Global On-Demand Revenues to Top $6 Billion by 2018 (Report)

"Bachelorette" was a hit on Video on Demand in the U.S.

North America and Western Europe currently account for the bulk of on-demand revenue but growth in Asia and Latin America is set to skyrocket, a recent study finds.

COLOGNE, Germany -- Global viewers want their on-demand TV. A recent study by U.K. firm Digital TV Research forecasts that revenues generated by on-demand services for film and TV programs will soar 44 percent to $6 billion by 2018, compared with $4.2 billion in 2012.

The report, a survey that looked at on-demand revenues in 97 countries, predicts a la carte TV will account for 2.9 percent of the $203 billion generated by pay-TV worldwide by 2018, compared to 2.3 percent of $184 billion last year. The on-demand boom, however, will not be enough to compensate for the fall in traditional pay-TV subscription revenues, the study finds.

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The U.S., which last year accounted for 37 percent of total global on-demand revenues, will remain the largest and most developed market but its share of the global on-demand pie will shrink to 30 percent by 2018 even as overall revenues stateside climb 16 percent.

Similarly, North America and Western Europe, which currently dominate the on-demand market accounting for 73 per cent of global revenues, will combine to take just 61 percent of the total by 2018. 

Growth in those two territories, at 20 percent through 2018, will be dwarfed, the study finds, by a revenue explosion in Latin America (forecast to increase 129 percent), the Asia Pacific region (up 113 percent) and Eastern Europe (up by 89 percent). Between 2012 and 2018, on-demand TV revenues in the Asia Pacific region are forecast to more than double to $1.457 billion, with the region making up 24 percent of the total global on-demand revenue, from 16 percent today.

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The study excluded on-demand revenue for sports and adult entertainment programming and did not include SVOD services or over-the-top video services provided by IP and cable operators.

In a breakdown of revenues by platform, the report finds revenue from digital cable on-demand services will increase $1 billion to $2.8 billion by 2018; IPTV on-demand revenues from services such as Netflix and Hulu will nearly double to $1 billion and satellite on-demand services will increase by a more modest 22 percent to $1.8 billion.