New research by media analysts Screen Digest forecasts that, from a low penetration of just under 8% today, true video-on-demand (VOD) will be available in 20% of Western European homes by 2011 – a 30% growth on current levels.

This growth will generate increased revenues, giving the VOD and pay-per-view (PPV) markets a value of €3bn by the end of 2011. Key markets include Belgium, the Netherlands and France, where cable operators have launched their own video-on-demand services.

The expansion of the rest of Europe's revenues is also a consequence of the wider availability of the so-called 'long-tail' of content. True video-on-demand services typically have a much greater range of local and international programming than their near-video-on-demand counterparts, driving increased spending.

In the early days of paid for services, it was blockbuster movies that encouraged people to buy. In 2001, 60% of revenues were generated by blockbuster films. By 2006, this had halved to 30%, as sports content came to dominance.

The analysts reckon the next five years will see the supremacy of sports and major movie content challenged, as other content such as archive and library films and a la carte TV programmes grow their share of total on-demand revenues from 9% to 18%.

On top of this, as subscriber numbers and overall on-demand buy rates increase, blockbuster films will benefit from the market growth and will be earning €700m per year by 2009, despite their loss of market share. The adult industry will also reap rewards, doubling its VoD revenues from its current level of over €250m to over half a billion Euros by the end of 2011.

Story filed 03.12.07