The on-demand market has arrived
Video-on-demand (VoD) is finally moving from promise to mainstream. For decades industry observers have predicted the decline of linear television, yet the multi-channel pay-TV model has shown remarkable resilience. Over the past 10–15 years, digital distribution and technological advances revived business models that in many cases are more than 30 years old.
Until recently, however, on-demand technology struggled to deliver a consistently compelling consumer experience. Early limitations included expensive, restricted hardware and small content libraries. As a result, industry forecasts for VoD growth were regularly revised downward. Today, the landscape is changing rapidly. Below are the key factors driving that shift.
Widespread device and app ecosystems
Five years ago, VoD was largely confined to desktop and laptop PCs. A few forward-thinking cable operators and telcos offered on-demand through specialized set-top boxes, but those solutions were costly and reached only a fraction of households. Over the last couple of years, a revolution in consumer devices and software has enabled true on-demand experiences to reach mass audiences.
Tablets have created an appealing personal viewing format for long-form content. Smart TVs from major manufacturers now support dedicated apps that connect directly to VoD services over the Internet, enabling so-called over-the-top (OTT) distribution. Most importantly, game consoles—Xbox and PlayStation—have opened their platforms to third-party VoD apps, instantly placing services in hundreds of millions of living rooms under the direct control of content and service providers.
These developments mean providers can deliver branded, consistent viewing experiences across multiple widely adopted devices, which removes a major barrier to consumer adoption.
Critical mass improves content availability
Consumers have long been frustrated by fragmented content availability: they are willing to pay, but can’t always find the shows or films they want in one place. Content is not a commodity—premium titles are unique and rights holders manage distribution to maximise revenue. Historically, that has meant protecting existing retail and linear-television licensing income, which limited the catalogue offerings of early VoD players.
Smaller VoD providers struggled to compete for desirable back catalogues, which slowed consumer uptake and reinforced the position of established, well-funded incumbents. Over the last year, however, many rights holders have started to recognise the revenue opportunity in broader non-exclusive licensing. By making content available to multiple VoD platforms rather than singling out one exclusive partner, they can expand overall reach and revenue.
This shift toward wider licensing is improving content selection across services and in turn accelerating consumer interest and market growth.
New entrants intensify competition
Many television markets have long been dominated by a handful of distributors and broadcasters—often within vertically integrated groups that control both content and distribution, enabling them to protect market share through exclusive deals. The rise of internet-connected devices and more open rights markets is changing that dynamic.
New and established players alike are entering VoD: global streaming services such as Netflix and other international brands compete with regional platforms; user-generated video sites are experimenting with longer-form content; device manufacturers offer their own stores and services; telecom operators and pay-TV providers launch OTT platforms; and premium channels launch direct-to-consumer offerings in multiple territories. The result is unprecedented competition for viewers’ attention.
Preparing for the on-demand wars
Over the next few years we will likely see a perfect storm of factors boosting online video: widespread device availability capable of delivering premium experiences, increasingly generous content licensing, and a crowded field of service providers. Consumers will benefit from more choice, better content discovery, and improved user experiences.
At the same time, competition will spur aggressive marketing, pricing pressure, and continuous innovation in features and service models. New partnerships and business models will emerge as companies seek differentiation. Ultimately, rights holders stand to gain most: as owners of premium content they will shape the competitive landscape and monetise distribution across a growing global VoD market.
As the ecosystem matures, the next three years should see significant industry growth, rapid innovation, and a transformation in how audiences access and pay for video.