July 15, 2016 | Authored by: Vindicia Team
Worldwide SVoD markets expected to increase
It's hard to imagine that video on demand services haven't completely engulfed the world, but there is still room for an exponential amount of growth. This is especially true in foreign markets like China, India and Brazil. If expectations are correct, then companies providing video on a subscription business model should definitely keep an eye on these areas.
"The number of SVoD viewers grew 56 percent between 2014 and 2015."
SVoD in Europe to double over four years
A report from the European Broadcasting Union found the number of European households subscribing to VoD services is expected to hit 50 million by 2020. Currently, almost 11 percent of Europeans subscribe to online video content, led by users in the U.K., the Netherlands and Ireland. The report also found that the number of subscribers grew 56 percent between 2014 and 2015.
One might expect Netflix to completely dominate this region. While the streaming service holds 52 percent of the current market, Amazon is catching up while competition from other companies is also increasing.
Sports and SVoD in China
Forecasts from Pyramid Research expect Chinese SVoD users will grow to 28.3 million in number this year, generating over $1.2 billion in revenue. This outlook is due to the increasing number of fiber internet connections within the region, which catapulted from 66 million to 117 million between 2014 and 2016.
Most of the interest in SVoD comes from the access to exclusive content - sports games, in particular. Chinese subscribers enjoy the real-time interaction many SVoD services offer, and the nation's leading over-the-top content providers offer more English Premier League games than other video services, most notably free-to-air platforms.
"It is fascinating to see that OTT plays a bigger role in securing exclusive rights for paid sports content in China," said Hansang He, an analyst at Pyramid Research. "As FTA platforms find it more challenging to pinpoint sports viewers to shore up advertisement revenue, OTT players will seek further differentiation with premium sports, which can be as valuable as extensive film and television libraries."
Video slow but promising in India
Meanwhile, online video revenue in India recently hit $213 million, putting it far behind the $9 billion pay-TV market, Media Business Asia reported. However, OTT should pick up speed in the region as more consumers and businesses gain access to high-speed internet, and the market is expected to hit $125 million by 2020. In addition, several pay-TV broadcasters are adding video through an online subscription management model. Star, for example, recently announced a streaming service that provides HBO original programming for $3 per month.
"India is still a new market for SVoD and other forms of content."
India is still a new market for SVoD and other forms of content, meaning businesses will have more luck if they target niche interests rather than attempt to appeal to all viewers. Taking the latter approach puts them in direct competition with more established broadcasters with larger budgets for both programming and advertising. Still, Media Business Asia pointed out content providers will have to create an environment where customers are comfortable with online payments if they hope to see the same success as streaming video in other countries.
SVoD drives content in Latin America
Latin America is also expected to see exponential growth over the next few years. A report from Digital TV Research anticipates the market will jump from $1.1 billion in 2015 to $3.6 billion in 2021. Brazil and Mexico will lead this growth, adding $938 million and $437 million, respectively.
Over this time period, more Latin American households will subscribe to SVoD services, bringing the total to 24 million homes. These subscriptions will contribute 58 percent - $2.1 million - to the market by 2021.
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