Online video subscription revenue in Europe grew by 128% a year between 2011 and 2016. It still represented less than 7% of total pay television and video revenues.

38.7 million people in the European Union subscribed to an online video service in 2016. That represents 14% of homes across Europe. Over 11 million of them were in the United Kingdom, with a penetration of 43%, although Norway and Denmark had even higher penetrations, at 53% and 50% respectively. It is estimated that Netflix accounted for almost half of the total number of subscribers in the European Union.

There were nearly 200 online video subscription services active in Europe at the end of 2016. 22% of them were based in the United Kingdom.

The figures come from a report from the European Audiovisual Observatory, although the numbers are likely to be higher at the time of release.

The total revenue for online video subscription services in Europe was estimated at €2.5 billion in 2016. That represents a growth of 128% a year between 2011 and 2016. Over €800 million of that revenue was from the United Kingdom.

Revenue from subscription video-on-demand services overtook that from transactional services in 2015 and is growing rapidly.

Video-on-demand service revenue in Europe 2011-2016. Source: European Audiovisual Observatory.

Subscription video remains a relatively small market compared to pay television, accounting for 6.8% of revenues to subscriptions to pay services in 2016, compared to only 0.2% in 2011.

SVOD and pay TV revenue in Europe 2011-2016. Source: European Audiovisual Observatory

Average revenue per subscriber is about €5 a month, compared to an average of €16 for pay television, although in countries like the United Kingdom pay-television subscriptions are much higher.

The report found that the growth of the online video subscription market in Europe had not resulted in a decline in pay-television numbers. The rate of growth has declined in recent years, although that varies by market. “So far, no evidence can be found of the so-called ‘cord-cutting’ phenomenon,” it notes. This is attributed to lower penetration of pay television, meaning that online video may address new customers, and that the cost of pay television is generally lower than in the United States.

Trends in the EU SVOD Market is published by the European Audiovisual Observatory and is available from its web site.