The entertainment and media industry in the Netherlands expanded by 4.4 percent in 2006, up from the 3.1 percent rise in 2005 and the fastest increase during the past five years.. Advert
Trang 1how to stay in
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Trends in the Netherlands 2007-2011
Entertainment & Media Outlook towards 2011
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Trang 2how to stay in
touch with tomorrow’s consumer.*
Entertainment & Media Outlook towards 2011
Trends in the Netherlands 2007–2011
Trang 3The entertainment and media industry in the Netherlands
expanded by 4.4 percent in 2006, up from the 3.1 percent
rise in 2005 and the fastest increase during the past five
years End-user spending, which comprised 76 percent
of the total market in 2006, rose by 4.0 percent, up from
the 3.4 percent rise in 2005 Advertising increased by
5.6 percent, its largest gain during the past five years and
well above the 2.1 percent growth in 2005 The rebound
in the economy in the Netherlands in 2006 contributed
to the jump in advertising
Fueling the improvement was a reversal in filmed
entertainment, which rose by 3.5 percent in 2006
after falling by 11.1 percent in 2005 Although recorded
music declined by 6.1 percent, that drop was a
10.4 percentage point improvement compared with the
16.5 percent decrease in 2005 Double-digit increases in
video games and sports also contributed to faster growth
in 2006 Sports benefited from spending associated with
the FIFA World Cup and Winter Olympics and video
games were bolstered by the introduction of new
console platforms
Video games and sports were the fastest-growing
segments in 2006 with increases of 17.1 percent and
11.6 percent, respectively, and the only segments to
generate double-digit growth The Internet, which was the
fastest-growing segment in 2005 at 15.6 percent, rose by
7.7 percent in 2006, falling to third place Slower growth
in broadband access spending and a faster decline in
dial-up accounted for the drop to single-digit growth
for the Internet, its first single-digit advance since 2000
Television was the next-fastest-growing segment with
a 7.2 percent advance, fueled principally by double-digit growth in subscription spending that offset a decrease
in the government contribution to public broadcasters Out-of-home advertising at 5.0 percent was the only other segment to grow by five percent or more Digital billboards and digital networks contributed to the increase in out-of-home growth in 2006
Recorded music, theme parks and newspaper publishing were the only segments to record declines in 2006 Physical sales of recorded music fell by 9.2 percent, offsetting a 200 percent increase in digital sales from a tiny base Falling admissions at De Efteling and Walibi World accounted for the 0.4 percent decline in theme park revenues, while a drop in newspaper circulation spending offset a rebound in newspaper advertising leading to a 1.1 percent dip in the newspaper market That drop, however, was substantially less than the 2.1 percent decrease in 2005
The entertainment and media (E&M) market as a whole
in 2006 benefited from a noticeably stronger economy
We expect economic growth to remain relatively healthy during the next five years, which should support continued E&M expansion We expect overall growth
to average 4.6 percent compounded annually during the next five years, comparable to the increase in 2006 Spending in 2011 will total an estimated ` 14.8 billion,
up from
We do not expect any segment to average double-digit growth during the next five years Video games, which rose at a 26.9 percent compound annual rate during the past five years, will drop to an 8.0 percent compound
Entertainment and Media Spending by Component in the Netherlands (`
Category 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2007-2011
CAGR*
Advertising 2,753 2,622 2,672 2,727 2,880 3,016 3,170 3,307 3,456 3,583
% Change –2.8 –4.8 1.9 2.1 5.6 4.7 5.1 4.3 4.5 3.7 4.5
End-User Spending 7,644 7,921 8,349 8,634 8,977 9,403 9,873 10,318 10,820 11,241
% Change 6.1 3.6 5.4 3.4 4.0 4.7 5.0 4.5 4.9 3.9 4.6
Total 10,397 10,543 11,021 11,361 11,857 12,419 13,043 13,625 14,276 14,824
% Change 3.6 1.4 4.5 3.1 4.4 4.7 5.0 4.5 4.8 3.8 4.6
*CAGR = Compound Annual Growth Rate Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Trang 4annual increase during the next five years, but it will remain the fastest-growing segment New video game platforms and growth in online and wireless gaming will drive spending We expect television to be the second-fastest-growing segment with a projected 6.8 percent compound annual increase A surging video-on-demand and the effect of government contributions to public broadcasters will propel television, although growth will
be less than the 7.9 percent compound annual increase during the past three years as subscription spending growth moderates Continued double-digit growth in online advertising will support the Internet market at
a 6.3 percent annual rate
Out-of-home advertising will build on the momentum generated in 2006 and buoyed by increasing penetration
of digital technologies will expand at a 6.0 percent compound annual rate Our 5.6 percent compound annual growth for recorded music represents a dramatic turnaround following five years of decline We project recorded music to begin to increase in 2008 as the expanding digital music sector begins to become large enough to offset continued declines in physical music
We project sports to expand at a 5.4 percent compound annual rate, led by expanding television rights fees and continued growth in sponsorship gate revenues
Theme parks will grow at a 3.8 percent compound annual rate, as new rides, hotels, and new parks boost admissions Steady box office growth and increasing sell-through spending will offset a drop in the home video rental market, leading to a projected 3.2 percent rate compound growth for filmed entertainment We expect radio to expand at a 2.4 percent rate compounded annually, helped by a rise in government contributions
to public broadcasters Magazines will lead the publishing segments with a 2.8 percent compound annual increase, while book publishing and newspaper publishing will grow by 1.9 percent and 1.3 percent, respectively We
do not project any segment to decline during the next five years During the past five years, three segments – recorded music, newspaper and magazine publishing – declined
Trang 5Entertainment and Media Spending in the Netherlands ( ` Millions)
Segment 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2007-2011
CAGR
Filmed Entertainment 648 639 642 571 591 606 619 636 662 693
% Change 39.1 –1.4 0.5 –11.1 3.5 2.5 2.1 2.7 4.1 4.7 3.2
Television 2,300 2,366 2,585 2,771 2,971 3,161 3,384 3,612 3,873 4,123
% Change 5.0 2.9 9.3 7.2 7.2 6.4 7.1 6.7 7.2 6.5 6.8
Recorded Music 467 444 411 343 322 320 337 359 391 423
% Change –6.2 –4.9 –7.4 –16.5 –6.1 –0.6 5.3 6.5 8.9 8.2 5.6
Radio 435 458 459 460 462 473 485 497 509 521
% Change 2.8 5.3 0.2 0.2 0.4 2.4 2.5 2.5 2.4 2.4 2.4
Out-of-Home Advertising 143 136 138 141 148 156 165 175 186 198
% Change –0.7 –4.9 1.5 2.2 5.0 5.4 5.8 6.1 6.3 6.5 6.0
Internet 1,020 1,137 1,342 1,551 1,670 1,818 1,954 2,077 2,175 2,268
% Change 16.3 11.5 18.0 15.6 7.7 8.9 7.5 6.3 4.7 4.3 6.3
Magazine Publishing 1,635 1,541 1,509 1,511 1,560 1,621 1,679 1,722 1,758 1,793
% Change –1.9 –5.7 –2.1 0.1 3.2 3.9 3.6 2.6 2.1 2.0 2.8
Newspaper Publishing 1,615 1,647 1,631 1,610 1,593 1,601 1,626 1,651 1,677 1,703
% Change –6.5 2.0 –1.0 –1.3 –1.1 0.5 1.6 1.5 1.6 1.6 1.3
Book Publishing 1,145 1,149 1,154 1,165 1,174 1,198 1,213 1,242 1,269 1,293
% Change 0.0 0.3 0.4 1.0 0.8 2.0 1.3 2.4 2.2 1.9 1.9
Theme Parks 265 259 267 278 277 286 296 312 323 333
% Change 1.1 –2.3 3.1 4.1 –0.4 3.2 3.5 5.4 3.5 3.1 3.8
Sports 560 565 605 645 720 745 810 840 930 935
% Change 6.7 0.9 7.1 6.6 11.6 3.5 8.7 3.7 10.7 0.5 5.4
Video Games 164 202 278 315 369 434 475 502 523 541
% Change 46.4 23.2 37.6 13.3 17.1 17.6 9.4 5.7 4.2 3.4 8.0
Total 10,397 10,543 11,021 11,361 11,857 12,419 13,043 13,625 14,276 14,824
% Change 3.6 1.4 4.5 3.1 4.4 4.7 5.0 4.5 4.8 3.8 4.6
Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Trang 6The Economy
In addition to the industry-specific factors, the economy
plays an important role in the entertainment and media
industry The rebound in real GDP in 2004 contributed to
the improvement in industry growth and the slowdown in
economic growth in 2005 was a factor contributing to the
slowdown in entertainment and media growth In 2006,
real GDP rose by 2.9 percent, by far its best performance
during the past five years While we do not expect a
further meaningful acceleration in growth, we do expect
increases to be sustained during the next three years and
project 3.0 percent advances during 2007 and 2008 and
a 2.8 percent rise in 2009 Thereafter, the economy will
lose some momentum, a typical pattern in the fifth year
of a recovery, and project growth to moderate somewhat
Real GDP growth for the 2007–2011 periods will average
2.8 percent on a compound annual basis, comparable
to 2006 but a noticeable improvement compared with
2002–2005 In nominal terms the economy rose by
4.8 percent in 2006, also a significant pickup We expect
nominal GDP growth to continue to average 4.8 percent
through 2011
The entertainment and media industry is cyclical This
means that during weak economic periods many markets
in the E&M industry start to decline as companies look
for ways to reduce costs and advertising is often one of
the first expense items to be cut During expansionary
periods the opposite happens, as most markets in the
E&M industry start to grow since companies start to
focus on generating growth and advertising is one of
main tools used to boost sales Similarly for consumer
spending, the economy affects disposable income, which
in turn affects the resources available for entertainment and media The Netherlands experienced this pattern during the past five years During 2002–2003, when the economy was weakening, entertainment and media grew more slowly than nominal GDP growth A rebound in the economy in 2004 contributed to a jump in E&M growth that year Despite a modest increase in nominal GDP growth in 2005, real GDP slowed in 2005, leading to a slowdown in E&M growth In 2006, both the economy and the E&M market rebounded at comparable rates During the next five years, we expect entertainment and media growth to closely track nominal GDP growth
0
8
2 3
1
4 5 6 7
Entertainment and Media and Nominal GDP Growth (%)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Nominal GPD Growth E&M Nominal Growth
GDP Growth in the Netherlands (%)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2007-2011
CAGR
Real GDP Growth 0.1 –0.1 1.7 1.1 2.9 3.0 3.0 2.8 2.6 2.4 2.8
Nominal GDP Growth 3.9 2.4 2.6 2.9 4.8 4.9 5.0 4.9 4.6 4.4 4.8
Sources: Statistics Netherlands, PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Source: Statistics Netherlands, PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Trang 7Advertising recorded its strongest performance during the
past five years with a 5.6 percent increase in 2006, nearly
three times the average growth during 2004–2005 and a
marked improvement compared with declines during
2002–2003 Each segment rose in 2006 with notable
turnarounds in newspapers and magazines Magazine
advertising increased 6.3 percent, except for the Internet
the fastest growing category in 2006 It also marked a 6.5
percentage point swing from the 0.2 percent decline in
2005 Newspaper advertising increased 0.6 percent
compared with a 1.8 percent decline in 2005,
repre-senting a 2.4 percentage point swing Television, radio,
and out-of-home advertising also grew faster in 2006
than in 2005 and Internet advertising continued to soar,
rising by 41.2 percent
Because we do not expect the acceleration in economic growth that occurred in 2006 to be replicated during the next five years, we do not expect the 2006 increase in advertising growth to be matched Nevertheless, with the economy expected to remain healthy during the next five years, we project advertising in the Netherlands to
be relatively strong as well The Internet, excluding key word and recruitment advertising, will pass out-of-home
in 2007 and will continue to grow at double-digit annual rates, boosted by the large broadband universe that attracts advertisers Growth, however, will moderate to 15.0 percent on a compound annual basis
Out-of-home will be the next-fastest growing segment
at 6.0 percent compounded annually New digital and interactive displays will make out-of-home a more appealing medium while making it an option for companies interested in time-sensitive ads
Advertising (` Millions)
Segment 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2007-2011
CAGR
Television 790 745 820 850 900 925 975 1,015 1,070 1,100
% Change 5.3 –5.7 10.1 3.7 5.9 2.8 5.4 4.1 5.4 2.8 4.1
Radio 240 260 265 270 280 290 300 310 320 330
% Change 4.3 8.3 1.9 1.9 3.7 3.6 3.4 3.3 3.2 3.1 3.3
Out-of-Home 143 136 138 141 148 156 165 175 186 198
% Change –0.7 –4.9 1.5 2.2 5.0 5.4 5.8 6.1 6.3 6.5 6.0
Internet 32 40 66 97 137 170 200 225 250 275
% Change 52.4 25.0 65.0 47.0 41.2 24.1 17.6 12.5 11.1 10.0 15.0
Magazines 770 696 666 665 707 755 795 830 860 890
% Change –4.2 –9.6 –4.3 –0.2 6.3 6.8 5.3 4.4 3.6 3.5 4.7
Newspapers 778 745 717 704 708 720 735 752 770 790
% Change –11.8 –4.2 –3.8 –1.8 0.6 1.7 2.1 2.3 2.4 2.6 2.2
Total 2,753 2,622 2,672 2,727 2,880 3,016 3,170 3,307 3,456 3,583
% Change –2.8 –4.8 1.9 2.1 5.6 4.7 5.1 4.3 4.5 3.7 4.5
Sources: Interactive Advertising Bureau Netherlands, PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Trang 8Magazine advertising will grow at a 4.7 percent
compound annual rate, buoyed by new consumer
launches and improved growth in the highly cyclical
trade magazine category In the television market,
inflows associated with major sporting events such as
the FIFA World Cup and Olympics boost revenues in
even-numbered years On quadrennial-to-quadrennial
basis (comparing 2007–2010 with 2003–2006), growth will
improve to 4.4 percent compared 2.2 percent during the
previous quadrennial Actual growth during the next five
years will average 4.1 percent on a compound annual
basis Radio and newspapers will be the slowest-growing
segments with compound annual increases of 3.3 percent
and 2.2 percent, respectively
We project the overall advertising market to expand
at a 4.5 percent compound annual rate, a substantial
improvement compared with the past five years when
spending grew at a percent rate Advertising will rise
to an estimated ` 3.6 billion in 2011 from ` 2.9 billion
in 2006
End-User Spending
End-user spending, consisting of spending by consumers and other end users on products and services produced
by the entertainment and media industry, rose 4.0 percent
in 2006, the first time during the past five years that advertising grew faster than end-user spending End-user spending is less sensitive to economic fluctuations than advertising Additionally, new technologies such as broadband and new video game platforms overrode economic considerations and fueled spending End-user spending was less affected than advertising when the economy was weak but did not benefit as much as advertising from improved economic growth in 2006 During the next five years, end-user spending and advertising will grow at comparable rates
-10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 10.0
Advertising and End-User Spending Growth (%)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
End User Advertising
The end-user market in 2006 was led by video games
at a 17.1 percent increase and sports, which rose by 11.6 percent Television was next at 7.8 percent followed
by the Internet access spending, which dropped to 5.4 percent form double-digit increases during the prior four years With 80 percent of Internet households now
on broadband, migration to broadband is slowing
A strong box office performance led to a rebound in filmed entertainment Books and magazine rose by less than 1 percent and recorded music, radio, newspapers, and theme parks declined
Sources: Statistics Netherlands, PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
Trang 9Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates
End-User Spending (` Millions)
Segment 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2007-2011
CAGR
Filmed Entertainment 648 639 642 571 591 606 619 636 662 693
% Change 39.1 –1.4 0.5 –11.1 3.5 2.5 2.1 2.7 4.1 4.7 3.2
Television 1,510 1,621 1,765 1,921 2,071 2,236 2,409 2,597 2,803 3,023
% Change 4.8 7.4 8.9 8.8 7.8 8.0 7.7 7.8 7.9 7.8 7.9
Recorded Music 467 444 411 343 322 320 337 359 391 423
% Change –6.2 –4.9 –7.4 –16.5 –6.1 –0.6 5.3 6.5 8.9 8.2 5.6
Radio 195 198 194 190 182 183 185 187 189 191
% Change 1.0 1.5 –2.0 –2.1 –4.2 0.5 1.1 1.1 1.1 1.1 1.0
Internet 988 1,097 1,276 1,454 1,533 1,648 1,754 1,852 1,925 1,993
% Change 15.4 11.0 16.3 13.9 5.4 7.5 6.4 5.6 3.9 3.5 5.4
Magazines 865 845 843 846 853 866 884 892 898 903
% Change 0.2 –2.3 –0.2 0.4 0.8 1.5 2.1 0.9 0.7 0.6 1.1
Newspapers 837 902 914 906 885 881 891 899 907 913
% Change –0.9 7.8 1.3 –0.9 –2.3 –0.5 1.1 0.9 0.9 0.7 0.6
Books 1,145 1,149 1,154 1,165 1,174 1,198 1,213 1,242 1,269 1,293
% Change 0.0 0.3 0.4 1.0 0.8 2.0 1.3 2.4 2.2 1.9 1.9
Theme Parks 265 259 267 278 277 286 296 312 323 333
% Change 1.1 –2.3 3.1 4.1 –0.4 3.2 3.5 5.4 3.5 3.1 3.8
Sports 560 565 605 645 720 745 810 840 930 935
% Change 6.7 0.9 7.1 6.6 11.6 3.5 8.7 3.7 10.7 0.5 5.4
Video Games 164 202 278 315 369 434 475 502 523 541
% Change 46.4 23.2 37.6 13.3 17.1 17.6 9.4 5.7 4.2 3.4 8.0
Total 7,644 7,921 8,349 8,634 8,977 9,403 9,873 10,318 10,820 11,241
% Change 6.1 3.6 5.4 3.4 4.0 4.7 5.0 4.5 4.9 3.9 4.6
Trang 10Video games will continue to pace end-user spending
with a projected 8.0 percent compound annual increase
Television will be the second fastest-growing segment at
7.9 percent compounded annually, with sports and the
Internet next at 5.4 percent each We expect recorded
music to turn around and grow at a 5.6 percent
compound annual rate, fueled by online and music digital
distribution We also look for a rebound in theme parks
with a 3.8 percent increase compounded annually while
filmed entertainment will rise at a 3.2 percent annual rate
Books, newspapers, magazines and radio will each grow
at low rates We project total end user spending to
expand at a 4.6 percent compound annual rate, rising
to` 11.2 billion in 2011 from ` 9 billion in 2006
The Netherlands’
share of Western European Spending
The Netherlands in 2006 accounted for 4.0 percent of total entertainment and media spending in Western Europe, which is comparable to its share of population and GDP The share for theme parks was well above average at 8.0 percent as the Netherlands has one of the largest parks in Europe, De Efteling, which attracts visitors from other countries Magazines at 5.1 percent had the next-largest share followed by video games at 4.9 percent and television at 4.5 percent The Netherlands has a large magazine market and its high broadband penetration is reflected in the vibrant online video game market The Netherlands also has a competitive television distribution market which leads to high subscription household penetration
The Netherlands’ share of Western European entertainment and media spending has declined in recent years, falling from 4.3 percent in 2002 We anticipate that the Netherlands’ share will remain at 4.0 percent in 2007 and then dip to 3.9 percent during 2008–2011 We look for
a substantial share declines for the Internet and video games as the rest of the region closes the gap with the Netherlands in broadband penetration We also expect share declines for theme parks and a small drop in book publishing The Netherlands is behind the rest of the region
in digital music but growth in that component will lead to
an increase in share during the next five years of six-tenths
of a percent We also expect modest share gains in filmed entertainment, out-of-home advertising, magazine publishing, and sports The shares for television and newspaper publishing are expected to remain unchanged