Music

Playing field

Digital streaming services overtook physical formats and downloads about three to four years ago. Even though a group of loyal fans still support the vinyl market and other physical formats, such as cassette tapes, physical sales continue to drop year after year and will eventually become insignificant compared to streaming revenues. 

The major catalyst for this impressive increase in streaming revenues was initially the consumer experience offered by music-streaming platforms, which was quickly followed by innovations such as the growing usage of smart speakers, the emergence of connected cars and the rapid rise of podcasts as a compelling new genre. For the Dutch market, the trigger for growth in accessing digital streaming services can be traced back to the partnerships formed with telecom operators, led by the 2013 partnership between Spotify and KPN. This initiative is thought to be the catalyst for the Dutch streaming market, pushing Spotify into a leading position in terms of generated streaming revenues.

Since then, many competitors have been keen to copy this telco partnership strategy. Napster is available to Vodafone subscribers and a third digital streaming service, called Deezer, is now available as part of a telecom bundle, combined with T-Mobile. These competitors, and others, are currently bidding for a piece of the pie, all by marketing their unique selling points like quality or by offering a range of special features.

In the meantime, the Dutch live music market has continued to grow, with a steady forecasted CAGR of 1.7% anticipated over the course of the next five years. Artists are contributing and reaping the benefits from the burgeoning Dutch festival and dance music scene, increasing the frequency, duration and ticket prices of their tours and concerts.

What’s new?

Spotify is still the no.1 digital streaming provider in the Dutch music market, taking maximum advantage of being the first market entrant using the successful telco partnership strategy. However, the market is becoming more diverse and Spotify must remain alert to competitors who have strategies focussed on gaining market share by enticing listeners to switch. YouTube launched its new music streaming services in August 2018 in the Netherlands, offering the free YouTube Music and a paid subscription for streaming music and music videos, YouTube Premium. Although YouTube is a subsidiary of Google, Google has its own music streaming service called Google Play Music, offering overlapping streaming services, but also offering radio stations and podcasts.

In line with the industry trend from ownership to subscriptions, Apple announced that it would replace iTunes by three streaming platforms in 2019.

The most significant recent development has been the exponential growth of podcasts available on the larger streaming platforms. These platforms, which initially focussed on music, are now becoming more diverse audio platforms. 

Music market (€ in millions)

Netherlands Historical data Forecast CAGR%
  2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2019-23
Physical 103 97 91 84 75 64 54 48 44 39 -12.2%
   y-o-y growth   -6.0% -5.4% -8.1% -10.9% -13.8% -16.1% -11.2% -8.3% -11.4%  
Digital 86 107 144 186 231 256 270 284 297 310 6.0%
   y-o-y growth   23.9% 34.8% 28.5% 24.6% 10.7% 5.5% 5.2% 4.6% 4.4%  
Performance rights 56 62 67 72 76 77 77 75 72 61 -4.2%
   y-o-y growth   9.7% 8.8% 6.6% 5.6% 1.8% -0.3% -3.0% -4.1% -14.5%  
Synchronisation 1 2 2 2 2 2 2 2 2 2 -0.8%
   y-o-y growth   20.8% 9.8% 7.5% 6.0% 2.6% 0.1% 2.8% 3.4% -11.9%  
Total recorded 247 267 305 343 384 400 403 409 415 412 1.4%
   y-o-y growth   8.2% 14.1% 12.6% 11.8% 4.1% 0.8% 1.4% 1.5% -0.6%  
Live music 541 551 560 569 581 592 603 613 623 633 1.7%
   y-o-y growth   1.8% 1.6% 1.7% 2.1% 1.9% 1.8% 1.7% 1.6% 1.5%  
Total 788 818 865 912 965 991 1,006 1,022 1,038 1,045 1.6%
   y-o-y growth 0.4% 3.8% 5.7% 5.5% 5.7% 2.8% 1.4% 1.6% 1.6% 0.7%  

Source: PwC, IFPI. Note: Because we rounded off amounts and percentages throughout this Outlook, tables may not sum to 100%.

Outlook

The Dutch live music market is likely to show steady growth towards 2023, accounting for more than 50% of the Dutch music market in an increasingly digital world. To give a boost to the live music market, in 2018, the Minister of Culture promised a €3.4m capital injection into the Dutch Performing Arts Fund on top of its earlier commitment to contribute €9m to the fund through to 2020. 

At the same time, a group of Dutch artists joined forces in late 2018 to demand an end to ticket touting in the market, handing over a manifesto to the Dutch Minister of Culture. Parliamentary questions on ticket fraud were also raised with the minister, after the enormously popular U2 concert tickets were sold out in a few minutes and then immediately appeared on the resale site Seatwave. Ticketswap responded to the growing frustration of fans by offering a secondary ticket marketplace, which puts a limit of 20% above face value on resold tickets and features robust anti-fraud measures.

TicketSwap is currently market leader on the ticket resale market, but must be aware of competitors, as large ticket sellers Eventim and Ticketmaster announced their own secured ticket resale platform in late 2019.In the digital streaming market, Spotify still leads the current playing field. However, international tech-giants like Google, Apple and Amazon are eager to gain ground, offering services such as radio stations, music videos and the increasingly popular podcasts. Other competitors are trying to gain market share by competing on quality, exclusivity or by offering fancy add-ons. The growth of the streaming industry has proved that consumers are embracing the subscription model and very willing to pay for audio. Streaming platforms will be successful in growing their subscriber bases, moving customers to paid subscriptions and upgrading them to premium subscriptions. The future for this market is, however, uncertain as platforms, labels and copyright owners continue their struggle to allocate revenues.

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Contact us

Joram Prinsen

Manager, PwC Netherlands

Tel: +31 (0)88 792 35 33

Casper Scheffer

Partner, PwC Netherlands

Tel: +31 (0)88 792 65 20

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