• Financial Times, Thursday, February 22, 2007 11 AM

The market for TV and film downloads is expected to far outweigh that of ad-supported online programming, according to industry researcher Adams Media Research.

Right now, the market for ad-supported programs is four times larger than pay-for video downloads -- $409 million compared to $111 million -- though it's expected to surge to $4.1 billion by 2011. Ad-supported video will grow to $1.7 billion over the same length of time. The reason is that the ad-supported model will mainly be used on the Web sites of major U.S. television networks. Video download services, on the other hand, will be able to offer a broad array of programming from one location, as retail giants like Amazon.com and Wal-Mart start selling downloads from $2 per TV episode.

Adams says the market will explode as TV becomes linked to the Internet, citing Apple TV as one potential game-changer. But what if Internet services like Joost turn TV into just another Web service? What's the point of downloading films and paying for them if you can easily stream them in real-time? What if TV becomes something we have on in the background of several other open Web applications? There's no telling how consumers will adapt to the convergence of TV and the Web.

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