Surge in VOD services ups stakes for film industry in 2015

In the last quarter of 2014 we have seen a surge of VOD services being announced forcing the film industry to speed up its thinking on how to deal with the changes in the traditional business model.

Streamed content is coming, and much faster than predicted. We estimate that in the next 12 months audiences will start to decline at the box office as increased online viewership will begin to channel viewers away from the cinema

In the past few months there have been several high profile VOD announcements which will lead to bigger competition for audiences, and more high quality content available around the clock.

CBS announced back in October it was launching a new digital subscription service. Then Lionsgate announced it would be launching a VOD subscription service with Tribeca Enterprises at the start of 2015.

On top of that, HBO are also going to begin a VOD service in 2015 while companies like DirecTV are teaming up with Samsung to offer 4K movie streams on demand.

Change is happening now, and with more content being produced than ever before it is likely that there will be fewer box office dollars for 2015 in the U.S. domestic market.

With more money being spent on VOD content, and companies like Netflix putting emphasis on original programming for their subscribers, we can expect the TV movie format to become an even bigger draw next year. Quality will be high on the agenda as companies like Netflix and HBO compete for audiences and we're just about to see this battle for viewers light up.

Film producers will also have to ensure quality at the box office in order to keep up the differentiation. Going to the cinema is an experience, but we've seen this year how audiences are beginning to opt out of movies because they're not good enough.

How will the film industry cope with VOD? It's too early to tell, but the rate in which the digital transformation is happening means that this is no longer a 5-year window of transformation. It's going to be a much faster process.