Video as a Service (VaaS) Market Trends

Growth Drivers

• The advancement of artificial intelligence (AI) and machine learning (ML) technologies: The integration of AI and ML technologies in VaaS platform is boosting the market growth by allowing for video summarization. The technologies are automating the process of content analysis, contextual adaptation, real-time processing, and customization, increasing the overall value of VaaS tools. Companies are also investing in the development of AI and ML-enabled VaaS platforms. In July 2025, Phenomenal AI launched its very first text-to-video AI platform. The platform is integrated with AI and ML to allow users to create stunning, professional-grade videos based on prompts.
• Rapid expansion of 5G infrastructure: With the rapid expansion of 5G infrastructure encompassing access network and user equipment, the video as a service market growth is expected to be accelerated. Robust 5G networks are standardizing video streaming with improved speed and mobile connectivity. In November 2024, the Press Information Bureau of India revealed that 5G networks are expected to carry 80% of mobile connectivity by 2030, indicating a crucial role in the enhancement of future connectivity.
• Rising cloud adoption by SMEs: The adoption of cost-effective and flexible video communication solutions is at its peak in small and medium-sized enterprises globally. This indicates a likelihood of a rising adoption of VaaS platforms in SMEs. As per the report by the European Commission, published in December 2023, around 59% of the medium-sized businesses in Europe adopted cloud platforms in 2023, whereas the ratio was 53% in 2021. Similarly, the adoption of cloud services in small businesses increased by 3.8%, reflecting a total proportion of 41.7%. VaaS solutions delivered over the cloud provide on-demand flexibility, easier deployment, and improved integration with other SaaS platforms.

Challenges

• Lack of development of network infrastructure in developing economies: Infrastructure disparity is one of the key challenges that can hamper the growth of the VaaS market in emerging and rural regions, as the performance of all the VaaS solutions heavily relies on high-speed, low-latency internet connectivity. In September 2023, the International Telecommunication Union (ITU) disclosed that around 2.6 million of the worldwide population did not have access to the internet in 2023. This is expected to limit the scalability of VaaS solutions, especially in the use of bandwidth-intensive applications, such a cloud-based video conferencing, playing high-definition videos, streaming AR or VR in real-time, and many more.
• Regulatory pressure: Laws related to data privacy and regulatory guidelines regarding content management limit the expansion of the video as a service platform significantly. It is necessary for the VaaS providers to ensure adherence to content regulations specific to different markets. Data protection regulations also obligate the service providers to take proper measures for data privacy and protection from third-party members. Similarly, regulatory guidelines for advertising, modernization of content, and advertising over VaaS solutions are expected to complicate the business operations of service providers further.