Chapter 12: Video on Demand – 133 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Online VoD services in the UK employ four basic types of business model; the first two are transactional VoD (TVoD) models: • Rental VoD – one-off rental, also known as download-to-rent (DTR) eg from Google Play or Blinkbox; • Retail or download-to-own (DTO), also known as electronic-sell-through (EST) eg iTunes or Xbox Video; • Subscription VoD (SVoD) – unlimited access to content for a fixed monthly sum eg Amazon Prime Instant Video or Netflix; • Free/advert-supported VoD from catch up services eg BBC iPlayer or 4oD. IHS estimates that subscription services accounted for 48% of online film revenues in the UK in 2013, followed by digital retail at 29% and digital rental at 22% (Figure 12.2). Subscription services overtook digital retail for the first time; the subscription model has seen significant growth in the past two years, up from 31.5% in 2012 and 0.6% in 2011. Figure 12.2 Online VoD film revenue by type of service, 2013 £ million % Subscription 92.8 48.1 Digital retail 55.5 28.8 Digital rental 41.9 21.7 Advertising 2.6 1.3 Source: IHS 12.3 Top providers of VoD In the absence of film by film data, this section outlines the top providers of VoD and top providers used by online viewers. Table 12.1 shows a list of the top VoD providers in the UK. Apple, BSkyB and Netflix are the highest earning providers. However, the ranking is based on revenue for both television and film on VoD (the figures are confidential) so it is possible that the rankings would be different if they were based on revenue from film on VoD only. Netflix was the fastest growing provider of VoD services in the market in 2013, almost doubling its international (non-USA) revenues from $476 million in 2012 to $775 million. According to IHS, this is due to Netflix expanding into the Nordic countries and the Netherlands, alongside the UK in 2012.
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