Video On Demand Market

Video on Demand (VoD) Service Market - Impelled by Shift in Consumer's Viewing Preferences and Increasing Penetration of High Speed Internet Infrastructure in Emerging Economies: Global Industry Analysis and Opportunity Assessment, 2016 - 2026

Introduction

Video on Demand, commonly denoted as VoD, provides consumers a way to watch their desired movies and television shows as per their own convenience. VoD services work similar to the DVR services, which enables users to record their favourite content (shows and movies) or pause it in order to watch it as per their convenience. VoD services are provided by OTT streaming service providers as per ‘pay per view’ business model. This enables users to avail their favourite content and pay for it as per their usage.

Market Definition and Scope

video-on-demand-market

Market Dynamics

VoD service enables users to access various type of movies and shows (irrespective of time) on demand. These include classic TV shows, television series, and movies from different decades, multi-ethnic entertainment, news, sports, and commercials. Although, VoD was originally started for movies access, with increasing demand to watch popular TV programmes including TV series and animated kids programs as per users’ convenience, VoD service providers expanded their offerings to include a diverse set of content programmes.

Rise and success of Content on-Demand (CoD) services, ease of access to high fidelity data networks and vertical integration by social media platforms to offer streaming video services are the prominent factors driving growth of the VoD service market currently. Factors such as high bandwidth requirement, no offline availability feature of certain service providers and technical anomalies causing unavoidable interruptions during content play are acting as the potential restraints for the VoD service market.

Market Overview

The global VoD service market was valued at US$ 45.03 Bn in 2014 and is expected to expand at a CAGR of 8.3% during the forecast period (2016–2026). Shift in preference of viewers from television’s linear schedule to viewing content as per their convenience and increasing penetration of high speed Internet network in emerging nations are factors propelling market growth currently.

The global VoD service market is classified on the basis of content type into animation and others. The animation segment was valued at US$ 7.38 Bn in 2014 and is anticipated to register a CAGR of 9.7% during the forecast period. Presently, the ‘others’ (excluding animation content) segment dominates the global VoD service market. However, with the growing popularity of top rated animation programmes such as Harry the Bunny, Numbers around the Globe, Rainbow Horse, Blue's Room and Curious George (All from the U.S.) on VoD platforms, the others segment is expected to lose a significant market share during the forecast period.

Currently, North America leads the market for animation content as part of VoD service. According to FMI analysis, the North America VoD service market, in terms of animation content, was valued at US$ 3.04 Bn in 2014 and is estimated to reach US$ 3.30 Bn by 2015 end. The dominance of VoD service market in North America is attributed mainly to the popularity of animation content due to the historic presence of animation content creators in this region, coupled with the lucrative deals offered by VoD service providers to attract customers and growing demand for animation series such as Ghostbusters, Batman and Avatar: The Last Airbender on VoD platforms, which in turn is propelling growth of the North America VoD service market currently. Additionally, partnerships of content providers with the consumer electronics industry players is further encouraging the adoption of VoD service in this region. In March 2015, Home Box Office, Inc. (HBO) entered into a three-month partnership with Apple Inc. to extend its new HBO Now service on Apple devices. With the introduction of HBO’s dedicated VoD services on Apple’s devices, iPhone or iPad users are now able to access original HBO content at nominal subscription charges.

The market in Asia Pacific (excluding Japan) is anticipated to register the highest growth during the forecast period. This is primarily attributed to the growing subscriber base of high speed Internet services in the region, creating potential opportunities for VoD service providers, including Netflix, Hulu and Home Box Office, Inc. (HBO). In addition, rising smartphone and tablet penetration in emerging economies, such as India, China, Philippines and Indonesia, is expected to further pave way for growth of the VoD service market in the region during the forecast period.

video-on-demand-market

Key Players

Key players in the VoD service market include Netflix, Apple Inc., Comcast Corporation, Amazon Video (VoD), YouTube, LLC, Vudu, Inc., Hulu, Dish Network, Home Box Office Inc. and Sky UK Limited. Leading animation content creators in the market are The Walt Disney Company and Fox Entertainment Group.

Introduction

 Video on demand (VoD) is an interactive service that facilitates the users to view their favourite content (especially shows and movies) in real time as per their convenience. Internet enabled smart TVs, smartphones and tablets are increasingly becoming a popular platform for availing VoD services globally.

 Factors such as increasing penetration of high speed Internet infrastructure in the emerging economies and vertical integration by social media platforms to offer streaming video services are primarily driving growth of the global VoD services market currently.

Report Synopsis

Future Market Insights offers a 10-year forecast of the global VoD service market between 2016 and 2026. The report defines 2014 as the base year and provides data for the following 12 months. In terms of value, the VoD service market is expected to register a CAGR of 8.3% during the forecast period.

Report Description

This research report provides a detailed analysis of VoD services to identify factors driving the popularity of these services among users. This study demonstrates market dynamics and trends in the concerned regions, which are expected to influence the current nature and future status of the VoD service market during the forecast period. A detailed analysis of the value chain further empowers clients to formulate strategies for every stage of their business.

With the success of Content on Demand (CoD) services offered by service providers such as Netflix, Amazon Video and Hulu, cable TV content providers are also introducing VoD services for subscribers who wish to access their favourite content (show and movies) as per their convenience, in turn advancing the adoption of VoD services further. Additionally, ease of access to high fidelity data networks and introduction of their own streaming video services by the leading social media players are among the major factors stimulating the market growth currently.

This report provides FMI’s analysis on key trends, drivers and restraints influencing the global VoD service market. The weighted average model is leveraged to identify the impact of the key growth drivers and restraints across various geographies, in order to help clients achieve a categorical view of the market.

On the basis of content type, the market is segmented into animation and others. A detailed analysis of every segment has been provided in terms of market size. The animation segment is further sub-segmented into content based on kids, movies and others. The report provides a detailed analysis of each segment in terms of its market value (US$ Mn) in the global as well as region based VoD service market. Key regions assessed in this report include North America, Latin America, Western Europe, Asia Pacific (excluding Japan), and Rest of the World. In addition, a detailed analysis covering key trends, absolute dollar opportunity and BPS analysis of VoD service market has also been presented.

Given the ever-fluctuating global economy, the report not only forecasts the market on the basis of CAGR, but also analyses the impact of key parameters during each year of the forecast period. This helps client to understand the predictability of the market and to identify the right opportunities in the market during the forecast period. Also, a significant feature of this report is the analysis of all vital segments in terms of absolute dollar opportunity. Absolute dollar opportunity is critical for assessing the level of revenue opportunity in the market.

Research Methodology

In order to evaluate the market size, revenue generated by the VoD service providers and content creators has been taken into consideration. Number of existing subscribers watching on demand paid content across each region and their average yearly spending on packages offered – including different content offered by VoD service providers, was taken into account for estimating market revenue across respective regions. Also, the number of users willing to pay for on-demand services has been taken into account to track the growth of the market during the forecast period. Moreover, market estimates have been analysed keeping in mind different factors including technology, environment, economic, legal, and social. In order to provide correct market forecast statistics, the current market was sized, as it forms the basis of VoD service market during the forecast period. Given the characteristics of the market, we triangulated the outcome on the basis of three different types of data, namely secondary research, primary research, and data from paid databases. Primary research represents the bulk of our research efforts, supplemented by extensive secondary research. Secondary research includes key players’ product literature, annual reports, press releases and relevant documents, recent trade journals, technical writing, Internet sources, trade associations, agencies and statistical data from government websites. This collated data from primary and secondary data sources is then analysed by the in-house research panel using market research statistical tools.

Key Segments Covered

  • By Content Type
    • Animation
      • Kids
      • Movies
      • Others
    • Others

Key Regions/Countries Covered

  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
  • Western Europe
    • Germany
    • U.K.
    • Denmark
    • Norway
    • Sweden
    • Finland
    • Rest of the Western Europe
  • Asia Pacific Excluding Japan (APEJ)
    • China
    • India
    • Indonesia
    • Malaysia
    • Philippines
    • Singapore
    • Thailand
    • Vietnam
    • Rest of APEJ
  • Rest of the World