Radio accounts for a stable and dominant share of total audio consumption. Alternative devices have led to a rise in digital distribution.
Radio is still the most popular media channel for audio consumption. On a weekly basis, radio attracts more than 12 million listeners who consume an average of almost 2.5 hours of radio per day.
The Dutch radio market is fairly concentrated. Two parties account for the vast majority of total radio consumption: NPO represents 29% of the Dutch market with five public stations, and Talpa Radio holds 40% market share with four commercial stations. With both operating a variety of different stations, both NPO and Talpa Radio cover the most important music genres within the main target group of listeners aged 20-59.
Smaller national and regional stations with a stable footprint stand out for their alternative offerings, which attract smaller but well-defined target groups. Similar to many sub-industries, radio stations try to reach younger demographics, either through FM or – increasingly – digitally. A local example is FunX, which targets a young, urban multicultural audience with both its music and the matching profiles of the station’s DJ base.
Radio advertising revenue will show a small increase in 2018, a trend that is set to continue for the next few years. On the one hand, the radio advertising market is propelled by the growing advertising market (4-5% expected growth rate in FY18), partially driven by the strong economy (approx. 2% expected growth rate). On the other hand, the average number of minutes that people listen to radio is gradually decreasing year-on-year, with a decline of 2% in 2017. We believe that the net effect will remain slightly positive in the short term.
|Radio advertising market (€ millions)|
|Netherlands||Historical Data||Forecast data
|Radio advertising revenue||227||233||225||225||225||226||227||228||230||231||0.5%|
There are three trends that will continue to shape the future of radio in the Netherlands: 1) the overall shift from non-digital to digital media 2) the digitalisation of radio distribution, and 3) a further consolidation of the Dutch radio landscape.
Across the E&M industry, non-digital media consumption is decreasing while time spent on digital media is increasing. Consequently, the traditional media channels are losing share.
Focusing on audio consumption, we see that the position of radio is stable. So far, digital audio channels such as streaming services, YouTube, and podcasts have grown largely at the expense of consumer-owned music media. The rise of alternative audio channels and the slow but consistent decline in listening time will affect advertising spending for radio on the longer run.
With a share of 52% in 2017, FM is still the main distribution channel for radio. Ensuring sustainable revenues in the sector, going forward depends on proactively positioning radio for a digital-driven future. There are various trends in the market underpinning the digitalisation of radio. One is a change in the devices used for radio consumption. In-car radio listening remains dominant, but the traditional radio set is losing listeners while consumption through smartphones, tablets, audio streaming services, digital television, and other systems is rising. Another trend is the high level of investment by the Dutch Government and commercial radio stations in the position and prominence of DAB+ in recent years. Since the latest expansion in January 2018, the Dutch infrastructure for digital radio now has a coverage of 97%, which is similar to FM coverage, albeit that the digital network has a wider variety of different stations. The latest Dutch Audio Distribution Research shows that DAB+ use has grown from 4% in 2015 to 13% in 2017.
As stated, the public stations (NPO) and Talpa Radio are the two main players in the Dutch radio market. The Dutch Government has decided to reduce the budget for the public stations, anticipating a decline in advertising revenue for NPO. Consolidation of smaller parties is expected, as a combined go-to-market will make them more competitive against bigger players, especially when such parties are impacted by ongoing saving programs.
© 2015 - Sat Mar 23 11:14:32 UTC 2019 PwC. PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.