation degree to TV ads. Yet e-mail is a serious medium as a starting point for communication with the individual viewer/user/client, when matters of interest are communicated.

Jochem demonstrated this with examples. He showed how SBS was producing more content of its own. The material not used for television could be used on internet or for mobile. But he also showed how he informs the individuals about related television programs, products and actions. In this way a program has a longer life than the one time plus a repeat it used to have. With the database it is also possible to do advertisement campaigns through other channels. In that way a broadcast can be extended across other media as well as the 12 minutes for commercials.

Blog Posting Number: 910

Tags: CRM, broadcast

Forget the Northern Wing, Holland one playing field

Yesterday the new Dutch cabinet minister for Education, Culture and Science, Mr Ronald Plasterk was present at a meeting of iMMovator in Hilversum, the Dutch broadcast city. iMMovator (in full iMMovator Cross Media Network) is a network organisation, which aims at the strengthening of the cross media sector stimulating innovation and economic yield. The organisation describes the cross media sector as sector in which there is an increasing integration of radio, television, internet, mobile and events. On the photograph the forum: see photograph: Mr Plasterk to the right; Mr Huub Deitmers next to him; Mr Kees van Kooten next to Mr Deitmers; Professor Paul Rutten second from the left. For more photographs and a Dutch language report and RSS feed, go tto the site of iMMovator.

The minister had come inform himself, not to deliver a speech. Most likely he saved the speech for the Broadcast Conference on September 6, 2007. Three subjects were on the list: investments, entrepreneurship and stimulating the cross media sector.

Behind the table were also two media investors, Mr Huub Deitmers and Mr Kees van Kooten. Mr Huub Deitmers, together with theatre and musical entrepreneur Joop van der Ende, runs an investment fund of 150 million euro, part of which has been invested in some 10 start ups; their latest investment is in the Spill Group, one of the global leaders in casual game traffic generation, based in The Netherlands and operating 24 game portals in 17 countries worldwide. He made clear that the fund only invests in new media companies with an international potential. Mr Kees van Kooten a former DJ, is also investing in local companies; he stimulates what is kicking, but looks first at the entrepreneur and then to his plans. In the Netherlands there are not many investment companies for new media; many companies look first for government grants and then go in search for venture capital. Asked whether the minister was an entrepreneur, he told that he had been a life-science researcher and had been the lead in some 10 patents. But he had never set up a company.

Through a spoken column of serial entrepreneur Mr Boris Veldhuijzen van Zanten, the attention of the minister was drawn to the fact that Dutch education makes employees of pupils and not entrepreneurs. The Dutch school system is focussed on delivering as many as possible students with a diploma and not top students. In business schools many managers are educated, but they seek employment with Shell and AKZO and hardly become entrepreneurs. Besides the students can not present themselves; they do not understand that life is one extended pitch.

On the subjects of investment and entrepreneurship the minister listened. But on the subject of the cross media sector he got into a discussion. Professor Paul Rutten presented the Northern Wing phenomenon. This geographical corridor (see illustration) from Haarlem, Zaandam, Amsterdam, Almere, Hilversum, Amersfoort and Utrecht, generates more jobs in ICT and the creative industries than any other region in the Netherlands. The Northern Wing offers in fact 35 percent of all the jobs in the cross media sector, a combination of ICT and the creative industry. But the minister did not swallow this argument. “When you look at the fact that one third of the Dutch population lives in this region, it is not surprising, that one third of the jobs can be found there.” Many people active in the cross media sector must have sighted with relief as Amsterdam and Hilversum have always been favoured above the other regions. Minister Plasterk referred to his visit to the Eindhoven region and the Design Academy; the students there are rescued from traditional ideas in order to start their creative career in the region. Mr Deitmers supported Plasterk’s vision and pleaded not to focus on the region; the Netherlands should be one playing field.

Blog Posting Number: 844

Tags: Northern Wing, crossmedia, investment, entrepreneurship

Dutch ICT sector finds creative industry (at last)

At the iMMovator meeting last Tuesday not only Breednet (Broadnet) was presented but also the CREATE platform, which stands for Creative And Technology Exchange. It is a network project between ICT companies and the digital creative industry. The network consists of the association of IT, Telecom, Office and Internet companies, ICT~Office, with 500 members, which turn over 30 billion euro annually, and of creative networks like Design Connection Eindhoven, iMMovator, MediaGuild and V2_.

The ICT sector in The Netherlands has discovered the creative industry. Two years ago it started to look into membership for ISPs. Following all the attention for the creative industry as a sector of growth and the Creative Challenge Call of the ministry of Economic Affairs and ministry of Education, Culture and Science, the sector is now looking closer at cooperation in the form of the CREATE platform. The purpose of CREATE is to economically generate added value for the creative industry and the ICT sector. The idea behind the CREATE initiative is that the creative industry can make a contribution to the innovative force of the ICT sector, while the ICT sector can function as a leverage for the creative industry in the development of products and services.

The ICT sector has been slow in adapting to the market convergence and certainly to the media convergence. On the other hand the creative industry has problems with marketing and sales as they are usually small companies, working in a fragmented market. Natural business networks are lacking and matching mechanisms are lacking. So, it is not surprising that synergy is under-resourced.

The platform has now set up a number of activities.
1. Network meetings. These meetings are planned in various cities and are hosted by local creative platforms (Amsterdam with MediaGuild; Hilversum with iMMovator; Rotterdam with V2_; Eindhoven with Design Connection Eindhoven/region)
2. The match. ICT companies challenge creative companies to make a pitch for an assignment.
3. Manager traineeships. During these traineeships, managers in the ICT sector will spent time in a creative company and vv.
4. Techno Master classes. During these master classes creatives can upgrade their knowledge about technology and discover new possibilities for their products and services.
5. Best practice cases. Best practice cases concerning cooperation between ICT companies and creatives will be presented.
6. Online environment. The platform starts with a site online, but likes to built out this site to an exchange platform of supply and demand.

The platform looks good. At last the ICT sector takes a serious interest in the creative industry. It has taken some time for ICT companies to take an interest in the smaller creative companies. Usually the ICT companies aimed at corporate for subscription and payment management and later on for running internet sites. But the companies did not move into the creative side of products and services. I personally think that the platform should organize, besides pitches, also an annual competition, showing the Dutch creative products and services and promoting them abroad. But that is my hobby horse, I guess.

Blog Posting Number 797

Tags: ICT, creative industry