Communications Question

You are a manager of programming for a new content platform of your choice that leverages external social media linking and sharing features for user connection. The platform aims to provide cutting-edge, professionally produced, on-demand content for its millions of members. You are tasked with finding ways to generate revenue for this platform.

platform: AMAZON

Use the Statista report to select a region where you think the platform should begin the launch of its content service based on the outlined metrics.

Determine whether your platform should be:

Subscription video-on-demand (SVOD)

SVOD with ads, or

Free or ad-supported video-on-demand (FVOD/AVOD)

Support your position with an analysis of the following elements:

Contrast the key difference between distributing content and exhibiting content for each of the three possible platform options listed above.

The benefits to your organization and its potential consumers, as compared with the other platform options.

The Statista report discusses customer behaviors and price trends (pp. 5-6). Compare your findings and research on customer behavior and price trends with this discussion and consider issues such as device costs, service price increases, and internet costs in addressing how to possibly deal with these digital divide inequities in the selected target region, in order to encourage more consumer conversion for your service.

Support your position and analysis in your report by referencing data from the Statista report and data from your own additional research.

The Statista report is attached.

INDUSTRIES & MARKETS
Video-on-Demand: market data
& analysis
Market Insights report
2023
Table of Contents
Overview
Appendix
Summary
5
Product Overview
22
Market Definition
6
Author
23
Key Takeaways
7
Market Numbers
2
Revenue by Market
9
Average Revenue per User
12
Users
15
Company revenues
18
Brand share
19
Penetration rate
20
Subscribers by service
21
Company profile
22
Deep dives
24
STATISTA MARKET INSIGHTS
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• 10 sectors: advertising & media, consumers, countries, digital sector,
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3
Find out more on:
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10
190+
1,000+
400+
sectors
geographical
markets
reports
entities
CHAPTER 1
Overview
The Video-on-Demand market is driven by the constant evolution of the video
streaming market
Overview: Summary
Summary
The video on demand (VoD) market is experiencing transformative trends that are
favorable environment for streaming services. The convenience and flexibility of
reshaping the way consumers access and consume video content. Firstly, the shift
accessing a vast catalog of content on multiple devices have propelled the
from traditional television to streaming services has become a dominant trend.
adoption of VoD platforms. Secondly, the trend of content fragmentation, with
Streaming platforms like Netflix, Amazon Prime Video, and Disney+ offer a vast
various studios and production companies launching their streaming services,
library of movies, TV shows, and original content, providing viewers with on-
has intensified competition and provided consumers with a diverse range of
demand access to a wide range of entertainment options. Secondly, the rise of
options. Furthermore, the rapid growth of original content production by
cord-cutting and cord-shaving has disrupted the traditional pay-TV model, with
streaming platforms has attracted viewers and fostered subscriber retention. The
consumers increasingly opting for over-the-top (OTT) services to customize their
investment in exclusive content, including TV series, movies, and documentaries,
viewing experience and reduce costs. Additionally, the proliferation of smart TVs,
serves as a strong growth driver for VoD platforms.
smartphones, and other connected devices has facilitated the seamless streaming
of video content, enabling viewers to enjoy their favorite shows and movies
anytime, anywhere.
The Video on Demand market is projected to experience robust growth in the
foreseeable future. Market research suggests a healthy compound annual growth
rate (CAGR) from 2023 to 2027. Factors such as the continued expansion of
The Video on Demand market is poised for substantial growth, driven by key
streaming services into new markets, the increasing availability of high-quality
factors that contribute to its expansion. Firstly, the global increase in internet
original content, and advancements in streaming technologies are expected to
penetration and the availability of high-speed broadband have created a
fuel market growth.
5
Sources: Statista Market Insights 2023
Video-on-Demand is the second largest market of Digital Media
Overview: Market Definition
Market definition
Video on Demand (VoD) refers to a digital media distribution model where users
The market comprises revenues, users, average revenue per user, and
can access and watch video content at their convenience, usually through an
penetration rates. Revenues are generated through purchases and subscriptions.
online platform or service. With VoD, users have the flexibility to choose what
Market numbers for video-on-demand can also be found in the OTT video
content they want to watch, when they want to watch it, and how they want to
market. Key players in the market are companies, such as Netflix, Amazon or
consume it. This allows users to stream or download video content on demand,
Disney+.
without the need for traditional broadcasting schedules or physical media. VoD
platforms typically offer a wide range of content, including movies, TV shows,
documentaries, and other video content, which can be accessed and viewed
instantly or stored for later viewing. VoD has become increasingly popular in
recent years, offering convenience, flexibility, and a personalized viewing
experience for users.The market consists of several markets, namely Video
Streaming (SVoD), which is streaming on a subscription basis, Pay-per-View
(TVoD), which is paying for digital video content and watch it online, Video
Downloads (EST), which is the download of digital video content and Advertising
(AVoD), which is the advertising in video streaming.
6
Sources: Statista Market Insights 2023
Video-on-Demand accounted for 25.4% of the Digital Media market revenue in
2023
Overview: Key Takeaways and in scope / out of scope
Key Takeaways
Revenue in the Video-on-Demand market is projected to reach US$159.40bn in
In scope
Out of scope
2023.
This segment includes:
This segment excludes:
Revenue is expected to show an annual growth rate (CAGR 2023-2027) of 9.71%,
• Over-the-top Video-on-Demand
(VoD) content distributed over the
Internet
• Ad-supported content and services
resulting in a projected market volume of US$230.90bn by 2027.
The largest market is Video Streaming (SVoD) with a market volume of US$95.35bn
in 2023.
In global comparison, most revenue will be generated in the United States
(US$69,540.00m in 2023).
In the Video-on-Demand market, the number of users is expected to amount to
3.44bn users by 2027.
User penetration will be 36.8% in 2023 and is expected to hit 43.2% by 2027.
7
Sources: Statista Market Insights 2023
• Rentals as single transaction or payper-view (Transactional-VoD or TVoD)
• Subscription-based services
(Subscription-VoD or SVoD)
• Digital purchases via download or
permanent cloud-storage (electronicsell-through or EST)
• User-generated content (UGC)
Video-on-Demand revenue are estimated to increase at a CAGR(1) of 17.7% from
2017 to 2027
Market Size: Global
revenue forecast in billion US$
200.6
181.9
+17.7%(1)
55.9
45.4
4.8
4.5
0.1
11.3
27.7
8.4
34.4
2017
4.7
0.1
5.5
2018
70.8
15.4
43.9
2019
Video Streaming (SVoD)
8
Notes:
(1) CAGR: Compound Annual Growth Rate
Sources: Statista Market Insights 2023
4.9
0.3
6.4
95.1
1.1
21.6
5.4
8.1
59.0
2020
Advertising (AVoD)
119.4
5.6
9.2 2.7
28.6
159.4
133.6
4.9 5.3
9.1
10.2
41.1
5.5
7.2
10.9
48.3
5.6
9.1
11.5
54.5
216.9
5.7
10.4
12.1
230.9
5.8
12.7
11.3
63.5
59.6
33.4
73.4
80.8
2021
2022
Pay-per-View (TVoD)
118.5
128.1
137.0
95.4
107.9
2023
2024
2025
2026
2027
Free ad-supported streaming TV (FAST)
Video Downloads (EST)
5.8
11.8
With revenue of 78.7billion US$, Americas is the biggest market among selected
regions, in 2023
Market Size: Regional Comparison (1/2)
revenue forecast in billion US$
+10.1%(1)
115.8
+9.5%(1)
78.7
66.5
+8.8%(1)
46.4
40.7
29.0
+11.5%(1)
2023
2027
Europe
9
Notes:
(1) CAGR: Compound Annual Growth Rate
Sources: Statista Market Insights 2023
+8.5%(1)
2.8
4.3
2023
2027
Africa
2023
2027
Americas
2023
2027
Asia
2.2
3.1
2023
2027
Australia
With revenue of 69.5billion US$, United States is the biggest market among
selected countries, in 2023
Market Size: Regional Comparison (2/2)
revenue forecast in billion US$
+10.3%(1)
102.8
69.5
+9.4%(1)
40.7
+8.2%(1)
28.4
2023
2027
China
10
Notes:
(1) CAGR: Compound Annual Growth Rate
Sources: Statista Market Insights 2023
2023
2027
United States
+7.8%(1)
+9.0%(1)
7.9
10.8
2023
2027
United Kingdom
5.7
8.0
6.5
8.8
2023
2027
2023
2027
Germany
Japan
Video-on-Demand arpu(1) are estimated to increase from 2017 to 2027
Market Size: Global
arpu(1) forecast in US$
90
80
70
60
50
45.1
49.7
54.9
60.3
65.2
69.7
73.6
76.6
79.0
81.4
83.8
40
30
20
10
0
8.3
11.5
4.3
0.2
11.8
8.2
12.1
8.1
5.3
6.6
0.2
2017
2018
Video Streaming (SVoD)
11
Notes:
(1) average revenue per user
Sources: Statista Market Insights 2023
0.7
12.4
8.3
8.0
2.0
2019
2020
Advertising (AVoD)
12.8
10.3
8.0
4.3
13.0
12.6
7.8
6.4
2021
2022
Pay-per-View (TVoD)
14.6
13.6
16.3
13.9
17.4
14.2
18.1
14.4
18.5
14.7
7.8
7.8 9.0
7.7 9.8
7.7 10.4
7.7 10.8
8.0
2023
2024
2025
Free ad-supported streaming TV (FAST)
2026
2027
Video Downloads (EST)
Americas has the biggest market in Video-on-Demand arpu(1) in 2027
Market Size: Regional Comparison (1/2)
arpu(1) forecast in US$
200
179.2
147.1
150
125.5
100
49.1
56.9
57.1
21.9
25.7
14.3
15.6
50 46.6
12
Notes:
68.3
69.8
31.2
18.1
84.9
87.3
39.4
104.3
104.9
47.5
189.9
169.8
197.8
177.3
165.3
152.1
161.9
72.8
77.5
81.3
84.4
138.2
121.9
59.4
66.2
28.0
30.9
33.2
34.4
35.2
35.7
21.3
24.7
0 2.8
3.5
4.5
5.6
6.7
7.7
8.4
8.9
8.9
9.0
9.0
2017
2018
2019
2020
Africa
2021
Americas
2022
Asia
2023
Australia
2024
Europe
2025
2026
2027
(1) average revenue per user
Sources: Statista Market Insights 2023
With an arpu(1) of 338.9 US$, United States is the biggest market among
selected countries, in 2023
Market Size: Regional Comparison (2/2)
arpu(1) forecast in US$
500
421.9
450
338.9
350
285.6
300
185.5
200
102.7
100
59.9
42.5
50 42.6
24.2
0
2017
120.6
70.4
49.9
49.7
147.1
86.7
60.8
29.9
110.2
77.2
75.7
238.5
(1) average revenue per user
Sources: Statista Market Insights 2023
133.8
95.3
91.2
157.0
114.3
106.8
179.7
162.6
173.0
182.1
133.5
133.1
142.4
150.1
156.2
120.7
198.9
150.2
214.3
34.5
39.4
44.2
48.4
51.9
53.1
53.8
54.2
2020
2021
2022
2023
2024
2025
2026
2027
25.4
2018
2019
China
Notes:
227.5
232.1
250
13
473.1
385.5
400
150
450.8
Germany
Japan
United Kingdom
United States
Video-on-Demand users are estimated to increase from 2017 to 2027
Market Size: Global
users forecast in billion
3.5
3.0
2.6
2.5
2.0
2.8
1.9
0.5
0.6
0.5
0.4
0.4
0.0
2017
0.6
0.5
0.4
0.8
0.6
0.5
0.5
2018
2019
0.7
Advertising (AVoD)
14
Sources: Statista Market Insights 2023
2.8
3.1
2.3
2.1
1.5
1.0
2.7
3.0
3.4
3.3
1.0
0.7
0.5
2020
Video Streaming (SVoD)
0.6
1.1
1.2
0.7
0.8
0.7
2021
1.3
0.9
1.5
1.6
1.6
1.0
1.1
1.1
1.1
1.4
0.7
0.8
0.8
0.8
0.8
0.9
0.7
0.7
0.7
0.7
0.8
0.8
2022
2023
2024
2025
2026
2027
Free ad-supported streaming TV (FAST)
Pay-per-View (TVoD)
Video Downloads (EST)
Asia has the biggest market in Video-on-Demand users in 2027
Market Size: Regional Comparison (1/2)
users forecast in billion
2.0
1.5
1.32
1.43
1.43
1.50
1.58
1.68
1.77
1.86
1.16
1.03
1.0
0.88
0.5
0.46
0.41
0.16
0.02
0.0
2017
0.53
0.42
0.44
0.47
0.55
0.48
0.18
0.21
0.25
0.29
0.02
0.02
0.02
2018
2019
2020
0.48
0.50
Africa
15
Sources: Statista Market Insights 2023
0.52
0.54
0.55
0.56
0.57
0.59
0.44
0.45
0.46
0.47
0.33
0.41
0.44
0.02
0.30
0.02
0.37
0.48
0.48
0.02
0.02
0.02
0.02
0.02
2021
2022
2023
2024
2025
2026
2027
Americas
Asia
Australia
0.39
Europe
With users of 590 million, China is the biggest market among selected countries,
in 2023
Market Size: Regional Comparison (2/2)
users forecast in billion
0.8
0.7
0.6
0.51
0.5
0.4
0.40
0.1
0.59
0.66
0.75
0.44
0.32
0.3
0.2
0.56
0.55
0.62
0.71
0.20
0.20
0.20
0.21
0.22
0.05
0.04
0.04
0.05
0.04
0.04
0.05
0.04
0.04
0.06
0.05
0.05
2018
2019
2020
0.0
2017
China
16
Sources: Statista Market Insights 2023
0.20
0.21
0.21
0.21
0.21
0.22
0.06
0.05
0.05
0.05
0.04
0.04
0.05
0.04
0.04
0.05
0.04
0.04
0.05
0.04
0.04
0.06
0.04
0.04
0.06
0.05
2021
2022
2023
2024
2025
2026
2027
Germany
Japan
United Kingdom
United States
0.04
Revenues of the top companies in the Video-on-Demand market (worldwide &
consolidated)
Further Market Analysis
Company revenues in billion US$
Company
2017
2018
2019
2020
2021
AT&T
160,55
170,76
181,19
171,76
168,86
Alphabet
110,86
136,82
161,86
182,53
257,64
Amazon
177,87
232,89
280,52
386,14
469,82
Apple
229,23
265,6
260,17
274,52
365,82
Comcast Corporation
84,97
94,51
108,94
103,56
116,38
Netflix
11,69
15,79
20,16
25
29,7
Tencent
37,8
48,23
56,46
74,54
The Walt Disney
55,14
59,43
69,57
65,39
Warner Media
29,32
31,27
31,27
31,27
iQiyi
2,57
3,78
4,2
4,3
17
Sources: Statista Market Insights 2023
67,42
In 2023, Netflix had the highest share in Video-on-Demand
Further Market Analysis
Brand share in 2023
18
Sources: Statista Market Insights 2023
Penetration rate for Video-on-Demand is especial high in Norway but also in
Sweden
Penetration Rate: Worldwide Comparison
Video-on-Demand penetration rate per country in 2023 in %
1.
Norway
0.71
2.
Sweden
0.69
3.
New Zealand
0.67
4.
Puerto Rico
0.65
5.
Belgium
0.64
low
19
Sources: Statista Market Insights 2023
high no data
In 2022, Netflix has the highest amount of paid subscribers
Subscribers by service
SVoD (Streaming video-on-demand) subscriber by service in million
250
200
150
100
50
0
204 209
200 193
208
150 152
125 124
100
99
89
87
43
63
51 58
3
2
17
2017
107
2
2018
20
18
4
23
2019
34
138
125
104
102
71
66
62
10
112
34 29
30
50
8
2020
2021
Tencent Video subscribers
YouTube Premium subscribers
Apple TV+ subscribers
Netflix subscribers
iQIYI subscribers
HBO Max subscribers
Hulu subscribers
Disney+ subscribers
Youku subscribers
Paramount+ subscribers
Sources: Statista Market Insights 2023
41
40 38
Amazon Prime Video subscribers
20
101
48
64
33
124
82 77
80 56
102
76
54
221
2022
Netflix invests heavily in its exclusive content
Company profiles: Netflix (1/2)
Netflix key facts
21
Availability of Netflix in 89 countries
Revenue: US$31.6 billion (2022)
CAGR(1): 6.7% (2021 to 2022)
Net income: US$4,492 million (2020)
Paid subscribers: 221 million (2022)
Founded: 1997
Headquarters: Los Gatos, California
Product: streaming service
Netflix’s digital strategy
In the early years after Netflix’ founding, the company grew by engaging in the DVD-
Netflix is increasingly investing in exclusive content in the form of content licenses
by-mail business. The video streaming service Netflix as we know it today launched
and the production of own series. This content involves high costs; thus, Netflix has
in 2007. Back then, the company started to offer subscription-based streaming of
raised the prices in the U.S. and added an “Ultra” plan. However, the company also
movies and tv shows. Users can choose from a variety of different plans in a price
reacts to country-specific habits by offering a mobile-only plan at a lower price in
range(3) between US$8 and US$14 and watch content on almost any device. Today,
some Asian markets. This strategy might be necessary to remain competitive in the
Netflix has 158 million paid subscribers in over 190 countries. Additionally, Netflix
Video-on-Demand market. Disney has ended its collaboration with Netflix in 2019
has been producing own film and TV series under the label “Netflix Original” since
to start its own streaming service Disney+. Other film studios might follow. Netflix is
2013. Netflix released 371 Originals in 2019, which represents over 50% increase in
no longer fully dependent on such deals as its customers are increasingly
comparison to 2018.
interested in its exclusive content.
Notes:
(1) CAGR: Compound Annual Growth Rate
Sources: Company information
Netflix ARPU and ARPU growth is highest in the U.S. among all available
countries
Company profiles: Netflix (2/2)
Average monthly revenue per paying membership in US$
12.5
9.7
9.6
Q1 2018
Q2 2018
22
Sources: Company information
13.5
13.4
13.3
13.1
11.5
11.3
11.2
11.1
11.0
13.2
13.1
9.2
9.0
9.2
9.2
9.4
9.3
9.1
9.0
9.1
9.2
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Q3 2020
Q4 2020
U.S.
International
Exclusive content becomes a core element in business strategies of video
streaming services
Deep dives: stronger focus on exclusive content
High Investments in the production of “Originals”
With the launch of its video streaming service, Netflix created the possibility to
legally access a wide range of movies and TV series from a variety of production
studios and publishers in one place. The growing number of competitors – Disney
will start its own streaming service in 2019 – and the accustoming to the freedom of
unlimited watching of video content has now made it necessary to stand out from
other providers. For Netflix and Amazon, focusing heavily on more exclusive
content in the future seems to be an opportunity to position themselves as serious
players in the film industry and, thus, offer more exclusive content and gain more
paid subscribers. With “House of Cards”, Netflix began to produce its own movies
and TV series in 2013 already. One year later, Amazon caught up with its exclusive
TV series “Bosch”. In October 2018, Netflix announced its plan to open a new
production hub in Albuquerque, NM, following the acquisition of ABQ Studios. The
company also plans to invest US$1 billion in new productions. Furthermore, more
local TV series for European markets, especially for Germany, were announced. As
a part of this new content strategy, both companies intend to screen their selfproduced movies in local cinemas as well.
23
Sources: Netflix, Amazon
CHAPTER 3
Appendix
STATISTA MARKET INSIGHTS
Market Insights – market data,
forecasts, and qualitative insights
Gain a better understanding of markets across 190+ geographical entities – on
a global, regional, country, and/or state level. Access our data via web
interface, download (XLS, PDF, PPT), or reports. Benefit from our 48-hour
customer service guarantee.
• 10 sectors: advertising & media, consumers, countries, digital sector,
finance, health, industrial sector, mobility, and technology
• 1,000+ markets, e.g., FinTech, Food, or Robotics
• KPIs, e.g., revenue, market shares, prices, and volume
• Features: Compare countries & regions, change currencies, select
visualizations, and/or customize downloads
• Use cases: sales planning, investment decision support, resource
allocation, and portfolio management
Go to Market Insights
25
Find out more on:
https://www.statista.com/outlook/
10
190+
1,000+
400+
sectors
geographical
markets
reports
entities
Author
Jonah Trenker
Analyst Digital Markets
Jonah.trenker@statista.com
Jonah Trenker graduated in Tübingen, Germany with a master’s degree in
economics and finance, with a focus on empirical calculations. In the Strategic
Market Insights department, he is responsible for media markets, as well as
Metaverse, AR & VR and Esports markets. Additionally for the Artificial Intelligence
market. He supervises the markets from research and modeling, to forecasting and
publishing. ​
26
www.statista.com