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Video on Demand (VoD) Service Market: Development Insight and Manufacturers Challenge Competitors

Video on Demand, commonly denoted as VoD, provides consumers a way to watch their desired movies and television shows as per their own convenience. VoD services work similar to the DVR services, which enables users to record their favourite content (shows and movies) or pause it in order to watch it as per their convenience. VoD services are provided by OTT streaming service providers as per ‘pay per view’ business model. This enables users to avail their favourite content and pay for it as per their usage.

VoD service enables users to access various type of movies and shows (irrespective of time) on demand. These include classic TV shows, television series, and movies from different decades, multi-ethnic entertainment, news, sports, and commercials. Although, VoD was originally started for movies access, with increasing demand to watch popular TV programmes including TV series and animated kids programs as per users’ convenience, VoD service providers expanded their offerings to include a diverse set of content programmes.

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The global VoD service market was valued at US$ 45.03 Bn in 2014 and is expected to expand at a CAGR of 8.3% during the forecast period (2016–2026). Shift in preference of viewers from television’s linear schedule to viewing content as per their convenience and increasing penetration of high speed Internet network in emerging nations are factors propelling market growth currently.

Currently, North America leads the market for animation content as part of VoD service. According to FMI analysis, the North America VoD service market, in terms of animation content, was valued at US$ 3.04 Bn in 2014 and is estimated to reach US$ 3.30 Bn by 2015 end.

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The dominance of VoD service market in North America is attributed mainly to the popularity of animation content due to the historic presence of animation content creators in this region, coupled with the lucrative deals offered by VoD service providers to attract customers and growing demand for animation series such as Ghostbusters, Batman and Avatar: The Last Airbender on VoD platforms, which in turn is propelling growth of the North America VoD service market currently.

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The market in Asia Pacific (excluding Japan) is anticipated to register the highest growth during the forecast period. This is primarily attributed to the growing subscriber base of high speed Internet services in the region, creating potential opportunities for VoD service providers, including Netflix, Hulu and Home Box Office, Inc. (HBO). In addition, rising smartphone and tablet penetration in emerging economies, such as India, China, Philippines and Indonesia, is expected to further pave way for growth of the VoD service market in the region during the forecast period.

Key players in the VoD service market include Netflix, Apple Inc., Comcast Corporation, Amazon Video (VoD), YouTube, LLC, Vudu, Inc., Hulu, Dish Network, Home Box Office Inc. and Sky UK Limited. Leading animation content creators in the market are The Walt Disney Company and Fox Entertainment Group.

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