Goldmedia: German VOD Revenues Growing Faster Than Ever

Video-on-Demand (VoD) is turning into a mass market in Germany, according to Goldmedia. At the end of 2017, 18% of all German households were subscribing to at least one paid-for VoD service. The market appears to be on an unabated growth trajectory and the boom in the pay VoD market is seeing revenues soar through the roof. Total gross revenues at the end of 2017 amounted to €1.1 billion ($1.3 billion) and are anticipated to more than double within only five years, climbing to €2.5 billion ($2.9 billion) by 2023.

Amazon Prime Video and Netflix continue to lead the pack in the German VoD market. Netflix primarily focuses on subscription video-on-demand (SVoD), while Amazon’s video offering is integrated into its Prime service where video titles can be either rented or purchased — transactional video-on-demand (TVoD) and electronic sell-through (EST).

Other important players in the German paid VoD market are Sky (a front-runner in the classic pay TV market), Maxdome (a subsidiary of the ProSiebenSat.1 Group), Apple’s iTunes and Google’s Play Store. Specialist sports streaming services such as DAZN and Eurosport are also seeing an increase in users.

The market is not likely to run out of steam in the near future. Goldmedia’s forecast suggests that it is more likely that the competitive landscape will soon start shifting in this rapidly growing market. Global service providers are already in the starting blocks with their new VoD platforms.

SVoD services account for by far the highest share of turnover in the German paid-for VoD market with a share of 74% in 2017. Goldmedia forecasts that this segment is capable of achieving an 80% share by 2023. The leading players in the SVoD market are focusing heavily on producing their own original content. However, licensed titles that are streamed via TVoD and EST are also popular among users, especially new feature films which are available to view on-demand just a few months after they have been released in cinemas.

In addition to attractive content, one of the most important market drivers is the way in which the services have become more convenient to access at any time of the day via smart TVs or special streaming devices such as the Amazon Fire TV Stick. The growing number of households with high-speed broadband connections is also boosting VoD’s technical reach.

The rural market is continuing to play catch-up and it is anticipated that huge potential will be unlocked in these areas in particular. Goldmedia predicts that every other household with a broadband connection will subscribe to a VoD service by 2019.

The wide range of content in the VoD market is continually growing. Content that serves niche markets such as children’s programming and independent films has been available for a while now. The sports segment is continuing to gain further ground, which is evident in the way that VoD service providers are vying to gain exclusive rights to stream sports events.

For example, the first match of the 2017/2018 Bundesliga football season could only be viewed on the internet via Eurosport Player.