Video on-demand Market Analysis and Profitability
Analyzing the relevant markets before embarking on an entrepreneurial journey is intensely crucial. Market analysis does not only provide the consumer demand for services. It also determines the strength of competitors. This brief article shares video on-demand market analysis by utilizing reliable and valid sources of information.
The market size of $58.3 billion measured at the end of 2018 is up from $41.9 billion in 2015. With the current average growth rate, the VoD market will cross $91 billion mark.
A couple of factors explain this incredible growth
- Convenience: Video on-demand services allow subscribers to watch their favorite shows when they want it – unlike cable or satellite TV which offers fixed-time broadcast only. The consumers can choose to be subscribers or make payment for each show individually.
- Cost effectiveness: Consumers can control data usage. The cost of VoD varies directly with consumption of data. With excessive facilitation of time management, the cost to benefit ratio is very small. Although subscribers get a cost effective substitute, the profit margin for VoD exceeds that of Cable and Satellite TV devices significantly.
The pace with which Video on-demand industry is growing disallows market to reach saturation. While new on-demand services startups are emerging, the demand is still very high. Some regions are only beginning to introduce this on-demand model. The regions with low per-capita income tend to avail subscription video on-demand more than transactional model.
Apart from socio-economic situations, geography is also shaping consumer behavior. The behavior varies in different regions as residents of developed countries are more likely to adopt VoD model. Nevertheless, the developing countries are also depicting a remarkable interest toward replacing the existing TV broadcast infrastructure.
Which VoD services are most profitable?
The geographic region plays a vital role in revenue generation. The YouTube-like model, called advertisement supported video on-demand (ASVoD) model, is best for areas with low average annual income. A significant share of subscription video on-demand revenue generates in North America and Western Europe. However, ASVoD in developed regions are also performing well.
Transactional VoD model is the third in line which requires consumers to pay for each video that they watch. This pay-per-view model is usually acquired by business offering academic and corporate courses. TVoD is popular among college students and corporate employees.
The growth of VoD indicates that cable and satellite TV will be obsolete in North America by 2030 or even earlier. Thus, the future of video on-demand businesses is highly sustainable if they ensure an efficient tech infrastructure.
Acquiring the requisite technologies
This video on-demand market analysis demonstrates highly promising growth and consumer demand. The startups investing in this sector are likely to attain remarkable profits. However, the efficacy of technology is essential. There are scores of startups which failed to sustain beyond first year of their operations for inefficient software systems.
The white label VoD platform of ODTap enables you to offer SVoD, TVoD, ASVoD, or any other video on-demand model. You can rebrand our platform and offer a combination of these VoD services to consumers. Contact one of our experts right now.