David Farnor | On 01, Aug 2014

The UK video on-demand market has grown a whopping 400 per cent in the last decade, according to the latest BFI Yearbook.

The annual report on the British film industry – here, and always worth a read – reveals that video on-demand revenue totalled £323 million in 2013. That figure has, unsurprisingly, rocketed compared to 2002, but has also expanded 37 per cent from the previous year, a sign of how rapidly the growth is now occurring.

How are people watching videos on-demand? The BFI offers some insight into viewing habits.

£193m of that sum, for example, was generated by online VOD sales, ahead of £130m from TV-based VOD (e.g. renting a film on a Sky box). In keeping with previous reports from the BVA, subscription makes up the the majority of activity, accounting for 49 per cent of sales compared to digital retail (29 per cent) and digital rental (22 per cent).

Which service is most popular? Apple, perhaps unsurprisingly given iTunes’ established position for several years, is the highest earning provider, but (according to Ofcom stats quotes by the BFI) is the fourth most-used by viewers. Number one? YouTube.

An unexpected discovery is that LOVEFiLM is more used than Netflix, making up 25pc of activity (up from 23pc in 2012). Netflix is only just behind, though, on 24 per cent, up from 19 per cent in 2012 – a rapid rate of growth compared to its rival. Indeed, Netflix is the fastest growing provider, almost doubling its non-USA revenues from $476m to $775m. (With Amazon’s rebrand earlier this year adding pay-per-view sales to its subscription business, it will be interesting to see what the market looks like in a year’s time.)

The number of films being watched online is also on the up, with viewers downloading or streaming a median of 5 movies between March and May 2013, up from 2 between April and June 2012. But are viewers paying? In 2013, 28 per cent of film viewers paid for all their streaming, while 58 per cent streamed all their content for free. In 2012, 32 per cent of viewers paid for all of their content and 50 per cent paid for none. Nonetheless, the proportion of people spending money on any of their content has risen 49 per cent to 72 per cent.

The conclusion? It’s hard to say. And that’s the main problem with the video on-demand industry: data is so highly guarded that a lot of figures are simply kept from public knowledge.

Compare it to the physical video information offered up by the BFI. Exactly 162 million videos were sold in 2013, generating £1,438 million revenue – down 9 per cent from 2012. DVDs accounted for 82 per cent sales in terms of volume, ahead of the more niche market for Blu-rays.

As well as overall sales quantities, the BFI can even tell you specifically which videos were popular. Skyfall sold the highest number of copies in 2013, followed by The Hobbit: An Unexpected Journey, Les Miserables, The Twilight Saga: Breaking Dawn – Part 2 and Star Trek Into Darkness.

The Raid was the most popular foreign title, while, impressively, Amelie managed to creep into the top 10 foreign language chart despite being released years ago.

Looper was the most-rented titled (of a total of 62 million), followed by Ted, Jack Reacher and Taken 2.

Which was the most popular streaming title in 2013? We have no idea. Despicable Me 2 broke home entertainment records for Universal, but that was only announced by the studio themselves – and still did not include the number of digital downloads. A Field in England was released simultaneously across DVD, TV, digital and cinemas, but while Film4 and Picturehouse Entertainment released initial data – there were more than 1,000 purchases of the film on Film4OD and iTunes – more detailed information is still kept under lock and key. TorrentFreak can reveal how many people are pirating titles, but the emerging VOD industry is still mustering confidence, with distributors and providers reluctant to reveal their inner workings to the wider world – or their competitors. Are they embarrassed because it’s doing badly? Worried because it’s doing so well and could threaten other media?

Even upcoming release dates are either not publicised, with titles slipping onto Google Play unannounced, or held under embargo. The sharing of this kind of data is a key step in digital becoming an established part of the industry.

The BFI Yearbook is a fascinating read. It shows that video on-demand is on the up, albeit still behind DVDs, which the BVA and ERA have already revealed. It notes that Netflix has almost doubled its revenues in a year, although Netflix itself regularly announces more in-depth figures. Almost all of the VOD stats in the report confirm things we know already, instead leaving us with other questions about what they might mean.

The one thing the BFI report tells us about video on-demand? There is still a lot more left to be told.

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