Download Digital Media - Video-on-Demand Report 2016

DIGITAL MEDIA:
VIDEO-ON-DEMAND
DATA AND ANALYSIS WITHIN THIS REPORT
Overview
Pages
Subject
03 – 05
Detailed overview
›
›
›
Market KPI comparison by region in charts
Market KPI comparison by region in tables
Biggest market is the US with US$9.5 billion in 2016
China has the highest average growth rate of 25.5% to
2021, but will stay the smallest market
Key Takeaways
Video accounts for 16% of the Digital Media market
Video-on-Demand as part of the Digital Media market
Global Video-on-Demand revenue of US$24.2 billion
in 2021
Best practice and deep dive
›
›
12 – 14
Video Streaming is growing fastly over all markets
Framework
›
›
10 – 11
Future developments, Assumptions and sensitivity
KPI-Comparison
›
›
08 – 09
Customer benefit, Market size
Video-on-Demand is divided into Downloads,
Streaming and Pay-per-View
Netflix
Netflix revenue per user
Netflix has over 83 million members in over 190
countries in 2016
Only Netflix users from the US provide a profit
Structure, contacts and imprint
2
© Statista Digital Market Outlook
06 – 07
Market scope
Essentials
DIGITAL MEDIA MARKET
Market focus: Video on Demand
Video on Demand
Fashion
Streaming
Video Download
Pay-per-View
FoodVideogames
& Personal Care
ePublishing
Furniture & Appliances
Toys, Hobby & DIY
Focus Segment
Other Reports
3
© Statista Digital Market Outlook
Digital Music
Electronics & Media
US IS THE BIGGEST MARKET WITH A
PIONEERING ROLE – CHINA’S ROLE IS SMALL
Video-on-Demand
(VoD)
is
defined as premium digital
video content, distributed over
the Internet. This includes three
fee-based business models:
Rentals as a single transaction or
Pay-per-View, respectively; subscription-based Video Streaming
services and digital purchases of
Video Downloads (electronic-sellthrough or EST).
Pay-per-View is defined as timelimited access to premium video
content that requires a usagebased one-time payment. Content
includes movies, TV shows or
series that can be downloaded or
streamed to various devices for a
pre-determined period of time.
The prices for Pay-per-View offers
are usually lower than for
Downloads.
Other
common
expressions for Pay-per-View are
Transactional-VoD or TVoD.
Video Streaming services offer
unlimited access to a broad
selection of different genres and
Market size
titles for a subscription-fee. Movies
and TV series can be streamed to
various
supported
connected
devices.
As in Music Streaming, the video
content is delivered without the
need for downloading files; the
content is played from an external
source.
Well
known
Video
Streaming services are Netflix or
Amazon Prime Instant Video.
Video Streaming is also known as
Subscription-based-VoD and SVoD.
Video Download means premium
digital video content that is
purchased
in
a
one-time
transaction and is permanently
accessible as a digital video file
through cloud-based or offline
storage.
Consumers are purchasing an
unlimited usage right to a
specific video file.
Electronic-Sell-Through (EST) or
Download-to-own can be used
synonymously
with
Video
Downloads.
The global Video-on-Demand
market size is about US$16.3
billion in 2016 and accounts for
16% of the Digital Media market.
With this share, Video-on-Demand
is significantly bigger than Digital
Music and on a similar level as
ePublishing.
85.6% of the global VoD market is
covered by the United States,
China
and
Europe.
The
cumulated market size of all
three regions is US$14.0 billion.
With US$9.5 billion in 2016, the
market in the United States is
dominating the global VoD market.
It accounts for 58.5% of the total
market on its own. Video
Streaming is the biggest segment,
with US$5.5 billion in 2016, while
Video Downloads and Pay-perView are at a similar level of
US$2.0 billion.
The market in Europe has a
volume of US$3.5 billion. The
share of Video Streaming is, with
61.6%, even higher than in the US.
Pay-per-View
and
Video
Downloads are following the
Streaming
market
at
some
distance with US$0.8 billion and
US$0.6
billion
in
2016,
respectively.
The Chinese Video-on-Demand
market is different. We can
observe a lack of willingness to pay
for digital media content. The total
market is, with US$0.9 billion, not
even a tenth of the size of US
market.
Although a lower price level in
China has to be taken into
account, the main reason for the
small market is a very low
adoption rate of paid Video-onDemand services. Only 3.1% of
Chinese Internet users are paying
for Video Streaming, although
Streaming is the biggest segment,
with US$0.6 billion in 2016.
The Pay-per-View market is, with
US$0.1 billion in 2016, the
smallest segment. With US$0.3
billion, Downloads account for
27.4% of the Chinese VoD market.
4
© Statista Digital Market Outlook
Customer benefit
VIDEO STREAMING IS GROWING FAST –
DIFFERENT DEVELOPMENTS OF PAY-PER-VIEW
The Video market is growing
with a CAGR of 8.3% to 2021. A
steady growth of Video Streaming
in all regions is the main driver for
this development.
Due to its pioneering role, first
saturation effects in the US market
can be observed. It is the slowest
growing market with a CAGR of
3.7% to 2021. The expected
market size is US$11.4 billion in
2021.
Nevertheless, Video Streaming is
growing with an average of 5.1%
per year. A significantly growing
user base is responsible for this
growth, while the average revenue
per user is growing moderately .
Contrary to the other regions, Payper-View revenue is declining
very slightly with a CAGR of -0.4%
to 2021, while Download sales are
increasing with 3.6% per year in
the same time frame.
In Europe, for instance, the Payper-View market is growing with
an average of 5.7% per year, while
Assumptions and sensitivity
the
Download
stagnating.
market
is
Pay-per-View is growing in
Europe, while it is declining
in the United States
Video Streaming, however, is
growing fast with a CAGR of 10.4%
to 2021, although growth will slow
down over the years. The yearover-year growth from 2020 to
2021 will be +5.3%, while it is
14.0% from 2016 to 2017. The
total European market will pass
US$5.1 billion in 2021.
Again, the market development is
mainly determined by a changing
user base, while the average
revenue per user does only grows
moderately.
The Chinese Video-on-Demand
market has the highest average
annual growth rate of 25.5% to
2021 and will reach US$2.9 billion
in 2021.
1: CAGR: Compound Annual Growth Rate/ average growth rate per year.
The
global
Video-on-Demand
market is mainly driven by a fast
and constant growth of Video
Streaming,
while
Video
Downloads and Pay-per-View are
developing contrarily in Europe
and the US.
Video Streaming services in the US
usually
have
more
relevant
content than in other countries.
We assume that European Videoon-Demand users have to fall
back on Pay-per-View offers, as
specific titles are not available on
Video Streaming services due to
territorial
restrictions
within
corresponding
license
agreements.
According to that, there is no need
for Pay-per-View in the US in the
same way as in Europe.
The Chinese market has to be
seen differently. The willingness
to pay for Video-on-Demand
content is very low and most
offers are ad-based or even on a
semi-legal basis.
As in other Digital Media markets,
we expect a noticeable impact of
Chinese government’s increasingly
severe
control
of
copyright.
New
copyright
protection laws from July 2015 will
drive
the
Video-on-Demand
market in China.
Ad-based video streaming is not
considered as Video Streaming
according to our definition.
Nevertheless,
the
subscriber
growth stalled after services raised
prices, which suggests a noticeable
price
sensitivity
of
Video
Streaming users.
Therefore, it is conceivable that
currently subscription-based video
services offer suitable content
refinanced by using advertising
in the future.
We cannot observe concrete
developments on this path yet, but
we have to keep an eye on this
possibility.
5
© Statista Digital Market Outlook
Future developments
VIDEO-ON-DEMAND IN MA JOR REGIONS
Market KPI comparison by region
United States
Revenue forecast
Europe
+3.7% p.a.
in million US$ by region
11,448
9,529
Download:
China
2,484
2,078
Streaming:
5,527
+8.0% p.a.
1,923
1,888
2016
2021
934
256
76
602
2016
2,011
566
3,485
2,904
Pay-per-View:
Revenue per user
5,120
+25.5% p.a.
7,077
556
536
3,531
2,155
774
357
1,023
2016
2021
2021
in US$ by region
2016
12.4
82.9
2016
24.4
22.4
Source: Digital Market Outlook 2016
53.4
20.3
13.1
86.3
24.5
2016
3.4
49.2
2021
34.7
2021
33.0
24.7
6.2
2021
55.7
19.6
6
© Statista Digital Market Outlook
50.2
VIDEO ON DEMAND IN MA JOR REGIONS
Market KPI comparison by region
United States
China
Europe
Revenue
CAGR1
16 – 21
2016
2017
2018
2019
2020
2021
CAGR1
16 – 21
2016
2017
2018
2019
2020
2021
CAGR1
16 – 21
10,000 10,436 10,825 11,162 11,448
+3.7%
934
1,309
1,730
2,157
2,557
2,904
+25.5%
3,497
3,925
4,312
4,644
4,914
5,132
+8.0%
1,923
1,915
1,908
1,901
1,894
1,888
-0.4%
76
120
175
237
299
357
+36.3%
774
847
906
953
992
1,023
+5.7%
mUS$
5,527
5,914
6,270
6,584
6,853
7,077
+5.1%
602
888
1,198
1,502
1,776
2,011
+27.3%
2,155
2,506
2,831
3,114
3,343
3,531
+10.4%
mUS$
2,078
2,170
2,258
2,340
2,415
2,484
+3.6%
256
301
356
419
481
536
+15.9%
556
560
563
565
566
566
+0.4%
Unit
2016
2017
2018
2019
2020
2021
CAGR1
16 – 21
2016
2017
2018
2019
2020
2021
CAGR1
16 – 21
2016
2017
2018
2019
2020
2021
CAGR1
16 – 21
Total:
m
109
104
102
103
105
107
-0.4%
43
54
66
79
90
101
+18.6%
63
66
69
73
77
80
+4.9%
Pay-per-View:
m
79
78
78
78
77
77
-0.5%
22
30
38
45
52
58
+21.1%
38
42
45
48
50
52
+6.2%
Streaming:
m
67
71
74
77
80
82
+4.1%
27
38
51
62
73
82
+24.8%
40
46
52
57
60
63
+9.0%
Download:
m
41
43
45
47
49
50
+4.0%
21
24
28
33
37
41
+14.6%
16
16
17
17
17
17
+1.2%
Segment
Unit
2016
2017
Total:
mUS$
9,529
Pay-per-View:
mUS$
Streaming:
Download:
2018
2019
2020
2021
Segment
1: CAGR: Compound Annual Growth Rate/ average growth rate per year.
Source: Digital Market Outlook 2016
7
© Statista Digital Market Outlook
Users
KEY TAKEAWAYS
Market sizing subjects for Video on Demand
Market size
Growth rate
Trend signals
?
›
US is dominating the global Video-onDemand market with US$9.5 billion in
2016
›
Video Streaming has, with 57.9%,
highest share of the Video-on Demand
market
›
China
Europe
›
Smallest of the three markets with
US$0.9 billion in 2016
›
Total market volume is US$3.5 billion
in 2016
›
Video Streaming is the biggest
segment and accounts for 64.5%
›
Video Streaming accounts for 61.6%
First saturation effects in the US
market
›
Highest growth rate with a CAGR of
25.5%
›
Europe has a relatively high growth
rate with a CAGR of 8.0% to 2021
›
Total market is growing with a CAGR1
of 3.7% to 2021
Strong growth over all segments
›
›
Growth is mainly driven by Video
Streaming (+5.1% p.a.)
›
›
Video Streaming is growing
extraordinarily strong with a CAGR of
10.4% to 2021
›
Total market volume will reach US$5.1
billion in 2021
›
Noticeable price sensitivity of Video
Streaming users
›
New copyright protection laws from
July 2015 will drive the revenue
›
›
Subscription-based video services
might offer suitable content refinanced
by using advertising in the future
›
Nevertheless, Chinese consumers are
not willing to pay for Video-onDemand yet
A pursued genuine
internal European market for digital
content might help to avoid territorial
restrictions within the European Union
›
Small conversion rates to paid content
from under 2%
1: CAGR: Compound Annual Growth Rate/ average growth rate per year
Source: Digital Market Outlook 2016
Total market volume will reach US$2.9
billion in 2021
8
© Statista Digital Market Outlook
United States
Video-on-Demand
Digital Media global segment size and growth rates
Global1 Digital Media market revenue
CAGR2 16 – 21
in million US$ by segment
125,403
+6.6% p.a.
23,888
+8.1% p.a.
91,102
13,197
16,163
Video-on-Demand:
Digital Music:
Games:
67,096
+5.8% p.a.
50,521
+6.8% p.a.
ePublishing:
15,274
2016
1: Only includes countries listed in the Digital Market Outlook
2: CAGR: Compound Annual Growth Rata/ average growth rate per year
Source: Digital Market Outlook 2016
21,222
2021
9
© Statista Digital Market Outlook
Digital Media
+7.6% p.a.
9,144
BEST PRACTICE:
Company profile
Footprint
Background
Netflix, Inc. (NASDAQ: NFLX) is an
entertainment company based
in Los Gatos, California.
The Video Streaming service
Netflix is known for today,
started in 2007.
In the early years after Netflix's
founding, the company grew by
starting in the DVD-by-mail
business.
Since 2013, Netflix produces own
film and television series under
the label “Netflix Original”.
DVD-by-mail
means
renting
physical video carriers for
delivery by mail.
Analyst opinion
Revenue:
Growth (revenue):
Net income:
Paying subscribers:
Content consumption p.d.:
founded:
US$6,779 million (2015)
18.8% YoY
(2015)
US$122 million
(2015)
83 million
(Jul 2016)
125 million hours
1997
Source: Digital Market Outlook 2016, company information
Netflix could not match their
forecasted membership growth
in the second quarter of 2016.
The main reason was an
increase in price. Price sensitive
users might have switched to
cheaper competitors.
Current rumors say that Disney
might takeover Netflix. Such a
takeover could help it to persist
in this competitive market.
Rumors are based on climbing
shares. Furthermore, some clues
already
indicate
a
close
connection between Netflix and
Disney.
Many “Netflix Original” series, for
instance, are under license from
Marvel which is owned by
Disney. In addition, a lot of other
Disney content is streamable
exclusively at Netflix.
10
© Statista Digital Market Outlook
Overview
Today, Netflix has over 83 million
members
in
over
190
countries, including more than
47 million in the United States.
ONLY USERS FROM THE US PROVIDE A PROFIT
Netflix profit/loss per user per month in US$
USA
2,7
2,5
2,2
1,9
-0,4
-0,6
-0,6
-0,9
-1,0
Source: company information
Q3 2014
Q4 2014
-1,2
-1,3
-1,4
Q2 2014
2,9
2,2
-0,9
Q1 2014
2,9
2,8
2,7
Q1 2015
Q2 2015
Q3 2015
Q4 2015
-1,0
Q1 2016
Q2 2016
11
© Statista Digital Market Outlook
2,1
International
VIDEO-ON-DEMAND REVENUE STREAMS
Market Structure and definition
Segment
Sub-segments
Pay-per-View
Out of segment
Transactional-Video-on-Demand services or Pay-perView offers. TVoD is defined as time-limited access to
premium video content that requires a usage-based
one-time payment. Content includes movies, TV shows
or series and can be downloaded or streamed to various
devices for a pre-determined period of time.
Video Advertising
Ad-based content and
Video Streaming
service
Pay-TV
Video Downloads
Video Downloads, Electronic-Sell-Through or Downloadto-own describes premium digital video content that is
purchased in a one-time transaction and is permanently
accessible as a digital video file through cloud-based or
offline storage.
In scope
Other segment
Use-generated content
Out of scope
12
© Statista Digital Market Outlook
Video-on-Demand
Subscription-based-Video-on-Demand services, e.g.
Netflix and Amazon Prime Instant Video, offer unlimited
access to their content libraries for a subscription-fee.
Movies and TV series can be streamed to various
supported connected devices.
ABOUT DIGITAL MARKET OUTLOOK
9 Markets, 34 segments & 85 sub-segments
Digital Media
Connected Car
Video-on-Demand, Digital Music,
Video Games, ePublishing
Connected Hardware, Vehicle Services,
Infotainment Services
FinTech
Digital Payments, Business Finance,
Personal Finance
eTravel
Smart Home
Details
›
›
›
›
50 countries
›
User count & penetration
›
Comparable data
Direct access & downloads
7-Year coverage: 2015 – 2021
Revenue forecasts
Home Automation, Security, Home
Entertainment, Ambient Assisted Living,
Energy Management
e-Commerce
eServices
Event Tickets, Fitness, Dating Services,
Food Delivery
Fashion, Electronics & Media, Food &
Personal Care, Furniture & Appliances, Toys,
Hobby & DIY
eHealth
Digital Advertising
Diabetes, Hypertension, Heart Failure
Banner Ads, Video Ads, Search Ads,
Social Media Ads, Classifieds
Exclusive part of the Statista Corporate Account
Access to more than 1,000,000 statistics and all digital markets
more
moreinformation
information
13
© Statista Digital Market Outlook
Online Travel Booking, Mobility Services
IMPRINT
Contacts and author
Sebastian Buss
Analyst
Sebastian Buss graduated in Business Administration and Business
Psychology in Hamburg, Germany with a specialization in
Consumer Behavior and Market Psychology.
Before his time at Statista he gained experiences in digital media
markets with a focus on the music industry.
He is working for Statista as a specialist for digital markets, trend
monitoring and data analysis.
E-MAIL
[email protected]
WEB
statista.com/outlook
Released: October 2016
Imprint
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Disclaimer
This study is based on survey and research data of the previously mentioned sources. The forecasts and market analysis presented were researched and prepared by Statista with great
care.
For the presented survey data, estimations and forecasts Statista can not assume any warranty of any kind. Surveys and forecasts contain information not naturally representing a reliable
basis for decisions in individual cases and may be in need of further interpretation. Therefore Statista is not liable for any damage arising from the use of statistics and data provided in this
report.