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Dutch Channel Ready To Go

After months of negotiations, three major pan-European media groups – CLT, Endemol Entertainment, and VNU – and Dutch broadcaster Veronica have agreed to launch Holland Media Group, the largest commercial television venture in Dutch history.

The heart of the new alliance has Holland’s three most powerful broadcasters – CLT-backed RTL 4 and RTL 5 and Dutch broadcaster Veronica – cooperating across all aspects of television broadcasting and production. Veronica, now a public broadcaster, will leave the state system in August to start up a commercial channel in a 50-50 ownership venture with Endemol Entertainment. Endemol is the biggest independent TV producer in Europe.

Domino theory

Analysts believe this could spur a round of similar media ventures to be formed in other European territories.

Under the new agreement, RTL 4 – 47% owned by CLT and 38% owned by VNU – will hold 51% of the shares of Holland Media Group, with Endemol/Veronica retaining 49% of the shares. The deal also has RTL 4 acquiring a 24.9% stake in Endemol.

HMG also has signed a contract with Endemol to supply programming. Under the terms of the new agreement, Endemol would continue to provide its glitzy, high-profile lineup of sitcoms and gameshows to other clients, including the public broadcasters. The Endemol product has formed the backbone of programming for some of the state system’s more commercial pubcasters, such as TROS.

Complementary

HMG chairman Huib Boermans, also CEO of RTL 4, told Variety the channels would be mutually complementary and would be “good for the Dutch broadcasting landscape and for advertisers.”

Program details have not been worked out, but Veronica chairman Joop van der Reijden said RTL 4 would continue to be a family channel and Veronica would concentrate on youth, but RTL 5 “will change its profile because at present it clashes with us.”

The new network is aiming for a 40% audience share, a goal believed by advertisers to be easily achievable, since RTL 4 and RTL 5 already have a combined 33% share of the market.

Boermans says the $900 million guilder ($530 million) Dutch TV ad market is big enough to support the new grouping.

The new HMG chairman downplayed fears by government officials, advertisers and other broadcasters that the agreement would create a media, production and distribution cartel in Holland, spelling the death of the public broadcasting system.

Said Boermans, “I don’t see any reason to view us as a hostile operation. The whole competitive environment is changing and pubcasters should organize themselves in a way that they can deal with the situation. It’s not only happening in Holland, but all over Europe.”

Market share across the three Dutch channels is expected to plummet when Veronica leaves the state system.

Part of the new operation will involve the launch of two radio broadcasting channels.

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