Research has revealed how the European TV-based video-on-demand and pay-per-view markets will develop over the next five years. From a low penetration of just under 8 per cent today, Screen Digest predict that by 2011 over 20 per cent of Western European households will have true video-on-demand (VoD), a 30 per cent growth on current levels. This growth will generate increased revenues, giving the VoD and pay-per-view (PPV) markets a value of E3 billion by the end of 2011.
While the ‘big five’ European markets will continue to take the lion’s share of on-demand revenues, other countries are beginning to catch up. As more Nordic companies deploy VoD services, the Scandinavian countries are beginning to show increasing on-demand average revenue per unit (ARPU's). The expansion of the rest of Europe’s revenues is also a consequence of the wider availability of the so-called 'long-tail' of content. True VoD services typically have a much greater range of local and international programming than their near-video-on-demand counterparts, driving increased spending. It is this which is one of the major factors in allowing Europe’s smaller states to close the gap between the big five countries of the UK, Germany, Italy, Spain and France.
The next five years will see the supremacy of sports and major movie content challenged, as other content such as archive and library films and a la carte TV programmes grow their share of total on-demand revenues from 9 per cent to 18 per cent. On top of this, as subscriber numbers and overall on-demand buy rates increase, blockbuster films will benefit from the market growth and will be earning E700 million per year by 2009, despite their loss of market share. The adult industry will also reap rewards, doubling its VoD revenues from its current level of over E250 million to over half a billion Euros by the end of 2011.