In the current scenario, pay-TV seems to be the largest segment of the entire consumer video services market as it accounts for approx 96.3 percent of total spending in 2014. But as per the latest market indicators subscription video on demand (S-VoD) is growing to compete with pay TV.
It was duly reflected in the research report shared by Fernando Elizalde, principal research analyst at Gartner who talked about the current future state of the S-VoD. The research also covered that how consumers’ behavior may impact this type of service, which is now in its beginning or growing stage.
According to research findings, the over-the-top S-VoD services have the strongest growth potential among all the video media services that are enjoyed by the customer by paying directly to the service provider. On the basis of research findings, Gartner expects that consumer spending on S-VoD services is likely to grow by 28.1 per cent in 2014 and 18.2 per cent in 2015.
According to the researcher although, S-VoD is not likely to replace the pay-TV services entirely but it is showing the potential to complement traditional pay TV services such as cable TV, satellite TV or IPTV. With change in consumer preferences, consumers may require spending less in additional premium services from the pay-TV service providers and in turn begin spending on S-VoD.
Furthermore, it is estimated by Gartner that currently households spend anywhere between $6 and almost $10 on average per subscription worldwide. However, it may vary regionally considering the recent changes in Greater China, Sub-Saharan, and Asia Pacific countries where consumers are paying the least per subscription. Technology enthusiasts who keep interest in using new technology first are already rushing to get subscription to multiple S-VoD services in mature markets. It is estimated that tech enthusiasts in the US region spend on an average $15 a month whereas, the similar group in Germany pays $17.
When asked about the type of content required for being successful in Europe, the researcher said that from a content perspective, some of the content from international S-VoD service providers should be in local language that can duly appeal to a broader segment of audience, although it is not necessary.