North American and European pay-TV operators’ burgeoning content portfolios are driving VOD traction towards 50 million users and over $3 billion in revenue.

According to a new survey from IMS Research in 2010, the North American VOD market generated $1.98 billion in revenues, and the European VOD market totalled $1.11 billion with the two regions responsible for 46.1 million pay-TV VOD subscriber homes.

The survey shows that the five largest country markets, in terms of VOD revenues in 2016 will be the US, Japan, Canada, the UK, and South Korea, with the US accounting for over a quarter of the market.

Going forward the study forecasts that in 2016, North America will continue to lead the market with a third of world VOD revenues, followed close behind by Western Europe with a 30.5% share, and Asia Pacific with 25.7%. IMS noted that pay-TV operators in emerging markets throughout Latin America, Eastern Europe and Asia Pacific, excluding Japan and South Korea, will start to catch up the leaders and will likely generate $2.4 billion in VOD revenues in 2016. In particular, it forecasts that Latin America will have the strongest growth in VOD revenues from 2010 to 2016 with its share of the global market to grow from 0.6% in 2010 to 4.8% share in 2016.

Commented Anna Hunt, IMS principal analyst and report author: “It will take some time for VOD to generate significant revenues for pay-TV operators in emerging markets, but that does not mean that they should not bother with VOD now. OTT services are beginning to pop up throughout the world, with an abundance of activity particularly in Latin American countries, and it is pivotally important for operators to position themselves as leaders in on-demand content delivery to remain competitive over the next 10 years.”