German VOD Revenues To Hit $2.9B By 2023, Market Report

Netflix

After taking a while to heat up, revenues in the German VOD market are now growing at a steady rate, according to a new report.

The study, ‘Pay VOD inGermany – 2018-2023 Forecast’ by Berlin-based research and consultancy firm Goldmedia, found that at the end of 2017, 18% of all German households were subscribing to at least one paid-for Video-on-Demand service.

The market appears to be on an “unabated growth trajectory” and the boom in the Pay VOD market (SVOD, TVOD, EST) is seeing revenues soar, Goldmedia claims. Total revenues at the end of 2017 amounted to €1.1B and are anticipated to more than double within five years, climbing to €2.5B by 2023.

The report notes that there are currently 30 VOD providers in the German market with new players lining up to enter. Amazon Prime Video Service, Netflix and pay-TV giant Sky are the leaders in the space, while ProSiebenSat.1 Group subsidiary Maxdome, Apple’s iTunes and Google’s Playstore are also key players. 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,” claims the report. “The 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.”

Subscription-based VOD (SVOD) services account for by far the highest share of turnover in the German paid-for VOD market with a share of 74 per cent (2017). Goldmedia forecasts that this segment is capable of achieving an 80% share by 2023. Goldmedia also predicts that every other household with a broadband connection will subscribe to a VOD service by 2019.

As for the drivers of growth, wrangling over exclusive sports rights is driving spiralling prices in Germany, says the firm. As an example of the increasing diversity in the ecosystem, the first match of the 2017/2018 Bundesliga soccer season could only be viewed on the internet via Eurosport Player.

Significant VOD growth in the German entertainment market has been expected for some time. Germany is Europe’s largest economy and has a relatively affluent population of more than 80M. However, growth has been restricted in part due to internet connectivity issues and the on-going strength of linear broadcasters.