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VoD market size, forecast…

September 16, 2009 Leave a comment

As some of you already know, I take some pleasure animating the GLITNER group on LinkedIn. Recently, André Lange from the European Audiovisual Observatory (EAO) has posted the following question:

Does the cable consumer spend more for VoD than the IPTV subscriber?

One of Screen Digest assumption in assessing the VoD markets in Europe is that a cable subscriber will spend more in VoD than an IPTV subscriber. Does anyone have any evidence on such thesis?

It is true that when researching the net looking for some evidence of such thesis or looking for some available market studies, it is disappointing to find out that often, the info, articles and/or reports found have conflicting forecasts and statements. In order to keep track of the most updated (and relevant) info, I have listed here below some my key findings of the last few months:

–       Global annual revenue from rental transactions of full-length movies and TV shows on pay-TV and online platforms generated $2.2bn in 2008. This is forecast to grow to $3.7bn by 2012 (source: Adam Media Research a division of Screen Digest).

–       VoD will generate $330 million a year (in the UK) in ‘direct revenue’ by 2013 (source: PaidContent:UK quoting Claire Enders speaking at the Westminster eForum on September 15th).

–       The sum of all forms of video (TV, video on demand, Internet, and P2P) will account for over 91 percent of global consumer traffic by 2013. Internet video alone will account for over 60 percent of all consumer Internet traffic in 2013 (source: CISCO – Cisco Visual Networking Index: Forecast and Methodology 2008-2013).

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–       Digital media revenue will jump about 270% between 2009 and 2013 to $3.28 billion (according to a Futuresource Consulting research).

–       The total home entertainment market in the US (all platforms – DVD/BD, TV-based VoD, online video and mobile video) is projected to generate over $25 billion in revenues in 2009. “Paid-for VoD revenues are expected to witness steady growth moving forward, as the closure of VoD windows increases the appeal of premium on-demand content. However, looking ahead, packaged media will remain a significant revenue generator for the home entertainment industry, accounting for close to 70% of total revenues by 2013,” said Carl Hibbert, business consultant, Futuresource Consulting (source: one to one).

–       Global revenue for digital formats will grow to $2 billion in 2013, from about $500 million this year. US revenue in the first half of the year was about $140 million, with a significant growth in EST – electronic sell-through (source: Screen Digest analyst Arash Amel cited in an article of videobusiness.com).

–       Over-the-top video (delivery of internet video to the TV) will grow nearly six-fold in the newt five years, from a meager $1 billion in 2009 to $5.7 billion in 2014 (source: TDG – Broadband-Enabled TV: Rise of the OTT Provider).

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–       On December 2008, the EAO has counted 691 on-demand audiovisual services in Europe: 142 in the UK, 108 in France, 92 in Italy and 55 in Germany.

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–       Eight percent of all consumers in Britain, France, Germany and the United States admit to downloading video illegally from the Internet (source: Reuters UK according to a survey).  I have done the math (based on Universal McCann Wave 4 Social Media Tracker): there are 158 million active Internet users in those 4 countries, from which 12.6 million (8%) are therefore downloading video illegally…

–       VoD server revenue tripling by 2013, date at which telco service providers are expected to derive about $56 billion worldwide revenue from IPTV services offered, not including mobile IPTV services  (source: Infonetics Research).

–       While overall streaming video is more popular than downloading video, users still in the US lean towards downloading when it comes to long-form video content in particular (source: an IPSOS study summarized on Reelseo.com)

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–       Total videos viewed per month went up from 7.2 billion in Jan ’07 to 21.4 billion in July ’09. The number of online videos watched per viewer per month went up from 59 in Jan ’07 to 135 in July ’09. The number of minutes of video watched per average viewer went up from 151 minutes (2 hours 31 minutes) in Jan ’07 to 500 (8 hours 20 minutes) in July ’09 (source: comScore as reported on the VideoNuze web site).

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–       HD online revenue will reach $2.25 billion by 2012 (source: AKAMAI presentation at the Content Delivery Summit in NY May ’09).

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As you can see, the VoD business, which barely registered as a revenue stream 3 years ago, has almost overnight changed the content distribution business. I strongly believe that VoD has a great promising future.

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