INTERNATIONAL: MEDIA GIANTS - Why VNU wants to shake off its dowdy image and work in lucrative international markets/From its Dutch base, VNU is now seeking a broader geographical portfolio. Report by Richard Cook




Operates 120 consumer magazines in seven countries. It is the leading

Dutch consumer magazine publisher, with titles such as Margriet. In the

Netherlands, it publishes 51 wholly-owned titles, including Playboy.

Through eight joint ventures it produces 22 titles. In the UK it

publishes 19 puzzle titles and has magazines in Belgium, the Czech

Republic, Hungary and Russia.


Six paid-for regional titles, including De Limburger, and more than 50

free newspapers in the Netherlands. This division also includes cable

television newspapers and regional TV broadcasting in the



Has minority interests in five TV channels. It owns a quarter of the

Holland Media Group, which operates three channels in the Netherlands:

Veronica, RTL4 and RTL 5. The group is concentrating on TV programme

production and distribution via CVI Media, its joint venture with the UK

group, Chrysalis.


Around 90 trade and professional titles in Europe, plus Calyx, a

marketing information group.


It has 33 trade and technical journals ranging from Billboard to


It also operates Data Services, which provides media statistics to

agencies and advertisers, and Market Information Services, a market

research company.


Educational textbooks in the Netherlands and Belgium.

There is a noble tradition of colourful eccentricity among media

magnates, one that stretches back over many decades and across several

continents. Walt Disney, for example, eventually turned his back on

making TV specials in favour of an obsessive interest in cryogenics

while, of the modern breed, Kerry Packer is still prepared to bet

millions on the turn of a single card and Ted Turner, according to his

biographer’s notes, once arrived naked for the signing of a lucrative

advertising deal.

VNU will never be run in that sort of publicity-hungry, flamboyant,

almost cavalier fashion. The Dutch-based company is too reserved for

that. Some of its executives admit that perhaps it is too reserved.

’I think people have an odd perception of VNU because we don’t shout

about our size or court publicity,’ says Brin Bucknor, sales director at

what is for UK audiences still the most visible part of the whole VNU

portfolio - the range of computer and management titles operated by VNU

Business Publications out of Soho. ’We’re in more markets and more areas

of the media than most people realise,’ he adds.

In fact, the entire Business Information Europe division, responsible

for titles such as Accountancy Age and Computing over here and

publishing 90 titles across Europe, represents just 15 per cent of total

group revenues, making it only the fourth largest of VNU’s six operating


The biggest chunk of VNU’s business remains the consumer magazines that

started the company off and still remain strong in the Netherlands and

Belgium. But, given the rate of corporate expansion around the world,

that’s not always likely to be the case.

Two years ago, VNU derived more than half of all group revenues from its

core Dutch operations. That figure has now dropped to comfortably below

50 per cent, as the fruits of an aggressive acquisition policy across

Europe and the US start to become apparent. The UK represents just 7 per

cent of total group sales, while the US is responsible for rather more

than a fifth of total income.

The new VNU dates from 1993 when the company sold off its sluggish

printing operations and began to reposition and streamline itself.

According to the chairman, JL Brentjens, the aim is to achieve a more

varied geographical portfolio, investing only in growth areas with

higher margins.

Unfortunately, its Netherlands-based conservatism has been a tough

legacy to shed. Just five years ago, VNU was heavily dependent on the

Netherlands and its mature consumer magazine and newspaper market. The

answer lay in a number of overseas acquisitions that have helped shape

the company, the first of which was BPI Communications, a major US

business publisher.

This was followed by a costly flirtation with the European TV


In 1995, the company bought minority interests in five commercial TV

stations in the Netherlands and Belgium, including the youth oriented

station, Veronica, as part of a joint venture with CLT.

But income from VNU’s commercial broadcasting has been falling for the

past couple of years and Brentjens has signalled that the company is now

more interested in providing programming than owning channels.

To that end, 18 months ago the company set up a joint venture - CVI

Media Group - with the UK-based music and media group, Chrysalis, with

the aim of augmenting Chrysalis’s existing TV production businesses

across Europe.

VNU has been rather more successful in developing higher margin

businesses within its consumer magazine arm. After a period of

reorganisation, the company stepped up its domestic magazine launch

schedule with the well-received women’s weekly title, Vrouw Vandaag.

More important has been VNU’s expansion outside Holland. At the end of

last year, for example, the company completed the acquisition of the

Prague-based publisher, Kwety Ceske, which owns Prague’s leading weekly

general interest magazine, Kvety. In one stroke, this addition to VNU’s

already impressive stable made it the largest consumer magazine

publisher in the Czech Republic.

VNU also maintains a strong position in Hungary, while its acquisition

of a 35 per cent stake in Independent Media in Moscow last year gave it

access to what is potentially the largest growth market in Europe.

Independent Media publishes seven consumer titles, including

Cosmopolitan and Good Housekeeping.

Since refocusing on international growth, VNU now operates in 15 markets

around the globe, including modest joint venture operations in India,

Puerto Rico and South Africa. But the area where it is expanding most

rapidly is in information provision. VNU’s most significant acquisition

by far last year was ITT World Directories, an international yellow

pages provider. ITT offers the double whammy of high margins and strong

cash flow which can be used to finance further growth for VNU in the

more cyclical, but potentially even more profitable, magazine markets.