USA Video on Demand Market Outlook to 2030

USA Video on Demand Market Overview

• The USA Video on Demand (VoD) Market was valued at USD 24 billion in 2018 and reached USD 69 billion in 2023. The increasing penetration of high-speed internet primarily drives this growth, the rising adoption of smart devices, and the growing consumer preference for on-demand content over traditional broadcast services.
• The key players in the USA Video on Demand Market include Netflix, Amazon Prime Video, Hulu, Disney+, and HBO Max. These companies have leveraged their vast resources to produce original content, which has been a critical factor in attracting and retaining subscribers.
• In 2023, Netflix launched an ad-supported subscription tier, attracting 10 million new subscribers within the first six months. This new tier is priced at $5.99 per month, lower than its standard plan, making it more accessible to cost-sensitive consumers. The ad-supported model also opens a new revenue stream for Netflix through advertising.
• In 2023, California led the VoD market in the USA, driven by the state's status as a technological hub and major industry players such as Netflix, Hulu, and Disney+. California's high internet penetration rate and tech-savvy population contributed to its dominance in the market.

USA Video on Demand Market Segmentation

USA's Video on Demand market is segmented into service type, content type, and region.

• By Service Type: The USA VoD market is segmented by service type into Subscription Video on Demand (SVOD), Transactional Video on Demand (TVOD), and Advertising Video on Demand (AVOD). In 2023, SVOD services dominated the market due to the continuous investment by key players in producing high-quality original content.

• By Content Type: The market is also segmented by content type into Movies, TV Shows, and Others (including documentaries, live sports, etc.). Movies dominated the market in 2023 due to the continuous release of blockbuster films and exclusive movie premieres on VoD platforms drive the popularity of this segment. Services like Disney+ benefit from their extensive movie libraries.

• By Region: The market is segmented by region into North, South, East, and West. In 2023, The eastern region dominated the market. With densely populated areas like New York City and Washington D.C., the demand for VoD services is particularly high in this region.

USA Video on Demand Market Competitive Landscape

• Disney+: Disney+ expanded its service to 10 new countries in 2023, increasing its global subscriber base to 150 million. The expansion is part of Disney's strategy to capture international markets and diversify its revenue streams. By the end of 2024, Disney+ plans to reach an additional 30 million subscribers globally through continued international expansion.
• Amazon: In 2024, Amazon announced a $1 billion investment in artificial intelligence and machine learning to enhance its Prime Video service. This investment focuses on improving content recommendations, optimizing streaming quality, and developing interactive features. The AI-driven enhancements are expected to increase user engagement and retention by providing a more personalized viewing experience.

USA Video on Demand Market Analysis

USA Video on Demand Market Growth Drivers:

• Increasing High-Speed Internet Penetration: In 2024, there are an estimated 115 million households with high-speed internet access in the USA, up from 105 million in 2022. This growth is driven by investments in broadband infrastructure and government initiatives aimed at expanding internet accessibility. With high-speed internet being a crucial prerequisite for streaming video content, this increase directly correlates to higher adoption rates of VoD services.
• Proliferation of Smart Devices: In 2024, there are around 300 million active smart devices in the USA, including smartphones, tablets, and smart TVs. This proliferation makes accessing VoD services more convenient for consumers. The widespread availability of affordable smart devices has democratized access to streaming platforms, enabling a broader audience to enjoy on-demand content.
• Rise in Content Production and Investments: The major VoD platforms are continuously increasing their investment in original content production. In 2024, it is estimated that the combined spending on content creation by leading platforms like Netflix, Amazon Prime Video, and Disney+ will exceed $30 billion. This surge in high-quality, exclusive content is attracting more subscribers and keeping existing users engaged.

USA Video on Demand Market Challenges:

• Subscription Fatigue: Consumers are experiencing subscription fatigue due to the plethora of VoD services available. In 2024, the average American household subscribes to 4 different streaming services, leading to higher monthly expenses. This fatigue can result in higher churn rates as consumers opt to cancel some subscriptions to manage costs, posing a challenge for VoD platforms to retain subscribers.
• Increased Traffic to Piracy Websites: A report by MUSO highlights that visits to piracy websites increased by 22% in 2022, with TV content being the most pirated media sector. The proliferation of easily accessible piracy websites and apps that offer unauthorized live television shows and VoD has contributed to this increase. In the first eight months of 2022 alone, piracy traffic grew by nearly 50%.

USA Video on Demand Market Government Initiatives:

• Broadband Expansion Initiative: The "Broadband for All" initiative launched in 2023 aims to provide high-speed internet access to underserved rural and urban areas. This $65 billion investment by the federal government is expected to connect an additional 20 million households by the end of 2024. Enhanced internet access will directly benefit the VoD market by increasing the potential subscriber base.
• Cybersecurity Enhancement Act: Passed in 2024, this act mandates stricter cybersecurity measures for digital platforms, including VoD services. With a $1 billion funding allocation, the act aims to protect consumer data and intellectual property from cyber threats. This initiative enhances consumer trust in VoD platforms by ensuring robust data security and protection against piracy.

USA Video on Demand Future Market Outlook

USA's Video on Demand market is expected to reach USD 110 billion by 2028. The market is also likely to shift towards more organized with established players and online platforms expanding their reach.

USA Video on Demand Future Market Trends:

• Integration of Virtual Reality (VR): Over the next five years, VoD platforms will increasingly integrate virtual reality into their services. By 2028, it is projected that 20 million households will have access to VR-enabled VoD content. This trend will be driven by advancements in VR technology and the growing demand for immersive viewing experiences.
• Adoption of Artificial Intelligence (AI): AI will play a pivotal role in enhancing user experience on VoD platforms. By 2028, AI-powered content recommendation systems are expected to increase user engagement by 30%. AI will also streamline content production processes, enabling faster and more cost-effective creation of high-quality content.