Madrid, April 26. (Press Europe) –
The video on demand (VOD) sector will overtake cinema and television within five years, according to the report “Video on Demand, Evolution or Revolution” by Professor Eduardo Erastorza of OBS Business School.
The study highlights that the video-on-demand sector has grown at a rate of 15.6% annually since 2017 and notes that it is “very difficult to define its boundaries and to set very clear boundaries using other communication tools.”
For this reason, he concludes, “this rapid development is a clear symptom of the total transformation that life has undergone in recent years.” Today, the level of VOD penetration into consumption habits is “clearly higher” in the most developed countries of the West, with the United States leading, followed by Canada, the United Kingdom, Germany and Norway.
However, the trend is a shift towards the East, where there is still a lot of room for growth, the two largest countries in terms of population are China and India, which have a population of more than 1.5 billion people each. “TV has become that device on which, among other things, we watch TV,” says Professor Erastorza.
It is the various forms of payment and advertising that make this sector profitable, but the report predicts that “the ever-changing reality will force us to reinvent these formulas and develop new ones, such as sponsorship or product placement.”
Subscription (SVOD) represents more than 85% of approximately $111,000 million in estimated 2023 billings for this segment. Next up, it’s PVOD or Push Video On Demand (Delayed Viewing of Recorded Content) with around 13,000 million.
The study predicts that, in the near future, as in the case of YouTube, “it will be common practice to pay a premium to not be bombarded with unexpected and frequent ads.”
NETFLIX, THE GREAT CHAMPION OF VIDEO ON DEMAND
It also reveals that the great champion of video on demand is Netflix, followed by Amazon Prime Video, Disney and Apple, all of which are located in the US.
Although one might think of it as an oligopoly controlled by Netflix and Amazon Prime Video, the report shows that each country usually has an “honorable exception”, such as Hulu in the US, Now TV in the UK, Tinvision in Italy or Movistar in Spain. Other players such as Disney or HBO are “fighting to increase their presence through a global strategy.”
Subscribed VOD users account for 62% among those who dedicate more than 6 hours per week, a multimillion-hour, multi-billion dollar business. Drama is the most requested content, followed by action movies, comedies, crime series, and thrillers. For their part, documentaries are still very well received.
On the other hand, the study shows that all of the platforms out there are “going strong” in the way of content. Thus, Amazon Prime Video has what purveyors would describe as a “very balanced” offering, with documentaries becoming increasingly important; Netflix dominates the production of its own content, especially series (2185 which has allowed it to achieve a “strong lead” in economic terms); Hulu is the company that brings North America the largest number of comedies and documentaries. And Disney, which is betting heavily on subscription viewing of animated films and series, has “unparalleled” characters and adventures from Pixar, Marvel and Star Wars.
Regarding the sector’s future prospects, he stressed that they are “necessarily optimistic”, as only the video game sector “shows strength such as content platforms and a promising future such as VOD”.
According to the forecast, the user will spend more money on VOD and the preferred method will still be subscription (subscription is expected to be 1,667 million, of which approximately 1,000 will be new). Within five years, VOD will overtake traditional television worldwide in consumption and will focus most of the budgets allocated to audiovisual production, in addition to cinema as well.