EUROPEAN MEDIA: Netherlands - Dutch media comes of age. Peter Heijmans reports from Amsterdam where the major media owners are jostling to become international players

The success of Big Brother in so many countries across the globe

has put the Dutch TV production company Endemol on the map. This is part

of a wider trend that has seen a transition in Dutch media from being

locally rooted and strictly regulated by the government to being a

consumer-oriented industry with an international outlook.



In 2001, this transition has been embodied by the $1.25 billion

sale of VNU's consumer magazines division to the Finnish publishing

house Sanoma. Certain analysts have described this deal as the final

stage of a process that has transformed the media market in the

Netherlands. Once it was a business sector that was judged on its

cultural and societal role, whereas now it is a free-market

entertainment and money-making machine that is gaining international

recognition.



Big publishing houses, such as VNU and Elsevier, which chose to take an

international expansionist approach about a decade ago, seem to have

gone one step further. These days they are scrutinised for ignoring

their domestic audiences, preferring to do big business in the US and

larger European markets, such as the UK and France.



The Telegraaf holding company, the owner of the country's biggest

national daily, De Telegraaf, with a circulation of 808,000, also

aspires to become an international player, but so far it owns only a

limited portfolio of foreign assets.



The Dutch newspaper market has stabilised after years of

consolidation.



It is dominated by three big players who each have a market share of

about 30 per cent and which, as a combined force, can set the standards

in terms of advertising fees.



"Their power is so huge that they maintain high fees in the face of

falling circulations," Hidde Zwaagstra, a partner and the exposure

director of Media Exposure in Amsterdam, says. "This market structure

makes the Dutch newspaper market one of the most expensive in

Europe."



The Telegraaf Holding Company, PCM Holding (which owns five out of six

national dailies) and Wegener Tijl ODC, a publishing house specialising

in local and regional newspapers, all seem to adhere to a mutually

agreed tariff structure, which stops short of breaking the national or

European anti-cartel regulations, according to experts in the media

buying industry.



Their selling power has been challenged only slightly by the appearance

of the free daily Metro, published by the Swedish company Modern Times

Group, and the Telegraaf-owned Spits, which have made only tiny dents in

the copy sales of the national dailies.



Newspaper owners have been suffering reduced revenues from advertising

this year because of the economic slowdown, but they have left their

tariffs unchanged. Meanwhile, Dutch magazines adhere to average European

prices, but the sale of the VNU consumer magazines may give advertisers

an advantage in negotiations, especially if the new owner allows the

former VNU division to dissolve by selling titles.



Dutch TV is comparatively cheap by European standards. "It has, however,

become a very fragmented market due to the establishment of almost a

dozen new networks over the past decade," Zwaagstra says. "There are so

many TV stations that it is difficult to plan a good advertising

campaign."



The three public networks have maintained a remarkably strong position,

with a combined market share of about 35 per cent, despite the fact that

they are allowed to broadcast only half as many commercials as their

commercial counterpart, HMG, which enjoys a market share of 22 per cent

and boasted the most talked-about show of the year on its schedules: Big

Diet.



Big Diet features a number of overweight people who compete to lose as

much weight as they can. The winner is rewarded with as much money as

the kilograms in weight that he or she loses. Big Diet's production

company, Endemol, expects to export the format in a similar way to Big

Brother.



Overall ad spending in the Netherlands has significantly diminished so

far in 2001. Advertisers spent $1.3 billion in the first half of

the year, down from $1.4 billion in 2000, a 3.9 percent decrease.

KPN Telecom accounted for the steepest reduction in ad spending - the

telecommunications company reduced its ad budget from $32 million

to $12 million in the first quarter of the year, according to the

Dutch advertising monitoring office BBC De Media.



Telecoms and dotcoms were the sectors that slashed their budgets the

most. KPN's adspend cuts came at a time when the former state-owned

company had become entangled in a worse-than-average financial situation

for a multinational investing in new media and technology.



Another Netherlands-based international media and telecoms company, UPC,

is also suffering from the unexpected setbacks in exploiting new-media

technology.



So the emphasis has shifted in the Dutch media market over the past year

from Amsterdam housing many fledgling dotcoms to an enhanced enthusiasm

for international business. So don't be surprised to see Big Diet coming

to a screen near you in 2002.



ARJAN POMPER - DEPUTY MD, UNIVERSAL McCANN



What is the brand with the most influence in your country?



KPN



What has been the most talked-about campaign this year?



KRO - a Catholic TV and radio station that used the Virgin Mary with

Jesus in her arms in a campaign to recruit new members



What's been the biggest surprise hit on TV this year?



Big Diet (below)



What's the latest must-read marketing book?



No Logo



Who are the best media sales team in the country?



Hillenaar Outdoor (now a Clear Channel company)



Which media personality gets the most column inches?



The media agency Ries Meijer and the sales house Nico van Zetten get the

most attention in our industry press



Who is the most feared person in the industry?



There really isn't anyone who is feared in the Netherlands



What's the biggest media party of the year?



Media Werkgroep Congres



Where's the best place to meet clients?



Het Jagershuis - Ouderkerk aan de Amstel



What is the biggest single issue facing Europe's media industry?



The development of "powerhouses". The concentration of negotiation power

at a European level. I'm afraid that the result will be quantity over

quality.



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