Dutch Entertainment & Media Outlook towards 2011
Summary
The entertainment and media industry in the Netherlandsexpanded by 4.4 percent in 2006, up from the 3.1 percentrise in 2005 and the fastest increase during the past fiveyears. End-user spending, which comprised 76 percentof the total market in 2006, rose by 4.0 percent, up fromthe3.4 percent rise in 2005. Advertising increased by5.6 percent, its largest gain during the past five years andwell above the 2.1 percent growth in 2005. The reboundin the economy in the Netherlands in 2006 contributedto the jump in advertising.Fueling the improvement was a reversal in filmedentertainment, which rose by 3.5 percent in 2006after falling by 11.1 percent in 2005. Although recordedmusic declined by 6.1 percent, that drop was a10.4 percentage point improvement compared with the16.5 percent decrease in 2005. Double-digit increases invideo games and sports also contributed to faster growthin 2006. Sports benefited from spending associated withthe FIFA World Cup and Winter Olympics and videogames were bolstered by the introduction of newconsole platforms. Video games and sports were the fastest-growingsegments in 2006 with increases of 17.1 percent and11.6 percent, respectively, and the only segments togenerate double-digit growth. The Internet, which was thefastest-growing segment in 2005 at 15.6 percent, rose by7.7 percent in 2006, falling to third place. Slower growthin broadband access spending and a faster decline indial-up accounted for the drop to single-digit growthfor the Internet, its first single-digit advance since 2000.Television was the next-fastest-growing segment witha 7.2 percent advance, fueled principally by double-digitgrowth in subscription spending that offset a decreasein the government contribution to public broadcasters.Out-of-home advertising at 5.0 percent was the onlyother segment to grow by five percent or more. Digitalbillboards and digital networks contributed to theincrease in out-of-home growth in 2006.Recorded music, theme parks and newspaper publishingwere 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 atiny base. Falling admissions at De Efteling and WalibiWorld accounted for the 0.4 percent decline in themepark revenues, while a drop in newspaper circulationspending offset a rebound in newspaper advertisingleading to a 1.1 percent dip in the newspaper market.That drop, however, was substantially less than the2.1 percent decrease in 2005.The entertainment and media (E&M) market as a wholein 2006 benefited from a noticeably stronger economy.We expect economic growth to remain relativelyhealthy during the next five years, which should supportcontinued E&M expansion. We expect overall growthto average 4.6 percent compounded annually duringthe next five years, comparable to the increase in 2006.Spending in 2011 will total an estimated
14.8 billion,up from
11.9 billion in 2006.We do not expect any segment to average double-digitgrowth during the next five years. Video games, whichrose at a 26.9 percent compound annual rate during thepast five years, will drop to an 8.0 percent compound
EntertainmentandMediaSpendingbyComponentintheNetherlands(
Millions)
Category2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2007-2011 CAGR*
Advertising2,7532,6222,6722,7272,880 3,016 3,170 3,307 3,456 3,583% Change–2.8–4.81.92.1 5.6 4.7 5.1 4.3 4.5 3.7 4.5End-User Spending7,6447,9218,3498,6348,9779,4039,87310,31810,82011,241% Change6.1 3.6 5.4 3.4 4.0 4.7 5.0 4.5 4.9 3.9 4.6Total10,39710,54311,02111,36111,85712,41913,04313,62514,27614,824% Change3.61.4 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
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