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1 Market Structure and Media Ownership

The news media in the Netherlands have a long tradition. Concerning media freedom, the Netherlands ranked in the top 10 in the 2012 Reporters sans Frontiéres ranking. In 1848, the Netherlands was among the first nations to guarantee fundamental rights and liberties such as freedom of the press, freedom of opinion, and freedom of information. The country’s media profile is one of an economically advanced, mature and stable democracy where traditional news media are still relatively strong. Newspapers, television, magazines, and radio, respectively, reach more than 70 %, 95 %, 93 %, and 70 % of the population in any given week (Zenith Media, 2011). All of these news media sources also have their own publicly accessible websites. Reading online dailies and magazines, listening to Web radio, watching Web television, and participating in activities related to obtaining and sharing audiovisual content are popular activities among Dutch citizens (Commissariaat voor de Media, 2011, 2014). Additionally, the Netherlands has one of the highest percentages in the world of regular Internet users. More than 96 % of households in the Netherlands are connected to the internet (CBS, 2014).

1.1 Newspapers

Print media is currently highly concentrated in the Netherlands. The number of daily newspaper titles has declined from 55 to 25 in the last 20 years. Recently, the two freesheet newspapers merged into one newspaper. Newspaper circulation declined from 1.460 million in 2004 to 1.017 million in 2014 (Commissariaat voor de Media, 2015). Given the substantial population growth in these years, the ratio of newspaper sales to total population shows an even more substantial decline. Both subscription and single-copy sales have dropped in the last two decades. Today, the daily newspapers are published by nine publishing companies, of which the largest three have an aggregate market share of 79.8 % (Table 1). The market share of the Telegraaf Media Group (TMG), Mecom Group (Wegener), and De Persgroep is 35.2 %, 19.7 %, and 24.9 % respectively.

Table 1 An overview of the market share of the main newspaper publishers in the Netherlands
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TMG publishes the largest and most popular daily newspaper, De Telegraaf, with a market share of around 15 %. It is the only publisher with a free daily newspaper, Metro, which focuses mainly on young professionals commuting by public transport to and from work. With its regional newspapers, TMG has a relatively strong position in the provinces of North and South Holland (Telegraaf Media Group, 2014). It is one of the most innovative and diversified traditional Dutch news media companies. The company also owns a majority share in the Sky Radio Group. It is also active in the new media and on the internet with websites and apps, and digital music stations. TMG’s main business activities are concentrated on the markets in the Netherlands.

The other dominant publisher, De Persgroep Nederland, is part of the diversified media company De Persgroep, headquartered in Belgium. It is active in the newspaper market and new media in the Netherlands. Its largest paid-for daily newspapers are AD, De Volkskrant, Trouw and Het Parool. The company owns Q-music radio station, and the parent company also has broadcasting companies in its product portfolio (De Persgroep, 2014). Recently, De Persgroup has become the largest publisher of newspapers. In June 2014, De Persgroep announced that it had the intension to acquire the newspapers from the Mecom Group. Based on a preliminary investigation about the consequences of the acquisition for customers and competition, the Dutch antitrust authority—‘Autoriteit Consument & Markt’ (ACM)—decided that it needed to further investigate the ramifications of the acquisition. The publishers applied for the permission on 8th October 2014, so that ACM could continue their investigation (ACM, 2014). On 11th of February 2015, ACM conditionally agreed with the proposed acquisition (ACM, 2015).

The British Mecom Group became active in the Dutch newspaper market in 2007. It entered the Dutch media market with the acquisition of Koninklijke Wegener N.V. It was the largest publisher of regional daily newspapers and free weekly door-to-door newspapers in the Netherlands in 2014. It had a dominant market position with its mainly paid-for daily newspapers (e.g. De Gelderlander, De Twentsche Courant Tubantia, Eindhovens Dagblad and PZC) in the east and south of the Netherlands, each daily has on average of eight local editions (website Mecom). Daily circulation ranges from 45,000 to 120,000 (Mecom Group, 2014). The company also publishes content in online, mobile and e-paper form such as the real estate website Funda. Mecom Group has approximately two million unique monthly online users in the Netherlands. Furthermore, the Mecom Group operates two printing plants in the Netherlands, one in the city of Apeldoorn and one in Best, with capacity largely used to print the Mecom Group’s own daily and weekly publications. Despite their strong market position, however, the Mecom Group has sustained losses in the last few years. In 2014, Mecom sold its business unit Media Groep Limburg (publisher of two daily newspapers in the province Limburg) to Belgium publisher Concentra. It also is one of the owners of NRC Media Holding which publishes the newspapers NRC Handelsblad, and nrc.next.

1.2 Television

The television landscape in the Netherlands has also changed significantly in the last decades. Since the beginning of the 1990s, the Netherlands adopted the dual system of public and commercial broadcasters for its television market. The national public broadcasters mainly compete with two large national commercial broadcasters for the audience in the Netherlands and less on commercial activities. This latter can be explained by the fact that the public broadcasters in the Netherlands are predominately state-funded although the grant funding is declining. The largest commercial broadcaster is RTL Netherlands which runs operations on four television channels, RTL4, RTL5, RTL7 and RTL8. It is a subsidiary of the Luxembourg-based RTL Group. The parent company is the leading European media and entertainment company, Bertelsmann. The second largest commercial broadcaster SBS Nederland which operates the channels SBS6, Net5, Veronica and launched another channel SBS9 in January 2015, is also owned by a foreign company, Finland’s Sanoma Group. In 2011, Sanoma Group became the owner of SBS Broadcasting. Talpa Media Group also is a shareholder in SBS Nederland. At the national level, the three largest broadcasters together hold on average three-quarters of the Dutch television market share. The Dutch public broadcast associations organized in the Nederlandse Publieke Omroep (NPO) has about one-third of the audience share, RTL Netherlands one-quarter and SBS Nederland with less than 15 %. Regional television has a relatively small market share of around two percent. In total, in 2011 there were 13 public broadcasters at the regional level and around 340 at local level (Commissariaat voor de Media, 2011; OLON, 2015). Table 2 presents an overview of the market share of the main broadcasters in the Netherlands.

Table 2 Market shares in the Dutch television market
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The total viewing time of the Dutch population has shown a clear upward trend since 1989. For instance, it increased from 167 min/day in 2001 to 200 min/day in 2014. The viewers predominantly tune in to the national public broadcasters or to the commercial broadcasters RTL or SBS.

Many people are connected to cable to watch television. The Netherlands has the highest density of cable connections and the highest percentage of households that use cable for their television reception in Europe (Commissariaat voor de Media, 2015). A fast-growing development in the market is digital television. In 2014, the three largest TV cable and digital operators had an aggregated market share of 79 %. The market share of Ziggo, KPN, and UPC is 33.8 %, 28.6 %, and 16.6 % respectively. However, Liberty Global announced in January 2014 its intention to acquire Ziggo. Liberty Global is the US parent company of UPC. After an in-depth investigation, the European Commission approved the proposed acquisition of Dutch cable TV operator Ziggo by Liberty Global, under the EU Merger Regulation. The approval is conditional upon the implementation of a commitments package (European Commission, 2014). The commitments package should guarantee that the consolidation should not hinder competition by removing two close competitors and important competitive forces in the Dutch market for the wholesale of premium Pay TV film channels, and should not hinder innovation in the delivery of audio visual content over the Internet. The new combination covers around 90 % of The Netherlands and currently command between 60 and 70 % of Dutch Pay TV subscriptions. The acquisition has given Liberty Global an increased buyer power position vis-à-vis TV broadcasters, in particular Dutch TV broadcasters.

The development of pay television is still in its infancy. It is likely that the development of pay television will be stimulated by the entrance of Rupert Murdoch’s News Corporation to the television broadcasters market in the Netherlands on 8th of August 2012. Fox International Channels, a subsidiary of News Corporation, acquired a majority share of 51 % in the pay television channel EredivisieLive for more than 1 billion euros for 12 years (NRC Handelsblad, 2012).

1.3 Radio Broadcasting

Many broadcasters also fully or partially own radio stations. The radio market also shows a high concentration in media ownership. The majority of national radio stations are owned by the public broadcasters or other Dutch media companies. Overall, public broadcasters, including regional broadcasters, have a market share of 41.7 %; commercial broadcasters have an aggregate market share of 54.2 %; and the rest category has a market share of 4.1 % in 2014. Broadcasters owned by foreign companies have around 10 % of the market of which De Persgroep is the largest, with a share of 8.8 %. Only a few companies dominate the market of radio stations. The three largest companies have a combined market share of 61.6 %. The market share of national public broadcasters, Telegraaf Media Group (TMG), and Talpa Media Group is 32.0 %, 16.1 %, and 12.5 % respectively (Table 3). Talpa Media Group is the holding firm that incorporates John de Mol’s media activities, and the company has a minority share in SBS Nederland. Radio stations Radio 538 and Slam FM are fully owned by Talpa Media Group. In addition, Talpa, holds a minority share in the radio corporation 100 % NL.

Table 3 An overview of the market share of the main suppliers of radio stations in the Netherlands
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2 Regulations

For many years, the Netherlands had different rules to constrain media cross ownership in the news media markets. It also posed restrictions in granting broadcasting licenses. These constraints were initially laid down in the various Media Acts. From January 2011, specific legislation on media concentration (such as media cross ownership) no longer exists in the Netherlands (Commissariaat voor de Media, 2011). The ongoing increase of alternative news sources provides sufficient counterweight against the larger media companies and provides enough opportunities to maintain or even increases quality and diversity of information provision to the society. As for the prevention of dominant positions of media companies, general competition law also applies to the news media markets.

Nowadays, the Dutch Media Authority called Commissariaat voor de Media enforces the rules formulated in the Dutch Media Act as well as in the regulations based on this act. Although the Media Authority operates and takes decisions independently, it is accountable for its decisions and actions to the Ministry of Education, Culture and Science. It is responsible for audiovisual content and distribution matters. It grants licenses to broadcasters, registers VOD services and systematically monitors compliance with the rules on quotas, advertising and protection of minors. Furthermore, it can issue warnings, impose fines, reduce broadcasting time and suspend or revoke a license. Penalties and corrective actions take place after a breach of the regulations has occurred; the broadcasting organizations are themselves responsible for the form and content of their programs. Money from fines is transferred to the state budget but has to be used for purposes of media policy (in the widest sense).

In the Dutch television system, there is no limitation on the number of national broadcasting licenses a broadcaster may hold for commercial broadcasting, as long as a company complies with the general competition law. However, a broadcaster can only hold one public national broadcasting license which is granted by the Ministry of Education, Culture and Science. The dominant position of the national public broadcasters has been phased out. Recently, a consolidation has taken place among the public broadcasters due to pressure from the Dutch government.

There are limitations on the number of licenses for regional and local public television broadcasting. Only one person or legal entity can be licensed for local public television broadcasting within the same geographical area (i.e. municipality). Similarly, only one person or legal entity can be licensed for regional television broadcasting within the same geographical area (i.e. counties). More than 50 % of their broadcasting time should be focused on information, cultural, and educational programs.

3 Media Innovation Policies

To save pluralism of daily newspapers, the Dutch government intervened in the Dutch daily newspaper market on several occasions. In 1962, the Dutch government imposed a rigid price policy for daily newspapers through a tight link between subscription prices and advertising tariffs. The newspapers had been required to annually increase subscription prices and advertising tariffs by a minimum percentage agreed on by all publishers to guarantee the plurality in the daily newspaper market. This price policy for the daily newspaper market disappeared.

In reaction to the concentration tendency, in 1971 the Dutch government decided to install a press relief fund to financially support newspapers that struggled for survival. This fund, known as Het Bedrijfsfonds voor de Pers, became a foundation in 1974, and still exists today. It seems that the exit barrier enhancing policies to maintain multiformity may have delayed the concentration process in the newspaper market, but could not stop it (van Kranenburg, Palm, & Pfann, 2002).

In the last decade, the Dutch support system to the news media has gone through a continual process of rethinking and transformation. The choice of policy instruments has changed. The policy now focuses more on stimulating publishers and editors to deliver news across diverse media platforms (Lichtenberg & d’Haenens, 2013). The fund works at a distance from the Dutch government and experiences no political interference. In 2008, a temporary innovation commission Tijdelijke Commissie Innovatie en Toekomst Pers, also known as Commission Brinkman, was established. This commission was assigned the task of discussing the future of state support to the press and providing recommendations on innovation policies (Staatscourant, 2014). One important recommendation was the establishment of a temporary fund to stimulate innovation of the press and journalism—the Persinnovatieregeling. The Bedrijfsfonds voor de Pers (changed its name to the Stimuleringsfonds voor de Pers in 2007) became responsible for the implementation of the temporarily innovation fund.

As a result of these developments, the Dutch support fund recently changed its name to the Stimuleringsfonds voor de Journalistiek, or innovation fund for journalism. The fund focuses on supporting innovative activities of news media, in particular activities of smaller firms and start-ups, because they do have generally not the required expertise and resources for the development of the activities. Its focus is also increasingly on giving advice and organising workshops and events that aim to inspire people and bring different experts together.

Despite the relatively high number of successful projects (Wolfert, 2014), the fund is endowed with relatively little money. The fund works on the principle of matching funds, with projects having to match at most 50 % of the grant. The budget has significantly declined over the last 4 years. Initially, the fund received once-off cash injection from the state of 8 million euros for innovation in 2010. Nowadays, the fund works with a budget of around 2 million euros. More than half of the budget is allocated to support innovative activities and the rest is allocated to research and workshops and events.

In the same period, 4 million euros was temporarily earmarked to rejuvenate journalists’ workforce. In particular, newsrooms could apply for funds to hire young journalist. After the end of the funding period, more than half of the young journalists were still employed by the newspapers (Plessing, 2014).

Also the policy to support the public broadcasters is changing. Recently, the government in the Netherlands decided to impose serious cuts on the budgets for culture and media for the forthcoming years. This means that public broadcasters are being confronted with serious budget cuts spread over the next few years. These reductions also influence the innovation activities of organizations given the fact that they can invest less in research and development. No alternative instrument has been designed to replace the budget cuts and promote the innovative activities of broadcasters.

The formulation of the innovation policy in the Netherlands also includes ultimate objectives. The government defined the creative industries as one of the leading industries for the Dutch economy and society. In particular, the selected industries receive support from the government and public organizations. The creative industries among the publishing, advertising, entertainment, music, broadcasting, visual arts, new media and gaming industry contribute substantially to the economic development of the Netherlands. The annual turnover of creative industries in the Netherlands adds up to more than 7 billion euros in 2012 (NLAgency, 2013). Government, knowledge institutions and companies are collaborating to facilitate research and to develop R&D facilities, new businesses and education. These collaborations are strong in particular regions in the Netherlands. For instance, the High Tech campus in Eindhoven and Hilversum and the Amsterdam Metropolitan Area are hotspots for broadcasting and the general creative industry respectively. Among the many collaborative initiatives to strengthen the creative industries is iMMovator Cross Media Network in Hilversum. It is a network organization that connects government, knowledge institutions and business to share knowledge and encourage collaborations to stimulate innovation in the media. Also the informal network organization Federation Dutch Creative Industries (FDCI) aims to strengthen the creative industries in the Netherlands.

The government has also developed various funding instruments and regulations for the creative industries. These instruments and regulations are primarily aimed at Dutch knowledge institutions and the Dutch creative small and medium sized enterprises (SMEs). For instance, the government has developed tax related instruments for research and development to foster the innovative power of SMEs. The goal of this innovation policy is to help the creative industries to gain an international top position. In the government’s attempt to achieve this goal, the creative industries knowledge and innovation network (CLICKNL) has been established (Ministry of Education, Culture and Science, 2014). Members of CLICKNL are among others TNO (independent organization regulated by public law to enable business and government to apply knowledge) and Dutch Science Foundation (NWO). Their task is to develop and implement particular instruments and regulations for the creative industries. For instance, the Dutch government and Dutch Science Foundation (NWO) have established the creative industries program to facilitate research, to make knowledge accessible, and to encourage collaboration among scientists and entrepreneurs in the creative industry. Researchers can submit embedded or strategic research projects on behalf of consortia of companies and researchers (NWO, 2014). Also a similar program—Raak—has been established for the applied universities in the Netherlands.

Although the government defined the ultimate objectives for the creative industries, the translation into direct innovation objectives for the news media industry are not well-defined. These innovation objectives cannot be derived because the identification of problems in the news media industry from a policy point of view that are not solved by the industry itself has not yet been completed.

4 Summary and Best Practices

The evidence shows a tendency towards concentration in the traditional news media markets. It is expected that the concentration will further increase in the next period. The long term increase in concentration has been caused by changing commuting, advertising and reading habits, but also the trigger for such concentration was the information and communication technology developments. In the Netherlands, the newspaper market has reached a point in which opportunities to successfully establish a new newspaper is very low. The Dutch government has intervened several times in the newspaper market, yet these interventions could not stop the concentration tendency. The level of concentration is even higher when we look at the owners of the newspapers. In 2014, the majority of newspapers were owned by three large diversified media companies of which two had foreign owners. Recently, De Persgroep acquired the publisher Wegener N.V. As a result, the two largest owners of newspapers have an aggregate market share of 79.8 %. The few dominant media companies are active in various domestic and/or international media markets. Media cross-ownership is allowed in the Netherlands. It seems that the ongoing increase of alternative news sources provides sufficient counterweight to the larger media companies and provides enough opportunities to maintain or even increase quality and diversity of information provision to the society. As for the prevention of dominant positions of media companies, general competition law also applies to the media markets. The general competition law applies only in the case of abuse of market power or intended mergers or acquisitions, but not for organic growth of the firms.

Also the policy to support the public broadcasters is changing. The government continues to support public broadcasting although it is implementing severe budget cuts for the public broadcasters. This development influences the innovation activities of organizations given the fact that they can invest less in research and development. No alternative instrument has been designed to replace the budget cuts and promote the innovative activities of broadcasters.

In the last decade, the Netherlands has moved to more flexible temporary support (Plessing, 2014: 21). These models not only focus on traditional news media but also include new media development initiatives such as digital media. Furthermore, the government decided that the creative industry is one of the hotspots. It should be or become one of the leading industries in the Netherlands. The news media industry is part of the general creative industry, although underlying problems from a policy point of view and the innovation objectives of the news media industry have not yet been well-defined. As a consequence, the formulation and implementation of an effective innovation policy for the news media industry is difficult at this point in time.

The new policies are open to a greater range of media initiatives than the previous policies. Although the Netherlands invested much thought in revising its subsidy system, the main question that arises is how effective and efficient are the new innovative policies, given the relatively small financial commitment, the temporary character and unclear objectives of these policies?

5 Innovation Policy Recommendations

Technological change, convergence and a change in customer needs are elements in the news media industry that demand the media companies to change and consider new avenues for revenue, but also governments, policy-makers and politicians to change their traditional ideas and perspective on the industry. Although they are becoming more aware of these developments, the awareness and attention to the policy challenges associated with current changes are still relatively limited. They should be aware that the boundaries between the traditional news media industry with its different markets and related industries are blurring at a high pace.

In general, most of the media policies are developed with the aim of ensuring media pluralism and addressing potential market failures in content production (in particular in news journalism and domestic programming for television). The new policy initiatives more often supplement than supplant the traditional ones. In these new initiatives the inherited arrangements and interests of legacy firms are generally left unchallenged and the focus on innovation is limited. These policies are necessary but not sufficient to trigger innovation and to maintain a sustainable news media industry. Nowadays, media pluralism and diversity are not only related to the traditional news media industry, but also related to other related industries. This implies that the debate to achieve the policy objectives to ensure media pluralism and diversity should take place in a broader context than the traditional one. Not only digitalization and Internet but also computer science and statistics have become part of the news media ecosystem. Nowadays, computer journalism creates news items from sets of data that are indistinguishable from human written news (Clerwall, 2014). Computational journalism uses algorithms, social science and mathematical processes and systems for the production of news and information. This debate will also influence the development of innovation policies.

Although many different interests and objectives exist that need to be balanced in order to create commitment and successful implementation of policies, companies, government, policy makers, and knowledge institutions should translate the ultimate objectives for the creative industries (including innovation and media pluralism) into direct objectives for the news media industry. Before this can be accomplished, the industry should first complete the identification of the problems in the industry from a policy point of view by itself. This requires from all actors to behave less defendedly and to act mindfully.

The policy discussion about the public service broadcasting is about cost-efficiency, budget reduction and competition with the commercial broadcasters. This policy is not triggering innovation. Legacy firms are lobbying to maintain their current position and their revenues and their resources are mainly going to the restructuring of the organizations. This policy is mainly based on short term objectives. It would be recommended also to include long term objectives such as the transition from public service broadcasting to public service media. The debate should be more focused on the role the public service media can play to trigger innovation and thus in the sustainability of the news media ecosystem. The public service media organizations can also function as experimental labs and incubators. The media park in Hilversum has a great opportunity to transform itself into a social network news media cluster given the existing resources, knowledge base and infrastructure.

It is important for policy makers and other actors from the traditional news media industry to understand that the future news media ecosystem will radically differs from the existing one. This implies that the traditional routines, practices, rules of production and distribution will change. In other words, the rules of the game will change. The creation of the hotspot for creative industries is an adequate response for the preparation of the transition of the news media ecosystem. However, the policies for the creative industries should not only consider initiatives of organizations from the traditional industries but should also consider initiatives from organizations outside these industries. Creativity, inventions and innovations for the news media eco system are not only coming from inside the industries but also from outside. Furthermore, these policies should have a more structural character and should include all policy instruments and structural financial commitments to trigger innovation.

The news media industry is not only an economic interesting industry, but it has always played an important role in the (democratic) functioning of the society. This gives the industry a unique position in comparison to the other creative industries. Therefore, it would be recommended to include particular emphasize on the news media industry in the innovation policies for the creative industries. The innovation policies should include measures to encourage the diffusion and uptake of existing innovations to a broad range of news media firms and not only firms from the traditional news media industry, as well as encouraging new innovations. Hence, innovations should be more widely distributed in particular to the news media industry, with support for firms to develop their ability to search for new options, evaluate them, and successfully implement and adapt them to their specific context.