German VOD Revenue Seen More Than Doubling to $2.9B by 2023

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After a slow start, on-demand and streaming revenue is exploding in Europe's largest market, a new study shows.

German consumers have taken their time adapting to video-on-demand, but a new study, published Monday, predicts explosive growth in the next five years.

Research group Goldmedia anticipates “an unabated growth trajectory and [a] boom in the pay VOD market,” in Germany with total revenue forecast to more than double from $1.3 billion (1.1 billion euros) in 2017 to $2.9 billion (2.5 billion euros) by 2023.

The study, Pay VOD in Germany – 2018-2023 Forecast, includes the business of subscription VOD services, such as Netflix and Amazon Prime, as well as transactional VOD and electronic downloads from the likes of Apple's iTunes alongside more niche streaming services such as sports-focused platforms DAZN and Eurosport. Goldmedia counts some 30 VOD providers currently active in the market, “with new players in the starting blocks.”

Subscription VOD (SVOD), which has been made available widely by Netflix and Amazon, accounts for 74 percent of VOD revenue in the German market, the study found, with no sign of its growth slowding down. Goldmedia forecasts the SVOD segment is capable of achieving an 80 percent revenue share by 2023.

In the transactional VOD and electronic sell-through segment, much of the revenue is generated by feature films released on VOD shortly after their cinema runs. Goldmedia sees plenty of growth left in the German market, noting that, at the end of 2017, just 18 percent of German households subscribed to a least one paid-for VOD service.

“The market is not likely to run out of steam in the near future,” the study concludes. “The forecast suggests that it is more likely that the competitive landscape will soon start shifting in this rapidly growing market. Global service providers are already in the starting blocks with their new VOD platforms.”

The VOD market has been growing strongly across Europe —France last year saw VOD revenue increase more than a third to some $590 million (500 million euros) according to figures released by France’s National Film Board (CNC) — but the industry still lags behind the North America market, which was recently valued at $15.3 billion for 2017, according to Transparency Market Research.