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Entertainment & Media Outlook towards 2011
Special pre-launch edition
Trends in the Netherlands 2007-2011

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how to stay in
touch with tomorrow’s
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Entertainment & Media Outlook towards 2011
Trends in the Netherlands 2007–2011
Summary
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. 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`11.9 billion in 2006.
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 (`Millions)

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

Dutch Entertainment & Media Outlook towards 2011

annual 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.

Dutch Entertainment & Media Outlook towards 2011

Entertainment 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

Dutch Entertainment & Media Outlook towards 2011

The 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.
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.
Entertainment and Media and Nominal GDP
Growth (%)
8
Nominal GPD Growth
7
E&M Nominal Growth
6

5
The entertainment and media industry is cyclical. This
4
means that during weak economic periods many markets
3
in the E&M industry start to decline as companies look 2
for ways to reduce costs and advertising is often one of 1
the first expense items to be cut. During expansionary 0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
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 Sources: Statistics Netherlands, PricewaterhouseCoopers LLP,
main tools used to boost sales. Similarly for consumer Wilkofsky Gruen Associates

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

Source: Statistics Netherlands, PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates

Dutch Entertainment & Media Outlook towards 2011

Advertising
Advertising 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

Dutch Entertainment & Media Outlook towards 2011

Magazine 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.
Dutch Entertainment & Media Outlook towards 2011
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.
Advertising and End-User Spending Growth (%)
10.0
8.0
6.0
4.0
2.0
0.0
-2.0
-4.0
End User
-6.0
Advertising
-8.0
-10.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Sources: Statistics Netherlands, PricewaterhouseCoopers LLP,
Wilkofsky Gruen Associates
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.
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

Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates

Dutch Entertainment & Media Outlook towards 2011

Video 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.
Dutch Entertainment & Media Outlook towards 2011
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.
Netherlands’ Share of Western European Spending (%)
Segment 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Filmed Entertainment 4.4 4.0 3.7 3.5 3.7 3.8 3.8 3.8 3.8 3.8

Television 4.4 4.3 4.4 4.5 4.5 4.5 4.5 4.5 4.5 4.5

Recorded Music 4.3 4.5 4.5 3.6 3.4 3.4 3.6 3.7 3.8 4.0

Radio 4.3 4.4 4.2 4.0 4.0 4.0 4.0 4.0 4.0 4.0

Out-of-Home Advertising 3.1 2.9 2.8 2.8 2.8 2.9 2.9 2.9 2.9 3.0

Internet 5.5 5.1 4.7 4.6 4.0 3.8 3.6 3.5 3.4 3.3

Magazine Publishing 5.7 5.4 5.2 5.1 5.1 5.2 5.2 5.2 5.2 5.2

Newspaper Publishing 3.7 3.8 3.7 3.6 3.5 3.5 3.5 3.5 3.5 3.5

Book Publishing 3.2 3.2 3.2 3.1 3.1 3.1 3.1 3.1 3.0 3.0

Theme Parks 9.0 8.6 8.4 8.4 8.0 7.9 7.9 7.9 7.7 7.6

Sports 3.2 3.2 3.2 3.1 3.0 3.1 3.1 3.1 3.0 3.2

Video Games 3.5 3.9 4.6 4.8 4.9 4.9 4.8 4.7 4.5 4.4

Total 4.3 4.2 4.2 4.1 4.0 4.0 4.0 4.0 3.9 3.9

Sources: PricewaterhouseCoopers LLP, Wilkofsky Gruen Associates

Dutch Entertainment & Media Outlook towards 2011

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