Revenues from VOD services in Europe increased 30-fold over the past decade, according to the latest report from the European Audiovisual Observatory, which revealed the financial robustness of the SVOD arena in the region. The study focuses on the evolution of the subscription video-on-demand (SVOD), transactional video-on-demand (TVOD), and advertising-financed and broadcaster video-on-demand (AVOD/BVOD) markets in the European Union, and their impact on the traditional audiovisual markets.
According to the European Audiovisual Observatory, for the 2010 – 2020 period (when the European Union sill included the UK), the paid VOD markets saw SVOD and TVOD revenues increasing from €388.8 million in 2010 to €11.6 billion in 2020. The SVOD arena was the key driver for this growth, exploding from €12 million in 2010 to €9.7 billion in 2020.
The growth in SVOD revenues was shown to be driven by multiple service launches over the past ten years and rapid consumer adoption in Europe, with SVOD subscriptions passing from just 300.000 in 2010 to over 140 million in 2020. In the traditional audiovisual sector, the European Audiovisual Observatory noted that European TV players dominated their national markets. Yet it also found that with the shift to direct-to-consumer SVOD streaming services, and the entry of global tech, US studios, and entertainment players into European national markets, the old market equilibrium was changing and new entrants were beginning to dominate.
At the same time, TVOD market revenues rocketed from €377 million in 2010 to €1.87 billion in 2020. This growth was driven by a steady increase in retail and rental revenues, from €377 million in 2010 to €1.87 billion in 2020, with retail revenues set to surpass rental revenues in the coming years as digital purchases of recent theatrical films are becoming more popular with European consumers.
Other key findings from the report included that for most commercial TV players, the sector was set to rapidly increase in revenues as new AVOD players enter the European market and advertisers shift their advertising expenses online to reach consumers who are increasingly spending viewing time on advertising-financed services. In addition, while paid VOD revenues were still a small fraction of total audiovisual revenues in Europe (7% of a total of €114.5 billion in 2019), this share is set to increase with profound changes happening in the audiovisual sector.