With rising demand for video-on-demand (VOD) content made accessible at any time, the VOD industry has grown exponentially in the last three years, driven by the growing demand to view desired video content at any time and on devices other than televisions, such PCs, mobile phones and tablets.
Frost & Sullivan says that to address multiscreen demand and to curb illegal means of downloading/streaming content, studios and networks have established distribution and licence 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 websites.
According to the firm, cable was the greatest contributor to revenue, with heavy hitters like Comcast, the Time Warner Company (TWC) and Virgin Media coming in as the largest VOD providers. But in terms of titles, the Internet segment was the largest contributor thanks to Netflix, Hulu and Apple.
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 telco Rogers, and various other Eastern European providers as well as Chinese cable operators.
Most operators can't offer full penetration of services in countries outside of North America or in areas where content owners are currently reluctant to licence content due to an immature piracy-protection atmosphere and limited revenue potential. Therefore, North America is the largest VVOOD market, followed by Europe, the Middle East and Africa (EMEA) and the Asia Pacific (APAC).
Based on overall VOD consumption, the United States, France and the United Kingdom are the largest countries.
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.
In the UK market, where cable is relatively weak, Frost & Sullivan says that there is 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 next few years.
Meanwhile, the emerging market for satellite in India will soon heat up; 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 coming 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.