PwC Global entertainment and media outlook Belgium

Transcription

1 PwC Global entertainment and media outlook Belgium Summary TV subscriptions and licence fees TV Internet access Out-of-home Newspaper publishing Business-to-business Radio Video games Filmed entertainment Music Magazine publishing Books Internet

2 Summary Entertainment and Media market in Belgium (US dollar millions) Entertainment and Media in Belgium Business-tobusiness Books Magazine publishing Filmed entertainment Internet access Internet Newspaper publishing Out-of-home Radio Music TV TV subscriptions and licence fees Video games with double counting without 1,272 1,307 1,308 1,294 1,293 1,295 1,304 1,318 1,333 1, , ,195 2,354 2,631 2,842 3,011 3,174 3,314 3,440 3,568 3, ,604 1,659 1,583 1,560 1,558 1,540 1,516 1,486 1,447 1, ,006 1,141 1,174 1,169 1,182 1,214 1,248 1,289 1,324 1, ,601 1,714 1,824 1,855 1,865 1,875 1,887 1,899 1,908 1, Note: Digital components such as online television, online radio, digital newspaper, digital consumer magazine, digital trade magazine and digital directory are included in the respective segments and in the Internet segment but only once in the overall total to avoid. In addition, consumer spending on radio licence fees is included in both the TV subscriptions and licence fees and the radio segment but only once in the overall total. Similarly, pay-per-view and video-on-demand revenues through a TV subscription are included in the TV subscription and licence fees segment and filmed entertainment but only once in the overall total. Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. 2 PwC Global entertainment and media outlook:

3 TV subscriptions and licence fees The Belgian pay-tv subscription market is at saturation point with 98.2% penetration, although an additional 100,000 households are forecast to be taking pay-tv by end 2018, reaching 4.8mn subscriptions. Cable TV currently has 68.4% of all pay-tv subscribers with the operator Telenet dominant in Flanders and VOO strong in Wallonia. However, cable is in decline and will take 64.9% of the market in Belgacom s IPTV services have successfully challenged cable, rising from 14.0% of all pay-tv subscribers in 2009 to 26.3% in 2013, and are forecast to reach 28.8% in Belgacom s rapid rise has been attributed to date to football rights but, since the domestic Jupiler League became shared, it has found it harder to attract homes away from cable. In response, Belgacom has secured rights to European Champions League football. With the return of football, the cable players have stemmed the loss of subscribers to Belgacom. However, there is still the challenge of upgrading the many analogue cable subscribers to digital packages and increasing revenues. Cable operators are using the full arsenal of HD content, ondemand programming and triple-play services to encourage users to upgrade to digital. The satellite platforms, which are principally owned by the M7 group, lack key sports and movie rights and have struggled with less than a 4% share of the market. Public service broadcasting is administered by the VRT (in Flanders) and RTBf in Wallonia. In 2012, the Flemish and Walloon governments contributed more than US$600mn to public radio and television. TV subscriptions and licence fees market in Belgium (US dollar millions) TV subscriptions and licence fees in Belgium Public TV licence fees Subscriptions with double counting without ,021 1,129 1,204 1,229 1,238 1,243 1,251 1,259 1,263 1, ,601 1,714 1,824 1,855 1,865 1,875 1,887 1,899 1,908 1, Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. 3 PwC Global entertainment and media outlook:

4 TV TV revenues in Belgium picked up between 2009 and 2011, before declining in Growth of 1.2% in 2013 saw revenues reach US$1.18bn and further growth will see them reach US$1.36bn in 2018, at a of 2.9%. There will be a very small shift to multichannel in this period, as its share rises from 11.1% of the total in 2013 to 12.5% in 2018.This causes terrestrial channels to dominate, as revenues rise from US$1.04bn in 2013 to US$1.17bn in The channels are concerned about the role of digital video recorders (DVRs) and the skipping of adverts. Private broadcasters charge advertisers based on live viewings and the ratings do not include DVR viewing. A number of broadcasters told cable and IPTV operators that their DVR services are destroying broadcasters business models and that an appropriate revenue should be allocated by the distributors of content (the operators) to the content providers (the public and private broadcasters). Due to the high penetration of digital TV and the fact that more than 60% of households in Belgium own a DVR, the potential loss of income for broadcasters due to time-shifted viewing is substantial. TV market in Belgium (US dollar millions) TV in Belgium Broadcast Multichannel Terrestrial Online with double counting without ,023 1,048 1,038 1,045 1,067 1,090 1,119 1,142 1, ,004 1,138 1,171 1,164 1,176 1,205 1,235 1,272 1,304 1, ,006 1,141 1,174 1,169 1,182 1,214 1,248 1,289 1,324 1, Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. 4 PwC Global entertainment and media outlook:

5 Internet access Belgium s fixed broadband penetration rate is one of the highest in Western Europe. As a result, the market will see only moderate growth between 2013 and 2018, rising from penetration of 84.9% in 2013 to 91.2% in 2018, driven by an increased take-up of bundled services. The incumbent Belgacom and leading cable operator Telenet dominate the fixed broadband market, jointly claiming over 80% of households. In the southern region of Wallonia, where Telenet does not operate, Belgacom s main rival is another cable operator, Voo. Because of these duopolistic structures and the maturity of the market, operators are largely focused on upgrading their services in order to win subscribers from each other, while retaining their own. In the early part of the last decade, Belgacom began rolling out fibre closer to homes in order to offer IPTV services in competition with the cable operators TV offers. More recently, the incumbent announced further plans to upgrade its network from 2014, starting with vectoring, a speedenhancing technology that promises rates comparable with those available via the cable operators DOCSIS 3.0-enabled networks. Adoption of mobile Internet is low in Belgium compared with other Western European markets, largely because operators have avoided subsidising devices as heavily as their counterparts in other countries do. However, attractive bundles and the beginning of competition in the 4G sector will drive mobile Internet uptake from now on, with subscriptions rising at a of 12.4% between 2013 and Internet access: wired and mobile market in Belgium (US dollar millions) Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. Internet access: wired and mobile in Belgium Mobile internet access ,054 1,169 1,272 1,370 1,475 1, Fixed broadband access 1,684 1,748 1,837 1,914 1,957 2,005 2,042 2,070 2,094 2, ,195 2,354 2,631 2,842 3,011 3,174 3,314 3,440 3,568 3, with without 5 PwC Global entertainment and media outlook:

6 Out-of-home The market for OOH in Belgium generated revenue of US$344mn in 2013 and is forecast to rise at a of 4.1% in the next five years, with total revenue reaching US$421mn in Growth prospects in the Belgian OOH market will continue to be constrained in the short term due to a slowdown in business investment and sentiment which is restricting the prospects for new initiatives. Authorities in Belgium are investing in their street furniture but more significant growth will come from digital OOH (DOOH). In the next five years spend will continue to shift towards DOOH, as illustrated by the launch of Clear Channel s digital network at major railway stations in the country. This trend will continue with DOOH forecast to overtake physical OOH in In 2012, the largest ever mega board in Belgium, covering 2,200 square meters and adorning the headquarters of ING, was opened. Innovation in the Belgian OOH market was best demonstrated when media company TNT Network produced an unconventional campaign to launch its drama content. A red button was positioned in a town centre daring passers-by to hit it. When someone did, actors appeared recreating scenes from medical and legal dramas. But despite such innovation in the physical OOH sector, it is DOOH that will drive growth. POS remains a key feature of the Belgian market. Currently, one of the largest networks in operation is idklic s network of digital screens across 750 pharmacies, which has been used by the leading pharmaceutical firms. Out-of-home market in Belgium (US dollar millions) Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. Out-of-home in Belgium Digital out-ofhome Physical out-ofhome with without 6 PwC Global entertainment and media outlook:

7 Newspaper publishing In this small country at the heart of Europe, a complex landscape sees newspapers published in French, Flemish and for a cosmopolitan mix of Brussels settlers. In a country of about 11mn people, well over 5mn still read newspapers, and newspaper websites are visited in heavy numbers. Despite growing Internet usage (broadband penetration is high at 85%), print newspaper circulation revenue has been rising, an encouraging sign in a difficult period. But newspapers share of total revenue is likely to fall as newspapers lose income to other traditional media. Although print newspaper revenue is forecast to fall by 4.1% between 2013 and 2018, it will nevertheless be helped by digital sales, which will grow at a of 6.1%. The number of average daily units for print circulation is falling at a of -2.5%, but price hikes have minimised the corresponding revenue declines to less. The Belgian market is marked by strong cooperation amongst rivals in the face of perceived threat from overseas digital disruptors. Publishers have teamed to offer their digital editions through a single, jointly-owned digital newsstand, GoPress. But their biggest cause has been fighting Google, which, after a long-running dispute, agreed to pay them EUR5mn (US$6.8mn) in expenditure to settle a dispute in which the papers opposed it of copying excerpts of their content. On its own, this may not be a cure-all. Success in building the next generation of newspaper readers has been mixed, with Belgium suffering from high unemployment and high levels of public debt, while its population is ageing. Newspaper publishing market in Belgium (US dollar millions) Newspaper publishing in Belgium Advertising Digital Print Circulation Digital Print with double counting without ,129 1,152 1, ,163 1,198 1,095 1,076 1,071 1,053 1,031 1, ,604 1,659 1,583 1,560 1,558 1,540 1,516 1,486 1,447 1, Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. 7 PwC Global entertainment and media outlook:

8 Business-to-business Belgium is the eighth-largest B2B market in Western Europe. B2B revenue reached US$1.3bn in 2013, representing a increase of US$21mn between 2009 and The market is forecast to grow by a of 0.9% over the forecast period, with total B2B revenue set to reach US$1.35bn in Real GDP in Belgium is forecast to grow by a of 1.4% between 2013 and 2018, but the country has fallen four places since 2012 in the World Bank s ranking for ease of doing business to 36th. trade magazine revenue is forecast to decline at a of 0.4% but will be partially offset by a small increase in total trade magazine circulation revenue. professional books revenue is forecast to grow by a of 1.8% and reach US$150mn in Both the business information and trade show segments are forecast to expand their share of the B2B market, with total business information revenue forecast to account for 34% of total B2B revenue, and trade show revenue 14%, in In 2013, the trade show segment had cause for optimism with Labelexpo Europe at Brussels Expo attracting 31,795 attendees, up 11% on PwC Global entertainment and media outlook:

9 Business-to-business market in Belgium (US dollar millions) Business-to-business in Belgium Business information Financial Marketing Industry Directory Digital Print Trade shows Professional books Electronic professional books Print/audio professional books Trade magazine Trade magazine Digital Print Trade magazine circulation Digital circulation Print circulation with double counting without ,272 1,307 1,308 1,294 1,293 1,295 1,304 1,318 1,333 1, less than $500,000 Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. 9 PwC Global entertainment and media outlook:

10 Radio Belgium is the sixth-largest radio market in Europe. Its total radio revenue was US$636mn in 2013, up by 33% from 2009, making it the fastest-growing market in Western Europe over the period. The Belgian radio sector will grow at a of 3.1% over the forecast period, with total radio revenue increasing to US$742mn by Public funding plays a significant role in the Belgian radio market, with public radio licence fees accounting for 11% of total radio revenue in DAB was first launched in Belgium in 1997 and is used for ten stations broadcast by the three public-sector broadcasters. All main Belgian radio stations stream online simulcasts of their FM stations. The role of online streaming is likely to play a strong role in the future of Belgian radio given that in-home listening is markedly higher than in-car listening. The Belgian radio market, which celebrates its centenary in 2014, is broadly divided between the Flemish-speaking north and the French-speaking south. In the north, the public broadcaster monopoly was broken in 2001 when the Flemish authorities passed legislation to make two commercial stations available. However, the public Flemish broadcaster VRT remains dominant, as does the French public broadcaster RTFB, and also BRF in the German-speaking region of Belgium. 10 PwC Global entertainment and media outlook:

11 Radio market in Belgium (US dollar millions) Radio in Belgium Radio Satellite Terrestrial radio broadcast Traditional radio Terrestrial radio online Public radio licence fees Satellite radio Satellite Satellite radio subscriptions with double counting without Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. 11 PwC Global entertainment and media outlook:

12 Video games The market for video games in Belgium was worth US$437mn in 2013, up from US$381mn in video games revenue is forecast to grow at a of 2.5%, reaching US$496mn in Belgium s mobile games market will benefit from increasing smartphone penetration and the wide range of games on offer, as well as the increasingly popular free-to-play monetisation strategy which allows consumers to choose how much they spend. Mobile games revenue was US$36mn in 2013 and will increase to US$49mn in 2018, a of 6.5%. The popularity of mobile games has had a big impact on the physical purchases of console-based games, as reflected by a 2.6% decline in physical console games revenue between 2009 and This decline is set to slow between 2013 and 2015 following the introduction of the Xbox One and PlayStation 4, but the effect will diminish once the novelty of these new consoles wears off. 12 PwC Global entertainment and media outlook:

13 Video games market in Belgium (US dollar millions) Video games in Belgium Advertising Consumer Console games Digital console games Physical console games Online games PC games Digital PC games Physical PC games Mobile games with double counting without Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. 13 PwC Global entertainment and media outlook:

14 Filmed entertainment Belgium s filmed entertainment sector will be worth US$595mn by 2018, up from US$579mn in 2013, a of 0.6%. electronic home video revenue will show the biggest growth, rising from US$102mn in 2013 to US$162mn in 2018, a of 9.6%, driven by a sharp increase in total electronic video over-the-top (OTT)/ streaming revenue, which is forecast to increase at a of 61.8% between 2013 and The long-awaited launch of Netflix into the Belgian market is expected to take place during Growth in the electronic sector will help offset the decline of 6.5% over the same period in total physical home video revenue, which will shrink to US$169mn by 2018 from US$236mn in The physical home video rentals revenue will experience the biggest drop, falling from US$14mn in 2013 to US$6mn in cinema revenue will increase slowly. While box office revenue will increase at a of 2.4%, cinema revenue will fall a little, at a of -0.6%, over the forecast period. Box office revenue will remain the largest part of Belgium s total filmed entertainment revenue: in 2013, it was US$202mn, 35% of the total, and it will rise to US$227mn in 2018, 38% of the total. Belgium had over 90% penetration for digital screens by Its cinema sector will be fully digitised by The country continues to benefit from its tax shelter status which encourages inward investment on a grand scale. The system is reckoned by film trade paper Screen International to generate US$200mn a year of investment into the film sector. 14 PwC Global entertainment and media outlook:

15 Filmed entertainment market in Belgium (US dollar millions) Filmed entertainment in Belgium Cinema Box office Cinema Home video Electronic home video OTT/streaming SVOD TVOD Through-TVsubscription Physical home video Rentals Sell through with double counting without less than $500,000 Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. 15 PwC Global entertainment and media outlook:

16 Music Belgium s music market was worth US$514mn in 2013, down from the 2009 revenue of US$603mn. music revenue is forecast to contract by a of -1.8% to US$469mn in Physical recorded music revenue took a dive in 2013, tumbling a precipitous 23.8% on 2012, and the market was worth just US$114mn in that year. The slack is not being taken up elsewhere as total digital recorded music revenue is a much smaller proportion of total recorded music revenue and is growing much more slowly than digital is falling. Belgian consumers are failing to see the attraction of digital music services such as those provided by the likes of Spotify, Deezer, Juke and Simfy, among others. Digital music streaming revenue was worth a mere US$2.4mn in 2013 despite the proliferation of services. Streaming services will eventually pick up in Belgium, but the country significantly lags behind its Dutch neighbour. The live music sector showed resilience in 2013, with total live music revenue of US$363mn. It is forecast to grow steadily to US$391mn in 2018, a of 1.5%. Belgium is home to a number of big annual music festivals, among them Rock Werchter, Suikerrock and Tomorrowland. The latter, a threeday electronic music event, attracted 180,000 attendees in July 2013, and organised the same event in the US state of Georgia in September Tomorrowland will be venturing outside its home market to Brazil in In November 2013, the market got tougher for pirates when the Belgian Supreme Court ordered ISPs to actively search for Pirate Bay proxies and to block subscriber access to illegal websites after the Belgian Anti-Piracy Foundation brought a lawsuit against leading telecoms carriers Belgacom and Telenet. The decision, which is not open to appeal in Belgium, means ISPs are required to actively police the Internet and restrict access to current and future infringing domains. Belgacom described the verdict as disproportionate. 16 PwC Global entertainment and media outlook:

17 Music market in Belgium (US dollar millions) Music in Belgium Live music Live music sponsorship Live music ticket sales Recorded music Digital Digital music downloading Digital music streaming Mobile music Physical with double counting without less than $500,000 Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. 17 PwC Global entertainment and media outlook:

18 Magazine publishing magazine revenue in Belgium, comprising total consumer magazine revenue and total trade magazine revenue, will reach US$909mn by 2018, down from US$947mn in 2013, falling at a of -0.8%. Advertising revenue accounts for 75% of total magazine revenue. In 2013, total trade magazine revenue and total consumer magazine revenue stood at US$354mn each. Magazine spend is being impacted by an overall reduction in across the board and a decline in circulations. magazine revenue will stand at US$686mn in 2018, having declined by a -0.6%. consumer magazine revenue, despite seeing a decline, accounts for 60% of total magazine revenue and stood at US$564mn in The figure will shrink at a -1.1% to US$534mn in 2018 as increasing cover prices fail to mitigate falling circulations, to account for 59% of total magazine revenue. Major magazine publishers in Belgium include Sanoma Media Belgium, Roularta Media Group and DePersgroep Publishing. 18 PwC Global entertainment and media outlook:

19 Magazine publishing market in Belgium (US dollar millions) Magazine publishing in Belgium Consumer magazine publishing Advertising Digital Print Circulation Digital circulation Print circulation Trade magazine Trade magazine Digital Print Trade magazine circulation Digital circulation Print circulation with double counting without , less than $500,000 Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. 19 PwC Global entertainment and media outlook:

20 Books books revenue in Belgium, comprised of consumer, educational and professional book publishing revenue, was US$473mn in 2013, and will increase to US$560mn in 2018, a of 3.4% over the next five years. Belgium divides into two main geographical regions: the French-speaking south, known as Wallonia, and the Dutchspeaking north, or Flanders. The market is dominated by both France s publishing industry to the west and the Netherlands to the north. The educational e-books segment will also grow strongly, however, as schools take advantage of their easily updateable properties. educational books electronic revenue is expected to be worth US$7mn in 2018, having grown at a of 16.3% over the forecast period. Overall, the market share of electronic books will rise from 14% in 2013 to 36% in Strongest growth will be shown by the consumer market, which will be driven by e-books. Consumer books electronic revenue will reach US$139mn in 2018 from US$37mn in 2013, a 30.0%. This is a significantly higher rate of growth than expected for educational electronic books revenue and professional electronic books revenue. 20 PwC Global entertainment and media outlook:

21 Books market in Belgium (US dollar millions) Books in Belgium Professional books Electronic professional books Print/audio professional books Consumer books Consumer books electronic Consumer books print/audio Educational books Educational books electronic Educational books print/audio with double counting without Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. 21 PwC Global entertainment and media outlook:

22 Internet Internet revenue in Belgium is expected to grow at a of 7.1% between 2013 and 2018, increasing from US$590mn to US$832mn. Belgian spend and Internet usage is strongly divided along linguistic lines: some 40% of Internet users in the market speak French, and the other 60% speak Dutch/Flemish. The large global sites have a greater presence in Belgium than in neighbouring markets. Classified Internet has remained bullish in Belgium, with revenue increasing from US$133mn to US$180mn between 2009 and 2013, and forecast to rise to US$247mn by Paid search remains the dominant Internet category, with revenue of US$210mn in 2013 representing 36% of the market. A of 5.7% will see it increase to US$278mn in 2018, but this will be just 33% of total Internet revenue in that year. Mobile and video will take a growing share of the Internet market, at 10% and 4%, respectively, by PwC Global entertainment and media outlook:

23 Internet : wired and mobile market in Belgium (US dollar millions) Internet : wired and mobile in Belgium Mobile internet Wired internet Classified Internet Display Internet Video Internet Paid search Internet with double counting without Note: Numbers shown are rounded. s may not equal the sum of their parts due to rounding. 23 PwC Global entertainment and media outlook:

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