The Global Video on Demand Market size was around USD 55 billion in 2019 and is projected to grow at 15% CAGR from 2020 to 2026.
Rapid development of high speed internet infrastructure and increasing number of on-demand service providers are the major factors driving the growth of video on demand service market. There is estimated to be 3.8 billion smartphones across the world i.e. 48% of global population owns a smartphones. This has been the primary factor of rise in VOD services. Although, high bandwidth requirement and high subscription costs for some of the service providers are restraining its growth.
Major Players in the global Video on Demand market are You Tube, Netflix, Amazon Prime Video, HBO, Vudu, Hulu, IndieFlix, Vubiquity, Disney Hotstar, iQiYi and Vulu.
Hulu has announced free live news in partnership with ABC News to its subscribers during this period. By Feb 2020, Hulu had 31 Million paid subscribers as compared to 61 Million for Netflix for similar time frame. Netflix reached its all-time high in terms of traffic and screen time during the weekend of the first week of lockdown in US in March. Netflix has announced it would be reducing the bandwidth consumption by 25% in Europe in order to meet the rising demand. While Netflix clearly wants to maintain the ad-free user experience, he thinks it will follow in the footsteps of Hulu which offers an ad-free, ad-funded and hybrid model.
Newly launched SVoD services by OTT are not only experimenting with the programming but also offering attractive proposition to the creators & studios, which are not offered by other competing platforms. Along with focusing on producing diverse quality content, smaller subscription based streaming platform also need to focus on customer acquisition and improving service reliability. Further in future they are ready to the 5G wave, Low latency, infinite AD creative, dynamic AD insertions, etc.
Over the past few months since the COVID-19 outbreak, the public has been kept in lockdown the number of countries enforcing home quarantine is increasing. Almost one third of the global population is in lockdown as of April 20th 2020. This has resulted longer screen time of public on mobile phones and other electronic devices that support streaming platforms. Thus the quarantine period has indirectly effected enormous growth of VOD services. Due to closed down of theatres many distributors are approaching the online platforms to make the movies reach out to audience and thus increasing the demand for these services. It has been estimated that there could be an increase in 60% in the amount of content watched in this period.
Market Segmentation of VOD market has divided into based on type, device, application and Region. On the basis of type it has split into IPTV, OTT and Pay-Tv. On the basis of device used it has split Mobile, PCs, tablets and TV. By application it has been Education & training, Heath & fitness and media & Entertainment. Based on region it has Europe, U.S, ASPAC and Row. Among theses USA has been the largest revenue generating region. The shift of people from traditional cable and satellite network and increased number of high quality contents available on online platforms has attracted more people towards on demand services. The rise of US based streaming platforms is another major factor affecting the market. During the ongoing lockdown period it is estimated that people are spending almost 6-8 hours a day with the media, hence there is a huge surge in the daily screen time of these services.