• Reuters, Tuesday, May 15, 2007 10:16 AM

Services like Apple's iTunes will become a thing of the past once we're living in a fully wired, on-demand world. However, what you might not know is that 2007 will be the year online media stores peak, while programming is added to free, ad-supported services like Joost, YouTube, and News Corp./NBC's joint venture.

Sales of movie and TV shows are expected to triple from an estimated $98 million last year to $279 million this year, according to Forrester Research, which expects sales to begin their inevitable decline next year. "In the video space, iTunes is just a temporary flash while consumers wait for better ways to get video. They're already coming," Forrester Research analyst James McQuivey said, calling the paid download video market a "dead end."

Meanwhile, digital sales growth never was what it could have been--just 9% among online adults in 2006, the report says. Confusion over different video file formats (i.e. DRM), difficulties watching downloaded videos on television screens and other technical problems kept the average user from buying digital content online. Late arrivals to the party, like Wal-Mart's MovieLink and Amazon's Unbox, are simply wasting their time. "Free is going to win," McQuivey said.

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