Video on Demand market insights 2016

Video on demand (VoD) is an interactive TV technology that allows subscribers to view programming in real time or download programs and view them later. A VoD system at the consumer level can consist of a standard TV receiver along with a set-top box. Alternatively, the service can be delivered over the Internet to home computers, portable computers, high-end cellular telephone sets and advanced digital media devices. The VoD concept is not new. The first commercial VoD service was launched in Hong Kong in the early 1990s. In the United States, Oceanic Cable of Hawaii was the first to offer it beginning in 2000, immediately after the passing of the Y2K scare. Today, VoD is offered by numerous providers, particularly those who also offer triple play services. VoD is used in educational institutions and can enhance presentations in videoconference environments. VoD is also offered in most high-end hotels. VoD will likely become more common as fiber to the home (FTTH) services become widespread (http://searchtelecom.techtarget.com).

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Video on Demand, according to the FutureMarketingInsights analitics agency, 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.

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.

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Traditional definitions of what it means to watch TV are changing, and consumers are in control. According to the Nielsen 2016 report „Video on Demand. How worlwide viewing habits are changing in the evolving media landscape”, nearly two-thirds of global respondents say they watch some form of video-on-demand programming (includes long- and short-form content). ost viewers appear to be supplementing, rather than replacing, paid traditional TV services (received through a cable or a satellite). Nearly three-quarters of global online respondents say they pay such a service to watch programming; just over one-quarter say they pay an online- service provider (such as Hulu, Netflix or Amazon).

The global data center video on demand market is anticipated to grow at a CAGR of 12% from 2016 to 2022, as Business Wire reports. The market had generated the revenue $ 6 Billion in 2015 and is anticipated to reach up to $ 11.84 Billion by 2022. Due to increasing demand for on-demand content and HD programming, various innovations in server technology and increasing number of smart devices along with technological advancements helps to drive the market of data center video on demand.

Viewing habits are not the only things changing. Traditional advertising models are changing as innovative technologies such as programmatic and addressable ads allow advertisers to reach consumers in new and creative ways. Many traditional TV providers, including networks and multichannel video-programming distributors (MVPDs), are reevaluating their business models in order to adapt better to consumers’ evolving habits. While it’s clear that business-as-usual methods won’t work in a landscape that is changing so rapidly, the field is wide open, as all players are looking to expand share.

North America and Asia-Pacific lead the way, with 35% of respondents in North America and 32% in Asia-Pacific indicating they pay an online service provider for programming content. The VoD market in Asia Pacific Excluding Japan (APEJ) is expanding at a robust pace and by 2020, the market is expected to reach US$ 80.5 billion. Strong demand for pay-TV services is expected to fuel the market in APEJ in the next five years.Self-reported usage in Europe falls well below the global average, with a response rate of 11%. Just over one-fifth of online respondents in Latin  America and the Middle East/Africa say they subscribe to an online-service provider(21% each).

The comScore report also highlighted the key role smartphones will continue to play in all digital activities. Time spent on smartphone apps earned a 47% share, and as mobile viewing rises, it will become the majority of digital consumption time. As analysts from TransparencyMarketSearch claims, the VoD market is also driven by factors such as increasing internet-based consumer spending and the growing adoption of mobile devices to watch online videos. The surge in high-speed data networks has enabled VoD service providers to deliver faster streaming and downloading services to users. The demand for personalized as well as regional content viewing is also supplementing the growth of the video on demand market.

The major players in VoD market include Amazon.com, Inc., Home Box Office, Inc., Hulu LLC, iTunes (Apple, Inc.), Netflix, Inc., Telefonaktiebolaget LM Ericsson (Ericsson Television), Verizon Communication, LLC, YouTube, LLC, maxdome GmbH, and Canalplay.

 

Cover graphic: ReelnReel