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“We are a fifth generation family business. This publishingcompany was founded by my great-great grandfather, apharmacist with an interest in the public cause. Our missionhas always been to give a platform to independent thinking,not primarily to be a commercial publisher of regionalnewspapers. For generations we have supported criticalvoices, reminding politicians and businessmen that we allhave a broader responsibility to society. As publishers wesee ourselves as classical ‘courantiers’, even though we cannow use new media to broadcast information and opinions.So our business is not driven by purely financial andcommercial motives. We are engaged to the public cause.That motive is embedded in the genes of this company.”

“At the dinner table we never talked about business, when Iwas a small boy. Not sales and profits, but culture and localpolitics were my parents’ favourite topics. It was understood,of course, that the company needed to earn money to exist,but that was never a real issue. So we were not surprisedwhen my father decided to use his publishing knowledge to

expand in books, having developed an interest in psychologyand sociology. Scientists in those days would shareinformation at conferences, but they did not publish a lot.That inspired my dad to launch the Terra Catalogue, a line ofbooks about various countries and their cultures. Terra wasour first initiative in the book market. Since then, we havediversified in educational, scientific and professionalinformation. We are now both publishers of regional massmedia and developers of highly specialized nationalpublications. The Dutch Psychiatric Periodical wasdeveloped here at this table.”

“Last year, the turnover of our national publicationsexceeded that of our regional media. We have followed thestrategy envisioned by Perscombinatie: broadening the baseof newspaper publishing by expanding in books. Dailies arevery sensitive to the ups and downs of the economy, whilepublications for education, science and the professionalmarket generate less volatile revenues. In good years, thenewspapers earn money that can be invested in the

John Boomdirector Royal BoomPublishers

‘Good publishers arenatural networkers’

development of new educational methods; in bad years,books and educational materials compensate for lowerrevenues from news media. The two outbalance each other.At PCM’s this strategy never materialized because theirmanagement could not persuade the board; at Boom itworked out well.”

“The passion for independent publishing, which has alwaysbeen at the core of our company, is guiding us into the digitalage. We consider the internet and other digital media as newchannels to reach the same target groups in a different way.As publishers we are not limited to paper. The mediumserves the message. We were one of the first publishers toexperiment with cable news to reach our regional targetgroups for instance. A forgotten medium. Currently, some 40percent of the population watches cable news every day!This medium was also a great learning experience for oureditors, since it made them work in the 24/7 mode that thecurrent internet is all about.”

“Another area that is affected by digitization involves our foliopublications. Digital media are often a companion of printedmedia, in education for instance. But sometimes the internetis leading. We could bring a lot more content to the internet,but most markets are not ready yet. There are someinteresting exceptions though. We have developed a trainingexam on the subject of Dutch citizenship that is availableonline, free for anybody that wants to apply for a Dutchresidence permit. In a period of 18 months, more than onehundred thousand people have signed up for that course.There is an obvious demand for services of this kind.”

“The advantage of specialized education, professional andscientific publications is that we can develop databases withcustomer information. Once information has been gathered,data on users of a standard work on labour law for instance,it is easier to develop new publications for this target group.Data are not enough, of course.We need to really engage with these target groups. A goodpublisher is a natural networker. The dedication to specialisttarget groups is not just a business model; it is also a way toremain passionate about publishing. We could apply thesame business model to plumbers or car dealers, but thoseare not markets we are enthusiastic about.”

“Digitization is definitely on the agenda at Boom’s. That isnot just a matter of technology; we also need the rightpeople and the right skills to transfer content to new media.

We are ahead of our biggest competitors in this domain ofspecialized solutions. We can make all our publicationsaccessible via the internet, but that is not what we do. Onceall your content is out in the open: how do you keep control?How do you arrange the digital rights management? Themarket is not ready yet, and the business models have notpanned out. It does not make sense to sell chapters online ifthat affects the sale of books.”

“Another question is whether it makes sense to develop yourown channel when a big gorilla like Google is working on thesame problem. It is known that Google is making booksaccessible via the internet. They have approached all Dutchpublishers. We have made our backlist available: books thathave reached the end of their lifecycle. The deal was thatGoogle would only publish 20 percent online, but we have tokeep an eye on them. We have ceased supplying them withour books. In the future, we will only hand over 20 percent ofour content Digitized.”

“Which business models will eventually work on the internet?I think you have to keep the fundamentals in mind.Everybody who is looking for some real information will try toget it from an unspoilt and certified source. We want to beone of those sources. Knowledgeable and reliable. Freecontent loses its value when it is financed by an advertiser orsponsor that wants to include commercial information. Thatis dilution. Quality is a unique selling point in our markets foreducational, professional and scientific content. Users willcontinue to be prepared to pay for quality. For mass mediahowever, there are new rules. The foundation for newspapersis undermined by the growth of free news in print and online.Will the Telegraaf survive the competition with freesheets? Isthere enough space for both Volkskrant and NRC? I hope atleast one quality paper has real staying power, so our medialandscape doesn’t change into a media desert.”

“This year our government started a debate about the futureof the press. One of the scenarios is state support forpublishers. My reaction: the best help is no support. Thestate should not interfere with private media enterprise.Support needs to be directed at the right cause. Newspapersthat have had to contribute to expensive holdings do notdeserve support. NRC will surely survive if PCM goes down. Iam not a big fan of state interference. Look what happenedto public broadcasting, both on national and regional level.What can we do as regional publishers when the state givesregional channels a flying start with 6 million euros and

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Interview

allows them to compete on the advertising market? Publicbroadcasting should at least be free of advertising! Anotherthing government should do is create a level playing field invalue added tax for printed and digital media. Why do wehave to pay more VAT when we publish online?”

“Level playing fields are even more important now theeconomy has slowed down. Advertising revenues werereduced by 14 percent in the first quarter of 2009. That iswhy our specialized publications do not rely on advertising.Our regional newspapers have been hit hard, so we have tocut back on costs. The trend is down and it will take another2 to 3 years before our advertising income recovers. If itrecovers. I am positive it will bounce back, but the generalperspective for newspapers is not too good. Manysubscription-based journals will disappear.”

“Despite the downturn we are not cutting back on innovationand other investments. Last year, our books were closedwithout any bank debt. Boom also does not have goodwill inits balance sheet, as we usually delete goodwill paymentsfrom our equity at every acquisition. As a consequence, weare now in a position to invest and acquire. Especially sincethe credit crisis offers us completely new opportunities. Wehave already acquired two publishers this year. Boom is inthe market for publishers with an interesting portfolio. We arenot asset strippers that fire half the staff to start fresh.Instead we inject money, add expertise and maketechnology and market access available.”

“This year we have acquired the publishers Jureco andNelissen. Jureco was struggling with its migration to digitalmedia, a problem that we could solve immediately. Next yearall their content will be digitized. Nelissen has a uniquemarket position in higher education, which offers a good fitwith our other activities in that market. Both acquisitionsraise the share of national specialized publications in ourrevenues to 60 percent. We are interested in regional massmedia too, but in that market we are dealing with largercompetitors such as Mecom. That does not meanopportunities do not occur. PCM ended up in the hands ofPersgroep. But we are not really keen to acquire a publishingcompany with loads of problems.”

“What are the boundaries for Boom? That is largelydetermined by the people in our company, their expertiseand their interests. The people we employ are characterizedby the same passion that is at the core of this company. We

have hired several publishers who were used to focusing onsales, costs and profits. At Boom they are encouraged toengage themselves again with authors and readers. With realpublications, not quarterly reports. Numbers are important inbusiness, but we prefer a passion for publications. Not forfinancial wizardry. Our publishers are entrepreneurs.”

“My impression is that business has gone a bit overboard inthe past few years. Top managers seemed to think that theycould make huge profits without taking risks. How else canyou explain the sums that have been paid for someacquisitions? The new International Financial ReportingStandards were a recipe for disaster, when they allowedinclusion of goodwill on the balance sheet. This way, theimpairing discussion is postponed in a foggy and trivial way,which does not promote transparency. In my opinion thathas caused the credit crisis.”

“I have worked at mergers & acquisitions for ABN AMRO, soI am not unfamiliar with this subject. By allowing goodwill tobe included in the balance sheet, we have created a hugebubble in business valuations. That has happened in themedia industry too, and as a result our business hassuffered. Respected newspapers and magazines havedifficulties, while great publishing companies are going downbecause of mounted debts. It was about time that thatbubble imploded. That happened last year, thanks to theAmerican mortgage market. Hopefully we can now go backto business as usual.”

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