Rising popularity of on-demand services and online proliferation in emerging nations are set to fuel spectacular growth for the VOD market over the near future, says Future Market Insights (FMI).
The analyst calculates that the global video-on-demand market will reach a value of $263 billion by 2016, up from $207 billion in 2014. Demand for pay-TV services will continue to remain strong during the forecast period 2014-2020.
Looking at particular hotspots, the research pinpoints North America and Western Europe as the two largest markets in the global VOD market. The North America VOD market is expected to surpass the US$100 billion mark by the end of this year. Proliferation of connected devices and increased spending on video services is expected to fuel the market in North America in the near future. Pay-TV services account for the bulk of the revenues in North America as well. Valued by FMI at $91.6 billion in 2014, the pay-TV services market in North America is expected to reach $103 billion by the end of 2016.
However, Asia Pacific, which currently has a 13% share in the global VOD market, is expected to represent nearly a quarter of business by 2020. Moreover, FMI expects Asia Pacific to surpass Western Europe as the second-largest VOD market by 2020. FMI sees the VOD market in Asia Pacific Excluding Japan (APEJ) as expanding at a robust pace and by 2020, the market is expected to reach $80.5 billion. Strong demand for pay TV services is expected to fuel the market in APEJ in the next five years.
Looking forward, the research adds that future popularity of pay-TV services, especially digital cable services, is increasing on account of deployment of 4K Ultra HD technology. It notes that service providers are focusing on clubbing together several advanced technologies, such as ITV and DVBS-2 based MPEG-4 video format with HD DTH. FMI believes that integration of these technologies has given consumers a broad array of options to choose from, increasing the pay-TV subscriber base.