Top Trends in the Video on Demand
Table of Contents
Exploring the Landscape of Video on Demand (VoD) Industry
Traditionally, the concept of “watching TV” involved being seated in front of a conventional television in your living room, anticipating the scheduled broadcast of your favorite show. However, the evolution of video on demand (VoD) programming has revolutionized this experience, granting viewers the ability to stream video content in real-time or download it from either a TV or an online platform. This paradigm shift is presenting lucrative opportunities for users, offering complete control over the programs they watch, regardless of their location or the devices they use for content consumption.
Anticipating significant growth, the Global Video on Demand Market is projected to reach an impressive USD 87.1 billion by the close of 2025. The surge in VoD users has been phenomenal, as evidenced by a survey conducted by the global market research firm Nielsen. Spanning 61 countries with 30,000 online respondents, the survey delved into global sentiments regarding VoD services and advertising models. A noteworthy 65% of participants acknowledged engaging with content on VoD platforms, encompassing both short- and long-form content. Join the VoD revolution and experience a world of limitless entertainment possibilities.
The Shift Beyond Viewing Habits: Transforming Advertising Models
The transformation extends beyond mere shifts in viewing habits; it encompasses a dynamic evolution in advertising models, propelled by advanced technologies that empower advertisers to engage a broader audience through innovative means. Conventional TV providers, including multichannel video programming distributors (MVPDs) and broadcasting networks, recognize the need to adapt their business models to align with the changing preferences of consumers. While it’s evident that traditional business models face challenges in a rapidly transforming landscape, the industry’s vastness encourages players to explore opportunities for expansion.
In this evolving landscape, two constants remain: Content continues to reign supreme, and customer habits persistently demand greater control over the customization of the viewing experience. Companies that successfully navigate this duality gain a competitive edge in the industry.
According to a survey, nearly one-quarter of participants opt to pay for shows through online platform subscriptions like Netflix, Hotstar, Amazon, and Hulu, as opposed to the 72% who pay cable providers for traditional TV content. North America and the Asia Pacific lead the VoD market, with 35% and 32% of participants, respectively, indicating payment to online service providers for streaming video content. In Europe, only 11% of online respondents reported using a VoD service provider, falling below the global average. On the flip side, around 21% of online respondents from Latin America and the Middle East and Africa (MEA) reported consuming content through online subscription models, highlighting the diverse patterns shaping the global VoD landscape.
- Empowering Viewer Control through Personalization
In the dynamic media and entertainment industry, the significance of professionally released, high-quality content has not diminished; rather, it has gained prominence. Customers, spoiled for choice, refuse to settle for mere streaming content. Notably, the focus is shifting from quantity to quality, emphasizing that superior content is key to sustained traction in the years to come.
- Revolutionizing Advertising Models with Personalized Approaches
The trend of personalized content extends to advertising, with advancements in addressable and programmatic advertising offering lucrative opportunities for marketers to target views more accurately. Surprisingly, 65% of global respondents, who once preferred ad-blocking, now intentionally engage with ads. While programmatic and addressable advertising show potential, broadband advertising holds equal importance, as both models serve distinct purposes, and one is not set to replace the other.
- Capitalizing on User Engagement Opportunities
In today’s digitalized landscape, content can instantly reach audiences, and passionate individuals, not just viewers, drive successful content. A noteworthy 58% of respondents engage with social networking sites while watching Video on Demand (VOD) content. Social media not only amplifies the buzz around content but also enhances the appeal of live TV. Nielsen’s study revealed that 68% of weekly Twitter activity occurs during live program airings.
- Smartphones Spearheading Digital Consumption
The surge in smartphone and tablet popularity has expanded the target audience for VOD providers, as broadband services and high-speed internet accessibility propel the adoption of VOD programming and content services. While users initially accessed VOD content on websites, the advent of smartphones and mobile devices has prompted service providers to develop dedicated applications, offering users seamless content streaming experiences.
Unveiling New Horizons in Video on Demand Growth
Exploring Opportunities for Cross-Industry Players in On-Demand Video Services
In 2018, the Motion Picture Association of America (MPAA) reported a global milestone where streaming subscribers (613.3 million) surpassed cable subscribers (556 million). Despite Netflix dominating the landscape, competitors from diverse industries have entered the arena, intensifying the competition.
For instance, in November 2019, Disney+ and Apple TV launched worldwide, with Disney+ gaining over 57.5 million subscribers by mid-2020. Apple TV+ invested USD 5 billion in original VOD content, with USD 300 million dedicated to the star-studded “The Morning Show,” becoming the most expensive online show, surpassing the final season of HBO’s “Game of Thrones.”
- The Revival of Shows and Localization Trends
Modern VOD content providers are turning to popular international formats for localized appeal. For example, Banijay Group India is adapting American reality shows like Survivor, Damages, The Mole, and Public Enemy for Indian audiences. Balancing authenticity with relevance in remakes proves a strategic challenge, promising more revivals and nostalgic content in the coming years.
- The Future Factors Shaping On-Demand Video Streaming
The next era of content consumption hinges on five factors: personalized services, revenue stream shifts, high-speed internet, value transition from content providers to platforms, and mobile devices as primary content sources. Success in the VOD landscape lies in engaging users with quality content, while telecom infrastructure remains pivotal for market expansion. Technology, particularly blockchain, addresses piracy concerns and enhances advertising impact. Integrating robotics and AI, as seen in features like ‘skip intro’ on platforms like Netflix and Amazon Prime Video, differentiates the user experience.
Smartphones and low data tariffs have solidified user-device connectivity, making personalized content crucial for mobile consumers. The industry’s shift from traditional revenue streams places value on platforms over content providers. As investors recognize the potential of digital content and advertising, OTT services emerge as a profitable investment, with a focus on personalization and emerging technologies to deliver unique consumer experiences. The evolving landscape underscores the key role of technology as a differentiator in the future of on-demand video streaming.
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