Germany, UK are ‘biggest’ European markets for SVOD, says research

Germany and the UK have emerged as the biggest European markets in terms of SVOD revenues, according to new figures from Strategy Analytics’ TV & Media Strategies.

Global consumer spend on SVOD services globally was €47bn ($52bn), with Germany and the UK each sharing 4% of that pile – amounting to roughly €1.9bn each.

Unsurprisingly, the US is the largest market accounting for 43% of SVOD revenues. This is more than double of China in second with 17% – and far in excess of Germany and the UK in third and fourth respectively.

Other European countries to feature in the top 10 are France with 3% of SVOD revenues and Spain with 1% of revenues. Overall, the top ten countries account for 81% of consumer spend on SVOD services.

The report also estimates that global consumer spend on SVOD services will grow to €91bn by 2025. The US’s market share is expected to modestly increase to 44% while China will decrease to 15%. Meanwhile, the German market share is expected to grow to 4%.

Researchers noted that US households are more likely to subscribe to multiple SVOD services – 74% vs a global average of 32% – meaning the US will continue to dominate in market share.

In 2019, US SVOD households subscribed to 2.45 SVOD services on average. This is expected to grow to 3.21 by 2025. In comparison, SVOD households globally subscribed to 1.54 SVOD services in 2019, with this growing to 1.82 by 2025.

Another reason is that SVOD services on average cost less in the US than in other developed markets. The average SVOD monthly cost globally was €9.11, while it is €5.56 in the US. However, this cheaper entry point has led users to stack up memberships with US subscribers spending an average of €20.08 per month on SVOD services, compared to €8.25 globally.

Michael Goodman, director of TV & Media Strategies, said: “Whether it is pay TV, video rental and sell-thru, or subscription VOD, US consumers have historically shown a willingness to spend on these products and services at a far greater rate than those in the vast majority of other countries.

“There are many local and regional SVOD services around the world, these services must be realistic about the ultimate potential of SVOD revenues and not base their models on US levels of demand.”