TV and video consumption

Playing field

The traditional Dutch TV market is largely saturated, however, with the rise of OTT, new entrants are trying their luck and incumbents looking for innovative ways to maintain their position. 

The subscription video on demand (SVOD) market in the Netherlands is showing strong growth. Netflix remains the dominant player, but Videoland, a local player, is winning ground with penetration of 40% and over 10% of households, respectively, according to Telecompaper (2019). As a proportion of subscribers share a subscription, actual reach is even higher. Ad-based video on demand (AVOD) services are also showing some successes, with NPO Start and RTL XL both reaching c. 20% of the Dutch market. 

The number of traditional TV connections continues to decline slightly by 0.3% in 2018.  A number of TV providers, such as NLe, Caiway and Ziggo were able to offset this by price increases, although the exact effect of this is difficult to measure because of the bundling of TV and internet.

Consumers have criticised price increases heavily, even though in some cases it was accompanied by faster speed or extended packages. Nevertheless, switching behaviour has been limited, with only 4% of consumers changing TV provider. At the start of 2019, the merger between Tele2 NL and T-Mobile NL was approved. The combined company now has a c. 5% market share. The majority of the market remains with market leaders Ziggo and KPN, holding market shares of c. 50% and 30%, respectively. 

What’s new?

An increasing number of Dutch households do not have a TV subscription. This group of “cord-cutters” or “cord-nevers” is represented mostly by people in their 20s. As these next generation consumers mature, this group is expected to grow. However, the majority of Dutch people are still not expected to cut the cord.

Even though the total viewing time of Dutch people remains stable, traditional TV channels continue to lose market share to online and on demand providers. An increasingly large share of the average total viewing time, goes to on demand viewing, which is expected to increase further. Demand for live TV via an OTT subscription is still relatively limited, and for this reason both KPN and T-Mobile NL decided to stop offering these services in 2018.

Videoland has benefited from the migration of premium customers from RTL XL. In addition, the Dutch OTT provider has gained popularity among 16-25 year-olds by offering exclusive content such as Temptation Island. Netflix is moving towards providing more local content throughout Europe. The first Belgian-Dutch Original Undercover was launched in 2019 and the first Dutch Original Ares started filming in February 2019.

Although other OTT services such as Amazon Prime and Cinetree have not been able to convincingly enter the Dutch market, new competition is around the corner. In August, Disney announced that the Netherlands was to be one of the first markets to see the introduction of Disney+, together with the United States and Canada. In addition, Apple has also announced that it will be launching its own streaming service, Apple TV+, this autumn. 

TV and video consumption (€ millions)

Netherlands Historical data Forecast   CAGR%
  2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2019-23
Pay-TV 1,108 1,127 1,147 1,181 1,210 1,216 1,222 1,229 1,235 1,241 0.5%
    y-o-y growth   1.7% 1.8% 3.0% 2.5% 0.5% 0.5% 0.5% 0.5% 0.5%  
OTT/streaming 84 158 242 290 345 379 409 434 451 460 6.0%
    y-o-y growth   89.3% 52.7% 19.8% 18.9% 10.0% 8.0% 6.0% 4.0% 2.0%  
Physical home video 136 105 83 72 64 58 53 48 44 41 -8.3%
    y-o-y growth   -22.5% -21.4% -13.0% -11.3% -9.2% -8.9% -8.8% -7.5% -7.1%  
Total 1,328 1,390 1,472 1,543 1,619 1,653 1,685 1,711 1,730 1,743 1.5%
    y-o-y growth   4.7% 5.9% 4.8% 4.9% 2.1% 1.9% 1.5% 1.2% 0.7%  

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

Outlook

We expect the number of cord-cutters to increase, although the percentage of cancellations will remain limited in the short term. Given that traditional TV services are usually bundled with internet in a relatively cheap package, the incentive to cancel is not overly high. Further, as a prerequisite for cancelling their traditional subscriptions, Dutch consumers want online access to the main public and commercial TV channels. 

Having said that, the rise in the number of international OTT providers who intend entering Western European markets, forces local players to defend their position and where possible benefit from new technologies. 

How many subscriptions are households willing to pay for? And how many of those will have their roots in Europe, let alone the Netherlands? This question has led to further discussions between local broadcasters and the Minister of Education and Media. Parties need to reconsider how to position and structure local collaborations, such as the existing NLZiet, which is a joint platform but also competing with NPO’s NPO Plus and RTL’s Videoland.

In parallel, TV providers are considering how to add most value to the media space. Dutch households are used to having TV subscriptions, and have proven to welcome bundling. The obvious next step is to add the OTT subscriptions to the bundle, enabling the TV providers to act as local aggregators. 

In summary, consumers have more and more options to consume video content, yet thus far they remain loyal to TV subscriptions. In the short-term, we expect the rise of OTT revenues to increase at a quick pace, whilst the net impact of price increases, the increasing number of households, partly offset by cord-cutting, will lead to a marginal increase in TV subscription revenues. 

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Contact us

Lisa van der Laan

Senior associate, PwC Netherlands

Tel: +31 (0)88 792 59 77

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