Despite the popularity of Netflix in the Netherlands, OTT services still account for less than a fifth of total revenues in the TV-video market, according to Telecompaper’s Dutch TV-Video Market report for Q1 2019. The OTT market share was 17.2 percent in Q1 2019, up slightly from 15.7 percent a year earlier. The segment’s annual revenue growth slowed significantly, from 48 percent on an annual basis in Q1 2018 to just 14 percent this year, suggesting the market may be approaching saturation.
Meanwhile, traditional pay-TV services increased revenues 3.0 percent to EUR 473 million in Q1 2019, the highest growth in seven quarters. The growth is driven by annual subscription price increases and VAS revenues such as set-top box rental fees, offsetting a gradual drop in the number of subscribers.
KPN narrows gap with Ziggo, Netflix in third place
Cable operator VodafoneZiggo dominates the Dutch TV market, but shows a slow but steady fall in revenues and market share. KPN continues to narrow the gap, outperforming the market with over 9 percent revenue growth in Q1, its strongest in over two years. KPN added 1.0 percent points of market share in the past year to reach 24.6 percent of revenues, while number three Netflix grew by only 0.8 percent to 13.3 percent of revenues.
"KPN has been successful at pushing through annual price increases, and it will be interesting to see if Netflix can do the same with its recent price hike and not put off subscribers," said Sanne de Bruyckere, Telecompaper senior research analyst and co-author of the Dutch TV-video market report. "KPN's revenue growth is supported by third-party services and VAS such as box fees, underlining how it's evolving from a basic TV provider to the customer’s gateway to a range of content."
TVOD opportunity
The TV and video market is expected to continue its growth as more OTT services are launched. Companies such as Apple, Disney and WarnerMedia are all planning new direct-to-consumer services in the coming year. Much of the focus has been on SVOD, following the success of Netflix, but the Telecompaper figures suggest this segment may be reaching saturation point. The TVOD segment remains under-exploited, with only around 2 percent of revenues on the Dutch TV-video market. Notably, pay-TV and OTT providers are on more equal footing in TVOD, with each accounting for around half the over EUR 10 million in quarterly revenues.
