Here's What Entrepreneurs Must Know About the Booming VPN Industry
The future of the VPN industry is bright, but mostly because the future of online privacy and security is so bleak.
Twenty years ago, virtual private networks (VPNs) were almost exclusively connected to businesses. The consumer VPN industry, as it is now, was pretty much non-existent, with many people using proxies to access blocked sites. However, with more streaming sites and faster speeds, consumers have begun to take to VPNs. A huge factor in the increase in consumer VPN usage is streaming content – especially Netflix – with nearly half of all people using VPNs for entertainment. Only 31 percent of consumers use VPNs for greater anonymity.
For that reason, VPN services have also become extremely user-friendly, with many applications allowing users one-click connections. That way, even the most non-technical user can get started with VPNs. Geo-blocked content, censorship and prosecution are many of the reasons why the VPN industry is expected to grow to nearly $54 billion by 2024, and why entrepreneurs should take advantage of this booming trend.
Who's at the top of the consumer VPN industry?
The time is right for entrepreneurs looking to leverage this trend for their own businesses or create in this space. With such a huge demand for such a niche industry, you'd expect the number of VPN services vying for the top spot (and the biggest piece of the pie) to be growing every year, and that's exactly right.
There are hundreds of VPN providers currently on the market, offering both paid and free plans, all promoting their high level of security and ability to bypass geo-blocking measures. However, the reality is many VPNs aren't able to meet these promises, and only a few major providers are able to rise to the top. In fact, these providers are beginning to employ marketing strategies to allow them to appeal to an even wider audience.
Cybersecurity experts at VPNpro recently analyzed the marketing impact of 100 popular VPNs. According to their VPN market share research, there were three real leaders over the last year: ExpressVPN, NordVPN and Hotspot Shield.
Overall, ExpressVPN was found to be the current market leader in terms of its monetary value. Using website metrics, the research found that ExpressVPN had monthly traffic roughly $700,000 higher than the second place, NordVPN. ExpressVPN was also a top contender in the other areas analyzed, including overall popularity.
NordVPN seems to do the best in terms of reaching most consumers. VPNpro research looked at how many searches each VPN provider gets for their brand name and its variations. Here, NordVPN has the most in terms of both global searches and searches from the lucrative US market -- a total of 1.2 million per month. They were also the provider with the most servers in their fleet and have been effective in accessing geo-restricted content, like Netflix or BBC's iPlayer.
One of the big dominators of the consumer VPN industry also happens to be one that has a free version: Hotspot Shield. While Hotspot does have a paid option, most of its users come through its free offering.
For that reason, Hotspot Shield dominates the market when it comes to the total number of VPN app installs on Google Play and the App Store, totaling 1.75 million installs. They were also found to have the biggest social media following, with 4.1 million from Facebook alone. However, it is unclear how this translates to actual revenue for the company, since its popularity in the market hinges mostly on its free VPN services.
The future of VPNs
While the research looked at the current situation of the consumer VPN market, it's important to consider what the VPN industry will look like in the upcoming years, especially for entrepreneurs looking to build in this space or leverage VPNs for their own businesses. Due to the current political and copyright landscape around the world, growth projections show that the VPN industry will continue to take off.
Here are some predictions for the upcoming years that will lead to increased consumer VPN usage:
1. Wider political repression
Many countries around the world have begun blocking certain websites and online services from being accessed inside their borders. Twenty countries, including Sri Lanka, Turkey and Uganda, have shut down social media sites and applications from being used in their countries.
Then, of course, there are the usual restrictive regimes like China and Russia that continue to restrict how their residents use the internet. There are also questions about Brexit and the EU's Article 13 that may contribute to an increase in VPN usage.
2. Successful clampdowns by Netflix and other streaming sites
Far and beyond, the main reason consumers are attracted to VPNs is to access geo-restricted content from services such as Netflix, Hulu, iPlayer, Spotify and even YouTube. While VPNs include strong privacy and security features, 49 percent of consumers use VPNs purely for entertainment. As these services improve their geo-restricting capabilities, and as more content is restricted, more consumers will be forced to use VPNs.
3. Increased fear of data breaches
Lastly, the data scandals surrounding social media sites, especially Facebook, have impacted consumers to where they are constantly concerned about their online privacy. In fact, trust in Facebook has dropped 66 percent since the Cambridge Analytica data scandal. This, coupled with major data breaches from healthcare and finance organizations, is causing consumers to turn to VPNs.
For all of these reasons and more, the future of the VPN industry is bright -- but mostly because the future of online privacy and security is so bleak. As conditions worsen, and as VPNs continue to reach more consumers, VPN usage will continue to skyrocket.
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