HomeArticleCapture Opportunity with the Growth of VOD

07 October 2021

Capture Opportunity with the Growth of VOD

In June 2021, Instagram announced their business decision to focus on becoming a video platform, transcending their original photo-sharing business models. Ever since the decision was made, Instagram users could find new video features such as reels, new filters, and other tools to create short videos. Given the growing popularity of other competitors such as TikTok, YouTube, and other video platforms, the rising demand for videos also signify the growth of VOD.

What is VOD?

VOD stands for Video-on-Demand. Basically, the term refers to pre-recorded video contents that can be accessed by users anywhere and anytime, which is also one of VOD’s advantages. If more conventional entertainment providers (such as cable TV networks) have scheduled programs, VOD users can watch any videos they want. Simply put, VOD gives users more freedom to choose. Relatively unhindered by TV executive decisions, VOD creators also can now have more independence in creating contents. 

Unsurprisingly, businesses are quick to capture the opportunity given by VOD. Currently, there are three models of VOD monetization. Platforms such as Netflix, and Disney+ are examples of SVOD (Subscription VOD), where users pay a monthly subscription to access videos on the platforms. TVOD (Transactional VOD), on the other hand, is a pay-per-view model where users pay based on the video they watch. Meanwhile, in AVOD (Advertising VOD) models such as YouTube, companies pay content creators by putting advertising on their videos. 

Current and Future Projections of VOD growth on Global and National Scales

With its popularity, VOD creates a market with dynamic possibilities that are observing. Currently, it seems that VOD greatly benefits business users. According to Animoto’s report in 2020, 85% of marketers find videos very efficient at getting user attention. In fact, video ads are said to be the most effective way to introduce consumers with a brand they would make a transaction from. Similarly, Uscreen.TV reports that websites which provide videos for their visitors experience 157% of traffic search growth.

While there’s a rapid development in VOD growth today, it seems that VOD popularity among both users and companies will keep on rising even until years from now. Cisco Annual Internet Report predicts that “online videos will account for 82% of all internet traffic by 2022”. Statista similarly predicts that VOD global users will reach to 2 million by 2025, which marks a 25% increase from 2020. Fortune business insights also reports that globally, VOD market will be worth $159.62 billion by 2027.

As for the Indonesian market, the growth of VOD seems to parallel global VOD developments. According to Bisnis.com, the Covid-19 pandemic prompts Indonesian users to seek out entertainment beyond what the national TV companies have to offer. Report from UGM’s Center for Digital Society supports this claim, as VOD user penetration is expected to reach 17.7% in 2025, which would generate 15.7% increase in yearly profit for VOD business. These figures mark an opportunity for business managers to develop their businesses using video services.

Opportunities offered by VOD for Users and Business Managers

From the data, we can see that VOD poses valuable opportunities for both users and business managers alike. In a time where a global pandemic happens and the supply of conventional entertainment is limited, users can turn to VOD. VOD Tools such as Wholesale TV Box can allow you to watch videos from a number of platforms on your smart TV. Meanwhile, business managers can work with reliable Video Management Systems (VMS) providers to improve their sales, brand awareness, and customer relations.

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