U.S. forecast to lead in VOD revenues

435 million homes hooked up to services

By STEVE CLARKE

LONDON -- The U.S. is set to generate the lion's share of global video-on-demand revenues in the next five years.

Globally VOD and NVOD (near video-on-demand) are forecast to generate some $11.4 billion by 2011, with 435 million homes hooked up to services, according to a forecast by London-based consultancy Informa.

While the Asia Pacific region will account for 45% of on-demand subscribers by 2011, it will be responsible for only 12% of global revenue.

North America will generate 46% of revs, albeit from only 27% of subscribers.

Informa predicts that pay-per-view sports and staggered starts of movies will continue to dominate the on-demand sector in the short term, with on-demand programs eventually becoming more important.

"Until recently, the expectation was that technically superior VOD would quickly replace NVOD, but that hasn't happened," said Adam Thomas, author of Informa's "On-Demand TV" report. "Much of the VOD content available is free of charge and being used as a churn-reduction device.

"This strategy won't last forever, but in the meantime, the established NVOD business is being retained and developed while operators gradually ratchet up levels of paid-for VOD content."

In Europe the U.K. leads the on-demand market by a big margin, generating $480 million last year, almost double that of the second ranked territory, France, with $241 million.