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Dutch Home Entertainment Eyes Growth in 2015

8 Jan, 2015 By: Erik Gruenwedel

Netflix and digital projected to surpass packaged media in revenue for the first time

Holland’s home entertainment market is poised to see 5% revenue growth to €2.1 billion ($2.4 billion) this year following a flat 2014 at €2 billion ($2.3 billion), according to new data from Futuresource Consulting.

The London-based research firm said that despite a 3% growth in home video revenue in 2014, packaged-media sales are expected to drop 20% this year as Dutch consumers increasingly opt for subscription streaming services such as Netflix as well as pay-TV retail platforms such as transactional VOD and electronic sellthrough.

Overall digital revenue in 2015 is expected to grow 51% to €215 million ($254 million), accounting for 63% of the home video market. 

"As in many countries, SVOD is a success story in the home video landscape. It witnessed phenomenal growth … and is expected to reach €111 million ($131 million) in 2015, driven largely by the launch of Netflix in late 2013," Joanna Wright, senior market analyst at Futuresource, said in a statement.

Indeed, SVOD now accounts for a third of Holland’s digital video market spend, overtaking EST and transactional VOD, which account for 4% and 1% in spending, respectively.

The Dutch pay-TV market has nearly 100% of household penetration and should account for 72% of total consumer video spending in 2015. However, average monthly revenue per subscriber is less than €20 ($23), and is expected to fall 1% year-over-year to 2018, due to the growth of IPTV subscribers, according to Futuresource.

Looking ahead, total video spend is expected to top €2.2 billion ($2.6 billion) in 2018, averaging 2% annual growth between 2015 and 2018. Pay-TV’s market share will fall from the current 74% down to 68% in 2018.

SVOD growth is expected to account for 55% of all home video spend by 2018, reaching €240 million ($284 million).

"The Dutch video market tends to share similarities with the Nordics, more than any other European country, with rapid SVOD uptake and [declines] in packaged video," Wright said. "This shifting mix of video business was compounded by the bankruptcy of leading retailer, Free Record Shop, just a few months prior to Netflix's launch."

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