Premium Content Driving Internet Video Growth According to a new forecast from IDC, Internet video services will generate over $1.7 billion in revenues by 2010, an increase of more
than $1.5 billion from 2005 totals. Internet video services are on the brink of becoming a mainstream phenomenon in the United States. Much of this growth will be fueled by a surge in the amount of
premium content made available online.
The market for Internet video services began its dramatic acceleration in 2005, as content owners started to experiment with digital distribution
as a way to complement and enhance their existing business models and to stem illegal P2P file sharing and piracy. In particular, the television networks' decision to offer episodes from new shows as
well as old sparked significant interest in Internet video.
According to Josh Martin, associate research analyst in IDC's Consumer Markets: Video, "The Internet video market has a huge
upside. With that upside, however, comes the risk to content owners of cannibalizing existing revenue streams."
Key drivers for the adoption of Internet video include the expansion of
premium content offerings online and the emergence of home networking solutions that allow consumers to view Internet content more easily on their televisions.
IDC expects that content
owners will migrate toward three basic service types:
- Advertising-based services will remain the dominant type of Internet video service.
- A
la carte services, buoyed by consumer familiarity with iTunes, will grow dramatically over the next 2-3 years.
- Subscription-based services will experience steady growth
throughout the forecast period, enhanced somewhat by the emergence of home networking solutions.
To sustain the momentum gathered in 2005 and maximize opportunities for
success, content owners and service providers will need to overcome several
- important problems
- licensing issues
-
inadequate video search
- competitive challenges
- and how to move content beyond the PC
The complete release may be found here, or the report is available for
purchase here.