Broadcasting in the Netherlands started as early as 1919 with radio pioneer à Steringa Idzerda whose ‘Dutch Concerts’, broadcasted from The Hague, were popular even in Britain before the BBC had started its operation. In the 1920’s the peculiar ‘pillarised’ organisational model developed in accordance with the social stratification of Dutch society. This model was also transferred to television in 1951, and is still more or less in use for the organisation of public broadcasting today: the pillars are gone, viewers and listeners are ‘organised’ according to lifestyle groups. Commercial broadcasting only started in 1989 through a loophole in the national media legislation and as a result of the new, liberal European Directive ‘Television without Frontiers’. At present a crowded television market of about fourteen stations – 3 public, 6 commercial and 5 youth-oriënted - in the Dutch language fights for attention in 6.9 million homes and the unique broadcasting model of before is developing into a European dual broadcasting system.

Historical development, legal basis

1920 – 1989
The public broadcasting system started in the 1920s and remained a closed entity formed by five associations until 1965. It is unique in the sense that broadcasting as a public service is in the hands, not of private corporations or national organisations, but of associations of viewers and listeners. These associations are, for their part, rooted in the ideological currents in Dutch society, based on the historical process of “pillarisation”. In the second half of the l9th century, Roman Catholics and Calvinist Protestants, and later also Socialists, opposed the hegemony of the Liberal-Conservative establishment of the time. Their efforts to achieve emancipation for their followers led to the creation of “pillars”: parallel, closed compartments in society for each belief or ideology, which applied their own way of thinking and living to all areas of life, which created a socio-cultural ‘apartheid’ ranging from their own political parties and trade unions to schools, hospitals and leisure associations.
When radio started up in the 1920s, the pillarised movements realised that this medium had the potential to become an ideal vehicle for reaching their respective flocks. Within a few years NCRV (Protestant), KRO (Roman Catholic), VARA (Socialist), VPRO (liberal Protestant) and AVRO (neutral) were established, broadcasting over 2 radio stations, Hilversum 1 and Hilversum 2. Advertising was not allowed, and until World War II there was no licence fee; the organisation’s members paid for radio broadcasts.

During World War II the forces of occupation introduced the license fee. In an effort to overcome pre-war divisions the Dutch government urged for more co-operation within the broadcasting system after the war. Therefore the Nederlandse Radio Unie (NRU, Netherlands Radio Union) was founded. It comprised studios, radio orchestras and choirs, and it produced joint programmes. The introduction of television in 1951 was left to the radio broadcasting organisations, and again a central organisation was founded. The Nederlandse Televisie Stichting (NTS, Netherlands Television Foundation) controlled studios and technical facilities for the broadcasters who would never own such facilities themselves (unlike radio). The first television channel, Nederland 1, was soon followed by a second, Nederland 2, in 1964. The 1960’s saw the slow but steady demise of the pillarisation structure. People began to appreciate diversity and choice above isolation and separation, and started listening and viewing outside their own pillar. The popularity of a number of pirate radio stations, broadcasting pop music from ships on the North Sea, led to the arrival of a third radio station, Hilversum 3. At the end of the 1980’s the public radio stations were renamed: Radio 1, Radio 2 etc.
The public broadcasting system was never laid down in legislation until 1967, when a new Broadcasting Act was introduced. The broadcasting associations remained at the heart of the system and had to be non-commercial. Their purpose was (and still is) to provide all citizens with a comprehensive radio and television programme, consisting of information, culture, education and entertainment. Airtime and funds were allocated according to the number of members the association had.

Three main measures were also laid down:
- the broadcast system was opened up to other organisations. Within a few years conservative Protestant EO, and former commercial pirate stations TROS and Veronica had joined the system, the latter two making the system more ‘consumer-oriented’;
- advertising was allowed as a second source of financing; a separate body, STER was founded to prevent advertisers’ influence on programming;
- NRU and NTS were joined together in NOS, which was given the task of general co-ordination, provision of studios and technical facilities and production of a joint programme for a.o. news and national events.

Next to the eight broadcasting associations (AVRO, EO, KRO, NCRV, TROS, VARA, Veronica and VPRO) and not member based NOS, there were (and still are) some 25 minor broadcasters, such as churches, political parties or educational organisations.
In 1988 a new law came into operation, the Media Act. It dealt with some situations laid down in the Broadcasting Act which were not satisfactorily settled and tried to cope with new (technological) developments.
- NOS’ studio’s and other technical facilities were made independent in a private company, Nederlands Omroepproduktie Bedrijf (NOB, Dutch broadcasting production company). The obligation of the broadcasting organisations to use its facilities was dropped.
- Programme obligations were quantified for the first time: broadcasters must offer 25% information, 25% entertainment, 5% education and 20% culture; the remainder of broadcasting time may be used in any way.

- A Media Authority (Commissariaat voor de Media) was set up in Hilversum; it controls the broadcasting associations’ (and later on the private broadcasters’) compliance with the provisions in programmes and advertising. The Commissariaat may inflict penalties and charge fines.

- The Stimuleringsfonds Nederlandse Culturele Omroepproducties (Dutch Fund for Cultural Broadcast Productions) was established; it’s objective to designate a part of the broadcasting budget to stimulate/co-produce cultural (quality) programming.

- Special attention was given to cable regulation. The Netherlands was then already densely cabled (85%). Must-carry rules were introduced for Dutch and Flemish TV channels. Private pay-TV was allowed. Netherlands-based private broadcasting was not allowed, but EU guidelines ruled out a ban on foreign stations (either public or private). Provided they broadcast in their country of origin, foreign broadcasters were allowed on Dutch cable. This allowed a loophole in the law.
Almost at the same time that the Media Act was introduced, a third television channel was set up in April 1988 in order to give the public system more means of competing with the increasing number of channels reaching households via cable and satellite.

The 1990’s
The result of the changes in legislation was enormous: within a few years the broadcasting landscape had completely changed.

In 1988 private radio stations emerged, at first only receivable by cable. But soon some FM-frequencies became available, and the number of stations grew quickly. The monopoly of the public radio stations had come to an end after 60 years.

Private television started on 2 October 1989 when Luxembourg-based RTL-Veronique, soon to be called RTL4, began broadcasting via the ASTRA satellite. It had been acknowledged by the Commissariaat as a foreign station, and was therefore allowed on Dutch cable. Within a year it became the market leader in The Netherlands. After the start of RTL 4 the market share of the three public television channels fell from 85 percent in 1989 to 50 percent in 1994. RTL4’s succes sparked a large number of private television stations that emerged in the 1990’s, the first being RTL’s second channel, RTL 5, in 1993. In September 1995 Veronica left the public system (after 20 years of uneasy alliance) to go private. Looking for stable partners it teamed up with RTL, forming the Holland Media Group (HMG), which consisted of RTL 4, RTL 5 and Veronica. SBS6, a channel of the Swedish/American SBS group, also entered the market in 1995. It started low profile, but its special programme blend of reality shows, more personal forms of news (sometimes with a degree of sensationalism) and late-night sex earned it a considerable market share and a favourite position with advertisers. In 1999 a second SBS channel was launched, called Net 5. Two other stations were launched in 1995: TMF (The Music Factory), a highly successful Dutch equivalent of MTV, and TV10, mainly broadcasting (unsuccesfully) repeats of old series. TV 10 was unable to find an audience niche and in 2001 it was sold to SBS and renamed V8. TMF was sold in 2001 to MTV.

The market for (independent) audio-visual production comp¬anies emerged quickly. NOB (NOS’s former studios and facilities), that focussed on production facilities, took some years to adjust to market forces. It has seen a long period of financial ups and downs, and in 2002 it was split into three parts, its core business remaining audiovisual production. Postproduction and other non-core activities, as well as the real estate activities (the Media Park in Hilversum) were sold. As a result, NOB was profitable in 2002 for the first time since 1998.

Independent audio-visual production companies flourished, in particular those companies that offered more than just facilities. One of these was the company (of) Joop van den Ende which brought together programme formats, stars and production potential in one operation. After a merger with equally successful John de Mol in 1994 Endemol was created, which developed into the largest independent producer in The Netherlands, and a major player worldwide. Endemol was sold to Spanish Telefonica in 1999. Although Endemol is the dominant factor in the production market, the market is very diverse. Chrysalis IDTV is the second largest production company in The Netherlands, and altogether some 200 companies make a living, some of whom are booming (Eyeworks e.g.), often as a result of programme-formats that are sold internationally.

Government policies in the 90’s
With the unexpected (and undesired) arrival of private television both the government and the public broadcasting system had to find a response to the new situation. The government’s new policy was a two-way track: in the first half of the 1990’s the authorities set out to regulate domestic private broadcasting and to strengthen the public system. The second half of the decade, media policy was focussed on liberalization of the various media sectors. These changes led to numerous amendments of the Media Act, which was, as a result, constantly “under construction”.

Domestic private radio was allowed. Domestic private television was also allowed, but only via cable. Private operators had to comply mainly with the EC Directive “Television without Frontiers”. The public broadcasting system was first strengthened in financial terms. Advertising opportunities were increased, and the licence fee was indexed to the increase in the cost of living. An attempt was also made to strengthen public broadcasting from the organisational point of view. Voluntary co-operation between the autonomous broadcasting organisations was stimulated. The programming task of NOS was split. NOS retained the task of broadcasting news, sports and national events. A new organisation, the Nederlandse Programma Stichting (NPS - Dutch programme founda¬tion) obtained the responsibility for cultural, minorities and young people’s programmes.

From 1995 a government of social-democrats and liberal-conservatives introduced an extensive liberalization policy throughout the communications sector. This liberalization policy was most noticeable in the telecom and cable sector. Liberalization of the public broadcasting system resulted in a 5 year concession for all broadcasters. Further attempts were made to strengthen the organisation of the public system by using a stronger central management. On 1 February 1998, a smaller Board of Management, comprising three independent members, replaced the large NOS Board. Its task was to develop strategic plans and to be responsible for the total programming output of the public system. For each television channel and radio station a network co-ordinator was appointed (as well as co-ordinators for a children’s channnel Z@ppelin and for internet) with the task of giving the channels a more recognisable identity. The broadcasting associations remained responsible for radio and television programming. Through a Supervisory Board they still have influence over co-ordination measures, financial plans and the network co-ordinators.

From 1998 a second government coalition of social-democrats and liberal-conservatives set out to fix public broadcasting for the first decade of the 21st century. A new Concession Act (again as an amendment to the Media Act) guarantees the public system 3 television channels and 5 radio stations for the period 2000 - 2010. NOS was given a 10-year concession for the whole system, while each organisation is subject to a review (‘visitation’) after 5 years. Programme requirements for the public system are tightened in order to safeguard a clear distinction from the offerings of the private sector. At least 35% of programmes must comprise information and education, at least 25% culture (half of which is for arts), and no more than 25% (per channel) entertainment. Furthermore 50% must be European production, 50% subtitled for the hearing-impaired, and 25% commissioned (independent) production. Public service broadcasting must serve as a guarantee for variety and quality in programming. Every five years an independent audit committee will assess the performance of public broadcasters. As part of a total tax revision, the licence fee was abolished on 1 January 2000, in favour of a levy on income taxes. The public broadcasting sector was given an income guarantee, based on the 1998 level, with yearly indexing. Advertising airtime was fixed, sponsoring of programmes was restricted.

The market share of the public broadcasting system fell to 45 percent in 1995 and then to 40 % in 1996 as a result of Veronica’s departure and the arrival of four more private competitors. In 1999 NOS’s Supervisory Board approved of a plan for improved channel identity. This policy seems to work. Through gaining and maintaining important programme rights (especially sports), by distinguishing its programming from private offerings, and by better co-ordination and profiling of the channels, the market share is now pretty stable at 38 percent. The gap that Veronica’s departure left in reaching a younger audience was filled in 1999 with a new entry in the public system (the first in more than 25 years). BNN received an aspirant status and did what it intended to do: reach young viewers.

The new millennium
The relative peace and quiet for the public system that the government had set out with its 10-years concession and financial guarantees, did not last very long. Due to an economic recession the profits of the private stations fell, and they aimed their arrows of ‘unjust competition’ to the public system. HMG filed a complaint with the European Committee, accusing the Dutch government of excessive state support for public broadcasting, claiming it was spoiling the market for private companies. There was also a growing discontent in society with the performance of the media (not only broadcasting), and a growing sentiment that the organisational model of public broadcasting was (still) inefficient.

In may 2002 new elections took place and they promised to bring major changes, mainly because of the presence of right-wing populist Pim Fortuyn. To the dismay of the nation Fortuyn was murdered one week before the elections, on the Media Park in Hilversum. His party (LPF) won the elections, but accused the media (especially NOS and some newspapers) of not taking Fortuyn serious at first, and ‘demonising’ him later on. The new centre-right government Balkenende I, that included LPF, charged public broadcasting with a structural cutback of E 30 million. Besides that the government ordered an investigation by McKinsey into the efficiency of the public broadcasting system, as well as a study by the Scientific Council for Government Policy into the aims and tasks of public broadcasting in the Netherlands. At the same time the Visitation Committee that has to evaluate the public broadcasters after its first five-year period has started as well (Bardoel, 2003). So the public system is under heavy scrutiny. The government with LPF proved to be very unstable, so it fell after only 86 days. The new coalition of Christian-democrats and right- and leftwing liberals, Balkenende II, set out a course of fierce savings in most parts of government expenditure, confronting public broadcasting with structural cutbacks of E 80 million. The results of the McKinsey study showed that public broadcasting in The Netherlands by comparison is very efficient, but that the financial targets can be met by more co-operation, reducing staff and management, and redefining core business.

At present three large parties dominate the television market. The public broadcasting system, HMG and SBS all have three nationwide channels at their disposal. Private television in The Netherlands is completely in the hands of foreign companies.

HMG nowadays is completely owned by CLT/Bertelsmann: Veronica left the Group in September 2000, leaving behind a television and a radio station, but keeping the successful programme guide and the Veronica name. HMG’s third channel was renamed Yorin. RTL 4 and 5 especially suffered from the arrival of more private competitors and the economic recession. Several programming and management changes resulted in a restored market leadership for RTL4 in 2002, and restored profitibility.

After leaving HMG Veronica had to lay low for a while, and from 2002 it made several unsuccessful attempts to regain a position in the television market, at first with a very low-cost programme offer, later with a high level of rancidity, and in both attempts the audience was unappreciative. In September 2003 Veronica, after losing large sums of money, merged its television and publishing activities with SBS.

SBS has succeeded in launching three channels in a relatively short time span. SBS Holland is relatively popular with advertisers, and is the most profitable unit of SBS International. SBS’s TV-stations are distinctly targeted at separate audience groups: a family channel, a channel for young females and one for young males. In September 2003 SBS’ original CEO switched to HMG, sparking rumours of a possible merger between the two private television companies.
The children’s and youth market are both mainly controlled by 3 stations. Fox Kids is the market leader in children’s TV, closely followed by public broadcasting’s Z@ppelin. Kindernet has merged with, and taken the name of Nickelodeon. Teenagers can choose from three music stations: TMF (with emphasis on Dutch artists), MTV Nederland, and The Box. MTV Networks (owner of Nickelodeon, TMF and MTV Nederland) has access to the complete youth-market in the Netherlands.

Radio
Even before the start of private television, a number of initiatives for private radio surfaced. The five public service radio stations (a classical music station and a station catering for minorities had been introduced in the eighties) were already competing with regional radio stations, and from 1992 onwards almost a dozen domestic private radio stations were set up within a few years; they are financed exclusively by advertising. At first they could only be received by cable, but when public radio stopped being broadcast on both FM and medium wave and more efficient use was made of the frequency range, a number of frequencies were released for private stations on a provisional basis. When new terrestrial frequencies were (provisionally) allocated in 1995, the number of private radio stations increased again. The government took a long time in allocating commercial frequencies on a permanent basis, constantly hesitating between an open auction or a stipulated one, and chose the typically Dutch solution to do both; in May 2003 the frequencies were allocated. Five frequency lots were designated for specific radio genres (news, classical/jazz, oldies, Dutch music and ‘alternative), four frequency lots were unstipulated and went to the highest bidders. No private company was allowed to own more than two lots. Because of this the lot for classical/jazz could not be allocated in May, and will be decided by the end of 2003. Radio 10 and Classic FM disappeared, other stations may change their names as a result of new alliances that were made. Newcomers are ID&T (dance), Holland FM, a new oldies station and a replacement for Classic FM.

Regional stations are still going strong in the ratings, but many of the regional radio stations have financial problems. They are excluded from the heavy government cutbacks, but their financial future remains bleak.

Cable and Pay-TV
The Netherlands is a very densely cabled, 95 percent of TV homes are connected to cable, 5 percent have satellite dishes. The average cable network brings 32 television channels, 38 radio stations, 2 or more pay-TV channels (by Canal Plus), a pay-per-view service and an EPG (Electronic Programme Guide) to the average living room for a monthly fee of about 12 euro.

Cable-laying began on a large scale in the 1970s, under the responsibility of the municipal authorities. As a result of the liberalisation policy of the 1990’s, many local public cable nets were sold to specialised private cable companies. In recent years this take-over process has resulted in market domination: the three major operators UPC, Essent and Casema cable 86% of the homes. In 2003 Casema was sold to Anglo-American investors, which leaves only Essent still in Dutch hands. There is no real competition: each cable company is monopolist in it’s own region. As a result of the many take-overs, digitisation did not make much progress for a long time. The government in its first Cable Bill demanded more choice for the subscribers with the introduction of digital cable, urging cable operators to diversify, offer more channels and services. In the second half of 2000 new digital services emerged. Subscribers of the major operators can choose from several tiers, new premium and pay-per-view services, and cable internet. But it’s an uneasy market because households already have a huge offering for a reasonable price and seem to be satisfied with that. As a result cable operators, after completing the digitization process, go back to basic services, leaving out pay-per-view and fancy premium offerings. The second Cable Bill told cable operators to open up their networks to internet service providers before July 2002. Cable internet is still growing while prices are falling slowly, but the competition from ADSL is fierce.

To counter the distribution market dominance of the cable operators the government wants to stimulate competition from other infrastructures like satellite and digital terrestrial TV. Of the 5 franchises for DTT, one was awarded to NOS and the other four to the only interested party, Digitenne, which is a co-operation of several media parties. Digitenne offers some 25 TV and radio stations in digital quality for a monthly subscription rate of Euro 9, which is 2 to 3 Euro less than a cable subscription. Digitenne started in april 2003, but audience interest is low.

Pay television has been offered since 1984 by FilmNet in the form of subscription television. For a long time it was owned by Nethold, and was sold in 1997 to Vivendi which changed the names of the two channels to Canal+Red and Canal+Blue. Canal+Red offers films and series; Canal+Blue offers films, live broadcasts of Dutch football and highlights of other European competitions. After almost 20 years Canal Plus is still not profitable. Canal Plus had some 330.000 subscribers in 2002 who pay E 27 per month for the two channels. In 2000 its digital package started, with a roster of European channels, thematic channels, the public and private Dutch stations and a classic movie channel. The number of subscribers to the digital services is slowly growing. Cable operators that tried to compete with subscription channels of their own are slowly backing off. As a result of huge financial problems, Vivendi tried to sell Canal Plus (Benelux) in 2002, but there was no real interest. In 2003 UPC showed some interest but Dutch authorities are not keen, because the cable operator would get an interest in digital satellite transmission, exactly the kind of cross-ownership that the government is opposed against. There is hardly any profit to be made from (high-pay) subscription TV in The Netherlands’ overcrowded broadcasting landscape.

Conclusion
In 15 years the broadcasting landscape in the Netherlands has changed drastically. Viewers and listeners have a lot of choice, but diversity has not increased. Profitability is low, because of overcrowded and fragmented media markets. Television and cable markets are both dominated by three parties, radio and production markets are more diverse. Private television in The Netherlands is completely in the hands of foreign companies now, and cable, independent production and private radio for a large part. The unique Dutch broadcasting model can still only be seen to some extent in public broadcasting; the Dutch broadcasting landscape has evolved to a more or less ‘standard’ European model.

Authors
·Prof. dr. Jo Bardoel works with the Department of Communication, section Media Management and Communications Policy, and The Amsterdam School of Communications Research (ASCoR), both at the University of Amsterdam. He also holds a special chair in Media Policy with the Department of Communication at the Radboud University of Nijmegen.
·Ben van Reenen is Head of the Information Center at NPO (Netherlands Public Broadcasting) in Hilversum.