Demand for Video on Demand to Mature as Traditional Media Loses Substantial Market Share to Digital Formats

A senior market analyst at Future Market Insights discusses the latest changes in the video on demand (VoD) market and the key strategic activities of service providers to optimally utilize unexplored opportunities.

Across the globe, media content is being increasingly generated and proliferated in digital formats. Media consumers have been given access to a virtually unlimited choice of content, through the emergence of numerous service providers such as Amazon, Hulu, Netflix and many more, that are increasingly challenging the dominance of television services on a global scale, which bodes well for the future of the video-on-demand market.

How has the proliferation of mobile devices affected video on demand services?

 Media consumption through the internet has witnessed rapid growth in the past few years. Moreover, mobile devices have become dominant as the favored medium of consuming such media content. Smartphone devices in particular have witnessed exponential growth, and are expected to reach a number more than 4.5 billion in 2019. Such rapid growth has made the access of music and video on demand content very easy for consumers. In addition, the enhancements to data plans and technologies such as 3G, 4G and LTE being provided by telecommunication service providers is expected to grow along with high data traffic in the near future.

What role does marketing play in the video on demand service?

There has been a significant change in consumer preference towards consuming digital media in comparison to consumption of traditional media forms such as television and newspapers. As a result the higher popularity of digital media, has pushed marketing businesses to invest larger amounts of their budget towards digital mediums such as video on demand services.

Moreover, with tracking algorithms being used by service providers, targeted marketing can be pursued towards the owners of specific mobile devices. By the end of 2020, more than 35% of all expenditure of advertising is expected to be put onto such digital platforms, and is noticeably eating up market share of print media, thereby providing a strong impetus towards the growth of video on demand services.

What does the growing popularity of VOD services mean for consumer viewing behavior?

Most users of subscribed video on demand (SVOD) services, watch television very infrequently. Moreover, as per a Nielsen study, more than a third of all SVOD subscribers have stated their intention to cancel their traditional television services, in the favor of online-only services. This is especially true of younger consumers, who are more techno savvy, but are increasingly on the lookout for optimal content to cost ratios for their service packages. On the other hand traditional TV services have the advantages of being able to provide live news or sports programing, which is not easily replaceable by VoD services as yet.

What kind of content is most consumed by video on demand subscribers?

Around 80% of all content that is being viewed by VoD subscribers is movies, followed by TV programs, original series, and sports or documentaries. Short form video content (below 15 minutes of duration), is fairly high owing to increased convenience of viewing such content on the whole. Moreover, VoD services allow multiple viewers in the same household to view different programs at the same time, which bodes well for market growth.

Need more revelations and stats? Then checkout a sample of the FMI report.

About Abhishek Budholiya 84 Articles
Abhishek Budholiya is a tech blogger, digital marketing pro, and has contributed to numerous tech magazines. Currently, as a technology and digital branding consultant, he offers his analysis on the tech market research landscape. His forte is analysing the commercial viability of a new breakthrough, a trait you can see in his writing. When he is not ruminating about the tech world, he can be found playing table tennis or hanging out with his friends.