The research firm said that the market rose by 3% year-on-year in 2016 and tipped digital video, pay TV and DVD and Blu-ray combined to continue expanding at the same compound annual growth rate for the next few years.
“Overall video entertainment spend is set to rise to US$280 billion by 2020,” said Futuresource Consulting market analyst Tristan Veale.
While pay TV still accounted for 86% of global video entertainment spend in 2016, Veale said “SVOD was the standout performer of 2016 and momentum is expected to continue well past 2020.”
FutureSource estimated that the global SVOD market reached 236 million subscriptions at the end of 2016 and projected this would almost double to 485 million by 2020.
“Netflix’s dominance in the sector is now facing a significant challenge from Amazon, with this space also being targeted by global entertainment companies including content producers, hardware manufacturers and telcos who are attracted by the significant revenues,” according to the report.
In 2016 digital video spend reached an estimated US$22 billion and exceeded that of physical which fell to US$18 billion.