ANP / Arie Kievit
The deal seemed almost done. Media companies Talpa and RTL would continue as one company. For example, they wanted to be stronger against major international players such as Google, Facebook and Netflix, which are taking away more and more viewers and advertisers.
But the Netherlands Authority for Consumers and Markets (ACM) still had reservations. Too big reservations, as it turned out today: the regulator is holding back the merger because the companies would become too powerful together.
A big disappointment for the two companies. But will the viewer notice anything of the collapse of the merger?
Battle for the advertising euro
Not much for the time being, expects media analyst Henk Slotboom. “SBS6 will remain SBS6 and RTL4 will remain RTL4.”
But: in the long term, a merged company could have been beneficial to the public, he says. “With a joint budget you can make and purchase better programs. Now they are always bidding against each other for the rights of a program. That is a bit of a waste of money.”
This is confirmed by the chairman of the board of RTL Nederland, Sven Sauvé. “Together we would have had more money to invest in Dutch content.” Without a merger, he says, the viewer will get even less offer on Dutch television.
He fears that the growth of international streaming services such as Netflix and HBO Max will make things more difficult for RTL and Talpa. And in the advertising market it was already difficult because tech giants Google and Facebook have swallowed up a huge part of the advertising revenue.
Slotboom: “The advertising market is shrinking and therefore the budgets for doing something fun on television are also shrinking. And that does not benefit the viewer. A merger could have meant that RTL and Talpa no longer had to compete for that advertising euro.”
Media giants
RTL Nederland and Talpa Network dominate commercial TV and radio. RTL owns the TV channels RTL 4, RTL 5, RTL 7, RTL 8 and RTL Z, but also streaming service Videoland and weather website Buienradar. Talpa includes SBS6, Net5, SBS9 and Veronica, a number of radio stations (including Sky Radio) and e-commerce companies (including VakantieVeilingen).
It was precisely this lack of competition that prompted ACM to block the merger. Together, RTL and Talpa control 70 percent of the Dutch television advertising market. As a single company, they would be given too much power in determining the prices of advertising. That is also bad for consumers, because advertisers would pass on those higher prices in their products.
Slotboom believes that with this decision the regulator is “using too much the old definition of the television market”. He points out that TV only accounts for 17 percent of the advertising market; online 56 percent. Seen in this way, RTL and Talpa are small players in the advertising market compared to Google.
Sauvé: “In addition to all the streaming services, you have Facebook and Google, which all want the attention of the Dutch viewer and who want the euros from the Dutch advertisers. They have very, very deep pockets and are very technologically advanced. And we have to counter that locally. That’s why we thought it would have been a very good plan to do that together.”
Reject channels
Fons van Westerloo, former director of RTL and SBS, thinks that the viewer will benefit from the fact that the merger does not take place. After a merger, RTL and Talpa would have scrapped some programs, he thinks. “They would be the first to look at where they could save. Then they would have divested channels.”
Van Westerloo agrees with ACM’s decision. “A merger would have been really bad for the industry. It’s not for nothing that producers, advertisers and music publishers all objected.”
Slotboom: “Advertisers will be happy that the merger does not go through. And smaller production houses too, because they now have more customers to sell their program ideas.”
Future
But, merger or not, eventually Dutch media companies will disappear anyway, says RTL boss Sauvé. They may merge with international players. Slotboom thinks that this can certainly apply to RTL, which is already owned by the German media company Bertelsmann. “RTL has an excellent position here in the Netherlands. But yes, once you put the company up for sale, you really want to sell it, don’t you?”
The need is greater for Talpa, says Van Westerloo. “Their programs are currently scoring poorly. They have never set up a streaming service, which RTL has done. Talpa has to find another partner to sell the company or to develop it further.”
