Dutch Treat

The Netherlands's newspaper economic crisis

After a cry for help from the print media, the Dutch government has established an €8 million ($10.2 million) fund to jumpstart the search for digital and other innovative solutions to the dramatic collapse of revenues at newspapers and newsmagazines. In April, Ronald Plasterk, the country’s minister of education, culture, and science, will hear recommendations from a committee on how the money should be spent.

As in the U.S., paid newspaper circulation in the Netherlands has steadily decreased—particularly over the last five years. In the third quarter of 2008, 3.6 million newspapers (not counting free papers) were printed—2.4 percent fewer than in the same months in 2007, according to Het Oplage Instituut, which tracks these data. The industry’s financial problems have been compounded by a rapid loss of advertising, a result of the spreading American credit crisis, and by, in at least one case, failing management.

This marks the first time the Dutch print media have asked the government to help them survive. Ironically, it was Plasterk himself who provoked the request. Presenting his policy for the print media in November, he said his hands were halfway tied because government interference would compromise journalistic independence.

Industry leaders loudly criticized this hands-off policy. Lawmakers, increasingly concerned about the impact of eroding news coverage on democracy, agreed that something had to be done. Emboldened, more than forty editors-in-chief, publishers, and directors of newspapers and newsmagazines sent a letter to Plasterk, urging him to “level the playing field.” They pointed out that public broadcast organizations annually receive €500 million in government subsidies and take in an extra €200 million from advertising. This, they wrote, constitutes “unfair competition.”

Plasterk refuses to ban commercials from public television and radio, but intends to get the money for the new innovation fund from the revenue these commercials generate. He rejects the idea of direct governmental subsidy for print media because they are commercial enterprises.

For now, most newspaper executives have welcomed the innovation fund. (One exception is the largest daily, the free market-championing De Telegraaf, which opposes governmental support and instead wants more freedom to grow through mergers and acquisitions.) But industry representatives say that the proposed budget—less than 1 percent of the government’s €900 million media budget for 2009—isn’t even close to what’s needed to keep newspapers and magazines afloat until Internet ventures become profitable. The Netherlands Association of Journalists (NVJ) says €24-35 million is necessary, comparable to the sum that public broadcast organizations receive for new-media projects.

The money should be used to ensure that journalism, not necessarily newspapers, survives, says NVJ Secretary General Thomas Bruning. “You don’t want to protect the steam train; you want to protect public transportation.”

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Hélène Schilders has been the west coast correspondent for Elsevier, the largest news magazine in the Netherlands, since 1998. She also covers developments in the U.S. news industry for De Nieuwe Reporter, an award-winning Dutch website on the future of journalism.