The global VOD market is predicted to hit $263 billion by next year, up from $207 billion in 2014, according to new research.
A study from Future Market Insights predicts that demand for pay-TV services will remain strong in the coming five years, but that the rising popularity of streaming services, supported by increasing Internet access in emerging countries, will fuel VOD growth.
North America and Western Europe are the two largest markets in the global VOD market.
The North America VOD market is forecast to surpass the $100 billion mark by the end of this year, thanks to the proliferation of connected devices and increased spending on video services.
Pay-TV services account for the bulk of the revenues in North America: the sector is valued at $91.6 billion in 2014 and is forecast to grow to $103 billion by the end of 2016. Cisco, SeaChange, Massive, and Pace are highlighted as the key software providers in the VOD market, with Netflix, Amazon, iTunes, and Hulu credited as the main content providers.
The Western Europe VOD industry is growing at an annual rate of over 4 per cent, with a current valuation of $55.6 billion by the end of 2015. Key players in Europe include Agama Technologies, Exterity, Youview, BBC, and Orange.
But Asia Pacific’s market is growing: the region currently has a 13 per cent share of the market, a share that is expected to expand to over 22 per cent by 2020. FMI expects Asia Pacific to surpass Western Europe as the second-largest VOD market by 2020.
The region, excluding Japan, is predicted to hit $80.5 billion in the next five years, with the proliferation of Internet and rising smartphone ownership expected to drive the adoption of VOD services. China and India, two of the fastest growing economies, are witnessing high demand for phones, a key factor contributing to the demand for VOD services. The key players in the APEJ VOD services market include CombiTel, Biditech Solutions, CNTV, and Singtel.
The sustained interest in pay-TV services is attributed to the ongoing rollout of 4K technology, as traditional television providers focus on offering advanced technologies to hold on to – and attract – consumers. The streaming world, though, is also stepping up its UHD game, with both Amazon and Netflix releasing their original content in 4K and Roku launching a new Ultra HD box.