New European SVOD analysis

A new report by the European Audiovisual Observatory shows that subscription VOD service revenue in Europe grew by 128% annually between 2011 and 2016. 

Key findings from the report include:

1. SVOD drives the on-demand market

Subscription video-on-demand (SVOD) is the driving force behind the growth of the premium on-demand market, with SVOD representing 66% of total 2016 on-demand service revenue, compared with only 11% in 2011.

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2. SVOD accounts for less than 20% of all pay-services subscriptions

SVOD still remains a comparatively small market compared to pay-TV. In 2016, SVOD accounted for 18% of all subscriptions to pay-services. However, this represents considerable growth: SVOD subscriptions only accounted for 1%, and just 0.2% of total pay-TV revenues, in 2011.

3. The number of SVOD subscribers and total revenue is growing fast

By the end of 2016, there were an estimated 38.7 million subscribers to SVOD in the EU (43.5 million in greater Europe), with an average annual growth rate of 55.5%. Revenues are also increasing: in 2016, the total revenue for SVOD services was estimated at €2.5 billion in the EU, growing at 128% annually. The top five countries by SVOD revenue were the UK, Germany, Sweden, Denmark and Norway, with the UK delivering over €800 million of total revenue.

4. Growth is driven by new users rather than cord-cutting in the EU

The report found that the growth of the online video subscription market in Europe had not resulted in a decline in pay-television numbers. The report found “no evidence of the ‘cord-cutting’ phenomenon”, attributing this to lower penetration of pay television in the EU, meaning that online video may address new customers, and that the cost of pay television is generally lower than in the United States.

This is stark contrast to recent forecasts of the “death of Pay TV”, with 40% of American pay-TV consumers expected to cut the cord of traditional cable TV by 2030. Cost is a major driver of this shift, but there’s also a generational shift: 61% of adults aged 18-29 say online streaming services are the primary way they watch TV.

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Read more, and access the full report, at the European Audiovisual Observatory.

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