VoD Market Overview
The VoD sector continues to experience substantial growth, driven by the increasing availability of high-speed internet, advances in streaming technology, and changes in consumer preferences. According to Market Research, the global VoD market is expected to reach a value of USD 103.5 billion by 2023, at a compound annual growth rate (CAGR) of 15.5% between 2018 and 2023. This growth is explained by the high number of users. According to Statista, this number will rise to 2.83 billion in 2023 and should reach 3.44 billion in 2027.
To differentiate themselves, VoD platforms will continue to invest heavily in original content production in the near future. This trend has been prominent in recent years, with platforms producing high-quality series, movies, and documentaries exclusive to their channel. Original content will remain a key driver of subscriber growth and retention.
One way of obtaining original content is through live sports streaming. Live sports streaming has become a major growth driver for the VoD sector. Major sporting events and leagues have increasingly embraced streaming platforms to reach a wider audience and increase fan engagement. During 2023, the live sports streaming segment is expected to grow notably, attracting both traditional broadcasters and VoD platforms to secure rights and offer compelling sports content.
While the VoD sector has seen remarkable growth worldwide, there are notable regional variations. North America and Europe remain dominant markets, accounting for a significant proportion of the sector’s revenues. However, emerging markets such as Asia-Pacific and Latin America are experiencing substantial growth due to increased internet penetration and the availability of affordable smartphones. These regions are expected to be the main contributors to industry expansion in 2023 and beyond.
The Users’ Experience
To retain customers, VoD services will further refine their recommendation algorithms to provide users with highly personalized content suggestions. AI and machine learning technologies will play a crucial role in analyzing user preferences, viewing history, and demographic data to curate tailored recommendations, enhancing the user experience.
Streaming is available on many devices, with smart TVs, smartphones, tablets and other streaming devices becoming the main means of accessing VoD content. In 2023, it is predicted that more than 50% of VoD users worldwide will primarily use their smartphones for streaming. The convenience and mobility offered by smartphones, combined with the availability of dedicated streaming applications, have made them the preferred choice for many users.
Alternative Payment Methods in the VoD Industry
As the devices giving access to VoD platforms increase and improve, so do the means of payment. Traditional payment methods, such as credit and debit cards, are still the predominant in mature markets used, but both merchants and telecom operators, a key player in the VoD market, are implementing alternative payment methods to maximize their revenue streams. Services such as electronic wallets and Direct Carrier Billing are growing rapidly in this vertical. It also gives the opportunity to make in-app purchases more easily than with a credit card.
Telcos commonly provide content bundles along with their mobile contracts, which normally include subscriptions to streaming services. These bundles are often offered at a discounted price as part of the contract, and customers pay for them through their monthly phone bills. Since people are watching content on their mobile devices, carrier billing has become a favored way to buy or rent individual shows or movies. Carrier billing is particularly popular in developing regions for digital video content, especially Latam, South Asia and Africa.
Video-on-demand platforms continue to disrupt traditional media consumption patterns. Original content, regional variations, and the popularity of streaming devices are key factors shaping the industry landscape. In addition, the integration of live sports streaming is opening new opportunities for VoD platforms to meet the needs of sports fans. As we move forward, the VoD sector is set to see further innovation, compelling content, and increased global penetration, transforming the way we enjoy entertainment.
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