Quo Vadis, VOD market?
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The COVID-19 pandemic changes the current scenario of further development of the VOD market in Poland. PMR estimates for 2019 show that the number of paid users of VOD services is growing organically compared to previous years. For 2020, the potential of VOD services in Poland is expected to grow. The situation with regard to COVID-19 will also be reflected in the following years.
The boom in the VOD services market
PMR estimates for 2019 show that the number of paid users of VOD services themselves is growing organically compared to previous years, mainly between 2017 and 2018. In other words, the last three years have more or less the same level of net new users. Currently, interest in VOD services is even greater than before – in addition to the natural growth of users for this type of platform, an ad-hoc epidemic situation (COVID-19) overlaps with it. The results of PMR’s own research (carried out in April this year) show that about one third of households in Poland are willing to buy or use VOD services more often due to the coronavirus epidemic. The situation related to COVID-19 resulted in interest in VOD services in the PPV model first of all.
As a result, VOD services are currently experiencing their golden age, or at least they are certainly at its threshold. On the other hand, it is worth bearing in mind how long the epidemic will last and whether it will not cause the VOD market to fall into decline due to the exhaustion of the potential for new productions on platforms, including cinema productions (COVID-19 causes films to go to VOD platforms without cinema distribution).
Taxing streaming services – will VOD lose much?
According to PMR, the possible taxation of VOD platforms in Poland will not significantly affect the value of the VOD market. 1.5% of revenue is not a large scale, considering the largest market players. The streaming tax will not apply to smaller players, who could actually fail to do so, additionally struggling with the reality of a competitive market. Moreover, it is quite possible that VOD providers will want to compensate for the possible losses on this account by increasing prices for the services provided.
On the other hand, again, it has to be borne in mind how long the pandemic will last – the lack of a sufficient number of new productions on the VOD platforms and their taxation may possibly jeopardise the position of the least profitable platforms to be taxed – both lower revenues and an outflow of customers due to higher service prices.
COVID-19 changes the current scenario for further development of the VOD market
In the latest edition of the report on the pay TV and VOD market in Poland, PMR is working on a scenario that will take into account the greater potential of VOD services in Poland in 2020. The situation related to COVID-19 will also be followed by years to come – more frequent use of VOD services by Poles during the epidemic may perpetuate such a need for longer. PMR preliminary estimates that in 2020 SVOD services in Poland alone may gain at least half as many net subscriptions as last year.