VoD disruption spreading across the globe

Video-on-Demand (VoD), essentially the practice of receiving visual content at any time by request of the user, is spreading rapidly across the world, demonstrating the demand for specific content by entertainment-hungry consumers. iTunes and Netflix have looked to corner much of the world market in this space but there is plenty of room for new players to drive uptake in emerging economies that are still being contested. Sell businesses are seeing growing demand for VoD businesses able to innovate and attract new revenue streams. For example, Lovefilm, a VoD service originally evolving from the London corporate finance space, attracted Amazon as a major investor.

Growing household access to the web has permitted consumers access to an ever-expanding range of digital media, which has offered opportunities to content providers, whether in the form of over-the-top (OTT) access (meaning through the public Internet) or IPTV (delivered through a service provider’s own infrastructure). The VoD sector is being driven by the global rise in broadband provision.

In mid-2013, the European Audiovisual Observatory counted over 3,000 VoD services in the region, which are increasingly squeezing traditional TV-delivery segments. Much like Internet retailing and online adspend, there is seldom a market globally not seeing an increase in the value of its domestic VoD sector. The entire European, North American and Latin American regions, and even hotspots in Africa, are seeing rapid uptake of digital video offerings due to the increasingly lower tariffs of broadband connections and, in the case of OTT, the removal of middlemen and extra equipment costs in the subscription process.

The biggest sign of VoD demand has been the expansion of US digital providers Netflix and Apple into other markets, including most developed countries and emerging economies such as Brazil. Similarly, broadband Internet providers are increasingly rolling out IPTV services to drive bundled packages and their own competitiveness. In early 2013, China Telecom claimed 22.0 million IPTV subscribers, the largest figure globally, although still well behind the 221 million cable TV homes in the country.

As IPTV and OTT services have significantly eaten into the market share of traditional pay-TV providers, their response has been to launch competing VoD offerings. Brazil’s Globo and the UK’s BSkyB have been some of the largest entrants into the digital media market, while terrestrial channels have rolled out free content online. There remain considerable opportunities for Internet Service Providers (ISPs) and broadcasters to attract web traffic and subscribers by launching Internet-based video content.

Nonetheless, a major obstacle to continued market expansion, aside from broadband under-connectivity, is the lack of a regulatory framework for VoD that already exists for some digital and broadcasting services, as well the issue of content rights that has to be uniform across borders and regions. Analysts expect this to be a growing issue in both Europe and Latin America, where the segment is maturing rapidly and where regulations are yet to catch up.

 

 

 

 

 

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