Benedicte Guichard | Tue Oct 06 2015 CET | Subscriptions
Does SVOD in Europe have a lot of catching up to do?
While cord-cutting is a major trend in the US, it is not surging in Europe with the same tempo. Reports show that the European SVOD market still in its infancy compared with the American one. The key factors influencing that are:
While the SVOD services are slowly conquering Europe, there is a significant difference between the penetration rate in Western versus Eastern Europe. According to Statista numbers, almost one third of the Western European households will be subscribed to on-demand video by 2020.
On the other hand, Eastern Europeans are more traditional in terms of video/TV consumption. The acceptance of these kind of services is way lower, more specifically, 4-5 times lower compared to Western Europe. As the market develops, it is expected that in mid to long-term, SVOD can become a mainstream option for those countries as well.
It is no surprise that the SVOD market acceptance is directly lead by the penetration of Netflix on European soil. While its no.1 position in North America firmly taken, Netflix is facing established local competition and Amazon since its introduction in early 2012. Anyway, Netflix managed to grab its share, especially in 3 major geographical markets:
While the SVOD penetration rates in Europe are still far from the North American, there are clear signals of growth. Average revenues per user (ARPU) numbers still show increasing usage and consumer loyalty. First-time subscriptions are on the rise, which in turn lowers annual average expenses. Increased customer loyalty will ultimately have a positive effect on annual per capita revenues.
Find more data about the demographics and financial projections in this infographic made by Statista.
Are you a interested in becoming SVOD provider? Find some important SVOD insights here: