Over 900 million homes will have access to true video-on-demand or near video-on-demand technology by 2012, equating to 78 per cent of the world's TV households.
New research from Informa Telecoms & Media suggests that the services will generate revenues of more than $10bn.
North America and Europe will account for a combined 83 per cent of global on-demand revenues by 2012, with North America leading the way at close to 50 per cent.
Asia Pacific will account for more than half of on-demand homes by 2012, but will take less than 12 per cent of global on-demand revenues.
The Informa research found that operators are continuing to demonstrate the importance of on-demand services through investments in network upgrades in preparation for widespread activity.
The fact that consumers are readily embracing digital TV and high-speed internet also adds to the "positive feeling".
Adam Thomas, author of the report, said: "True video-on-demand operators still use a free-content model to promote high customer awareness of the technology.
"But there are now signs that these services are successfully converting users into revenue-generators. This is often at the expense of near video-on-demand services, which are being phased out or reduced in size."
The UK is the on-demand leader in Europe, and is forecast to generate $677m in 2012. France and Germany are some way behind in second and third places respectively.
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