Will Talpa Network become the Dutch business ecosystem

Denis Doeland
Aug 11, 2019 · 8 min read

Following an exciting power struggle for TMG — publisher of Dutch newspaper De Telegraaf, among others — John de Mol’s Talpa and Belgian company Mediahuis reached an agreement in November 2017. Talpa will distance itself from its shares in the newspaper, while TMG will sell its shares in the radio branch to Talpa (Nagtegaal, 2017). Why is this a smart move by Talpa? Can it really compete with Facebook by doing this? And what is the network of these combined channels worth as an ecosystem?

Talpa’s ecosystem

Radio 538, Sky and Radio Veronica all belonged to TMG. Thanks to Talpa acquiring the radio activities of TMG, Talpa Network now consists of Radio 538, Sky and the broadcast activities of SBS6, Net5, Veronica and SBS9, as well as a number of digital platforms. Let us first focus on all the assets of the Talpa Network. The following image appears.

  • Talpa Events;

What does this actually mean?

  • Talpa Radio assets 538, Radio 10, Sky Radio and Radio Veronica already reach more than 7 million people per week;

Entire Dutch population

Talpa fears Facebook more than RTL, stated John de Mol in recent interviews. The blue giant from America is currently taking entire marketing budgets. That is why Talpa takes up the battle with the social media platform, instead of other Dutch media. To achieve this, Talpa carried out a number of acquisitions with which a network was created that enjoys a reach which can compete with Facebook.

Talpa has created a network of more than 12 million people, because its media practically reach all of the Netherlands. Recent acquisitions were done for this, such as Emesa and radio stations Radio 538, Sky Radio and Radio 10. If you do not watch or listen to the traditional media, you will come across the Talpa media makers on YouTube via Social1nfluencers.

In addition, all Talpa brands have digital extensions, such as online (video) content. Some brands also produce events. In short, it is a media network that in various ways and at various times comes into contact with practically the entire Dutch population. Just like Facebook, actually.

But can Talpa compete with Mark Zuckerberg’s creation? And what is Talpa’s network actually worth? To determine this exactly, we have to look at the way in which you can determine the value of a network — and what a network actually is.

Background network value

I wrote in our vanAnaloognaarDigitaal book that digital ecosystems are business ecosystems. We frequently research how DJs, music companies and festivals (in the dance industry) should use their digital systems as business ecosystems. With a number of them we are already busy designing their organisation in this way.

Hardwell is a good example of this. The Dutch top DJ approaches his platforms as a business ecosystem. Using this standpoint, you can approach Talpa Network in the same manner: as a company with a (digital) business ecosystem.

The fact that one of the objectives of Talpa Network is to activate part of their business ecosystem appears from the information on their site. Where it states “Thanks to our unique ‘connect and smart data’ platform we can fully focus on content innovation, data science and consumer satisfaction. This ensures that we can create and share unique experiences when the consumer wants this. But we can also add maximum value to the objectives of our advertisers.”

New component

How can you value the ecosystem of the network of Talpa broadcasting companies and other media? The framework is the method to arrive at a valuation. In this framework, it becomes transparent how you can optimise an organisation on the basis of five objectives. One of the first of the five objectives is brand equity, or the market value: that is the value of the fanbase. We now refer to this as the digital assets.

By determining how many identified and unidentified profiles exist, but also by determining which characteristics of them are known. This allows an estimation to be made of the value of the digital channels. After all, this creates insight into which additional and future net cash flows can be generated, for example in advertising revenue. This forms a new component in the company valuation of an organisation: the digital network value, which is formed on the basis of data.

Talpa’s network value

Together with Fanalists, specialists in the area of Data Driven Business Acceleration, I have tried to determine a part of Talpa Network’s digital assets.

The digital network value is primarily crucial and the direct reach of the network of John de Mol´s company. When determining the value, it is also relevant to determine what the willingness and amount is that an advertiser would pay to be present in the network of Talpa Network. You base these two pieces of data (willingness and amount) on market data.

From the first primary calculations, on the basis of data that we previously used in our paper on The Voice, it appears that the estimated potential scope of the value of the data of Talpa Network, the digital assets, is already heading towards 400–500 million euros.

Obviously, this is a rough estimate, just to get an idea. If the media empire is able to identify the data and develop it with the correct rights, then the value could possibly have such a scope. In order to be able to capitalise the digital assets, the Talpa team face various challenges. These are their largest:

  1. Activating the followers, listeners and viewers towards more completely identified profiles in an own database;

For comparison

The first estimation in any case gives a nice image. More data is required to determine the entire digital assets. The question that immediately arises is of course: isn’t this first part of the network value a little excessive for a media company? If this value is only based on the basis of what the audience figures of a channel was, then this was probably the case. However, Talpa Network has become a network that can reach almost every person in the Netherlands. It can develop a (possible) additional revenue models for this.

If you compare the Talpa Network system with that of the Vodafone Enterprise Group, then you see that this organisation currently has a value of 115 billion dollars, which is 99 billion euros. The company has more than 470 million mobile ‘connections’ globally and 14.3 million fixed connections, with 209 million in India alone. The value of Facebook, with 2 billion connections, is worth 425 billion euros. A quick calculation shows that a connection at Vodafone is worth 205 euros and at Facebook 212 euros.

These companies are busy every day to maintain their client value. The client value is the average revenue per connection, where the ARPU is one of the most important parameters. Maintaining and expanding the connections is part of the core task to maintain the value, and to increase and capitalise it.

Talpa is ahead, but can be better

Talpa knows how to create a network which will impress advertisers. How many companies can claim that they can reach almost every person in the Netherlands? In addition, there is synergy between the different companies: online video, radio, TV and events can strengthen each other.

With this, Talpa is actually an example for the rest of the Netherlands. It is an ecosystem that is valuable for its users and that is why it is valuable for advertisers to gain access to this network. This validates the theory that I formed in 2012 about networks in the paper — the internet ecosystem — to know more about the manner in which an ecosystem functions and how you can benefit from it. Talpa now brings this theory into practice and benefits from it: this has created a business worth millions, if not billions, of euros.

The fact that Talpa is on time is apparent from a statement from Ruud Hendriks. According to the former member of the Board of Directors of John de Mol’s Endemol, 2018 will be a year of “disruption, dismissals and accepting that things will never be as they once were” for RTL, SBS and NPO. He recently made his statement on Facebook and LinkedIn. A statement that I actually published earlier.

Basic instinct

Can Talpa rest on its laurels? On the contrary. It is now time to take the next step. This means that they should work in an even more data-driven way. Supplement the ‘basic instinct’ with a tried and tested approach. To capitalise on the profiles in the network, it is necessary to, among other things, determine which characteristics of them are known. As an organisation you also want to develop new revenue models or improve current revenue models with regards to a tried and tested framework.

This method is the solution for that. It assists you in working in a data-driven way, get an overview of the total value of the data and gain more control over the organisation. It allows everyone to work on predetermined, common objectives. These objectives are crucial to allow the working capital, and subsequently the value and the relationship with the (potential) fan or client, to grow.

This client data will work for you when using this method. To operate this framework, the 9 steps from the step plan, that I will call Business Acceleration Plan from now on, are required. It would be a great accomplishment if Talpa was able to develop the business ecosystem of the Netherlands. It would be a shame if they didn’t exploit all of its possibilities!

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Digital Assets by Denis Doeland

In order to get started with digital change, it is…

Digital Assets by Denis Doeland

In order to get started with digital change, it is important to realize that this change consists of three fundamental core elements. Force, Power and Potential. Learn through this publication to make optimal use of of the digital capacity of your organization.

Denis Doeland

Written by

Author, Blogger, Disruptor, Maven, Numerati and Transformer. Check more on: denisdoeland.com

Digital Assets by Denis Doeland

In order to get started with digital change, it is important to realize that this change consists of three fundamental core elements. Force, Power and Potential. Learn through this publication to make optimal use of of the digital capacity of your organization.