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Current Issue: July 2007
Ovum raises VoD revenue forecast to US$12.7 bn for 2011
by Ken Wieland
“After speaking to a lot of telcos in Western Europe and Eastern Europe toward the end of last year and seeing some of the initiatives taking place from the likes of France Telecom, Telefonica and FastWeb, I’m a lot more optimistic about VoD revenue growth,” says Aleksandra Bosnjak, content and media specialist at the Ovum consultancy.
Accordingly, Bosnjak has upped her projected worldwide annual user spending on VoD to US$12.7 bn for 2011. Last September, she had calculated the figure at US$9 bn by 2010. (The September 2006 forecast would have slated VoD revenue at around US$10 bn for 2011.)
VoD revenue, as defined by Bosnjak, is end-user spending on downloadable or streamed content. It does not include IPTV service bundles, pay per channels or free VoD (which is sponsored by advertising).
Different regions,
different patterns
According to Bosnjak’s figures, cable operators in North America currently are generating the overwhelming majority of VoD revenue. For 2007, Bosnjak calculates that North America will account for US$2.1 bn out of a worldwide VoD revenue total of US$2.7 bn.
The Western and Eastern European markets, she says, will chip in with US$262 m for 2007, and the remainder will come from the Asia-Pacific region.
Of the North American total, Bosnjak calculates that cable operators account for 90 percent. In Western and Eastern Europe she says telcos will grab between a quarter and a third of end-user VoD spending in the region during 2007.
She expects, however, that by 2011 Europe will have taken large strides to catch up with North America. “Europe as a whole is a promising market because, unlike in North America, cable has not reached mass scale,” she says.
Bosnjak estimates that of the worldwide US$12.7 bn VoD revenue by 2011, North America will account for US$6.6 bn; Western and Eastern European markets will generate US$2.6 bn; and the Asia-Pacific region (which includes China and India in Ovum’s research) will have US$3.1 bn.
“Due to the population size and investment in broadband, Asia will come more to the fore,” Bosnjak says.
Telcos still on VoD back foot
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