Data Center VOD Market is in High Demand as More Providers Offer VOD Service

Digital Content Market

When Netflix first began their subscription-based video on demand or VOD service back in 1999, the content selection wasn’t even close to up-to-par with what television and satellite broadcasters offered.  10 years later, and over 10 million users subscribed to Netflix’s 100,000 titles.  By 2013, Netflix surpassed 37 million members across 40 countries with more than one billion hours of TV shows and movies per month.

In order to process, manage and store videos for broadcasting, VOD service providers use data centers which consist of several inputs, outputs and storage mediums used to encode, decode, store and deliver video content through cable, broadcast and telecom networks. Video servers have high processing power with real-time streaming capabilities and networking abilities with other equipment. They also offer other application features such as branding, integrating graphics and inserting live inputs and advertisements.  These benefits are playing a huge factor in Data Center VOD Market growth, which is expected to post a CAGR of 13.87 percent for the 2012-2016 period. 

VOD service revolutionized the way we watch movies and television.  The ability to stream video content allowed end-users to pause, fast-forward and rewind television and movies which means no more rushing home to catch the latest episode of your favorite show. VOD service providers offer content through service channels such as cable TV, direct to home (DTH) or internet protocol television (IPTV). These services can be connected to their viewing systems such as TVs, computers and portable devices such as tablets and smartphones.

The Data Center VOD Market is broken up into three main segments: VOD Server, SAN and Video Server which combined are expected to generate over US$ 2.5 billion during the forecast period, ultimately reaching US$ 6.87 billion by 2016.

The financial success in the VOD market has driven many cable TV, DTH and IPTV providers to create their own VOD platforms.  This year, Netflix added streaming TV network to its list of services in order to compete with cable and network television VOD service.  DirecTV is also expected to release their online VOD platform called Play which offers more than 5,000 on-demand content selections and provides live streams of sports programming offered by DirecTV.  As more VOD providers adopt VOD platforms, they will need to seek the services of data centers to help manage and store content.  All in all, as consumers continue opting for VOD options to watch television and movies, the demand for VOD service and thus data center VOD will remain “on demand” in the years to come.

For more information, view our 2012-2016 Global Data Center VOD Market report.