Global Trends in Video-on-Demand Technology

  • December 2013
  • -
  • Frost & Sullivan
  • -
  • 58 pages

Demand for Video Anywhere, Anytime Drives the VOD Market

With rising demand for video-on-demand (VOD) content on multiple devices and made accessible at any time, the VOD industry has grown exponentially in the last 3 years. This market insight covers emerging global trends in this industry. It measures VOD content by number of subscribers and titles streamed, and it is further segmented by the different media that Paid VOD is offered through, including cable, Internet Protocol television (IPTV), satellite, and the Internet. The study also includes segmentations by encoding format. The base year is 2012, and the study period is from 2012 to 2018.

Executive Summary

•This market insight covers global video-on-demand (VOD) trends, providing in-depth analyses by number of subscribers and by number of titles steamed for the cable, Internet Protocol television (IPTV), direct-to-home (DTH)/satellite, and Internet service segments.
•The VOD market is driven primarily by growing demand to view movies and television (TV) shows at a time convenient for the viewer rather than during the scheduled broadcast time. It is further, and more emphatically, driven by the growing demand to view desired video content at any time and on devices other than televisions, such personal computers (PCs), mobile phones, and tablets.
•This market insight provides forecasts for subscriber growth and increases in the number of titles streamed for each service segment. Furthermore, it provides market shares by subscribers for the total VOD market as well as for each individual service segments.
•In terms of subscribers, cable was found to be the greatest contributor to revenue. In terms of titles, the Internet segment was the largest contributor.
•Some of the biggest providers of VOD are Comcast, the Time Warner Company (TWC), Virgin Media, Orange TV, DirecTV, BSkyB, Netflix, Hulu, and Apple.
•North America is the largest region for the VOD market; it is followed by Europe, the Middle East, and Africa (EMEA) and Asia-Pacific (APAC). Based on overall VOD consumption, the United States, France, and the United Kingdom are the largest countries for this market.

VOD Market—An Overview

•VOD systems are defined as systems that enable users to watch long-form video content on demand, as opposed to this content being received through traditional live linear programming. VOD content can typically be classified into X categories: movies and catch-up TV programming.
•VOD can be received as part of a cable, satellite, or IPTV subscription, or it can be directly received via the Internet through an online video service provider. Videos can also be streamed on demand to mobile phones through mobile-specific services rather than through over-the-top (OTT) providers.
•The VOD market can be measured by number of subscribers as well as by number of titles streamed. This market insight examines the current status and growth of both subscribers and titles among the cable, IPTV, satellite, and Internet segments.
•Growing demand for access to entertainment (such as TV shows and movies) at any time and on any device selected by a viewer is one of the biggest driver for the VOD market.
•To address this demand and to curb illegal means of downloading/streaming content, studios and networks have established distribution and license agreements with individual vendors, such as Comcast and DirecTV. The success of these vendors in the VOD space is determined by the volume of titles they make available as well as the public awareness of and easy access to vendor Web sites.
•Most of these vendors cannot offer full penetration of services in countries outside of North America or in areas where content owners are currently reluctant to license content due to an immature piracy-protection atmosphere and limited revenue potential. Therefore, today, North America, followed by EMEA and APAC, is the largest market for VOD services.

Cable Segment
•The largest advanced market for cable Pay TV providers is the United States.
•Comcast is the leading provider and offers VOD through both its set-top boxes and its online offering, Xfinity; TWC is the second-largest provider of cable services. Together, Comcast and TWC contributed more than X% of the VOD content streamed globally in 2012, with Comcast serving over X billion streams in the same year.
•Other salient VOD providers in the cable segment include Kabel Deutschland, the biggest cable provider in Germany, and Numericable of France. Other vendors in this space include cable providers such as Cablevision Argentina and Net Servicos in Latin America, Canadian provider Rogers, and various other Eastern European providers as well as Chinese cable operators.

IPTV Segment
•An early innovator market, France remains one of the biggest global markets for VOD in the IPTV segment, with stalwarts Free and Orange TV (by France Telecom) accounting for nearly all IPTV subscribers in France and a sizeable chunk of the global market.
•The UK market, in which cable is relatively weak, is also seeing tremendous growth in IPTV, with providers such as Virgin, Sky, and British Telecom—as well as the YouView service—contributing to this growth. The US services U-Verse and FiOS are also experiencing solid growth.
•With VOD streamed over IPTV spreading to regions such as China, Frost & Sullivan expects to see many more Chinese operators among this list of providers in the nextX years.

DTH/Satellite Segment
•The United States was also the world’s largest satellite market for VOD in 2012, contributing more than X% to the number of global satellite subscribers. DirecTV on Demand and Dish Network are the leading satellite providers in the country.
•The emerging market for satellites in India include the US companies previously mentioned; the country’s biggest names in VOD are Dish TV, Tata Sky, Airtel, Sun Direct, and Reliance. With India’s satellite market expected to double in the nextX years, VOD will be a key competitive differentiator among DTH providers because their prices and offerings are similar.
•Satellite is also expected to gain significance in Latin America, in which rising middle-class incomes have led to rapid growth in the uptake of Pay TV services. Moreover, rugged terrains and scattered populations have made it difficult to lay down the cable and infrastructure required for cable services.

Internet Segment
•VOD content streamed over the Internet has experienced explosive growth, and, indeed, the Internet is the primary source of VOD content. Together, Netflix, which offers VOD subscriptions, and Apple, with VOD offered by title, have fundamentally disrupted how content is found, acquired, and experienced.
•Increases in the use of handheld devices, such as tablets and smart phones, and in the video capabilities of gaming consoles have created an environment for VOD accessed via the Internet to flourish.
•Owing to content licensing considerations, North America accounts for the majority of VOD in the Internet segment, but broadband-intensive countries, such as Japan, are significant consumers as well.
•Among vendors, in the United States, Amazon and Hulu are seeing their shares grow for VOD. Moreover, Amazon’s recently acquired LoveFilm is gaining ground in Europe.

Table Of Contents

Global Trends in Video-on-Demand Technology
Table Of Contents

Executive Summary 4
VOD Market Overview 6
Cable Segment 23
IPTV Segment 30
DTH/Satellite Segment 37
Internet Segment 44
The Last Word 51
The Frost and Sullivan Story 54

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