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In South Africa, the Pay-TV segment in the video on demand market is estimated to witness 18% growth rate through 2026. Video on demand providers are focusing on price strategy to expand their consumer base. In the MEA market, the competition is intensifying with the use of lower Average Revenue Per User (ARPU) to increase subscribers. African countries have a lower internet penetration rate, thus supporting the growth of Pay-TV Video on Demand.
In North America, subscription-based revenue model is projected to attain a CAGR of 16% and is poised to reach USD 55 billion by 2026. Subscription offers benefits to consumers to watch content without any interruption. Enabling flexible subscription and cancellation provides an easy opt-in and out option to users. The subscription-based revenue model in video on demand services is adopted among consumers owing to the availability of a wider content portfolio to engage audience on a long term.
The media & entertainment sector has been hit hard by the COVID-19 pandemic attributed to the ban imposed on public gatherings. This has led to a large audience to shift to video on demand services for entertainment. An increasing number of people prefer platforms such as Netflix, Hulu, and Amazon Prime to watch movies. This change in consumer preference is propelling the industry growth. The video on demand platforms offer flexible payment modes to suit user requirements.
Prominent artists have also started performing live through video on demand platforms to raise funds to fight against the coronavirus pandemic. Live & sports events in the recent future are also expected to be live streamed through such platforms to avoid mass gatherings. These live streaming concerts will accelerate the industry expansion.
Asia Pacific video on demand market accounted for around 16% of revenue share in 2019 and is predicted to expand at more than 19% during 2020 to 2026. The region showcased the worst impact attributed to the coronavirus pandemic, resulting in huge economic & human losses. The government in the region have imposed stricter lockdown regulations. Most employees are working from home, resulting in a significant screen time to watch videos on OTT platforms.
Video on demand providers are partnering with movie producers to release movies on their platforms credited to the closure of multiplexes and single screens. The market demand in the region will further stimulate with extension of the strict lockdown. Market players operating in the APAC region are entering the sports segment to generate significant revenue by targeting specific audience segments.