VOD in 2013

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The UK video on demand industry continues to show fantastic levels of growth, and as VOD specialists, we couldn’t be happier.

Digital video, including services such as iTunes, Netflix and LoveFilm, grew by a massive 40.2% in 2013 reaching sales of £621.4m according to figures reported by the Entertainment Retailers Association. Despite a fall of 7.6% fall in physical sales, the UK video industry as a whole was able to grow by 3.7%, thanks to the increasingly important contribution of VOD services. VOD now accounts for nearly a third of the entire UK video market, which itself is worth just over £2bn.

Digital video sales grew 40% in 2013

Source: Data from ERA, 2014; graphic by Ostmodern, 2014

This follows a trend of growth in the UK VOD industry, coinciding with changes in the ways in which people are consuming video. Data from Nielsen, reported in a Raindance Film Festival blog, suggests that video on the internet was watched by 37% more people, while video on mobile devices was watched by 25% more people.

These trends are emerging globally as well. Research by Accenture shows that the number of people who say they watch film and TV on laptop and tablet increased in the last year. This is consistent with insights we have gained from our own experiences in user research, where we have found that laptops and tablets are increasingly being used to watch video online.

BBC iPlayer continues to show growth

Source: Data from BBC iStats, 2013; graphic by Ostmodern, 2014

It was a good year for catch up services as well, with the BBC iPlayer usage continuing to show consistent year on year growth, with the number of monthly views in 2013 up by an average of 26% on the previous year to over 184 million requests.

These figures point to the increasing importance of digital formats to the UK film and TV industry. Video sales make a key contribution to the revenue streams of both content producers and distributors, and with physical sales in decline, video on demand looks set to be the driving force for growth in the industry.

Our clients need to squeeze greater value out of the whole of their catalogue will drive innovation

In 2014 we expect to see continued levels of growth in digital video, as TV and film viewing behaviours are shifting from a linear broadcast to video on demand. However, the market will soon reach a saturation point where VOD becomes the dominant model for AV consumption.

Ostmodern’s UX director Tom Williams predicts that the focus of the market will shift to getting the most value out of the time people spend using VOD services:

“Until now, we've seen VOD services mostly focus on promoting a few big titles and being pretty lazy about encouraging users to engage with a breadth of content. As on demand content becomes the norm, the rise in numbers will plateau. We predict that when this happens our clients need to squeeze greater value out of the whole of their catalogue will drive innovation in the existing paradigms around discovery. Otherwise their customers will go elsewhere.”

Getting the most value from existing content catalogues and increasing the consumption of will be driven by innovation in digital video on demand products and services. At Ostmodern we are always innovating, creating with new and exciting ways to improve VOD products and services, improvements that will drive up viewing figures and increase the value of digital video, cementing the importance of VOD to the UK film and TV industry.

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