VOD ready to download $10 bil in next 5 years

N. America seen as leading trend

Revenue for VOD services will top $10 billion within the next five years, according to a report published here Thursday.

The report from Informa Telecoms & Media indicates that by 2012, 909 million homes will have access to true VOD or near-VOD technology, equivalent to 78% of the world's TV households.

Significantly, all of the U.S. majors are preoccupied with demands from broadcasters worldwide for special VOD windows in their contracts. Access to top U.S. primetime TV series as close to day-and-date as possible has become critical for many broadcasters who are increasingly combating illegal online broadcasts of top dramas within hours of their American debuts. VOD, studio sources said, has become a key component of international licensing contracts and will be front and center of many discussions at MIPTV in April.

The latest Informa research also forecasts that North America and Europe will account for a combined 83% of global on-demand revenue by 2012, and that North America will lead the way with close to 50% of the world's VOD revenue.

In 2007, North America accounted for 56% of revenue but only 25% of the world's VOD/NVOD makeup, Informa said. The Asia Pacific region will account for more than half of on-demand homes by 2012 but will take less than 12% of global on-demand revenue.

In Europe, the U.K. is the on-demand leader and is forecast to generate $677 million in 2012, with France and Germany following some way behind in second and third place, respectively.

"While true VOD operators still use a free-content model to promote high customer awareness of the technology, there are now signs that these services are successfully converting users into revenue-generators. This is often at the expense of NVOD services, which are either being phased out or reduced in size," report author Adam Thomas said.