Video on demand (VOD) is substantial and growing in the US, but for American content producers there is an even bigger market to be tapped in the developing countries overseas. By 2014, 84 percent of all pay-TV net additions will come from emerging markets, however a successful pay-TV VOD service in these markets will depend on a variety of factors, according to a new report by Pyramid Research, the telecom research arm of Light Reading Communications Network.
“By 2014, emerging markets will account for 69% of the global subscription total, with 84% of all pay-TV net additions coming from these markets,” says Dan Locke, Senior Analyst at Pyramid Research and author of the report. “Almost half of the world’s pay-TV subscriptions come from Asia/Pacific, mostly from China and India. The next-largest emerging pay-TV nations are Russia, Egypt, Turkey, and Poland,” he adds.
Even though most pay-TV subscriptions are found in emerging economies, the revenue opportunity in these markets is considerably smaller than in developed ones, due to significantly lower pay-TV average revenue per subscriber (ARPS). “Low incomes make high prices for pay-TV unaffordable for most in developing markets, and free or inexpensive alternatives such as pirated content deters adoption even further. As a result, only 20 percent of pay-TV revenue worldwide comes from emerging markets,” Locke noted.
“A successful pay-TV VOD service in an emerging market will depend on a variety of factors, including the network technology and architecture, content availability, consumer demand, and the competitive landscapeDespite lower attach rates in emerging markets than in the US, Pyramid believes sizeable revenue opportunities for VOD and DVR services still await due to the sizeable and largely untapped markets,” said Locke.
The report, which Pyramid Research would, of course, like to sell you, offers specific recommendations to operators, content providers, vendors, and investors. For more information on the 98-page report, “Pay-TV Video on Demand in Emerging Markets: Service Provider Strategies, Business Models and Five-year Adoption Forecasts,” go to www.pyr.com.