Market Insight

Impact of alternative platforms on Benelux physical video market has shifted

May 13, 2016  | Subscribers Only


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IHS has revised Belgium and Netherlands physical video forecasts for 2015 through to 2020 on the basis of feedback received from the NVPI (Dutch video association) BVE (Belgium video association) and other industry sources.

Belgium

In Belgium, sales of video discs in 2015 fell to 7.6m units down from 8.9m units, a decline of -14.6%. Consumer spending on physical retail fell to €98.8m from €115.7m, the same yearly decline of -14.6%. Of the total sales, DVD accounted for 6.4m units, down -15.9% from 7.6m. Consumer spending declined to €80.4m, down -16.1% from €95.8m. Blu-ray Disc (BD) accounted for 1.19m unit sales, down from 1.28m, and for €18.4m in consumer spending, down from €19.9m a year prior, declines of -7.0% and -7.5% respectively.

In 2016 Belgian physical market is forecast to decline at a faster rate, consumer spending declining -17.1% to €81.9m, and sales by -16.5% to 6.3m units. DVD is declining faster than BD; consumer spending on DVD will amount to €65.6m, a -18.4% change, and unit sales to 5.3m, a -18.4% decline. Consumer spending on BD will fall by -11.2%, to €16.3m, and unit sales by -8.5% to 1.1m.

By 2020, the physical video market in Belgium is projected to generate 2.9m in retail unit sales, and €36.1m in consumer spending. These figures represent a fall of -17.7% and -18.2% respectively on an average yearly basis throughout the forecast period. DVD will account for 2.1m of unit sales and for €25.36m of spending, a -20.6% average yearly decline. BD will account for 0.73m unit sales and €10.8m of consumer spending, a -10.2% average yearly decline.

Netherlands

In the Netherlands, video disc unit sales in 2015 fell to 9.93m units down from 12.5m, a decline of -20.6% compared to 2014. Consumer spending fell to €106.8m from €135.3m in 2014, a decline of -21.1%. DVD accounted for 8.56m of unit sales, down -21.9% from 11m units, and for €86.4m in spending, down -23% from €112.2m. BD accounted for 1.37m in unit sales, down from 1.54m, and for €20.35m in consumer spending, down from €23.1m, showing declines of -10.8% and -11.9% respectively from 2014.

In 2016, Netherlands physical video market spending will decline to €85.6m, down -19.8%. Unit sales will also fall to 7.9m, a fall of -20.4%. This represents a slightly slower rate of decline than was observed in 2015. DVD is also declining faster than BD; DVD will generate €67m in consumer spending, a -22.4% decline, and 6.7m unit sales, a -22.1% decline. BD will generate €18.6m in consumer spending, a -8.8% decline, and 1.2m unit sales, a -10% decline.

In 2020, consumers in the Netherlands will buy 3.67m physical video units, a -18% average yearly decline throughout the forecast period. Consumer spending is projected to fall to €39.4m by 2020, a -18.1% average yearly decline over the same period. By year end 2020, DVD will account for 2.83m of unit sales and €27m of consumer spending. BD will account for 0.84m units and €12.3m in consumer spending.

Our analysis

Since 2012, the Dutch market has experienced a faster rate of decline of physical video than Belgium. This has brought these countries, of significantly different populations, roughly in line with each other in terms of consumer spending on physical video to €82m and €86m for Belgium and Netherlands respectively. The rate of decline in the Dutch market in 2016 is now forecast to slow, whilst the Belgian market will see declines accelerate. IHS forecasts that spending in both countries will continue decline at a similar pace to one other, around 18% on average through to the end of the IHS forecast period, 2020. Belgium will remain marginally smaller than the Netherlands in terms of consumer spending throughout the period.

Physical video in the Belgian market continues trading at a premium compared to the Netherlands. In 2015, the average disc price in Belgium was 21% higher, with DVD accounting for most of this difference. It is unlikely that prices will continue to be lowered by studios as such strategies have proven ineffective in curbing consumption decline. In the Netherlands a local independent studio “A-Film”, which was active in the market of lower priced titles, closed during 2015. In Belgium some smaller and cheaper releases were simply not made for sale in the market. These factors resulted in an upward pressure on average disc prices in their respective territories.

2016 has so far been a strong year for both markets, propped up by some notable releases, resulting in reported average disc price increasing over 2015. However, aggressive promotion practiced by retailers in the Netherlands, and the Belgian retail market being affected by titles transported cross border from France, should prevent prices from increasing over the coming years. IHS forecast prices to stay relatively stable from this point forward, DVD falling slightly, driven by retailers’ pricing and promotional activity.

Consumption patterns in video industry continue to be affected by the rise of alternative video platforms, most notably services such as Netflix, adoption of which is yet to approach the point of plateauing, and other services from pay TV operators that enable time-shifted viewing. IHS Global insight forecast the economic environment to continue improving across Europe, with growth likely underpinned by consumer spending, supported by rising employment and negligible inflation.

Geography
Belgium Netherlands
Research by Market
Media & Advertising
Category
Digital Media Video
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