New research from Informa Telecoms & Media reveals that in 2011, 435 million homes will take video-on-demand (VOD) or near-video-on-demand services, equivalent to 38% of the world’s TV households. These homes will generate revenues of US$11.4 billion.
The fifth edition of Informa’s
On-Demand TV report forecasts that Asia Pacific will account for 45% of on-demand subscribers by 2011, although significantly lower price-points mean the region generates only 12% of global revenues.
North America, meanwhile, will take 46% of revenues, from only 27% of subscribers.
The research has found that established methods of delivery, such as pay-per-view for sports and near-video-on-demand (NVOD) for staggered movie screenings via digital cable and DTH, will continue to dominate the on-demand sector for the next few years. Thereafter, true VOD, whereby subscribers can purchase programmes when they want, will come more to the fore.
Adam Thomas, author of the report, said: “Until recently the expectation was that technically superior VOD would quickly replace NVOD. But that hasn’t happened.
“Much of the VOD content available is free of charge and being used as a churn-reduction device. This strategy won’t last forever, but in the meantime the established NVOD business is being retained and developed while operators gradually ratchet-up the levels of paid-for VOD content.
“Added to this is the rise of the DVR, which dovetails nicely with a NVOD service, meaning they aren’t going anywhere for some time to come.”
| Global household forecasts by region |
| VOD/NVOD Households(000) |
2006 |
2011 |
| Asia Pacific |
25,737 |
194,246 |
| North America |
73,067 |
117,989 |
| Rest of the World |
54,501 |
122,373 |
| Total |
153,267 |
434,608 |
| Source: Informa Telecoms & Media |
In Europe, the UK is easily the leader in on-demand, generating US$480 million in 2006, almost double the second ranked country (France with US$241 million).
Many operators have made progress in upgrading their networks and consumers continue to embrace digital TV as well as high-speed internet. Moreover, telcos have continued to embrace the entertainment sector via DSL and FTTH.
| Global revenue forecasts by region |
| Revenues (US$ million) |
2006 |
2011 |
| Asia Pacific |
290 |
1,418 |
| North America |
2,081 |
5,201 |
| Rest of the World |
1,803 |
4,798 |
| Total |
4,174 |
11,417 |
| Source: Informa Telecoms & Media |
In recent key predictions looking at the year ahead, EMarketer forecast that VOD will be in 30% of US TV households by the end of the year and that DVRs will be in 30% of US TV households by 2009 (see Key Predictions For 2007).
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