Market Scenario
The global video on demand (VOD) market is expected to reach US$ 673.4 billion by 2031, up from US$ 215.7 billion in 2022, growing at a CAGR of 14.07% during the forecast period from 2023-2031.
The video on demand (VOD) market has experienced explosive growth over the past decade, and this trend is expected to continue in the coming years. With the proliferation of high-speed internet connectivity and the increasing adoption of mobile devices, consumers are shifting away from traditional TV broadcasting and towards online streaming services. As of 2021, the global VOD market had 1.1 billion subscribers, and this number is expected to grow to 1.5 billion by 2026. Moreover, North America is the largest market, with 308 million subscribers, followed by Europe with 229 million subscribers.
The growth of the market can be attributed to several factors. One of the primary drivers is the increasing adoption of mobile devices, which provides users with easy access to on-demand content on the go. Additionally, the demand for personalized content, such as movies, TV shows, and other programs, is driving the growth of the VOD market. The proliferation of high-speed internet connectivity has also contributed to the growth of the market, allowing for seamless streaming of high-quality content.
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Market Dynamics
Drivers:
Growing Preference for Convenience and Flexibility
The convenience and flexibility offered by VOD services are some of the primary drivers of the growth in this market. VOD providers have revolutionized the way people consume media by offering viewers the ability to watch their favorite shows and movies at any time and on any device. This level of convenience is highly valued by consumers, as it allows them to watch what they want, when they want, without being tied down to traditional broadcasting schedules.
Moreover, VOD providers offer a seamless experience across multiple devices, including smartphones, tablets, smart TVs, and game consoles. This flexibility in accessing content makes VOD services attractive to viewers who are always on the go and need to catch up on their favorite shows during their daily commutes or lunch breaks.
In addition, VOD providers leverage the data collected from users' viewing history to offer personalized recommendations for new content. This enhances the overall experience for viewers by allowing them to discover new shows or movies they might not have otherwise found, creating a more engaging and satisfying viewing experience.
Strong Content Variety and Original Programming
The variety and availability of content, including original programming, have been another major driver of the VOD market. VOD services like Netflix and Amazon Prime Video offer a vast library of content, including popular TV shows, movies, documentaries, and kids' programming. This wide range of content provides something for everyone and has contributed to the growing popularity of VOD services.
Furthermore, VOD providers invest heavily in producing original programming to attract and retain subscribers. Original programming is a way for VOD providers to differentiate themselves from their competitors and create a loyal customer base that can drive long-term growth. Popular shows like Netflix's Stranger Things, Amazon's The Marvelous Mrs. Maisel, and Hulu's The Handmaid's Tale have become cultural phenomena, driving subscriptions and creating buzz for the VOD providers that produce them.
Rapid Fragmentation and Competition to Challenge Market Growth to Some Extent
The highly competitive nature of the VOD market can be a restraint for VOD providers. With multiple providers vying for market share, the market has become fragmented, with consumers having to navigate a range of providers to access the content they want. This fragmentation can lead to customer churn as viewers switch between different providers to find the content they want, potentially leading to lost revenue for VOD providers.
Moreover, the cost of subscribing to multiple VOD services can be a barrier for consumers, limiting their willingness to pay for more than a few services at a time. This cost constraint may cause some viewers to forego subscribing to some VOD services altogether, opting instead for traditional cable TV or other forms of entertainment. As such, VOD providers need to focus on creating differentiated content and user experiences to remain competitive and attract and retain subscribers.
Segmental Analysis
By Services Type
The VOD market can be segmented into two categories: subscription-based services (SVOD) and professional services. SVOD services, such as Netflix, Amazon Prime Video, and Disney+, offer a large library of content for a fixed monthly fee. The SVOD segment has been the main driver of growth in the VOD market. The report forecasts that the number of SVOD subscriptions will reach 1.16 billion by 2025, up from 642 million in 2019.
The success of SVOD services can be attributed to several factors. Firstly, these services offer a vast selection of content, including original programming, which attracts and retains subscribers. Secondly, the convenience of streaming on-demand content on any device at any time has become increasingly appealing to consumers, especially with the growth of mobile devices. Additionally, the lower cost of SVOD services compared to traditional cable TV has made them more accessible to a wider audience.
By Subscriber Type
Based on subscriber type, VOD market is segmented into residential and commercial subscribers. The residential segment is expected to dominate the VOD market and generate over 62% of market revenue in the coming years. This is due to several factors such as the increasing popularity of on-demand content among consumers, the convenience and flexibility of VOD services, and the growth of mobile devices.
Consumers have increasingly adopted on-demand content, with VOD services providing access to vast libraries of movies, TV shows, and other content. Original programming from providers like Netflix and Amazon has further attracted a loyal customer base, driving long-term growth. Moreover, the convenience and flexibility of VOD services have also contributed to the residential segment's dominance in the market. Viewers can watch their favorite shows and movies at any time and on any device, offering the ability to fit entertainment into their busy lives. Additionally, the growth of mobile devices has made VOD services more accessible to viewers on the go.
By Application
Based on application, travelling and gaming to capture more than 26% revenue share of the global VOD market. The gaming segment is a rapidly growing market for VOD services. With the increasing popularity of online gaming, gamers are looking for new ways to access content related to their favorite games. VOD services provide gamers with a convenient way to access game-related content, such as trailers, reviews, and walkthroughs. Moreover, VOD providers are now producing original content focused on gaming, such as documentaries and web series, which attract gaming enthusiasts.
The travel segment is also a significant market for VOD services. With the growth of the travel industry, consumers are looking for ways to access travel-related content, such as destination information, travel guides, and documentaries. VOD services provide travelers with a convenient way to access this content, allowing them to plan their trips and get inspired by new destinations.
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Regional Analysis
Europe is the second-largest VOD market in the world, after the United States. The market has been growing rapidly in recent years, driven by factors such as the proliferation of high-speed internet connectivity, the increasing adoption of mobile devices, and the demand for on-demand content. The European VOD market is expected to reach $151.54 billion by 2030, up from $50.86 billion in 2021. Moreover, the number of VOD subscriptions in Europe is expected to reach 131 million by 2025, up from 75 million in 2019.
One of the primary drivers is the increasing adoption of mobile devices. In 2020, the number of smartphone users in Europe was estimated to be over 450 million, and this number is expected to grow to over 500 million by 2024. This growing number of smartphone users is fueling demand for mobile-first video content, which is becoming increasingly popular among viewers. Another driver of the VOD market in Europe is the increasing popularity of original programming.
VOD providers are investing heavily in producing original content to attract and retain subscribers. European VOD providers such as Netflix, Amazon Prime Video, and Disney+ are producing high-quality, locally produced content that appeals to European audiences. For example, Netflix's German-language series "Dark" has become a global sensation, and Amazon's "The Grand Tour" is a popular automotive show that appeals to audiences worldwide.
Moreover, government support for the VOD industry is also driving growth in the European market. For example, the European Union has launched the Creative Europe program, which provides funding for the production and distribution of European audiovisual works, including films, TV series, and video games. This program is helping to support the growth of the European VOD industry and promote European cultural diversity.
List of Key Companies Profiled:
Market Segmentation Overview
By Service Type
By Platform
By Content Type
By Revenue Model
By Application
By Subscriber Type
By Region
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