World's most mature SVOD market still offers huge development and growth potential

DetailsJoseph O'Halloran | 25 June 2015

The North American subscription video on demand (SVOD) market is simultaneously the most mature and yet intrinsically immature, says a new report from Digital TV Research.

amazonIn the Americas OTT TV & Video Forecasts report, the analyst calculates that by the end of 2014 North America already had 50.6 million SVOD homes for films and non-sport TV services representing 38.8% of TV households and 48.1% of fixed broadband homes. This signifies considerable growth since 2010 when there were 16.7 million SVOD homes or 13.0% of TV households. However, the market is not yet mature. In fact, 7.1 million more SVOD homes will be added in 2015 alone. Digital TV Research projects that this will climb to 76.5 million by 2020 to result in 57.3% penetration of TV households and 65.2% of fixed broadband homes.

On the back of this growth, SVOD revenues are set to soar from $4.46 billion in 2014 and onto $7.09 billion in 2020, 59% growth in the period. North American over the top (OTT) TV and video revenues are set to reach $20.5 billion in 2020; up from $2.6 billion in 2010 and the $13.2 billion expected in 2015.

The Americas OTT TV & Video ForecastsAmericas OTT TV & Video Forecasts report also reveals that advertising on OTT sites will generate revenues of $6.0 billion in 2015, quadruple the $1.4 billion in 2010. The analyst is confident that rapid advertising expenditure growth will continue, reaching $10.3 billion in 2020. At the same time download to own (DTO) revenues are forecast to hit $2.197 billion by 2020, up from $321 million in 2010 and $1.218 billion in 2014. Films will contribute two-thirds of DTO revenues by 2020, with TV series providing the rest.

OTT TV and video rental/pay-per-view revenues are also expected to expand rapidly, climbing from $169 million in 2010 on to $591 million in 2014 and to $999 million in 2020. Film will be the main earner; providing $715 million by 2020 while TV box sets will become a more popular promotional tool than single episodes.