A new report says Western Europe broke through the €2 billion mark in 2015 and is now forecast to reach €3 billion by then end of 2016.
“The multi-territory international players changed the game dramatically for SVOD in Western Europe in a very short period of time,” said Tania Loeffler, analyst at IHS Technology. “When Netflix launched in the UK, total consumer spending on SVoD in Western Europe more than doubled to €307.6 million in 2012. By the end of 2014, that figure had more than trebled to €1.1 billion due to Netflix’s European expansion and the launch of Amazon Prime in the UK, Germany and Austria.”
IHS is forecasting that year-on-year growth will slow into the forecast period. Nevertheless, by 2018 SVOD will still account for 49% (€4.2 billion) of home video spending in the region and is set to increase to a 58% share or €5.2 billion by 2020.
The analyst points to smaller relatively affluent markets including the Nordic countries, the Benelux and Switzerland that generate a disproportionate amount of consumer spending.
In 2015, Sweden had 3.2 million broadband households and Norway had 2.1 million, compared to Germany’s 26.9 million. However, broadband households in Sweden spent an average of €23.16 on online SVOD services and the average spend in Norway was €89.46; German Broadband Households, in comparison, spent only an average of €6.06 on SVoD services during the same timeframe.
Norwegians are forecast to spend a total of €239.6 million on SVoD by year-end 2016, set to increase to €318.3 million by 2020, which will put it on par with both Spain and Italy (markets with approximately four times as many broadband households). By 2016, Belgium and the Netherlands combined will account for 10 percent of total SVoD spending in Western Europe.