TV and video consumption

Streaming is winning ground. Will Amazon Prime get a significant piece of the streaming pie?

Playing field

The Dutch pay-TV market is highly concentrated and dominated by market leader Ziggo. Yet, Ziggo is losing subscribers as the IPTV offering of rival KPN is capturing a growing share of the market.

KPN uses IPTV technology to serve three-quarters of its customers, while the rest of the customers receive services via paid DTT (Digitenne). Rival IPTV providers will find it difficult to compete with KPN and achieve significant growth themselves. Although there had been reports that KPN would cease to serve its DTT network as from 2017. KPN’s DTT licence has been extended to 2030, with an unnamed rival dropping out of the bidding process.

In reaction to the gains made by VOD services, Ziggo launched a new package of exclusive HBO content in January 2017, offering the full library of HBO titles as part of an on-demand service called Ziggo Movies & Series XL. This deal followed HBO's decision to discontinue HBO Nederland, a JV between Ziggo and HBO Europe, at the end of 2016. 

TV and video consumption market (€ millions)
Netherlands Historical data Forecast data CAGR %
  2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 17-21
Pay-TV 1,141 1,102 1,108 1,127 1,147 1,180 1,207 1,225 1,241 1,254 1.8%
y-o-y growth   -3.4% 0.5% 1.7% 1.8% 2.9% 2.2% 1.5% 1.3% 1.1%  
OTT/streaming 29 53 84 158 242 290 323 342 362 375 9.2%
y-o-y growth   83.7% 57.4% 89.3% 52.7% 19.8% 11.4% 5.9% 5.9% 3.8%  
Physical home video 227 176 136 108 86 74 67 64 62 61 -6.7%
y-o-y growth   -22.3% -23.0% -20.1% -20.9% -13.3% -9.3% -5.4% -3.1% -1.8%  
Total 1,397 1,332 1,328 1,393 1,475 1,545 1,597 1,630 1,664 1,690 2.8%
y-o-y growth   -4.6% -0.3% 5.0% 5.9% 4.7% 3.4% 2.1% 2.1% 1.5%  

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

What’s new

The merger of Vodafone and Ziggo brings together the second-largest mobile operator and the largest cable company in the Netherlands. The EC approved the joint venture in August 2016, under the condition that Vodafone would divest its consumer fixed-line business. The divestment was completed in November 2016, with T-Mobile as the buyer. The merger was completed in December 2016 under the new company name VodafoneZiggo.

The new company still needs to align the post-merger entity as a successfully functioning unit if it wants to put a halt to the number of households leaving its services. Additionally, ACM's desire to open up Ziggo's cable network to rivals might spark an intra-cable competition war that Ziggo might find uncomfortable.

Outlook

Despite almost complete take-up of subscription TV services, the pay-TV market continues to grow. The general trend of the market suggests there will be a slow increase over the forecast period.

Research shows that Netflix reached 1.9 million subscribers by the end of 2016, leading to a large increase in OTT/streaming revenue. Netflix has improved its position via a partnership with KPN to host its streaming services on the KPN platform. Furthermore, Amazon launched its Amazon Prime service on the Dutch market in 2017, providing competition to both Netflix and local OTT outfits. It is too soon to determine the success of Amazon in trying to capture market share. An appealing content library will definitely be one of the required ingredients.

Contact us

Steven Pattheeuws
Partner Strategy&
Tel: +31 (0)88 792 29 36
Email

Follow us