Radio

The average number of minutes that people listen to the radio keeps decreasing, but online radio is on the rise.

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Radio advertising revenue will return to limited growth in 2017 after a drop in 2015 and almost stable levels in 2016. We believe that the radio market will be relatively stable for the next five years. On the one hand, the radio market can be expected to gain its fair share of the growing advertising market (2-3% expected growth rate in FY17), driven by the strong economy (approx. 2% expected growth rate). On the other hand, the average number of minutes that people listen to a radio is gradually decreasing year-on-year, even though radio has a relatively stable listener base. This downward trend will eventually have a negative impact on radio advertising spend. We believe that both effects will cancel each other out in the short term.

Radio advertising market (€ millions)
Netherlands Historical data Forecast data CAGR %
  2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 17-21
Spot 209 214 219 213 213 213 214 215 216 217 0.4%
y-o-y growth   2.4% 2.3% -3.0% 0.0% 0.2% 0.4% 0.4% 0.5% 0.7%  
Non spot 12 13 14 13 12 12 12 12 12 13 0.6%
y-o-y growth
  8.3% 7.7% -10.7% -2.4% -0.6% 0.5% 1.0% 1.0% 1.0%  
Radio advertising revenue 221 227 233 225 225 225 226 227 228 230 0.4%
y-o-y growth   2.7% 2.6% -3.4% -0.1% 0.2% 0.4% 0.4% 0.5% 0.7%  

Outlook

There are three trends that will continue to shape the future of radio in the Netherlands: 1) shift in media time spent by the younger generation, 2) the rise of online radio and 3) consolidation of the Dutch radio landscape.

Several studies show that, on average, non-digital media consumption is decreasing while digital media time spent is increasing. The overall trend might not seem too drastic, but if we zoom in on trend per age group, we see a much stronger shift from traditional to online media for the younger age groups. In FY15, for example, the average radio time spent was 2.30h per day for the 65+ age category, 2.04h for the 20-34 age cohort and only 35 minutes for 13-19 year-olds. Time spent listening to internet music/radio and own music reveals the opposite picture, with most time spent by the youngest age group and least time spent by the oldest age cohort.

In the past, the rise in online advertising mainly affected media spending in the publishing sector. So far this has not resulted in a material decline in the radio market. In the longer term, the gradual decrease in average listening time will impact advertisers’ willingness to spend their budget on radio, especially if radio fails to remain attractive to millennials.

Radio must adapt to changing technologies and innovate its message to stay relevant. Although FM remains the dominant distribution channel, online radio is growing rapidly, giving traditional stations an opportunity to expand their reach. This market, characterised by programmatic channels and more targeting options, is still relatively small but will become a proper source of revenue for radio stations in the future. The Radio Netherlands App, for example, has more than 50,000 downloads so far and gives users the chance to listen on-the-go. DAB+ remains small despite media campaigns and the fact that the Dutch digital radio infrastructure is well established.

Finally, consolidation has changed the shape of the radio market in the Netherlands in recent years. This, together with a potential decline in government subsidies for public radio, means that Talpa Radio and its related sales house, One Media Sales, have become the dominant players in the Dutch radio industry. Its sheer size gives Talpa Radio the means to invest in new and innovative radio, for example its recent launch of JUKE, a new cloud-streaming music service. Talpa Radio’s strong market position is likely to trigger further rounds of consolidation and/or cooperation.

Contact us

Ennèl van Eeden
Global Entertainment & Media Industry Leader
Tel: +31 (0)88 792 45 40
Email

Guido van Aardenne
Director, PwC Netherlands
Tel: +31 88 792 65 10
Email

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