The VOD market in Western Europe will reach EUR 30.5 billion in 2027, up from EUR 25.7 billion in 2024, at an average annual growth rate (CAGR) of 6%, as reported in the 20th ITMedia Consulting Report: VOD in Europe 2024-2027. After years of double-digit growth, the streaming market in Western Europe is therefore showing the first clear signs of slowing down as a result of the following factors that will emerge in the coming years.
The pay-TV component of VOD (SVOD and TVOD), having reached full maturity, in the coming years, will show a substantial stagnation +3%, in real terms, when compared to the inflation rate. Only sport will allow paid VOD to maintain positive growth and this component will increase its weight in the overall offer in the coming years. In any case, there will not be a real paradigm shift, since it will be AVOD, and therefore advertising, that will make it possible to maintain a consistent growth rate over the next 3 years - around 10% -, but ITMedia Consulting's forecasts now envisage a smaller increase than expected, compared to what was predicted in last year's report, especially from 2026. Now, what works best are the hybrid forms, with a lowered monthly price in exchange for the viewing of advertising, compared to pay-only, but also to the completely free models of pure AVOD, a la Pluto TV for instance.
The bundle of services, i.e. the offer of several SVOD services in one package at a discounted price compared to individual subscriptions, which represents the last frontier of streaming, is also destined to develop even more in the coming years, based on different types that are emerging on the market and which are described and explored in detail.
Generative AI will have a preponderant and disruptive impact on the entertainment industry, but it will be more relevant in terms of changing production and distribution models and in terms of reaching economies of scale and cost reductions, identifying tomorrow's winners and losers, less so in terms of its impact on the overall revenue level.
In the meantime, video consumption on the big social platforms — You Tube, TikTok and Instagram — is growing strongly, with users spending more time on these platforms each year and this viewing by default impact time spent with subscription video. Indeed, social video viewing as well as video games became part of the larger video sector in the new digital ecosystem where all the digital media compete for the consumer’s attention, the only scarce and increasingly contestable resource.
All this will lead to a rapid decline of traditional TV as well as video streaming, albeit at a slower pace, with consequences also in the shift in advertising spend. This will be the result of changing video content preferences and habits among consumers, starting from younger generations towards the rest of the population. For sure, the race is on to replace linear TV and eventually video streaming as the video option that commands the most viewing hours in the average people’s waking day. However, this will be a marathon, not a sprint.