Video on Demand (VoD) Market

Market Overview

The global video-on-demand (VoD) market size was valued at USD 96.09 billion in 2023. It is estimated to reach USD 286.36 billion by 2032, growing at a CAGR of 12.9% during the forecast period (2024–2032). In recent years, owing to rapid digitization worldwide, there has also been a surge in the global expansion of high-speed internet services, particularly in emerging economies, which has increased the accessibility of VoD platforms. This is estimated to augment the global market growth. Moreover, there has been a rise in the launch of new VoD platforms, thereby creating market expansion opportunities.

Video on Demand (VoD) is a digital content delivery system that gives users access to and watch video content whenever they choose, rather than at scheduled broadcast times. It provides various movies, TV shows, documentaries, and other video content that users can stream or download over the internet to their devices, such as computers, smartphones, tablets, or smart TVs. VoD platforms offer various models, including subscription-based services like Netflix and Amazon Prime Video, transactional services like iTunes and Google Play, and ad-supported services like YouTube. Users enjoy the flexibility of choosing what to watch and when without being tied to traditional TV schedules. VoD has revolutionized the entertainment industry, offering audiences worldwide convenience, choice, and personalized viewing experiences.

Highlights

• TV shows dominate the content type segment
• Subscription-based VoD dominates the monetization model segment 
• North America is the highest shareholder in the global market

Market Dynamics

Global Video-on-Demand (VoD) Market Drivers

Rise in Internet Penetration

The proliferation of high-speed internet connectivity globally has emerged as a significant driver fueling the growth of the Video on Demand (VoD) market. For instance, ITU estimated that almost 5.4 billion individuals, accounting for 67% of the global population, were using the Internet in 2023. This represents a 45% surge in the number of people who have gained access to the Internet, with an estimated 1.7 billion individuals going online.

As internet penetration continues to expand across both developed and developing regions, more consumers gain access to online streaming platforms, contributing to the growing subscriber base of VoD services. Moreover, advancements in wireless technologies, such as 5G, promise even faster and more reliable internet connections, enhancing the user experience for VoD consumers. This widespread access to high-quality Internet enables VoD platforms to reach a broader audience, transcending geographical barriers and driving adoption rates, ultimately propelling the growth of the VoD market globally.

Global Video-on-Demand (VoD) Market Restraint

Regional Licensing Restrictions 

Regional licensing restrictions refer to agreements between content owners and VoD platforms that limit the availability of certain titles to specific geographic regions. These restrictions pose a significant challenge for VoD providers as they strive to offer diverse content libraries to their global audience. Due to licensing agreements, popular movies, TV shows, and other content may only be accessible in certain countries or regions, leaving viewers in other areas with limited choices. This fragmentation can frustrate consumers and hinder the growth of VoD platforms, particularly in regions with limited access to localized content. Moreover, navigating the complexities of regional licensing agreements adds administrative burdens and costs for VoD providers, impacting their ability to expand into new markets and offer competitive subscription packages. This is estimated to restrict the global market growth.

Global Video-on-Demand (VoD) Market Opportunities

Technological Advancements 

The recent surge in the demand for VoD services has led to a rise in the launch of novel VoD platforms. For instance, in January 2021, Maala introduced a new Video-On-Demand (VoD) channel that showcases over 50 short videos in both English and Hebrew. The channel provides innovative digital content showing individuals at the forefront of responsible and sustainable business practices in Israel and worldwide. The channel will be a prominent platform for reciprocal education and showcasing the frontrunners in such areas.

Furthermore, in April 2022, Wowza Media Systems introduced Wowza Video, a comprehensive video platform designed for creating essential applications in the corporate sector. Wowza Media Systems is a well-established and dependable company known for its dependable and scalable video solutions. This comprehensive solution enables enterprises to integrate live streaming and video on demand (VOD) into their products and services, enhancing their offerings with video content. Wowza's latest iteration of its cloud-based streaming service integrates live streaming, VOD, and content management system (CMS) functionalities into a unified platform, catering to organizations seeking to leverage the potential of video content. Consequently, this is estimated to create opportunities for market growth.

Regional Analysis

Based on region, the global video-on-demand (VoD) market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

North America Dominates the Global Market

North America is the most significant global video-on-demand (VoD) market shareholder and is expected to expand substantially during the forecast period. North America dominates the Video on Demand (VoD) market, driven by factors such as widespread internet penetration, a tech-savvy population, and a thriving entertainment industry. The region boasts a mature digital infrastructure, facilitating seamless streaming experiences for consumers across various devices. Although the current level of internet access among Americans is already substantial, it is projected to increase further. According to Forbes, over the next five years, the proportion of Americans using the Internet will rise from 94.6% to 98%. This expected increase results from the continuous trend towards greater digital connectivity and the increasing incorporation of internet-based technology into everyday life.

Additionally, in North America, VoD platforms have become deeply ingrained in everyday media consumption habits, with streaming services like Netflix, Amazon Prime Video, and Disney+ leading the market. These platforms offer vast content, including movies, TV shows, documentaries, and original programming, catering to diverse audience preferences. Moreover, North America serves as a hub for content production, with major Hollywood studios and production companies headquartered in the region. This concentration of talent and resources fuels the creation of high-quality content, driving viewer engagement and subscription growth for VoD platforms. Regulatory frameworks and industry standards also shape the VoD landscape in North America, influencing content licensing agreements, data privacy practices, and competition dynamics within the market. Thus, North America remains a key driver of innovation and growth in the global VoD industry.

The Asia-Pacific region is a burgeoning frontier in the Video on Demand (VoD) market, characterized by rapid digitalization, a burgeoning middle-class population, and increasing internet penetration. With diverse cultures and languages, the APAC region offers immense opportunities and challenges for VoD providers. Moreover, government initiatives and regulations also significantly shape the VoD landscape in the APAC region. For instance, content censorship and licensing regulations in China influence content offerings and distribution strategies for VoD platforms operating in the country.

Furthermore, the launch of novel VoD platforms by the key players is estimated to create opportunities for market expansion. For instance, in February 2019, Shemaroo Entertainment introduced a new type of entertainment called ShemarooMe, a digital video platform for on-demand viewing of the studio's content. Shemaroo currently possesses a strong digital presence due to its extensive range of offerings on YouTube, a platform that boasts 250 million active viewers in India every month. ShemarooMe offers consumers a selection of seven categories, including 'Bollywood Classic,' 'Bollywood Plus,' 'Kids,' 'Bhakti,' 'Ibaadat,' 'Gujarati,' and 'Punjabi.'

Segmental Analysis

The global video-on-demand (VoD) market is bifurcated into content type, monetization model, and device compatibility.

Based on content type, the global video-on-demand (VoD) market is segmented into TV shows, music, sports, kids, movies, original content, and others. 

The TV shows segment dominates the global market. VoD platforms have become the go-to destination for binge-watching entire seasons of popular TV series, offering convenience and flexibility to viewers. This segment encompasses various genres, from dramas and comedies to reality shows and documentaries, catering to varied audience preferences. One notable trend within the TV shows segment is the emergence of original programming produced by VoD platforms. Streaming giants like Netflix, Amazon Prime Video, and Hulu invest heavily in creating exclusive content to attract and retain subscribers. Original series like "Stranger Things," "The Crown," and "The Handmaid's Tale" have garnered critical acclaim and loyal fan bases, driving subscriber growth for these platforms. Moreover, VoD platforms leverage data analytics to understand viewer preferences, enabling them to curate personalized recommendations and tailor content offerings, enhancing user engagement and satisfaction within the TV show segment.

Based on the monetization model, the global video-on-demand (VoD) market is bifurcated into subscription-based, transactional, ad-supported VoD. 

The subscription-based VoD segment is estimated to own the highest market share. The subscription-based video-on-demand (VoD) segment represents a dynamic and rapidly growing sector within the digital entertainment landscape. Characterized by services such as Netflix, Amazon Prime Video, and Disney+, this model offers consumers unlimited access to a vast content library for a fixed monthly fee. Subscribers enjoy the flexibility to stream a wide range of movies, TV shows, documentaries, and original productions across multiple devices without additional charges. One of the key advantages of subscription-based VoD is it fosters long-term relationships with customers by providing a consistent and satisfying viewing experience.

Moreover, these platforms leverage data analytics and artificial intelligence to offer personalized recommendations, enhancing user engagement and retention. As competition intensifies, subscription VoD providers differentiate themselves through exclusive content acquisitions, strategic partnerships, and innovative features like offline viewing and family plans. Thus, the subscription-based VoD segment continues to thrive, driven by evolving consumer preferences, technological advancements, and the global expansion of digital infrastructure.

Based on device compatibility, the global video-on-demand (VoD) market is bifurcated into smartphones, smart TVs, gaming consoles, tablets/laptops, and others.

With the widespread proliferation of smartphones globally, particularly in emerging markets, VoD providers have a vast and ever-expanding audience at their fingertips. Smartphones offer unparalleled convenience, enabling users to access VoD platforms anytime, anywhere, and on-the-go. This accessibility aligns perfectly with the modern consumer's desire for instant gratification and flexibility in entertainment consumption. Additionally, advancements in mobile technology, such as high-definition screens, improved processing power, and faster internet connectivity, have enhanced smartphone viewing experience, rivaling traditional TV screens.

VoD providers can capitalize on this trend by optimizing their platforms for mobile use, offering intuitive interfaces, seamless streaming experiences, and personalized content recommendations tailored to the preferences and behaviors of smartphone users. Furthermore, partnerships with mobile carriers and device manufacturers can facilitate pre-installed apps, promotional offers, and bundled subscriptions, further driving adoption and engagement in this lucrative segment.

Recent Developments

• September 2023- SEG Media introduced Jazz+, a streaming service that provides live games, exclusive series, and other on-demand content directly to fans of the local Utah Jazz team.
• December 2023- 1&1, a telecoms operator from Germany, formed a partnership with Zattoo, a Swiss TV-as-a-Service provider, and Rakuten TV, a streaming platform, to introduce their own video-on-demand (VOD) service called 1&1 Cinema.